- HousingZone.com

Setting a New Customer Standard

Winners of the NRS Award show how your company can create customer delight.

By Paul Cardis

Creating a first class customer experience dominates discussion in every industry. No longer can leaders be con-tent just satisfying customers; the bar has been raised and for builders this means managing the customer relation-ship rather than just focusing on customer service.

In year two of the NRS customer satisfaction competition, some of the winners will be familiar, yet even for these two-time top scorers, improvement is a way of life. Here the data and the winners tell a story on how every builder can create a world-class experience for their home buyers.

Production Builders Overall quality of workmanship is the dominant factor in customer satisfaction. In fact, the five main items that suggest a new homeowner will recommend his/her production builder to family or friends are:Overall quality of workmanship;

Home was built to expectations at the walk-through;
Overall quality of materials;
Warranty service provided the highest quality of repairs and services; and
Project superintendent was responsive to concerns.

Quality and service are key to customer satisfaction; two of the five items correlate to service, with warranty ser-vice ranking high. Additionally, 76 percent of homeowners said they would recommend their builder and 85 percent actually did make at least one positive recommendation. More than 10 percent (11.7) made 10 or more referrals.

Following is a look at the key factors influencing customer satisfaction among the four production builder classi-fications.

500+ closings: Like the overall customer satisfaction factors, the production builders with 500 or more closings last year had high customer satisfaction ratings with:

Overall quality of workmanship;
Home was built to expectations at the walk-through;
Overall quality of materials;
Warranty service provided the highest quality of repairs and services; and
Warranty service began work in a timely manner.

The top production builders in this category are seeing increasing effect on customer satisfaction from warranty service. Like the overall counts, 73 percent of homeowners said they would recommend their builder and 88 percent did make at least one positive recommendation. Thirteen percent made 10 or more referrals.

100-499 closings: The production builders with 100-499 closings are the largest group in the study, therefore they mimic the overall items used to correlate between customer satisfaction and recommend levels:

Overall quality of workmanship;
Home was built to expectations;
Overall quality of materials;
Warranty service quality repairs and services; and
Project superintendent was responsive to concerns.

Continuing the trend of the overall production builders, this category ranked 77 percent of homeowners who said they would recommend their builder and 82 percent who made at least one positive recommendation. Ten percent made 10 or more positive referrals.

50-99 closings: Overall quality of workmanship continues to be the main reason a homeowner will recommend a production builder to friends and family. Other items for this category include:

Overall quality of workmanship;
Sales staff made buying process pleasant;
Sales staff kept homeowner informed of progress;
Overall quality of materials; and
Sales staff was knowledgeable of building process.

Sales come in very strong with these companies because the sales person tends to be the lead contact with cus-tomers in smaller organizations. The sales staff maintain the customer relations and are key in setting expectations, which is an NRS strategy for improving customer satisfaction scores.

Among this group, 82 percent of homeowners said they would recommend their builder and 81 percent made at least one positive recommendation. Sixteen percent made 10 or more referrals.

Small volume closings

In smaller organizations, builders have a lot of direct contact with the customer and a much stronger influ-ence on the relationship. Because of this, the five main factors in homeowner satisfaction rely heavily on the project superintendent:

Project superintendent provided quality workmanship;
Home was built to expectations at walk-through;
Warranty service provided immediate contact to schedule;
Project superintendent explained construction process; and
Project superintendent was responsive to concerns.

The small volume closings category ranked the highest in recommend rates ? 87 percent of homeowners said they would recommend their builder and 80 percent made at least one positive recommendation. Fourteen percent made 10 or more referrals.

How the Competition Sets Itself Apart

Cedar Knoll has a 100 percent homeowner recommend rating and 92 percent had already recommended to their friends and/or family. Customers are very happy with their warranty service and the top five items used to correlate between customer satisfaction and recommend levels are:

Size and shape of home site/lot;
Lighting fixtures;
Overall quality of workmanship;
Options selection location was convenient; and
Convenient hours to schedule options selections appointment.

Pulte Homes Phoenix has a 96 percent homeowner recommend level. In fact, the organization has high home-owner satisfaction levels in warranty service, service satisfaction, and exterior home features. The top five items used to correlate between customer satisfaction and recommend levels for Pulte Homes Phoenix are:

Finished in a timely manner;
Quality repairs and services;
Began work in a timely manner;
Knowledgeable about repairs; and
Overall kitchen.

