By Bob Mirman and Wyatt Kash. The final orientation walk-through is the "show me the money" occasion for the home buyer. After months of requiring the buyer to fill out too many documents, make too many decisions, prepare for too many cut-off dates, attend too many meetings, and -- finally -- pack too many boxes, the orientation provides an opportunity for the builder to demonstrate just how good his company really is.

The purpose of the orientation walk-through differs from builder to builder. For some, it exists simply as a last chance for the buyer to identify items which are still unfinished or are in need of repair prior to move-in. For others, it is only used as a buyer orientation in which the buyer is educated on the operation of the various features of the home. Most builders use the orientation walk-through to accomplish both purposes.

Regardless of its intended purpose, it is clear that builders who receive strong buyer satisfaction ratings in this category have most or all of the following elements in common, according to ongoing research by Eliant (formerly National Survey Systems, in Irvine, Calif.):

  • The builder has a clearly defined purpose for the walk-through. This purpose is openly communicated to all buyers in advance of the orientation walk-through -- what it is, and what it is not.
  • The approximate time required for the walk-through is defined in advance.
  • Buyers' expectations are managed so that the buyer does not expect a perfect home at the walk-through.
  • The time promised for correcting any punch-list items is specified (typically in number of days) at a level that can be achieved 95 percent of the time. Perfection is not promised but speedy resolution is.
  • To develop an immediate sense of trust in the walk-through representative (and by association, the builder), orientation walk-through personnel are urged to follow the strategy developed initially by the JM Peters company in the 1980s: During the first 15 minutes of the walk-through, the builder's representative is instructed to proactively identify at least one repair item that the buyer has missed.

For all the effort that could go into the walk-through meeting, the orientation has less influence on future referrals compared to other activities: Of 11 major categories measured, the "Orientation Walk-Through" ranks seventh, just after "Initial Customer Care." While the walk-through's impact on future referrals is 36 percent below the average impact of all the major categories on the survey, it still has more than twice as much impact as the design center.
Key Performance Issues

Within the orientation walk-through category, two issues control almost 70 percent of the category's impact on overall satisfaction and referrals: the number and scope of items requiring attention and whether those items were corrected in the time promised.

The first issue is responsible for more than a third of the category's impact on referrals and is directly affected by two factors: the expectations set by each of the sales, construction, customer care, and orientation walk-through representatives; and the degree of trust buyers have in the builder's promise to complete the repairs. In particular, builders need to clearly establish the purpose of the walk-through and the definition of a successful walk-through in order for buyers to come away satisfied.

Builder's Action Plan
...For improving orientation walk-through satisfaction.
Referral 'Accelerators':
  • Lower buyers' expectations. Remind them that the purpose of the orientation walk-through is not to demonstrate perfection.
  • Promise to repair punch-list item within a specified time frame.
  • Meet or beat this promise 95 percent of the time.
Referral 'Killers':
  • Guarantee a large punch-list by closing homes before they are really ready.
  • Take longer than the buyer expects to complete the punch-list.
  • Hold staff accountable for or pay bonuses for "zero-item walk-throughs."

All bets are off, of course, if the number of orientation walk-through punch-list items is unusually high or if the scope of the repairs is severe (for example, water leaks, wrong options installed, or flooring replacement required). If the house was not ready to be walked in the first place and was only done so because the builder had to close it by the end of the quarter or fiscal year, all the pre-walk-through communications and effort to manage expectations will do little to soothe the buyer's disappointment and anger. The second issue, involving whether items were completed within the promised time frame, also contributes a third of the referral impact of the entire orientation walk-through category. Regardless of which department is responsible for the resolution of the punch-list, speed of resolution is the primary issue. The longer the buyer has to live with unresolved items, the more problematic it becomes.

Speed of resolution is, however, relative to what was promised: Builder "A" promises to complete the punch-list within two weeks, but actually takes three weeks; Builder "B" promises to complete the punch-list within four weeks, but actually gets it done in three weeks. Both builders provided the same speed of service completion, but Builder "B" comes out smelling like a rose and has at least met or possibly even exceeded buyers' expectations. Although the actual performance was exactly the same, "B" generates referrals while "A" generates dissatisfaction.

Builders know they should always under-promise and over-deliver. But they need to set the goals or the buyer will. If builders meet buyers' expectations, buyers will not actively refer their friends to you. The goal is to exceed buyers' expectations. The best way to do that is to make the promise at a level that can be beat 95 percent of the time.

While the two punch-list issues cover the bulk of the buyer's impression with the orientation walk-through, another issue carries some significance: "Was the walk-through representative honest and trustworthy?" This issue controls about 12 percent of the buyer's overall satisfaction with the orientation walk-through experience.

Buyers need to feel a sense of trust in the walk-through representative. They need to feel that he or she is honest. Inevitably, the buyer's perception of the integrity of the representative is transferred to the buyer's perception of the builder. To the buyer, the orientation walk-through experience is a major proving ground: If the walk-through representative tries to go for the zero-item walk-through or dismisses some items as insignificant or "within industry standard," the buyer's impression of the builder's integrity can only suffer.

Buyer Satisfaction Norms

While the average orientation walk-through satisfaction level for more than 40,000 home buyers who completed this survey in 2002 was a fairly strong 87 percent, the two lowest rated issues (out of nine) in the walk-through section of the survey were also the two that were most important in driving buyers' satisfaction with the overall walk-through process: "Corrective items completed within the promised time frame" scored a 75 percent satisfaction rating; "Buyer comfortable with number and scope of corrective items identified" scored 83 percent satisfaction (See Figure 4-2).

