WHEN J.D. POWER AND ASSOCIATES released its 2004 New-Home Builder Customer Satisfaction Study on Sept. 15, it included a first-ever Platinum Award for Excellence in Customer Service. The honors went to Pulte Homes, whose three brands (Pulte, Del Webb, and DiVosta) ranked highest in 14 out of the 25 markets surveyed and made the top three in 23 out of its 24 markets. It wasn't a fluke. Pulte led the study in 2003 as well, taking top honors in 12 markets and ranking in the top three in 17 of the 21 markets surveyed (see chart, page 86).

Erik Pekarski, Pulte's national vice president of customer relations, says the award is validation of continuing efforts across the company.

“We've been pulling the plow, building customer relationships instead of ‘fight it and fix it' and toss them the keys at closing,” he says. “We want to build a relationship early on.”

Many of the initiatives that have helped Pulte achieve its success in customer satisfaction have come from an unlikely arena: the hotel business. Specifically, the philosophy used at Pulte was pioneered by The Ritz-Carlton. As it turns out, that's understandable: Pekarski came to Pulte in 2001 from his role as director of operations for Sandcastle Hotels and Resorts, which owned and operated several flagship Hilton properties.

“At the time, I said, ‘What the hell do I have to offer to the home building business?'” Pekarski says. “I even think some folks at the time were looking at me saying, ‘What the hell are you doing coming from the hotel business?' But a seven-day stay in a hotel and a seven-year stay in a home are extraordinarily similar,” he says. “Hotels live and breathe off repeat and referral business because the inventory is dead after 24 hours. When you compare it to the ‘Homeowner for Life' objective with Pulte, repeat and referral business is critical to us.”

One change that Pekarski initiated was to reinvent division service departments, now calling them customer relations. That created consistency among divisions, where the name had varied from home care to warranty department. And, as Pekarski says, service “implied something must be wrong”—when in fact the department's job is to build relationships and respond actively to customer needs.

Seventy percent of the customer relations managers are recruited right out of college, Pekarski says, with degrees in everything from finance to political science and even theater. The common traits: an attitude of looking at a customer's new home as if it were their own and the ability to put the basics of a relationship in place.

“If we do our job as key relationship managers instead of waiting two months for a survey, we can find out now; we don't wait,” he says. “Internal surveys rank us really high [on customer satisfaction]; we've done that because we've stopped using [the survey] as a key indicator of where a homeowner is at and it's just validation. If homeowners score us poorly after they move in, it's not a surprise to us. We know. … If the company were to vary in its revenue performance, I don't believe our CFO would be surprised when the quarterly report comes out. He knows.”

THE PERSONAL TOUCH Each of the managers is trained—and expected—to be his own CEO, responsible for building his own personal brand with the customer and managing a budget. That budget might only be $30 a month for promotions, but it's nevertheless his or hers to spend to build the all-important relationship with customers.

Pekarski acknowledges that the approach is a page out of the Ritz-Carlton handbook. The hotel's employees have the power—and personal budgets—to satisfy a guest on the spot without getting an OK from management. (The stories about these customer interactions are the stuff of legend in customer service circles.)