OK, so you’re probably thinking I threw that in
that title just to hook you into reading this
article.
Au contraire. In fact, as I pointed out in a
previous conference presentation (“Consumer
Sex in Model Homes: Pros & Cons,”), I don’t
need to resort to cheap, misleading, titillating
titles to get people to consider my point of
view.
But, as long as you are already here, I
would like to reiterate this somewhat
provocative notion: “Forget about satisfying
your customers.” And, before I take this any
further, keep in mind that this message is
coming to you from a guy whose entire livelihood
is based on the measurement of home buyers’
satisfaction, which is precisely why I am able
to state, with a high degree of certainty, that
spending time, energy, and money to create a
cadre of happy, satisfied customers is not
the most cost effective policy. In fact,
it’s about as cost effective as the Whitewater
hearings.
Here’s why: The pursuit of customer satisfaction
has only one legitimate overall goal:
Increased referrals. The problem:
‘Satisfied’ home buyers do not typically go out
of their way to refer a friend to your community.
Pro-active referrals come from VERY
satisfied buyers. Your strongest sales force is,
therefore, an army of very satisfied
homeowners.
Are Satisfied Homeowners Valuable?
So, you’ve conducted a survey and found that 85%
of your homeowners say they are “satisfied” with
their home’s quality or with your customer
service. Does this have any value? Sure.
Compared to unhappy homeowners, ‘satisfied’
homeowners...
-
Don’t complain as much
-
Don’t often call in the middle of the night
with a service request
-
Don’t spread nasty rumors about your firm
-
Don’t sue you as often
-
May
recommend you to a friend if asked
But ‘satisfied’ buyers are not loyal customers. They
will not pro-actively rave about your quality, your
service, your integrity.
Consider this: You arrive at 6:25 for your 6:30
reservation at the new restaurant in town, and are
seated promptly at 6:30. Your server is courteous
and able to answer all your questions. Your meal is
served in a reasonable time and is quite tasty. You
ask for the check and it is delivered promptly. The
price is also reasonable. If asked, you would say it
was a satisfactory experience.
But would you go out of your way to rave about this
new restaurant to your friends? Probably not. Yet
‘raving’ is precisely what the restaurateur would
like. If only the server would have had a sense of
humor, or if he had offered some suggestions for
your meal, or if the portions were larger or if...
If only your expectations would have been exceeded
by just a little bit. In the building industry, that
‘little bit’ is the difference between a 10%
referral rate and a 30% referral rate.
Top 10 Tips
In our on-going surveys of home buyers, the builders
with the highest referral rates do the small things
really well. These small things make a big
difference to your buyers but don’t cost you a lot.
Here are three from a list of our “Top 10 Tips For
Increasing Referrals”:
1.
Each new buyer should receive a call from your
firm’s president or other executive 2-4 weeks after
move-in. Ask about the purchase and move-in
experience; how it could have been improved; how can
you help now. Buyers do not expect this call, this
interest by their builder. Based on their past
experience, most buyers assume you follow the same
“Sell ‘em and forget ‘em” philosophy as their
previous builder. This pro-active process is part of
a “Knock Your Socks Off Service” philosophy which
yields “Raving Fans” who will go out and sell your
homes for you. Cost: Zero
2.
Train your customer service reps to “Knock Next
Door.” Pro-active customer service is better than
reactive service. Once each day, each customer
service rep should knock on the door of a new
homeowner without having been called by that
homeowner. “Hi, I’m Dave with Customer Service. I
am in the neighborhood today and wondered if you
have anything which needs touch-up or repair?”
The rep should make any repair taking less than 10
minutes. If it’s a larger repair, use the
homeowner’s phone to call in and set up an
appointment. No one expects this kind of
customer-oriented behavior by a home builder. You’ll
be the talk of the town. Homeowners will shower you
with heaps of praise. Warm letters. Referrals.
Rolling Stone tickets. Cost: Zero to minimal
3.
Between 6-12 months after move-in, invite a small
group of Plan 3 homeowners to a catered dinner in
your Plan 3 model. Here’s why: Thinking about
building a similar product again? Who knows more
about how your homes work than your current
homeowners? Bring them together and ask them to
re-design their home. They will be impressed with
your interest in improving your product; they will
help you improve your design, and they will enjoy
the process. Result: a customer-driven design
process, better designed homes, and more referrals.
Cost: Catered dinner for 10-12 people ($250. Cheap
research)
So, don’t be so focused on simply satisfying your
buyers. Aim for exceeding your buyers’ expectations
at every step of the process. Every “VERY’ satisfied
buyer increases the size and power of your sales
force.
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