Maybe the closest parallel to being a home builder today can be found at your favorite neighborhood burrito chain.
“A home really is the last thing that’s still handmade,” says Camille Nesbitt, director of national customer relations at Scottsdale, Ariz.–based Meritage Homes. “It’s the last thing you can go and watch being built. The only other place you can do that these days is Chipotle.”
Now, imagine watching an employee pull a hair out of your burrito, flick it from her latex-gloved hand, and then casually ask you whether you want guacamole or cheese. You really wouldn’t want that same burrito, would you?
That’s analogous to how home buyers feel when they see the not-so-pretty aspects of construction as their home comes out of the ground. When it comes to achieving great customer satisfaction in the new-home industry, builders face a challenge that most other product companies don’t. Namely, like Chipotle, their customers see how it’s being made. But unlike Chipotle, a new house typically is the largest financial outlay most people make in their lives. That means buying a new home is stressful, and since it fulfills the core need of shelter, it’s emotional, too. Add to that the fact that most people only ever buy a new home a few times in their lives, making it an unfamiliar process rife with fear and uncertainty, and you’ve got a recipe for creating unhappy customers fast.
“In a day and age when everyone has been conditioned to expect instant gratification, we tell customers to give us all their money, and then wait six months,” says Jeanne Conger, executive vice president of sales and marketing at Fayetteville, Ark.–based Rausch Coleman Homes. “It’s the largest emotional and financial investment that most people make in their lifetime, and when they stop by to make sure everything’s OK, they see that maybe someone has urinated in their bathtub. How would you feel?”
Do Unto Others …
Asking yourself how you would feel in your buyers’ shoes is at the core of how customer-centric home builders operate. When you talk to builders who consistently earn high marks on customer service and satisfaction surveys—and the referrals that come with them—you hear again and again some variation of the Golden Rule. These builders approach their business from the home buyer’s side of the coin first. They walk those buyers through the process verbally up front, and at each milestone along the way, to ensure expectations are realistic. They make sure everyone knows what is happening now, and what should happen next. Finally, when something goes wrong (customer-centric builders let buyers know up front that something will go wrong), they own up to it and tell their buyers what they’re doing to fix the issue. Basically, the builders who succeed at being customer-centric in home building get that way by being decent and treating their customers with respect first.
“When you design and construct someone’s home, it becomes by definition an intimate experience,” says Peter Di Natale, president of Cold Spring, N.Y.–based home builder Peter Di Natale & Associates. “There’s a lot of emotion, and builders have to understand that. Whether customers take your guidance or not, you’ve got to respect their choices.”
Far from coming off as touchy-feely, however, these builders strike a chord as being hardened realists about the home building process, and they are unflinchingly honest with their customers and employees about what to expect.
“We keep everyone very aware of the fact that we’re building a home for a family just like yours, and just like mine,” explains Meritage’s Nesbitt, whose Tucson, Ariz., division took home a 2015 Diamond Award for customer satisfaction from Avid Ratings, the Madison, Wis.–based home builder customer satisfaction and reputation management firm. “They’re going to have bad days. They’re going to be overwhelmed. They’re going to have days when they go to the jobsite and see the uglier aspects of construction. And it’s our job to anticipate those obstacles and help our customers through them.”
For Paul Cardis, Avid Ratings’ CEO, that means “inoculating” buyers about the unique aspects of home building from the start. “Buyers today don’t really understand our industry very well at all, because we’re not like any other industry they’re used to dealing with,” Cardis says. “So you’ve got to inoculate your buyer about the realities of home building—that something will go wrong, and to expect it—from the start. That’s not to say inoculating the customer is a panacea. You’re still going to have to do a ton of work as a builder. But if you don’t share the realities of the industry with them, and what the experience is about, you don’t have a chance.”
A large part of sharing the realities of the industry with your customers comes from keeping them informed, and that means communicating with them on a regular basis. At Rausch Coleman Homes—whose Little Rock, Ark., division landed an Avid Gold Award in 2015—Conger offers a new industry mantra to encourage builders to do just that.
“Communication, communication, communication,” she says. “It’s about saying, ‘I’m going to call you every Tuesday. What’s a good time for you?’ Then, of course, you’ve got to follow up and do it.”
One way to facilitate that communication is through the use of technology. At Glenview, Ill.–based William Ryan Homes, division president Chris Ehlers says the firm’s proprietary customer portal, dubbed “My Home 24-7,” helps keep his clients up to date about exactly what is happening at their home site. Every Friday, the company posts photos of each house it’s currently building so customers can see their home’s weekly progress.
“It keeps everybody satisfied from a communications standpoint, especially in today’s society where everything is information,” Ehlers says. “People want to know the progress that’s happening on their house, and they want to know that somebody is paying attention.”
For some builders, that kind of transparency might be unsettling, especially if it generates more questions in customers’ minds when they see something that looks wrong. But Ehlers says any questions that arise from customers looking at the portal give superintendents an added opportunity to have a touch point with the client and manage their expectations, while keeping them informed.
“In those situations, it allows us to take on the role of the teacher,” Ehlers says. “Those questions really just become an educational process for our superintendents, who enjoy explaining the process of building a home to the customer.”
Technology also can be used to avoid surprises on the customer end.
“Surprises aren’t fun for anyone,” notes David Simon, president of operations at Madison–based Veridian Homes—another recipient of a 2015 Avid Gold Award. “It’s critical to educate your customers on the process. We use a proprietary software system that helps keep us and the buyer on the same page, complete with budgets, deadlines, and change orders.”
Including customers in the information flow also helps create a perception of their own involvement in the build.
“We make sure to really detail information out for our clients, as well as give them choices,” explains Matthew Young, president of Dallas-based custom builder Autus Properties. “It makes them feel like they’re part of the process and have more ownership of the project. The advantage for the builder there is that if problems arise later, they know how it came about, and that it was a result of choices they made, not ones we made for them.”