Trustway Homes’ homeowners <\m> all of them <\m> say they will recommend their builder to friends and/or family and 88 percent already have. They rank high in service satisfaction, exterior home features, and warranty ser-vice. The top five items used to correlate their customer satisfaction and recommend levels are:

Warranty service adequately cleaned after work;
Project superintendent overall quality of workmanship;
Overall kitchen;
Builder’s representative was pleasant at the walk-through; and
Lighting fixtures.

Shamrock Builders have homeowners who will recommend them to friends and family ? 100 percent of them! The number one distinction for the company was warranty service. The top five items used to correlate between cus-tomer satisfaction and recommend levels for Shamrock are:

Option selection process was convenient;

Reasonable price for upgrades;

Option selection location was convenient;

Convenient hours to schedule option selection; and

Grading/drainage of lot.

Pulte Homes – Tucson have very happy customers; 94 percent of them say they will recommend their builder and 71 percent already have. They rank high in exterior home features and project superintendent. The top five items used to correlate their customer satisfaction and recommend levels are:

Overall quality of workmanship;
Home was built to expectations;
Quality repairs and services;
Interior trim carpentry; and
Project superintendent was responsive to concerns.

Greth Homes is product and warranty service-oriented and it shows! Ninety-seven percent of homeowners say they will recommend Greth Homes to friends and/or family and 79 percent already have. The top five items used to correlate between customer satisfaction and recommend levels for Greth Homes are:

Warranty service finished in a timely manner;
Warranty service provided in quality repairs and services;
Project superintendent provided quality workmanship;
Warranty professional in appearance; and
Began work in a timely manner.

Brighton Corporation have a 92 percent homeowner recommend level. The organization ranks high in home-owner satisfaction in warranty service, interior home features, and production. The top five items used to correlate between customer satisfaction and recommend levels for Brighton Corporation are:

Project superintendent was responsive to concerns;
Size and shape of home site/lot;
Builder’s representative was pleasant through the walk-through;
Project superintendent was knowledgeable and courteous; and
Overall location of home.

Estes Builders ranks high in warranty service; 100 percent of their homeowners say they will recommend to their friends and/or family and 83 percent already have. The top five items used to correlate their customer satisfaction and recommend levels are:

Landscaping/plantings;
Bathroom faucets;
Exterior trim;
Siding; and
Grading/drainage.

CEDAR KNOLL: ANTICIPATING BUYER BEHAVIORS

Exceeding customer expectations is the key to high satisfaction scores. That's why personal relationships with buyers are just as important as quality control. Southeastern Pennsylvania builder Rob Wishneski of Cedar Knoll Build-ers anticipates the points in the home buying process where customers most likely will be uptight and then intercepts anxiety before it has a chance to undermine relationships.

"The big wow factor here is that customers are always surprised by how smooth the process runs," NRS president Paul Cardis says. "There are no jolts, no worries, and that's because Cedar Knoll systematically eliminates unpleasant surprises."

Cedar Knoll is a move-up builder drawing buyers to Chester County, Pa., from Philadelphia, Wilmington, Del., and even Baltimore. It's owned by developer Brian Campbell, but Wishneski has run the company for 17 years as general manager. He believes in nipping the seeds of concern about quality and service before they sprout. "We run into a lot of people with chips on their shoulders from previous experiences," he says. "We tell them, 'Let us entertain you while we build this home!'"

Budget Beyond Warranty

Cedar Knoll scores high on warranty service questions. Part of the reason has to be that Cedar Knoll sells the ser-vice side so strongly in the sales office and all through construction. "We budget an extra $2,000 into every house, so we never have to worry that we don't have the money to go back and fix it, even after the warranty expires," Wishneski says.

Like with virtually all builders in this market, Cedar Knoll's independent sales agents are Realtors, but in this case they have an extra bond because they come from a brokerage owned by Campbell. As soon as buyers go to contract, Wishneski and the purchasing team led by Craig Martin become key contacts. "For three weeks we work closely with each buyer, through pricing to blueprints," Wishneski says. "Then I do a handoff to the super, who still works closely with the sales agent.

"We've standardized our processes to a high degree for such a small firm. For instance, when we hire a new su-per, he works as an assistant, under one of our longtime supers, until he knows our system inside out. One of our current supers worked for seven years as an assistant."

To smooth the option, upgrade and selections process, Cedar Knoll now has a 3,000-square-foot design center at its headquarters, where buyers meet with an interior designer working under design center manager Sim Whitehill.

