In the June 7 Wall Street Journal's “Customer Service as a Growth Engine,” Jim Bush, head of worldwide customer service for American Express, said: “Customer service is a growth engine for a company in a world where marketing dollars and credit is constrained.”
The article stated that “executives are paying more attention to customer service in an effort to increase sales and gain market share in the economic recovery.”
A recent Accenture study quoted in the article found just over 25 percent of the companies surveyed said “customer service would be the first area they'd increase funding for as the economy recovers.”
Will home builders join this trend and increase funding for customer service activities? Can customer service contribute and drive a home builder's growth? The answer is most likely “yes, but ...” For many home builders, customer service has been the ugly stepchild.
This historical belief is premised upon the fact customers rarely purchase a second home from the same home builder. The decision to purchase a home focuses on location, perceived value, price, and monthly payments, as well as design and features. Customer service has not differentiated itself as a significant component of the buying decision. It is generally considered unwise for builders to invest additional funds into customer service.
Why do so few customers make a second purchase from their builder?
Purchasing a home happens infrequently and is most likely the largest purchase a family will make. Yet, there are other sizeable purchases made where loyalty plays a role, such as cars. People buy a BMW or Ford or Dodge time after time as a result of brand loyalty. Why? They trust the company, their experience has been positive, and the risk of changing is deemed as costlier. What is also interesting is that if a customer has a bad experience with an automaker, there is little that will bring the customer back to their showroom.
While I believe home builders could benefit from brand loyalty, I would argue the more likely opportunity is for a current purchaser to influence a prospect to become a customer. This type of referral can drive top-line growth, but it requires superior customer service.
I think builders should change how they organize aspects of their business. The majority of builders do not organize around the customer, rather they organize around functions.
Our sales associate sells the home, a contracts administrator processes the sales agreement, a construction coordinator processes the plans and permit, a superintendent builds the home, etc. Too many people touch each customer, and no one builds a lasting relationship with the customer. Customers are handed off from one person to another as a result of our structure. Is it any wonder customers don't create a lasting bond with the company—a bond that encourages them to buy another home from us and to become an advocate for us, driving business to our door?
I support a “customer concierge” structure where one person stays with the customer from beginning to end. The customer concierge becomes the customer's advocate when issues arise; coordinates with the various departments; processes the sales agreement, the building plans, the permit, the closing; and handles all customer service requests. This develops a strong relationship between the customer and customer concierge.
In a highly competitive environment, an organization's ability to differentiate itself is critical. Superior customer service is one way to drive top-line growth. The implementation of the customer concierge is a key component of making a meaningful improvement to customer service.