How To Say No and Still Sell Houses
Of course, giving customers unlimited choices isn’t as easy for a production builder, especially when you’re taking down lots in sequential order for a given subdivision. For Conger at Rausch Coleman Homes, the key to telling customers no and still being viewed as customer-centric comes down to explaining why they can’t get exactly what they want.
“We don’t do change orders after a certain point,” Conger says. “We set that expectation upfront and then if they forget about it later, we give them the why. They don’t necessarily like it, but they will live with that.”
The same goes for her own internal sales team, which often can give push back and advocate for customers who are trying to get changes made after the deadline. In that case, Conger will explain how changing even small elements can affect the larger project.
“I tell them I understand your buyer wants a farmhouse sink, and your buyer wants a special faucet, and your buyer wants a doggy door,” Conger says. “But we are an affordable home builder. We’ve been in business 60 years, and if we want to be in business for 61, we can’t constantly throw curveballs at our trades. It isn’t efficient, and it increases our chances of making a mistake. If that happens, it’s going to delay that buyer’s home, and then the buyer’s home across the street. Usually, when you tell buyers that, they understand because they don’t want their home delayed, and they don’t want us to ‘practice’ building something we’re not used to building on their home.”
Is It Worth It? That’s Up to You
Since home building is so different from other industries, some builders may not believe there are benefits to stressing customer service. One common view goes like this: being customer-centric to generate repeat business as a home builder is a fool’s errand. The thinking is that many builders focus on a particular type of customer, such as first-time home buyers, who will never buy for the first time again anyway. Or they concentrate on a particular geography, where repeat business isn’t likely since people tend to buy again only when they move to a new location.
But taking such a narrow view of how sales are generated by home builders also can be counterproductive. “Look, we’re in an industry where there is no ‘Home and Driver’ magazine,” Avid’s Cardis says. “But now, you have sites like Angie’s List and Google and Yelp and Houzz, and these have effectively become the new type of ratings for the industry. It’s all about referrals.”
It’s also about keeping your good name good for other buyers who may not know customers who bought from you, but can learn about their experiences with one click.
“With the power of social media, the question becomes how many sales are you losing,” says Jason Forrest, founder of Fort Worth, Texas–based sales training organization Forrest Performance Group. “Take female buyers, for instance. Female buyers are much more likely to get online and check review sites, and if they see another female on a site saying go with this builder, or don’t go with that one, they’re much more likely to trust that.”
For Carlos Robert De Leon, vice president of the Bridgehampton, N.Y.–based high-end home builder Leon Group, positively influencing that type of word of mouth comes down to taking a long-term view of your business, beyond your next closing.
“Delighted customers share their experience with others, and when they do, your brand will ultimately grow and self-promote,” De Leon says. “Focusing only on the result and the short-term gain rather than the process and long-term relationship is a mistake that often excludes the customer. ”
At the same time, that’s not to say you want to take your eye off the ball in terms of numbers. This is especially true when it comes to your customers’ understanding of your brand. For example, at Rausch Coleman Homes, Conger was perplexed by initial Avid survey responses where customers said the company had a great price, but not a lot of value. When she looked into the reasoning behind those seemingly contradictory messages, she started to understand how Rausch Coleman had put an emphasis on the cost of its homes, versus the quality that went into them.
“We discovered we hadn’t been selling the price as a great value,” Conger says. “We were giving them 1,200 square feet for $130,000, and there was no one else in the marketplace like that, but we hadn’t told them that. We were being the bad guy, telling them that they couldn’t have all the options in the model for that price, instead of emphasizing everything they did get compared to the competition.” Once Rausch Coleman adjusted its messaging, those survey results changed almost immediately.
Putting in the legwork to do that kind of customer research is also a big part of being a customer-centric home builder. For Fletcher Groves III, vice president at Ponte Vedra Beach, Fla.–based SAI Consulting, it comes down to knowing both your customer and yourself, so that you can meet the needs of both.
“We tell builders not to try to be all things to all people. Build a good product, with limited options, or allow your customers to make changes, but don’t do both, because you’ll just end up tying yourself—and your customers—in knots,” Groves says. “The hard part in that equation comes down to figuring out who your customer is, and what features and finishes they want.”
For each neighborhood the Coconut Creek, Fla.–based office of Minto Communities enters, it establishes a customer service team to stay in constant contact with buyers and keep them informed of what’s happening with their homes.
“But we also conduct focus groups and surveys to determine what the customers like, what can be improved on, and various trends,” says Steve Svopa, Minto’s vice president of operations for Florida. “We use that feedback to improve our future designs.”
The Big Reveal
One particularly sore point for home builders is the final walk-through. Where other industries like consumer electronics and automotive companies “unveil” their products to consumers to wow them, home building’s final walk-through invites customers to pick apart everything that’s wrong with the product first.
“We don’t look at the final walk-through as an unveiling of this amazing new home,” Forrest says. “We look at the final walk-through as an opportunity for the customer to beat the crap out of us. Well, that’s just dumb. We need to change that so that the goal is to unveil the home in all of its glory. But in order to do that, you have to allow people internally to beat the crap out of the house before it actually gets to the customer. And that takes knowing what the customer expects first, which comes back to the basics of talking to them throughout the process.”
Or, in Conger’s words: communication, communication, communication.
While home building is definitely a different beast than almost any other industry out there, it does have one thing in common with all of them: its customers are people first. Treating them as such, and remembering the emotional and financial stakes that your customers have invested in your product not only makes you customer-centric, but it also could make you a better builder as well. Putting in the effort upfront to know what your buyers want and what you can realistically give them, while keeping them in the loop about the process along the way, makes all the difference.