The Customer Delight Honor Roll

In the December "Lesson's Learned" column, I described how my staff analyzed the results of the J.D. Power and Associates 2005 New-Home Builder Customer Satisfaction Study.

Last month I talked about the negative side and wondered how some of the big regional and national builders could score so consistently low in so many cities, for so long.

Just this week however, I received word that one of the worst offenders was mounting a very serious and very expensive campaign to remedy their low status with customers. Of course, there is a wrong way to approach this — throwing money at the back end — and a right way to do it — reengineering a company's processes from start to finish.

You can't do that without extraordinary management commitment. Does this firm have that? Time will tell, but the important message is that J.D. Power has finally gotten to even the lowest performers. This "customer satisfaction thing" is not going away.

Focusing on the positive, we wanted to learn just who is the best on a national basis among firms doing business in more than three cities. It is important first to note that there are many local builders who compete head-to-head with the best of the regionals and nationals.

Some of these locals that I know well are Robertson Brothers in Detroit, Lakewood Homes in Chicago and Tripp/Trademark Homes in Tampa who, by the way, finished at the top of J.D. Power in only their 4^th year in existence. I recognize these local builders to establish clearly that customer delight is in no way the exclusive domain of the Giants. Arguably, it is more difficult to achieve the highest levels across a broad range of markets, but I can tell you from personal observation that key success drivers are the same for builders of all sizes in all locations.

A national calculation is tricky due to complicating factors, such as builders with multiple divisions in one market and wide variations in norms among the 30 J.D. Power markets. You can't simply total the scores, divide then compare averages. You need a method to assign values to the rankings that makes sense based on reasonable assumptions of how customers will respond when they see the J.D. Power results.

We tried five different scoring schemes, all logical and sensible, and no matter how many ways we ran the data, the same five builders always emerged at the top.

The rankings within the top five changed a bit with different approaches, so we decided to present the results alphabetically, but the top five were always the same. What's more, in each approach there was a clear and undeniable statistical break between #5 and #6. In other words, these were the top performers by a substantial margin. This was not a close call.

For two reasons, special mention should be made of the Pulte/Del Webb/DiVosta family. First, they once again finished #1 in more cities (16) than any other builder. Centex was #2 by this measure, with 11 first place finishes, a huge leap from last year. Second, Pulte has earned the most Top three J.D. Power Awards of any builder for six consecutive years. That is an exceptional achievement that may never happen again.

Pulte has, indeed, been ahead of most of home building in the customer satisfaction department for years and dramatically so. But it is no surprise to Pulte that others have closed the gap.

This is a very open industry with a great deal of movement of people and at the end of the day, there are no secrets.

Pulte executives and managers began openly discussing trying to change their once shaky reputation as far back as 1990. In those days, the message was not generally well received. (As a full disclaimer, you should know that I worked for Pulte from 1989 to 1997.)

Now, however, you would be hard-pressed to attend any industry conference without one or more representatives from our top five builders or one of the best locals on the program explaining, one more time, what it takes to achieve customer delight and why it's a profitable business strategy.

So what is it about these firms that is truly different? They have built a high-performance culture focused on customer satisfaction. I have written extensively (some might say ad nauseum) about the critical importance of organizational culture and how it drives everything that works — and doesn't work — in a company.

You can search back through old columns I have written on the HousingZone.com [2] archives and find many lists and descriptions of how the best firms approach construction, purchasing, design, customer service, sales or any other element of both strategy and daily operations. It is all driven by culture.

But have you wondered exactly what drives the culture? Who is it that mixes the cultural Kool-Aid and gets people to willingly drink it down?

I have had the good fortune to meet the leaders of all five of our honor roll companies and in several cases know them personally. Each is an exceptional leader, and customer commitment is not a new-found revelation for any. I was on a program with David Weekley in 1991 and he didn't just get it, he was already living it.

I spoke at a Centex company meeting years ago and Tim Eller began the meeting with a statement that set the entire audience back in their chairs. "We have concluded that the company who reaches the highest level of customer satisfaction is recession-proof."

Bert Selva at Shea and Larry Webb from John Laing Homes beat the customer drum every single day in their firms, both of which have won top industry awards while being singled out for exceptional customer satisfaction. And Richard Dugas was the one guy Bill Pulte thought could ensure that the tradition of quality in a company that was once lost and now restored, would never falter again.

If you have ever heard any of these 5 industry leaders or the many key executives who work with them speak, you know immediately they are for real and you understand exactly what drives the exceptional cultures in their firms.

Last month, I quoted Brian Joiner, who said, "Every system (or company) is perfectly designed to get the results it is getting."

Ultimately, the leadership of a company owns the system. It is in your hands. Even if you didn't originally design it, you are the one maintaining it. If you truly want to be like our five members of the honor roll or any of the top locals, you will have to redesign your system and lead your people in the new way.

That's what leadership is all about. Go mix up some Kool-Aid.

scott@truen.com [3]