By Bob Mirman. Learning how to anticipate and shape home buyers' expectations before they solidify can often mean the difference between a customer who is simply satisfied versus one likely to make a referral.
What do buyers expect when they buy a home? How do these expectations affect the "satisfaction" equation? Our research of new home buyers suggests buyers hold two types of expectations:
"Universal Expectations." These are expectations that almost all buyers share about their new home. They are based on the buyer's level of experience living in a home, as well as normally accepted performance standards. Examples: Buyers reasonably expect the roof will not leak; the toilets will flush; the lights will work; and the dishwasher will work.
"Learned Expectations." These are expectations imparted on the buyer by the builder's advertising/sales personnel, customer care representatives, and other staff: "We have the best quality of any builder in the area." "We will return your phone calls within 24-hours." "Our goal is a final walk-through with no problems identified." "We will have all your punch-list items completed within 10-days after move-in."
Beyond those, our research has helped crystallize what I call "Mirman's 10 Laws of Home Buyer Expectations" that every builder should keep in mind:
1. The stronger the expectation (particularly "universal expectations"), the stronger the dissatisfaction when the expectation is not met. Example: Buyers absolutely expect their electrical system to work perfectly. A failure in any part of this system will create enormous dissatisfaction. I call these "showstoppers" -- a problem in any of these areas will overcome all the positive "satisfiers" that the builder has achieved. Moreover, these types of serious problems create credibility questions: "If they can't even get the electrical system right, what else is wrong that I have yet to find?"
2. The more the expectation directly relates to the buyer's comfort (e.g. HVAC or plumbing operation), the stronger the dissatisfaction when the expectation is not met.
3. The stronger and more universal the expectation, the less impact this issue has on the buyer's satisfaction when the builder's performance meets expectations. Example: A buyer absolutely expects a roof that does not leak, so if his roof does not leak, he will not be more likely to refer a friend to his builder. In other words, a builder earns no points when these things are done correctly, but will get slammed if he fails on a "showstopper" expectation.
4. Most home buyer dissatisfaction issues are the result of the builder's failure to live up to the very expectations that he has established for the buyer (e.g. "learned expectations" often create unfulfilled promises).
5. The gap between the buyer's expectations and the builder's actual performance is what determines the likelihood -- and quality -- of a referral. The builder can adjust this gap by either improving his performance or lowering the buyer's expectations ... or both.
6. Developing a program to improve home buyer satisfaction cannot succeed unless the builder takes steps to manage the home buyer's expectations by:
- Controlling the accuracy of promises which are made, even those that are made inadvertently;
- Ensuring those promises are reliably completed; and,
- Once the contract is signed, making every effort to honestly "lower" the buyer's expectations. (This is not conscious deceit -- it is conscious realism. It is the difference between promising a perfect house on final walk-through versus reminding the buyer that there is no such thing as a perfect house.)
7. If the builder does not set standards or timelines for performance (e.g. "We will respond to your service requests within three working days"), the buyer will establish his own standards; and those standards will almost always be more stringent than the builder would have set. 8. There are no universal standards for promises made to buyers with regards to timelines for performance. Consequently, there is nothing inherently better about a promise to respond to a phoned service request in one day versus two days. The issue is not what a builder promises, but what he does. The promise simply sets the expectation while the behavior forms the perception of excellence.
9. Only promise a level of performance which you know you can beat 95 percent of the time. A builder is always better off promising to respond to all service requests within four days and beating that target 95 percent of the time, than by promising to respond within two days while only meeting this promise 50 percent of the time.
10. A builder does not improve his reputation by raising expectations through a promise of performance excellence or speedy service. His reputation is earned by the degree to which he meets his commitments to provide performance excellence and speedy service.
The articles in this special report were written by Bob Mirman, CEO of Eliant, and Wyatt Kash, editor of Big Builder magazine. Eliant (formerly National Survey Systems) provides customer satisfaction data and solutions to more than 150 of the nation's top home builders including D.R. Horton, John Laing Homes, Lennar Family of Builders, Shea Homes, and Standard Pacific Homes. The firm is considered the largest consumer research company in the country that caters exclusively to the building industry, conducting more than 200,000 home buyer surveys annually. Eliant is recognized for its use of sophisticated, high-tech consumer tracking tools and information management systems to provide builders with timely, actionable information and strategies to increase home buyer satisfaction and building industry rankings.
Headquartered in Irvine, Calif., Eliant was founded in 1984 by Bob Mirman. Mirman is a clinically-trained psychologist who translated the consumer perception tools he had developed while working at General Mills into a series of surveys designed to capture detailed information on the entire home buying experience, including satisfaction up to two years after move in. Builders use Eliant's tracking information to monitor, reward, and modify practices that directly impact home buyer loyalty.
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