Two and a half years ago, we at Trend Homes of Arizona rolled out a red carpet program for our buyers when they move in to their new Trend home. Named "The Red Carpet Program," we added 10 days after the completion of the home to allow senior management to inspect each and every home. We initiated the program to ensure 100 percent customer satisfaction. I believe my personal attention to the completion of each and every home we build has gone a long way in deflecting negative buyer perceptions about poor quality and, therefore, deflects litigation and lawsuits. Prior to the program, I was getting calls from customers saying, "My home wasn't complete when I moved in. Why didn't you finish it?" I've personally had to call and respond to these complaints and that is both embarrassing and frustrating for me as a builder. What do you say to those types of questions? I'm sorry? The customer's complaints should have been done before the customer had a chance to make the complaint.
That's where the Red Carpet Program comes in. The first step of the program is the home completion date. The superintendent is required to fill out a certificate of completion and fax it to the main office. By filling out the certificate and signing at the bottom, the supers certify that the home is 100 percent complete and that they would move in with their own families (if that was an option). The supers have to fax the certificate by close of business in order to qualify for their bonus on that house. A pretty good part of our supers' bonuses are based on getting that certificate of completion in on the day the home is complete. This motivates the supers to stay on schedule and not fax in the certificate three, four, even five days after the home is complete, which would blow our entire schedule.
The very next day, the salesperson walks the homes within the community that have met the completion date. A nice subdivision for us only closes eight to 10 homes a month, so our salespeople only walk one or two houses a week. All they are expected to do is just give the house a quick once-over -- does the house look, smell, and feel good? All we want is another set of eyes on the completed homes. This gives the salesperson the power to call the customer and say "I just walked through your home and it looks good. I'm really excited for you," versus the salesperson never coming out from behind the desk. It gets them involved, which we know the customers like.
Every Friday, myself, our two sales managers, and our vice president of construction divide the communities and walk all the houses that have met the completion date. We're just doing a quick, 5-minute walk-through, but it's important. If I pull up to a house and the landscaping isn't done, I won't even get out of the car. The superintendent, by this point, should have already certified that the house is done, which includes landscaping. It includes everything. Our goal is to have the home ready for move-in on the home completion date.
The next stage is the home demonstration with the customer. The superintendent goes through a checklist and demonstrates most or all features of the home. If the customer notices something, we provide an exceptions list where the customer can note the items that need to be fixed. Usually, customers notice small things such as a texture they don't like on a sheetrock wall or other cosmetic items.
The home presentation usually occurs two or three days after the home demonstration. We use those days to fix any items the customer has marked on the exceptions list. If the customer is satisfied, he or she signs the exceptions list. Usually within two days of the home presentation the customer closes escrow, gets the keys, and moves in (we call this Red Carpet Day).
A key component to this program is that we are absolutely committed to not letting the customer move in before the Red Carpet Day. To help us achieve this, we send out a letter 45 days before the Red Carpet Day to let customers know when their house will be ready. We feel that by sticking to the program we can provide a better home building and buying experience.
The results at Trend Homes have been amazing. Our customer satisfaction scores have really improved. Within about six months after starting the program, the numbers had dramatically improved and we hit our target level. We were getting noticeably higher marks on cleanliness, completeness, and quality of workmanship, all areas that were suffering. Before this program, we were literally completing the house the night before the close of escrow. This was causing us and our customers a lot of stress. This 10-day Red Carpet period has reduced buyer stress and changed the perception our buyers have of the home they're purchasing and of our company as a whole. I believe our customer referrals have also gone up.
I know that adding days to the entire process does cost money, but we feel that it is money well spent. We're hoping we've earned the trust and confidence of the customers so they'll call us if something goes wrong and not an attorney.
I feel that tying the superintendents' bonuses to the home completion date was important, but the key to the program, and this is the message for other builders, is management walking every completed home. I guarantee you that if we (the management) stopped doing the walks, then the program would stop being effective. The supers look forward to us coming out. They want to show us their handiwork and, in return, we're showing them that the quality of the home is important. I like knowing that if a customer calls me, it's safe to say I've already walked through his or her home. I know our bankers like that. They think it's really great that top management is personally invested in the homes the company builds.