Few builders so fully embrace the principles, strategies of, and investment in customer focus as Miami-based Lennar Corp. It may be of value to drill in for a closer view to see how concerted and action-oriented the company's commitment is. For half a century, Lennar has delivered homes for more than 600,000 families. From the moment a customer arrives at a Lennar Welcome Home Center, staffers work to make the company mantra clear: Satisfaction is only satisfactory. In fact, Lennar has transformed its business culture around a determination to provide customers not only a home, but a “tickled, delighted, and happy experience,” a phrase Lennar execs coined and then summed up with the acronym TDH.
As a beacon for associates, Lennar created a holistic customer-care master plan that aims to transform ordinary into extraordinary when it comes to buying a home. Highlights of the program include:
- Lennar associates build relationships with customers based on communication throughout the first year of homeownership and beyond.
- During framing, customers get a “Dusty Shoe Preview” invitation to check the quality behind the walls. They even get a camera to document the event.
- About a month before closing, an invitation to a “TDH Party” offers customers a chance to meet neighbors, enjoy food and fun, and learn about steps to keep the next 30 days on track.
- When a home is finished, an “Orientation Celebration” honors a customer's homeownership and demonstrates how the house works.
- A week later, a “Pre-Closing Orientation” aims to ensures that all the items discussed during the Orientation Celebration have been resolved before the close of escrow.
- Through the first year, “Total Lennar Care” schedules customer-care visits at one month, three months, and one year after the close.
LEARNING TO LEARN
The transformation didn't happen over night. Like most companies, Lennar used to worked under the assumption that quality was an entirely innate set of product features, but it learned that consumers were changing that assumption as they demanded a positive purchase experience in addition to the basic quality benchmarks.
Two years ago, Larry Peebles, regional vice president for Lennar's Tampa operations, found his division in last place in Lennar's company-wide customer survey scores. His team members were in denial because they had been working hard and thought they were doing and delivering what customers wanted. “Our improvement process started with the premise that we couldn't keep doing the same things that we had been doing, or we would keep getting the same scores as before,” Peebles says.
Customer focus groups helped his division identify six areas to address immediately:
- Accuracy of completion date
- Cleanliness and detail of the construction site
- Timeliness and completion of warranty work
- Closings with zero items on the orientation list
- Perceived value of options
- Code Red (complaints unresolved in the field, escalated to management)
To jump-start the process, 60 division associates teamed up to brainstorm solutions, 10 associates per topic. Candid discussions led to real-world recommendations from folks who had first-hand customer contact. The teams presented their ideas to the division, which bought in on the actions and accountability needed to improve customer satisfaction. It set the solutions in motion, held the team accountable to its commitment, and, monthly, benchmarked progress.
“There was no magic bullet,” Peebles says. “It took an all-consuming commitment [from the top down] in the division to raise the bar.”
For Rich Sherman, division president for of Lennar's Raleigh-Durham division, consistency in delivering a positive home buying experience was a challenge. “There was miscommunication throughout the home buying experience,” he says. “We knew that we needed to tell the same story and be consistent throughout by creating the same product, having the same quality, and delivering what we represented to the customer.” To address this, Lennar nationally rolled out a minimum-standard customer “touch-point” process, creating an explicit matrix of who is involved in each step, the supplies needed, and so on.
The result is heightened awareness of what to do when something's gone awry. “We look at everything we do,” Sherman says, “and if something is not really working, we of course correct it in five clear steps: test it, change it, train it, measure it, refine it.”
WHAT TO MANAGE
“There is no such thing as a perfect home,” says Arra Yerganian, regional vice president of strategic operations and organizational development in Lennar's Northern California region. “Things will inevitably go wrong along the way, but we are absolutely committed to correcting those things we may have missed.”
For Yerganian, managing customer expectations is an internal and trade training issue. Members of his Homeowner expectations Performance Team—known at Lennar by their HPT Squad logo shirts—travel the region educating staff and trades on the survey process, setting proper expectations, and improving customer communication.
“If you cannot manage expectations, you cannot successfully manage customer service,” says Yerganian. “Our focus on our customers is designed to ‘wow' them in order to build trust,” he adds. “Every time we delight customers, they, in essence, make a deposit into our emotional ‘trust' account. And the more they invest into our trust account, the less they will be negatively impacted if we miss the mark somewhere in this very involved process.”
Lennar's San Diego division is Eliant's overall No. 1-ranked division among more than 200 builders. The high ratings come during a time that the division quadrupled closings in a little more than two years, adding more complex products into their mix. How, one might ask? The answer would be two-fold: it implemented a redefined focus on timely delivery of homes and an active customer-care approach.
“We focus on quality—not just quality of construction but quality of the relationship with home buyers,” says Mike Levesque, Lennar's regional vice president for the San Diego division. “We try to make the most of the ‘defining moments' [of a customer's experience].” One factor in his division's success is the emphasis placed on home readiness. An internal quality assurance check certifies each home as complete a day before the scheduled delivery.
