The Wells Fargo/NAHB Builder Confidence survey, for February, reported a historic drop in Builder Confidence.
The Road to Referrals
Superior customer service is the number one way remodelers can (and should) differentiate themselves from inferior competition. In the ongoing battle for customers' trust and — ultimately — referrals, remodelers must distinguish themselves in everything from quality of materials and workmanship to the professionalism of sales personnel and work crews.
Superior customer service is the number one way remodelers can (and should) differentiate themselves from inferior competition. In the ongoing battle for customers' trust and — ultimately — referrals, remodelers must distinguish themselves in everything from quality of materials and workmanship to the professionalism of sales personnel and work crews. Time after time it's been proven: When customer satisfaction is the primary focus, new business readily follows.
The results of the 2004 NRS Homeowner Satisfaction Survey, the third such study conducted in as many years, indicate that remodelers as a group are becoming savvier about customer satisfaction. That's good news for the industry, but it also means more challenges. With the customer service bar raised, you'll need to work even harder to "wow" customers with service that exceeds their increasingly high expectations.
Data from the 2004 customer satisfaction survey reveals almost 92 percent of homeowners surveyed said they would recommend their remodeler, and 13 percent have already made 10 or more referrals.
For both Consolidated Construction of St. Louis, winner of the 2004 NRS Diamond Award, and Boardwalk Builders of Rehoboth Beach, Del., winner of the 2004 NRS Excellence Award, an impressive 100 percent of their customers are willing to recommend them to a friend. The awards were determined after surveying the work of 11 remodelers on more than 350 jobs.
These two companies scored highest with customers in a number of areas, including: number of walk-through items identified (in other words, the length of the punchlist), adherence to production schedule, time taken to correct walk-through items, cleanliness of worksite, and price in relation to value. Their production crews also were recognized with high marks for communication of progress.
Some areas really set the winners apart from the other remodelers. For example, in the category of "number of walk-through items identified," the average score of the two winning companies was 20.6 points above the national average of 76.1. Similarly, in their ability to adhere to a production schedule, winners received high marks — 12.4 points above the national average of 86.3.
Other areas showing a significant spread between winners and non-winners include: current satisfaction level (12.9), time taken to correct walk-through items (11.3) and communication of progress during production (11.1). Remodelers need to look at these five areas to determine if there's anything else they could be doing to improve customer satisfaction.
There are some areas, however, where the top performers don't differ too much from the rest of the pack. The four areas where there is less than a 5-point spread between the winners and non-winners include: courtesy (3.1), design of project (3.8), knowledge of remodeling (4.5), and professional appearance (5). This doesn't mean that remodelers can afford to become lax in these areas; it simply means that they should probably invest more heavily in the areas where they are falling drastically behind the market leaders.
When looking at areas where remodelers consistently score the highest, only two categories made it in the top five all three years: courtesy during the sales process, and knowledge of remodeling during the sales process. Categories making it into the top five two out of the three years include professional appearance of the production crew and design of project.
Meanwhile, the areas where remodelers consistently perform poorly include: number of walk-through items identified, adherence to production schedule, and price in relation to value of the project. Remodelers scored low in these areas for three consecutive years. Time taken to correct walk-through items appears twice: This is not surprising because it relates to the low score for number of walk-through items identified.
Every remodeling company can improve its customer satisfaction by focusing on those areas of selling, fulfillment and follow-through that are most important to homeowners. If they do, referrals will emerge. And isn't that what's really important?
|Willingness to recommend||92.1||91.3|
|Scores based on jobs from the prior year.
|Willingness to recommend||100.0||90.7||9.3|
|Number of walk-through items identified||96.7||73.2||23.5|
|Adherence to production schedule||98.7||84.0||14.7|
|Current satisfaction level||100.0||87.1||12.9|
|Time taken to correct walk-through items||97.3||86.0||11.3|
|Communication of progress||100.0||88.9||11.1|
|Courtesy during sales process||97.4||94.9||98.5|
|Professional appearance: production crew||95.7||93.4||—|
|Knowledge of remodeling during sales process||95.6||93.9||98.5|
|Design of the project||95.0||—||98.0|
|Availability and courtesy of production crew||—||93.3||—|
|Quality of materials||—||92.6||97.5|
|Availability during sales process||—||—||97.3|
|Number of walk-through items identified||76.1||75.8||81.3|
|Adherence to production schedule||86.3||87.1||91.9|
|Time taken to correct walk-through items||87.3||87.5||—|
|Price/value of project||88.6||87.4||91.8|
|Communication of production progress||90.5||—||—|
|Adherence to budget||—||90.0||—|
|Cleanliness of worksite||—||—||93.0|
|Communication of price changes caused by change orders||—||—||93.2|
|Scores based on jobs from the prior year.
|Paul A. Cardis is president/CEO of NRS Corporation, a leading research and consulting firm serving the construction industry.|