NEW-HOME BUYERS ARE MORE SATISFIED than ever with their builders, even as the number of units built and the average price of a house increases, according to the J.D. Power and Associates 2004 New-Home Builder Customer Satisfaction Study.
This year, the national average industry score for customer satisfaction increased from 109 to 112, with 100 being the starting value for the index.
“In this environment that's hard to do,” says Paula Sonkin, executive director of the Real Estate Industries Practice for J.D. Power. “Initiatives that builders have put in place are continuing to have an impact. They're recognizing the value of providing high levels of customer satisfaction. It's what differentiates a builder, especially production builders. The product's not that different. How else will they stand out from the competition?”
Builders receive weighted scores based on nine factors that customers say contribute to their satisfaction: customer service (23 percent), home readiness (18 percent), builder's sales staff (16 percent), quality of workmanship and materials (14 percent), price/value (10 percent), physical design elements (7 percent), design center (5 percent), recreational facilities (4 percent), and location (3 percent).
This year's study results included a first-ever Platinum Award for Excellence in Customer Service, presented to Pulte Homes. Its three brands, Pulte, Del Webb, and DiVosta, ranked highest in 14 of 25 markets and were in the top three in 23 of the 24 survey markets in which Pulte builds.
“Pulte demonstrates a lot of characteristics common to high-ranking builders,” Sonkin says. “The importance of customer satisfaction is a message sent from the top. [The company] also focuses on areas that are important to home buyers across time in the home. [Pulte] has recognized that someone who has been in a house 18 months is just as important as someone who just moved in. [Pulte} recognizes the value of maintaining that relationship.”
Pulte's national vice president for customer relations, Erik Pekarski, says that the results are confirmation that the company's emphasis on the home buying experience has paid off. Throughout the company, employees are trained to simply “do the right thing.”
“We go through so many training courses, but they all lead to the same thing,” Pekarski says. “If there's something to be done and you'd do it for your mom or dad, do it for the customer. That measure is right on target. People will tell their mom ‘no' on things that are out of the question, but there are other things they'll do because it's good for the family.”
The study, which began in Southern California in 1997, now covers 25 markets. This year's study added Ft. Myers/Naples, Fla., Seattle/Tacoma, Wash., Jacksonville, Fla., Detroit, and San Diego, which was previously included in the Southern California survey. It is the result of interviews with more than 64,000 home buyers who have lived in their homes between four to 18 months.
With the continuing increase in the scores comes the need for vigilance, Sonkin says. In Austin, Texas, for example, David Weekley Homes took top honors in 2003 with a score of 125. This year, the company's score went up seven points, but its ranking dropped to third, eclipsed by KH Home (138) and Pulte (137).
One of the reasons that companies such as Pulte, Centex, Lennar, and KB Home do well is that they recognize that simply repeating the previous year's score is actually a step backwards.
“They know that they can't continue to maintain the status quo or other guys will fly by them,” Sonkin says. “When you're an elite builder, you have to be innovative and think outside the box. That's the challenge. It's also the fun.”