For Irvine, Calif.-based MBK, that award in the multiple division builder category is the culmination of seven years of effort, during which it has developed a four-step process to ensure its homes are delivered on time and to the satisfaction of their buyers. (Eliant’s awards are based on surveys of 60,000 new-home buyers who provide statistically significant ratings of 146 builders nationwide along key measures such as construction quality and willingness to refer.)
At Scottsdale, Ariz.-based Rosewood, winning in the single division category has been a goal set by its founder and president, David Kitnick, since his company opened its first neighborhood in 2007.
Tim Kane, president of MBK Homes—which placed first in its builder class in four of Eliant’s five measurements—says that customer satisfaction begins with keeping promises, which means delivering houses on time. “If you don’t do that, you can never win [customers] back.” MBK has developed a system to hit a promised date, which it sets firmly 75 days before close of escrow. And it never closes on a Friday because, explains Kane, a delay would “mess up” a buyer’s plans to move in that weekend.
Over the years, MBK has found that construction standards are generally less stringent than the standards to which buyers hold builders. So a few years ago MBK plucked one of its female employees in its accounting department to become its field inspector and to serve as its buyers’ advocates for quality. Subs griped initially, but they eventually bought into the program, which Kane says has fortified the bond of trust between MBK and its customers.
That bond is further strengthened by having its superintendents meet with buyers three days after the sale and encouraging multiple walkthroughs while their homes are being built. In addition, MBK won’t pay its subs at one stage of construction until the trade that follows signs off on their work. MBK also exerts its own form of peer pressure when it sprays orange paint on subpar work, and green paint on work that meets its criteria. “The subs want to avoid that embarrassment,” says Kane.
The supers are members of customer service teams that MBK has formed to provide what Kane calls “gracious hospitality” during the buying process. These teams are evaluated jointly, but the builder does not award financial compensation based on service scores, which Kane thinks are too easy to “game.” “Our motto is ‘manage the store, not the score.’ ”
Kane concedes that sustaining momentum of customer satisfaction is easier said than done because “once you’ve got that stone rolling, you have a tendency to relax.” That being said, Eliant’s surveys have rated MBK highest among large builders nine out of the past 12 months.
Rosewood, which generated $8.4 million in revenue from 16 closings in 2009, is the first Arizona-based builder to receive Eliant’s top award. The 49-year-old Kitnick, who during his career has helped Ryland Homes, Greystone Homes, and Ashton Woods Homes start divisions in Arizona, attributes Rosewood’s high level of customer recognition to its Signature Construction Program, which emphasizes such quality practices as screwing all drywall and wood subfloors and installing post-tension foundations.
Rosewood isn’t shy about letting buyers know about those practices, either. “We’ve put together a fact sheet that says a lot about us,” says Kitnick, who adds that his company currently controls its production by building only three or four homes at a time in any community.
Still, prospects often have nagging worries about choosing a builder: several builders and contractors in Arizona have either gone out of business or are financially precarious. To assuage buyers’ concerns about its solvency, Rosewood keeps their earnest money in a mutual escrow account. “We’re telling our buyers, essentially, that we don’t need their money to complete their house,” says Kitnick. The builder has also worked out a way to get buyers to ante up bigger deposits by paying them interest on that money in escrow, and then reducing the price of the house by the amount of the interest. (Kitnick says this program is allowed under RESPA consumer protection rules.)
Eliant’s award will soon appear on Rosewood’s marketing materials and on its Website. Kitnick views the award as one more sales tool which could help his company hit its target of closing 30 homes this year, and 250 annually eventually. But he doesn’t think he’ll need to make big changes to maintain Rosewood’s customer satisfaction levels until it starts building 500 or more homes. “When I was at Greystone, we were building 600 homes a year. The biggest challenge when you grow is finding competent division presidents,” he says.
John Caulfield is senior editor for BUILDER magazine.
Learn more about markets featured in this article: Phoenix, AZ.