Paul Cardis

Founder and CEO Avid Ratings

paul.cardis@avidratings.com
Anje Jager/agencyrush.com Paul Cardis Founder and CEO Avid Ratings paul.cardis@avidratings.com

When experts criticize their own industry, it tells you there is a real problem brewing that deserves attention. As a surveyor of customer satisfaction for over 20 years, I am going to share with you a disturbing trend that is leading many large-scale home builders seriously astray, causing them to lose millions of dollars each year.

In the last seven years, phone marketers have converged on home builders with an intriguing value proposition—namely to provide 75 percent response rates for customer satisfaction surveys. Sound good? Actually, I too was intrigued enough to join them in offering this service until I did the research and realized that this approach could seriously damage my clients’ businesses. Instead, I have been sharing the research studies of the world’s foremost experts from Harris Poll, Oxford Press, and the U.S. Census who all warn against adopting such programs. Since space is short in this article, I will provide a quick synopsis. (For a complete review with detailed references please visit www.avidbuilder.com.)

While on the surface it may seem better to get more surveys from customers, the “more is better” principle, the fact is that the survey must be shortened by 50 percent to 75 percent, and a multitude of phone survey calls to homeowners must be made to achieve the goal of 75 percent or higher response.

Unfortunately, research has found that phone surveys are highly subject to Social Desirability Bias, which means respondents provide answers that are least controversial in order to avoid conflict with the surveyor. Furthermore, because these telemarketers use shortened survey instruments to measure a complicated transaction such as home building, a comprehensive customer review is simply unattainable.

The bottom line with these high response rate programs is 1) less real information to diagnose problems, and 2) customer satisfaction results that are skewed toward a positive score. Not a good situation if your company doles out bonuses to its employees based on customer satisfaction. Unless, of course, you are the employee of one of these companies and then it might make sense (tongue firmly in cheek).

The graph above shows you the difference between survey methodologies and the impact social desirability has on a number of commonly asked questions.

How many times have you been to a restaurant when the manager asks you, “How was everything?”—only to respond with “good” even though the meal may not have been up to par? This is social desirability at work in customer satisfaction, and it happens every day. It’s no surprise that Morgan and Rego (2006) found that short “Net Promoter Surveys” have little relationship to business financial performance.

Unfortunately, we may have entered a time when home builders may value the quantity of response rates over the quality of customer research, only to find it has produced misguided results, allowing substandard performance to go unnoticed and, in some cases, even rewarding it! I am hopeful improving communication on this issue will keep our industry from being bitten by this new type of snake oil salesman.