Both buyers and builders agree that completing the punch-list within the time promised is of critical importance, and it appears as No. 2 on the buyers' rankings and No. 1 on the builders' rankings.

The similarity ends at that point.

Builders give relatively low importance to the "Buyer's comfort with the number and scope of corrective items identified." Even though buyers ranked this as the No. 1 orientation walk-through issue contributing to their satisfaction, builders ranked it as seventh of nine (See Figure 4-1).

The "Honest and trustworthy" issue, ranked third by buyers, is ranked sixth by builders.

The lowest ranked issue on the builders' list of important walk-through factors is "Flexible in scheduling orientation walk-through appointments." In fact, only 6 percent of builders placed this issue in the top five issues in this category. Buyers, on the other hand, felt this was the fourth most important issue.

The lesson for orientation walk-through managers: Do not aim for a zero-item walk-through, make sure your walk-through representatives are honest and reassuring, then set prompt targets for resolution of punch-list items and beat them consistently.

Best practices: What builders are doing to...

...Manage the punch-list.
  • Punch-list and/or management walk-throughs to be completed prior to orientation
  • Quality control and walk-throughs throughout the construction process
  • Bonuses to superintendents for performance

Beazer Homes, Quality Control/Warranty Manager:

Created a "must do" punch-list for construction that is completed prior to the orientation.

Shea Homes, Vice President of Construction:

Conduct a pre-walk with the customer one week prior to the homeowner orientation. This allows us to review quality with the customer prior to the end of the process. n We conduct internal quality walks two weeks before the orientation. Our 550-item checklist allows us to review all critical items of the home to assure nothing is missed.

William Lyon Homes, Director of Warranty Service:

We have enacted several quality walks throughout the process including a final quality control walk with sales, construction, and warranty. Many involve the buyer. Presentation quality at the new home orientation has been our biggest focus.

Richmond American Homes, Customer Care Manager:Customer service representatives walk homes pre-paint to mark drywall, two weeks prior to quality assurance walk with superintendent; Q/A walk with superintendent seven days prior to homeowner preview walk; preview walk with homeowner three to seven days prior to final orientation walkthrough.

Alpha Construction, Vice President:

A weekly walk-through by the superintendent's assistant helps to control an accumulation of items on the punch-list. The items are brought to the attention of the contractor.

Classic Custom Builders, Project Manager:

Bonus system put into place for field superintendents to deliver zero-defect homes at time of closing.

Waldon Development Corp., Production Manager:

Instituted a bonus program with foreman based on the number of items on punch list: $500/house less $10 per punch-list item.

Forecast Homes, Customer Service Manager:

Our New Home Inspection Acknowledgement form (in conjunction with a Quality Standard Inspection form) requires that four separate managers walk, inspect, and sign-off each home. The four managers are construction superintendent, construction manager, area customer service manager, and project manager. The form must be completed and signed-off prior to homeowner orientation. Seems as though by putting your name on each home you tend to look a lot closer at things.

Keller Homes, Production Manager:

We focused our production team and trade contractors on the importance of finishing activities on time and turning in Certificates of Completion for every activity. This established greater knowledge of expectations, adding efficiencies not only to the owner and managers of the trade contractors, but also the tradesman doing the installation. Enforcement is critical. If all know the full completion of the expectation is the only thing accepted throughout the construction process, the final walk-through is a pleasant presentation to the customer.

TOUSA/Engle Homes, Construction Process Manager:

We track all items specific to "causing" trades. As we meet with our trade contractors, we review the items they are causing, work through a five-step improvement process (benchmark statistics, set-goal, define existing process, re-define existing process for improvement, and monitor), and redefine our interactive scopes of work.

US Home, Customer Care Manager:

We implemented a policy where the home is walked three days prior to the title appointment. We will complete any listed items before the customer goes to title. We would only close a home if the customer signs off on an item that may have to be ordered and not expected within the three days. We contact the home buyer at five crucial steps in the process: 1) Design center, 2) Pre sheetrock, 3) Close of escrow, 4) 30 days after COE, 5) 90 days after COE. This allows us to take the homeowner through the process, identify areas of concerns, and react to them actively versus having an unhappy customer at the end of the process. They then become partners in the building process.

The articles in this special report were written by Bob Mirman, CEO of Eliant, and Wyatt Kash, editor of Big Builder magazine. Eliant (formerly National Survey Systems) provides customer satisfaction data and solutions to more than 150 of the nation's top home builders including D.R. Horton, John Laing Homes, Lennar Family of Builders, Shea Homes, and Standard Pacific Homes. The firm is considered the largest consumer research company in the country that caters exclusively to the building industry, conducting more than 200,000 home buyer surveys annually. Eliant is recognized for its use of sophisticated, high-tech consumer tracking tools and information management systems to provide builders with timely, actionable information and strategies to increase home buyer satisfaction and building industry rankings.

Headquartered in Irvine, Calif., Eliant was founded in 1984 by Bob Mirman. Mirman is a clinically-trained psychologist who translated the consumer perception tools he had developed while working at General Mills into a series of surveys designed to capture detailed information on the entire home buying experience, including satisfaction up to two years after move in. Builders use Eliant's tracking information to monitor, reward, and modify practices that directly impact home buyer loyalty.

For more information, contact:

18 Technology Drive, Suite 200 Irvine, CA 92618
949-753-1077 ext. 10; 800-814-9595

Back to Cashing in on Customer Satisfaction