Imagine it: a home buying process in which your entire organization teams up to communicate in a way that builds a deep, abiding trust, and provides solutions at each phase that meet your customer needs on the money. Now that's enlightened customer care.
If two competing companies each deliver an extraordinary product, the one that also delivers an extraordinary customer experience will likely surpass the other on a number of levels. “Providing the exceptional experience on top of the superb product is a great differentiator,” says Martha Baumgarten, vice president for customer experience management at Irvine, Calif.-based consultancy Eliant.
For new home builders, this top-tier level of product quality—matched with extraordinary customer care—often equates to remarkable customer satisfaction ratings. It also, however, represents the level of experience that customers have learned to expect. Technology allows customers to personalize their choices for countless consumer products from new jeans to new cars. And when products and experiences—tailored expressly to their own, personal preferences—magically appear the moment they walk in the door or visit a Web site, is it any surprise that customers expect more from every marketer, at every level, in every industry?
“Customers will continue to have higher and higher expectations, which will bring increased pressure to provide improved value and efficiency,” says Mike Humphrey, vice president at David Weekley Homes in Houston.
So where do we go from here, when more and more customers enter our doors expecting to go from satisfied to delighted? “Although nothing can ever truly replace the significance of personal, face-to-face contact with a customer, technology will allow us to deliver the type of experience that each individual and family expects,” says Larry Webb, CEO of John Laing Homes, which is based in Newport Beach, Calif.
Rather than the one-size-fits-all approach, the path to the future is pointed toward individual buyers designing their own, personalized and ultimate buying and ownership experiences.
“Right now, we're in Phase I, where builders are the ones who are actively defining a singular extraordinary home buying experience for all their buyers,” says Bob Mirman, CEO of Eliant. “What will happen over the next couple of years in Phase II is that successful builders will begin custom-tailoring each experience to specific demographic segments. Where it will really get interesting is in Phase III, when tools like the technologies we are now developing will allow builders to provide home buyers a chance to design their very own experience by choosing from a list of experience options.”
“Five years from now, ‘Mr. and Mrs. Consumer' could be interacting with their TV/computer/telephone, and a message will pop up from a new home builder that a new home is being built that perfectly matches their profile and needs,” says Cheryl O'Connor, vice president of sales and marketing for Warmington Homes in Costa Mesa, Calif. “[This will be] followed by a virtual tour of a home that they themselves can customize on the spot. The builder knows their preferences, because the builder's technology maintains and queues their family and individual profiles.”
One day, each customer will be able to design the experience he wants to have during each phase, from sales and construction through move-in and homeownership. This will all be possible due to emerging technology that will allow builders to systematically link each home buyer's preferences to each phase of the home buying process.
“It's much more than simply surveying and listening to customers' feedback and desires,” says Edward Zinke, senior vice president at Eliant. “It's really about providing the ability to incorporate that feedback into a systematic methodology.” The effect? Each team member at the company will possess information on exactly when, and how, to easily deliver an individual experience for each customer.
“The competitive advantage will be earned by the builder who provides a personalized experience to such a degree that it fully delivers confidence, reassurance, and peace of mind for each customer,” says Scott Stowell, regional president of Irvine, Calif.-based Standard Pacific Homes.
IT'S NOW OR NEVER
Eliant is developing a future customer experience management system that includes a questionnaire at purchase time that offers home buyers a menu of experience offerings that will spell out the precise customer-care experience they prefer.
Customers will have an opportunity to make choices about such things as how often they prefer contact with a sales associate, the type of preferred contact regarding finance information, the frequency and mode of consultations with design associates, the number of on-site meetings and face-to-face sessions, and so on.
“In the next five years, the relationship of the customer and the builder will be more akin to a true partnership,” says Stephen Doyle, president of Brookfield Homes. “The customer experience will evolve into a relationship that takes on greater dimension and depth for both parties. Technology advances will increase productivity and allow for greater development of this relationship, transforming and profoundly enhancing the experience.”
OVER TIME WINS
Another key to strengthening the builder partnership with a customer is long-term care. Well past the closing experience and initial customer service, this level of long-term care pertains to the nurturing of a relationship for 10 to 15 years.
“In the future, customized experience takes a giant leap from just providing ‘extraordinary touch-points,' ” says Alex Roqueta, president of Eliant. “It takes the experience to the next level by offering home buyers a dedicated, personalized relationship for the long run, and the complete assurance that their builder is committed to providing an extraordinary level of customer care for many years.”
Having the foresight to maintain a healthy relationship with customers in the future, leading builders are partnering with their homeowners on such items as extended warranties, remodeling, re-painting, and even furnishing and re-furnishing their homes. The long-term results? Trust, the forging of friendships, lifetime loyalty, repeat sales, and ongoing referrals.
What's the average number of referrals a builder can generate in a six- to 10-year period? It's something to think about, considering that Eliant data indicates that as many as 20 percent—one in five—homeowner referrals ends in a sale. “The day of move-in isn't the end. It's simply the end of the beginning,” says Roqueta.
Builders often lose touch during the critical first 12 months after close and may be missing a golden opportunity. “The pattern for developing the next generation of customer-care programs—specifically designed for new home builders—is very clear to us,” adds Roqueta. “Builders who focus on results of mid-year and end-of-year surveys and incorporate experience-management systems that will monitor and implement long-term solutions, serve as prototypes for builders of the future.”
