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Customer Service For Home Builders
In today’s tough economic climate, builders who want to survive the downturn need to make sure that they are providing exemplary customer service to their clients. The term “Customer Service” is often confused with “Warranty Service”, but it is much, much more. Warranty Service repairs construction defects or workmanship issues and is an important part of a comprehensive Customer Service program. “Customer Service”, on the other hand, refers to the client’s complete experience with the builder. From first contact, to contract, to completion of the home and beyond, satisfying the customer at every step should be foremost in every builder’s mind. To my way of thinking, good customer relations start with…
• The ability to see issues from the customer’s perspective
• The commitment to exceed the customer’s expectations
• A willingness to do what was promised
• A business ethic that puts honesty, fairness, and integrity ahead of monetary concerns
Good Customer Service is really a client management system designed to help them understand and appreciate the design / build process. It is also one that creates realistic expectations while setting limits and responsibilities for both the builder and the customer.
Some of the mistakes that builders make leading to customer dissatisfaction include:
• Using incomplete plans and specifications. This creates misunderstandings and disputes during construction. Custom builders must strive to provide, or insist on, detailed plans and specs.
• Over-promise and under-deliver. Optimism is great, but doing what you said you would do, when you said you’d do it, provides a good basis for an excellent customer experience.
• Confusing systems and hap-hazard procedures. These lead to misunderstandings and eventual distrust between builder and client.
• Fail to maintain consistent and clear communications with the client. Ignored phone calls is the most often cited problem that customers have with builders.
It has been my experience that most of the horror stories related to the custom home building experience are a result of the process, not the home. That is, most customers are satisfied with the end result (the finished home), but are often frustrated and exhausted by the process. And, it is this frustration that helps to turn a normal person into a “Client From Hell”. So, it is imperative that builders develop a system that shepherds the customer through the design / build process. Too often, we builders assume that our clients have a much greater understanding of custom building than they do. We need to remember that when we “assume”, we take the chance of making an “ass” of “u” and “me”.
One good way of improving a customer’s understanding of the process of building a custom home is to create a series of manuals for the customer to refer to before, during, and after construction. While these manuals can be combined into one so-called “Orientation Manual”, I prefer to break it down into three parts. They are:
• The Custom Building Design & Building Manual – This manual spells out, in a customer friendly manner, your way of doing business. All of the steps of the custom building process are explained in detail so that there are fewer surprises and areas of disagreement during and after construction.
• The Construction Manual – This manual helps the customer organize the various documents created during construction. Here, you would provide sections for contracts, change orders, selection sheets, allowance information, schedules, surveys, draw sheets, field notes, and other materials needed for a smooth construction process.
• The Warranty Manual – This manual provides the customer with all of the information required to live in, operate, and maintain their new home.
Showing the customer how to use the manuals during the construction and warranty periods will forestall many typical builder / client issues. Additionally, they are an excellent marketing and sales tool that can be used to demonstrate your commitment to a positive customer experience.
Creating Realistic Expectations before construction begins and reinforcing them during and after construction helps to create a positive customer experience. Creating and maintaining realistic expectations should be part of every builder’s Customer Service philosophy. Because our buyers come to us with so many misconceptions about custom building and, to a degree, distrust of our profession, we must work hard to gain their trust and to make sure that they understand what we will and won’t (or can’t) provide.
Some of the unrealistic expectations that buyers bring to the table include:
- The process will be smooth and fun
- All of my dreams will be fulfilled
- I won’t make any changes
- I can save money by doing some of the work myself
- I can avoid two moves by timing the sale of my current home
Custom builders know that these expectations are fantasy and can lead to real problems, yet are reluctant to dispel them during the selling process. I believe that carefully crafted explanations to the above misconceptions will go a long way toward the beginnings of a successful partnership with the customer.
Gently, though firmly, additional issues must be clarified and reinforced before and during the construction process. You need to explain that:
- They must be willing to pay for what they want. There is no free lunch, and you and the others involved in the construction process are in business to make a fair return on the work and value that you bring to the table. Respect is a two way street.
- Selections and decisions must be made on a timely basis in order to keep the project on schedule. Delays will cost not just time, but money as well.
