Want to see the future of residential marketing in Southern California? All you need to do is take a look back at the history of the U.S. automotive industry.

The relationship between auto manufacturers and consumers has come a long way since the time when Henry Ford promised his buyers any color car they want – as long as it was black. For decades following those simple early days, U.S. manufacturers designed cars for every lifestyle. By 1962 General Motors had won 52% of the American Market.

Then American automakers began to take the buying public for granted, concentrating more on cutting production costs than on boosting quality. With an overemphasis on short-term results, manufacturers lost sight of the customer. Poor product quality, combined with a take-it-or-leave-it service policy created a huge window of opportunity through which the Japanese promptly drove their Datsuns and Toyotas.

Compared to the 1950’s, when autos were easily distinguished by the size of their tail fins, today’s cars offer little visual distinctiveness. As a result, savvy auto marketers now boast about their customer-satisfaction ranking. This ‘blind’ brand loyalty that used to exist as a result of image marketing has given way to customer loyalties based less on style than on the substantive issues of product quality and service.

This historical review may sound all too familiar to many of you. Regardless of your belief in the distinctiveness of your product, our research shows that homebuyers perceive little difference in builders’ product. This presents the aggressive builder with an opportunity to develop a ‘point of difference’ with competing companies based as much on customer satisfaction as on price or design.

Even in the first few months of this “Decade of the Customer’ we’re beginning to see a shift in the marketing of new homes. There is a trend toward a policy already mastered by the automotive firms: buyer-satisfaction ratings of quality and customer service featured prominently in all advertising.

New-home shoppers of the ‘90’s, conditioned by the similar strategic advertising for other consumer products, will come to consider customer-satisfaction ratings as a normal part of their home buying decision process. As a result, the builder’s reputation will play an increasingly important role in the buying decision.

Word of Mouth

Surveys have revealed that home shoppers, as a rule, rely heavily on information provided by family members, friends, and associates. Simply put, the strongest sales force in the marketplace is a group of satisfied buyers. Consequently, builders with strong positive reputations possess a tremendous competitive edge.

Tony Callister, nationally recognized customer-service guru and president of Newport Beach-based RESOURCE, preaches that word-of-mouth advertising is the cheapest, most effective way to enhance the perceived value of a new home. Callister reminds builders that, in addition to satisfying the buyer’s product-oriented needs, they need to focus on their own relationship with the buyer.

Callister firmly believes that buyer satisfaction is based primarily on the buyer’s perception of the process used to sell, deliver and service the new home. The issue that has the strongest impact on a buyer’s willingness to recommend the builder to a friend is not amenities, not smooth operation of features, like plumbing and air conditioning, not even product quality. No, the issue with the greatest impact on buyer satisfaction is the customer service process.

What part of customer service is most important to buyers? Pleasant personnel? Knowledgeable staff? Short walkthrough list? These are all important, of course. But one of the most important elements is the builder’s timely response to repair requests.

Data from our homebuyer surveys repeatedly demonstrate that buyers who were dissatisfied with every part of the purchase process – including walkthroughs – can be salvaged and turned into loyal customers by a builder who responds promptly to their requests for repairs. On the other hand, strong satisfaction ratings for every pre-move in issue can be negated by the builder’s slow, uncommunicative response to repair requests.

Again, the strongest sales force in the marketplace is a group of satisfied customers. Builders in the market for the long pull must develop this critical group of satisfied customers. Builders in the market for the long pull must develop this critical group of satisfied customers by responding to all buyer needs.

Builders can set themselves apart from the competition by performing especially well in those areas that have the greatest impact on customer satisfaction – including rapid response to repair requests. Those who follow this route to enhanced customer satisfaction will find their efforts to be an excellent business-boosting investment.

Copyright 2008, Eliant Inc.

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