Whenever the future actually arrives, one thing is clear today: Your customers expect something special from their home buying experience, and it's becoming evident that your company—or your competitor's company—will step up with technology to provide it, each and every time.
–Bob Mirman is CEO and Alex Roqueta is president of Eliant in Irvine, Calif. For further info, visit www.eliant.com.
NOTEWORTHY: WHERE TO START
By Edward Zinke
Companies that seek to become more customer-centric don't need to turn themselves inside out to accomplish it. Managing your customers' experiences does require a foundation of commitment, but beyond that, it's pretty much about developing an adaptive system and consistent process execution.
Dramatic improvements in customers' ratings of their experience do not require grandiose programs. For Irvine, Calif.-based MBK Homes, the genesis of its systematic customer experience management process was president Tim Kane's commonsense suggestion: “Let's have our senior managers randomly walk our homes a week prior to closing.” This activity served as a catalyst for change throughout the company, propelling it to a national No. 1 ranking on Eliant's move-in survey.
In the time the sacred scripture says it took God to create the universe, ABC-TV's Extreme Makeover: Home Edition promises to build a new home personalized to the homeowner's needs and dreams. Seven days later, it over-delivers on that promise.
Pretty lofty expectations to live up to. If ABC can do it in seven days, one legitimately may begin to wonder, “Why is my builder taking four months?” Call it Extreme envy. No one that we know of is trying to re-create the universe, but week in and week out, ABC's series is doing a serious number on public expectations. Albeit, the show does cast welcome light on the customer-friendly aspects of home building and compels us to think about the very human side of our industry. Still, how does this show reflect—or even stimulate—the soaring expectations of America's consumers?
Fortunately, companies that seek to become more customer-centric don't need to turn themselves inside out to accomplish it. Managing your customer's experience does require a foundation of commitment, but beyond that, it's pretty much about developing an adaptive system and consistent process execution.
Out of the Blocks
Home building as an industry is capital-intensive, out-sources much of its production, and has lengthy cycle times. These factors create a system that rewards speed and volume over almost all other considerations. Realignment to a more customer-centric approach requires a good “start” and a solid underlying system. Here are some essential building blocks of a customer experience foundation:
- Improvements are aligned with company objectives
- Active support by senior management
- Accountability via specific, measurable plans
- Process “conflicts” debated and resolved
- Involvement of trade partners, vendors, and associates
- Development of an ongoing improvement system
What Not to Do
Just as important as what to do is what not to do. If you know what to do to give customer experience management a chance to work in your organization, do you know what the surest ways to sabotage an otherwise valiant effort are? Here are some big no-nos:
Have a lack of genuine commitment. Management commitment is one of the keys. Commitment is defined as active participation in the improvement process. For example, insisting that purchasing consider a trade's warranty and customer satisfaction record—not just front-end bid price—when awarding a contract.
- Use quick fixes. There are no silver bullets. Improvement is a journey. Applying short-term “techniques” to raise a customer satisfaction score achieves only short-term gains.
- Think of change not as a one-time event. Your customer is constantly changing. To stay ahead of these changes, you need to establish a system that continuously circulates customer feedback. It is not uncommon to see satisfaction scores rise over a period of time and then suddenly level off—for no apparent reason. Upon inspection we often find three factors at work:
- The improvement effort was project-oriented, not a sustainable change in behaviors.
- As success was achieved, the team became overconfident and began over-promising.
- There was no ongoing improvement system.
- Nurture unrealistic internal expectations. We hear a lot about the need to properly manage our customers' expectations. Well, an about-face is no mean feat. We also must take a hard look at our own organizational expectations. How much improvement should we expect? How long will it take? What is the payoff?
- Don't put first things first. In the same way that a mint on the hotel pillow is quickly forgotten when the wake-up call is 30 minutes late, a celebratory ribbon-cutting at move-in loses its impact when the front door does not latch properly. Be sure that you are executing consistently on the basics before going to the next level. In his keynote address at Eliant's 2004 National Roundtable on Homebuyer Satisfaction, Jon Jaffee, CEO at Miami-based Lennar Family of Builders, acknowledged: “The primary goal that we must be responsible for is completing a quality home on time, for without that, we are fighting a losing battle.” Basics first.
Chat with builders who have been working this process for years and they will share results such as these:
- We are achieving higher levels of referrals.
- Our preferred lender capture rate has improved.
- Our buyers spend more money in our design center.
- Our overall warranty costs are lower.
- We are able to realize a greater market premium due to our enhanced brand.
In recent years, we have also seen the influence of customer satisfaction migrating “upstream” to mission-critical activities such as land acquisition and project approvals. Case in point: Builders' customer satisfaction rankings are increasingly being considered as part of land sellers' and master planners' criteria in evaluating land purchase candidates.
Companies seeking to improve their customers' experiences need not engage in “extreme” challenges such as re-inventing the wheel. By approaching your customers in a disciplined, systematic, commonsense manner, you can improve their experiences in a powerful way and with extraordinary results.
Learn more about markets featured in this article: Los Angeles, CA.