“We focus on the day before the closing date, not the day after,” says Levesque. “With this new focus on preparing the home for delivery, the delivery becomes a real celebration for everybody. We can now follow through on our promise to deliver the customer's dream.” San Diego home buyer satisfaction ratings jumped dramatically in the six months since the unit started this focus on delivery in January 2005. Other customer satisfaction highlights include:
- “Meeting commitments” (i.e., delivery) moved from 82 percent to 97 percent satisfaction
- “Overall satisfaction” grew from 83 percent to 96.5 percent
- “Willingness to recommend” improved from 83 percent to 96 percent At move-in, although the moment can be stressful, “Lennar does many special things at the orientation celebration to make our customers TDH,” says Jim Weaver, director of construction for Lennar's Lundgren Bros. division in Wayzata, Minn. Here's a sampling:
- Big red bows on the front door and garage with balloons at the entry
- Red carpet to the front door or a Lennar welcome mat
- Plants or flowers in the kitchen
- Gourmet coffee and drinks, with snacks for the family
- Toilet paper, paper towels, and soap dispensers with “We Care” seals
- Water and soft drinks placed in the refrigerator
- Tool buckets filled with helpful things needed at move-in
- Photo albums of the home from start to finish
- Two Lennar bathrobes hung in the master closet
- Gift certificates from local restaurants for move-in day
Lennar takes a proactive rather than a reactive stance on customer care. To ensure consistency in the relationship with homeowners after the close of escrow, Lennar offers Total Lennar Care—whose acronym is TLC. “The two key components for customer follow-up are: commitment and communication,” says Jonathan Tepper, director of sales and marketing for Lennar's Maryland division, which is based in Silver Spring. “It means doing the right things for the right reasons. Proactive customer communication increases our homeowners' comfort, and, ultimately, their customer satisfaction survey responses.”
TLC calls for customer visits at one month, three months, and one year from closing to ensure that the home is functioning well and that there are no outstanding warranty issues. Lennar promotes consistency by having the same two customer-care associates visit the same customer throughout the relationship. Here's an example of what the checklist looks like:
- Check all home maintenance items
- Check windows and doors
- Check electrical, gas, and plumbing
- Check exterior and landscaping
- Change out smoke detector batteries
- Change out furnace filters
- Touch up any drywall and paint as needed
- Answer all homeowner questions
- Vacuum work areas and vacuum out the front door
Morgan Bickel, president of Lennar's Orrin Thompson division in Wayzata, Minn., believes that the relationship between builder and buyer continues far beyond the first year. “After the first year,” says Bickel, “we try to maintain the relationship by assisting the customer with questions on things like paint colors, trade partner information, and other recommendations. We make a point to drive our neighborhoods and wave to the families every time we see them.”
–Bob Mirman is CEO of Eliant in Irvine, Calif. For further info, visit www.eliant.com.
ABOVE AND BEYONDWHAT COMES AROUND
In Colorado, Barb, a Lennar homeowner, learned that her sales associate, Yvonne, was seriously ill and was having trouble finding a kidney donor. This incredible homeowner—and purely generous and loving human being—tested positive for a match and donated her kidney to her sales associate on Nov. 26, 2001.
Not surprisingly, Yvonne was awed by this truly remarkable gift and asked Barb what had inspired her selfless act. Barb said that the reason that she was so compelled to give was that she had been deeply touched by the way Yvonne and Lennar had set an example in “giving back.”
Barb told Yvonne that she quickly had come to the realization that this was her opportunity in life to give back to a special person who had earned her lasting trust while building a lifetime relationship. With endless reverence for Barb, this is what we call a customer for life.
Poet Edwin Markham puts it this way:
There is a destiny that makes us brothers, None goes his way alone.
All that we send into the lives of others, Will come back into our own.
ABOVE AND BEYONDSENSITIVE SOLUTION
At Lennar's Northern Virginia division based in Chantilly, Va., Scott, a senior construction manager, and Sharon, a construction manager, touched the heart of Mr. Conrad, a homeowner at Lennar's Willow Oaks community.
After Mr. Conrad's wife passed away in April, he was preparing for funeral services and mentioned a concern to Scott and Sharon: Since the street he lives on is a designated fire lane, he worried that post-funeral service visitors to his home after the funeral would find little space to park.
Sharon and Scott contacted the neighbors within walking distance of Mr. Conrad's residence and got permission from other homeowners in the community who had room in their driveways to allow Mr. Conrad's friends and family to park there. Sharon and Scott put signs up on the driveways that were available to use so everyone would know where they could park. Then, they contributed food to Mr. Conrad and his family for the gathering. Afterward, they returned to remove the signs.
Sharon and Scott's caring and generous actions during Mr. Conrad's difficult time exemplify “above and beyond” acts of caring.
ABOVE AND BEYONDMOMENT OF TRUTH ... AND TRUST
When Lisa, a Lennar Chicago division new home counselor, took a phone call from Ned Thomas, a Parkview Meadows customer who was scheduled to close that afternoon, she knew something unusual was happening. “My wife can't make it to the closing,” Ned explained. “Actually, it's happy news. Last night, our baby was born two weeks early, so Donna is in the hospital.” Although baby Stephen's arrival was a joyful event, it did present Ned and his wife, Donna, with a predicament.
“Our movers were scheduled and it was really important that we close on time,” says Ned. “So Lisa, who works in the closing department at Lennar, volunteered to come to the hospital so we could sign the necessary documents.” Lisa had never handled a closing without a title company's involvement, so she debriefed on every step of the procedure, and took off for Loyola Medical Center in Maywood.
Lisa's willingness to go beyond to make the closing happen on time gave the couple confidence to let their guard down a little when it came to the paperwork—and let them enjoy their new son. “It was hard to concentrate on reading,” recalls Donna. “So I said, ‘Oh, I'll just sign it … I don't have to read it,' because by this time, we completely trusted the people at Lennar.”
After this poignant moment, Ned and Donna hold a very special sentiment about Lennar and Lisa. “Everyone was so great and so helpful to us, and we'll never forget how Lisa was a part of such a momentous time in our lives.”
Incredible closings inspire amazing beginnings.