Not long ago, one of the industry’s largest builders consistently received miserable satisfaction scores from homeowners polled by Eliant, the San Clemente, Calif.–based consumer research firm. To reverse that trend, the builder set up a “customer experience” division, putting one of its top executives in charge.
The housing recession has heightened builder sensitivity to customer expectations about new-home quality, and findings from annual studies conducted by Eliant and J.D. Power & Associates have become critical to some builders’ marketing efforts.
“Even in good times, builders have limited resources, and our study helps them prioritize where they should point those resources,” says Paula Sonkin, vice president of real estate and construction quality for Westlake Village, Calif.–based J.D. Power.
Sonkin and Bob Mirman, Eliant’s CEO, say they haven’t been surprised when builders that customers rated poorly went out of business during the recession. Mirman thinks low scores reflect a tone-deafness among builders’ management that “don’t care about their detractors or word of mouth, which is playing a more important role during the downturn” in generating referrals. Sonkin says builders “looking for points of differentiation” are paying closer attention to what customers’ ratings say about their companies.
Critics sometimes disparage Eliant and J.D. Power’s findings as superficial and little more than marketing fodder for builders. Mirman and Sonkin concede their studies don’t measure construction defects, but also think critics miss the point about the purpose of these surveys, which is to give builders an impartial measurement of how satisfied homeowners are at a given moment with the homes they’ve recently purchased. As for the surveys’ usefulness to builders, Mirman asserts that “the best predictor of future performance is present performance.”
J.D. Power’s latest study, released in September, found that customers’ satisfaction and quality ratings are up this year. Sonkin attributes those jumps to competitive pressure on builders to deliver a better product. “Quality equals performance minus expectations. And our studies do touch on structural quality because when a floor squeaks, that’s important to homeowners.”