- You, or your company, are in charge of the project and that while the customer is the ultimate “boss”, the prosecution of the work is your responsibility. Supervision / direction of the subs and suppliers is not allowed.
- Change orders during construction cost not just money, but time. A concerted effort must be made to have the project well defined before starting construction.
- Allowance over-runs are common. It is the nature of custom building to have allowance budgets exceeded by the customer, no matter what the amount of the allowance. We need to make sure that they understand this and to be ready for it.
- Delays during construction of custom homes are normal and are factored into the schedule. This means that sometimes nothing will happen on their particular job on some days.
- That, unless they are willing to pay for a full time on-site construction supervisor, you or your staff will not be on their job all day, everyday. Indeed, some days, no one will visit the jobsite.
- Problems during the construction process are inevitable. You, along with the vendors, trade contractors, and customer will work through the issues as they arise. It is also important to stress that while we strive for perfection, it simply is not possible in custom building, or any construction project for that matter.
By being pro-active and addressing these potential problem areas ahead of time, you will have a much better opportunity to assist the customer in a smoother and less stressful construction experience.
The final piece of a good Customer Service program is warranty work. First, three warranty nightmares need to be headed off at the pass. They are:
- I want to do some of the work myself. Avoid this at all costs. Explain that they will not save money, it won’t be fun, and that you can’t be responsible for problems that their work could cause. Firmly and resolutely say no.
- I want to buy materials / products and have your subs install them. Ditto above. Just say no.
- I know a plumber (electrician, framer, etc, etc) and I would like them to bid on or to do the job. Unless you have a relationship with that trade contractor, explain that a construction project is not an individual sport. It is a team sport that requires practice, respect, and experience working together. As before, no is the correct answer to this proposition.
The final piece of the Customer Service system rests with an effective and smooth warranty service process. Making sure that the process is well defined and explained in the Warranty Manual, and reinforcing the company’s policies during warranty will help to increase customer satisfaction. But the most important thing that a custom builder can do to take the pain out of the warranty period is to finish the home, and finish it right, before the customer moves in. Deliver a defect free home, without a punchlist. Customer satisfaction rises exponentially and reduced service calls will allow you and your staff to focus on new and profitable projects.
Customer Service is a philosophy of doing right by our customers. It is also a pro-active system of managing the customer toward a satisfactory experience. Satisfied customers mean more referrals. It’s just that simple.
My Opinion On Competitive Bidding:
There Are Three Main Reasons a Client Wants to Bid a Job:
- The client does not trust the contractor, therefore, to keep him “honest”, the client must bid the job out. Comment: You cannot make a good deal with a bad guy – the bad guy will always get you.
- The client is hoping the contractor will make a bidding error and the client will gain a lower price due to the error. So, the client bids the job to then contract with the builder who made the biggest mistake. Comment: Forcing a builder to make good on a bidding mistake is not always in a client’s best interest. Builders who do not know how to estimate properly, do know how to get mistakes back through charges on extras and options.
- The client feels that bidding the house out will give him the same type of competition for his business that working two car dealers against each other will. Comment: Houses and cars are as different as night and day. To compare them on price, without considering all of the subjective factors such as reputation, attention to detail, and compat- ability is an invitation to disaster.
Bidding a home out to multiple builders raises the client’s stress level. A custom home takes an incredible amount of time and expertise to bid correctly. These “bidders” are people whom you will probably spend a great deal of time with and will develop friendships. Let’s face it, no one likes to be the bearer of bad news and the client will have to be the one to deliver it to all but the “winning” bidder. Telling a “friend” that they didn’t get the job is very unpleasant and stressful.
If your plans and specifications are poorly drawn and executed, and the bid instructions are vague and incomplete, the bids will be so far apart that it will be impossible to reconcile them and to determine which among them is really the lowest. If your plans and specifications are properly drawn and executed, and the bid instructions are complete, three competent and reputable builders will come up with pricing that is almost identical. If that is so, why submit yourself to the stress of bidding the home out. Choose your builder the same way which you would choose any professional to whom you are entrusting your life savings. That is on the basis of their Professionalism, Reputation, and Warranty.