What do customers want? The answer, always vital, takes on an urgent edge in a down market burdened by too much inventory and too few buyers.

Oddly, at least a substantial part of the answer may rest in a good night's sleep. Immediately after September 11, the hospitality industry was in a period of deep “retrenchment,” says Rob Rush, president and CEO, LRA Worldwide, a customer experience management consulting firm. Business and leisure travelers were staying home in droves and occupancy rates plummeted.

It was then that Starwood Hotels, an LRA client and operator of the Westin, Sheraton, W, and other hotel brands, acted on long-recognized customer discontent and “got serious about improving the sleep experience, even though visits were way down,” he recalls.

The result was The Heavenly Bed. Made up of 21 different parts, the bed did what it was made to do: differentiate the company, attract existing travelers at the time, elevate the brand in consumer's mind, and “provide something people really cared about, which was a better sleep experience,” adds Rush.

Likewise in 2003, the PGA Tour Tournament Players Clubs (TPC) golf resorts found themselves in a market where the total rounds of golf played was declining, fewer new golfers were entering the game, and the supply of courses was outstripping demand. TPC launched a far-reaching program to “create exceptional customer experiences based on what customers considered most relevant and important,” Rush says. As a result, the number of rounds played at TPC courses outpaced the national average, membership remained strong, and the organization posted consistent earnings while competitors struggled.


Home builders, like hoteliers, have been well aware of the importance of customer satisfaction for years. Yet, just when sales and revenues are down, and many builders are focused on cutting costs, counterintuitively, the right move may be to revisit, revamp, refine, and reinvest in the programs that deliver the customer experience that buyers reward in the short and long term with referrals and repeat sales.

Today's buyers are frightened, suspicious, and wracked by uncertainty. At the same time, they sense the balance of power in the market has shifted to them.

“A year ago there was a sense of urgency, and the fear was of missing out, of leaving money on the table by not buying at that stage” says Brent Herrington, vice president of DMB Associates, a real estate developer with residential communities and other holdings in several Western states. Now buyers are tentative, he says. “Nobody wants to be the last dumb guy that bought at the peak of the market.”

While the fundamentals of customer service don't change—“The things that are important to home buyers are important across segments and markets,” says Paula Sonkin, executive director of real estate industries practice at J.D. Power and Associates—the buyer's specific interests and concerns can and do change.

Consumers scrutinize the price-value relationship a lot more, says James Bell, senior partner at Lippincott Mercer, a brand-management consulting firm. “The long-term integrity of a builder is more important in times like this. Notions of quality and craftsmanship feed into it,” and concerns about a home's potential resale value, “become a more critical element,” says Bell.

“I think we stress our reputation more now and what differentiates us from the competition,” explains Erik Pekarski, Pulte Homes national vice president of customer relations. “This being a buyer's market, they're more interested in talking about what they are getting for the price.” Likewise, buyers are more interested in the warranty than has been usual. “People are looking at more of a long-term buy,” adds Pekarski.