Hooked on Service

The further buyers get into the process, the better they feel about their decision. "We really hook 'em with service after the sale," Wishneski says. One aspect shows the foresight that makes Cedar Knoll a winner. "At closing, we set up a 30-day walkthrough visit to the home. If an emergency arises, we take care of that immediately, but if not, we ask them to write down their concerns and wait for the 30-day.

"When we get there, we take care of all the easy stuff with tools on our customer service truck. For the things that require a visit from one of our trades, we make the call to set that up right on the spot so the visit fits the cus-tomer's schedule, not the trade's," Wishneski says.

"That's a huge wow factor," Cardis says. "Doing that on the spot takes all the worry out of it for the homeowner. There's no question that the work is going to be covered. There's no anxiety about issues related to access to the home.

"And Cedar Knoll's willingness to budget for and perform work beyond the warranty period shows they know how important long-term customer relationships are. They'll say 'no' on the front end (during the selection process) to set expectations and avoid building a house that may have maintenance issues later on, but then they overdeliver on the back to cement positive relationships."

2005 CUSTOMER SATISFACTION LEADERS

Homeowner satisfaction varies, depending on the size of organization, warranty service, sales staff, project super-intendent, and quality. The NRS Diamond Award in Homeowner Satisfaction winners scored the highest among their homeowners than any other production builder, no matter what their size. To reach that status, carefully study the differences between the major indicators of what will affect recommend levels listed above and what your customers are telling you. Doing so will help you reach and maintain a reputation for excellence.

The 2004 NRS Award in Homeowner Satisfaction winners are:

Methodology

To determine the awards, NRS surveyed 63,651 homeowners, who had closed on a new home in 2003, about their satisfaction with their home builder and the homebuilding process. They were surveyed about their satisfaction in key areas:

Production and custom builders were compared separately because of the unique challenges each type of builder faces and because each generally serves different market segments. Production builders typically deal with higher volumes, while custom builders typically deal with greater demands from home buyers, larger square footage, and higher price.

TOTAL RECOMMEND LEVELS BY CATEGORY

All Production Builders

76 percent Homeowners would recommend
85 percent Homeowners made at least one positive recommendation
41 percent Made one to three referrals
24 percent Made four to six referrals
7 percent Made seven to nine referrals
12 percent Made 10 or more referrals

500+ Closings

73 percent Homeowners would recommend
88 percent Homeowners made at least one positive recommendation
42 percent Made one to three referrals
25 percent Made four to six referrals
7 percent Made seven to nine referrals
13 percent Made 10 or more referrals

100-499 Closings

77 percent Homeowners would recommend
82 percent Homeowners made at least one positive recommendation
41 percent Made one to three referrals
24 percent Made four to six referrals
7 percent Made seven to nine referrals
10 percent Made 10 or more referrals

50-99 Closings

82 percent Homeowners would recommend
81 percent Homeowners made at least one positive recommendation
37 percent Made one to three referrals
25 percent Made four to six referrals
3 percent Made seven to nine referrals
16 percent Made 10 or more

Small Volume Closings

87 percent Homeowners would recommend
80 percent Homeowners made at least one positive recommendation
36 percent Made one t
o three referrals
24 percent Made four to six referrals
6 percent Made seven to nine referrals
14 percent Made 10 or more referrals

Custom Builder Class

95 percent Homeowners would recommend
85 percent Homeowners made at least one positive recommendation
42 percent Made one to three referrals
15 percent Made four to six referrals
10 percent Made seven to nine referrals
17 percent Made 10 or more referrals

DO CONSUMERS CARE?

In a separate study, NRS surveyed homeowners to gauge their awareness of customer satisfaction awards and whether or not they are used in the determination of their homebuilder. What they found was that a combined total of 72 percent stated customer satisfaction ratings are important to their buying decision.

Survey Topic	Frequency of Statement	Percentage of Responses
Very Important	241	21%
Moderately Important	30	30%
Slightly Important	21	21%
Slightly Unimportant	8	8%
Moderately Unimportant	4	4%
Very Unimportant	17	17%
Not Answered	2

Your access to premium content.
USER NAME:
PASSWORD:

• Register • Info • Help

HousingZone.com

Reed Business Information

Professional Builder

Professional Remodeler

Custom Builder

Giants

Search Powered By

Please visit these other Reed Business sites