Re-Emerging Trend in Housing: Employee Satisfaction = Uh – Oh!

Many experts have said that it is unreasonable for a company’s leadership to expect their employees to take better care of their customers, than the company does for the employees.  There is a lot of truth in this reasoning, but in addition to customer satisfaction implications there are business operations to consider, too.

When the industry tanked most home building companies felt that if an employee still had a job, then they darn well should be satisfied!  The drastic market decline forced builders to 1) reduce staff, 2) eliminate bonuses, 3) trim benefits and even 4) reduce salaries.  What did all this do for employee morale, satisfaction and loyalty?

During the depths of our industry downturn, I called Veronica Ramierz, CEO of Joseph Chris Partners, one of the industry’s leading employee recruitment and placement firms and asked for a state of the industry comment.  Veronica told me that in 2006 Joseph Chris Partners averaged about 250 homebuilding job orders on any given day – in 2011 the average was just 2!  As home building activity has gained momentum, she now reports that their homebuilding job orders are back up to an average of 90 on any given day.

Now that the market has finally bounded back (permits have nearly tripled from this cycle’s low), hiring and recruiting have picked up, too.  This means experienced employees are at risk of being hired away.  That’s right – headhunters are targeting experienced salespeople, construction personnel, estimators, purchasing agents, customer service staff, and operation executives with sales and/or finance backgrounds. 

The smart home building leaders are already ahead of this curve.  The proof is that we have had more calls to administer our Employee Satisfaction Survey in the past five months, than in the past five years combined!  These leaders’ objectives are to understand their employee satisfaction current reality and to plan accordingly.  This third party survey allows their employees to provide honest constructive criticism, benchmark the builder’s employee satisfaction with other leading companies, and prepare strategies to 1) improve employee satisfaction or 2) pre-strategize new staffing plans.

Those of us who have managed home building companies know that it is far better to identify what the company can do to improve employee satisfaction, before an employee resigns, than afterwards.  It inevitably seemed that once an employee tendered their resignation, any success in “salvaging” that employee was generally short lived. 

This week’s management meeting question of the week: “Do we really know what our current employee satisfaction is, and what potential employee losses are looming?”


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Net Promoting Index = No Pertinent Information

Let me be straight – I am anti-Net Promoting Index in the home building industry and this is why….

When I was a manager/leader/owner of a homebuilding company there was a recurring problem that I often saw (and personally committed).  Too often, we would manage our company by average numbers.  For example, let’s say our Willingness to Refer (WTR) declined 5 points from 95% to 90%.  We would become upset and meet with the Sales Team and Builders to tell them “we are better than this!”  We were managing the company and staff by the average number.  In fact, in this example we had most of the Onsite Teams achieving 100% Willingness to Refer and others at only 80%.  By painting everyone with the same brush and talking to everyone the same way, we were actually demoralizing the 100% WTR Champions and the enabling the 80% Underperformers by making them feel it was a company-wide problem.  So, I was often on guard for the dreaded use of “averages” to manage our company and/or people.

So, if you agree that managing by an “average” number is bad, then you would also likely agree that managing by an “index” is even WORSE.  To me an index is meaningless.  The NPI sprang from the “ultimate question” philosophy, whereby customers are asked a single question, “Would you refer XYZ Homes” on a scale of 1 to 10.  Then, the powers that be subtract the low scores from the high scores and come up with an “index.”  The theory was that this index would allow all industries to compare themselves on a consistent customer satisfaction scale.  While this may (but I doubt it) work for American Express, or GE – which are huge companies that do a lot of other market research, customer focus groups, customer surveys, etc., it doesn’t work for a homebuilding company to rely on one number (NPI) to gauge Customer Satisfaction.  It is silly, ineffective, and for the life of me, I don’t know how it gets traction from intelligent people.

NPI pro arguments are that it is simple; but simplicity doesn’t mean it is effective.  The other argument is that it allows cross industry comparisons.   Do you honestly care whether your home building business Customer Satisfaction is better or worse than a hardware store, an amusement park, or a coffee shop?  The purpose of customer feedback should be to make your specific product and services the best they can be!

NPI con argument is the same – it is simple. This simplicity, in my book, is ineffective as it gives NO direction as to WHY the number exists, or what to do about it if the number is not desirable.   Worse, its simplicity squanders one of the best opportunities to get effective, meaningful customer feedback. 

We think the one opportunity you have to gather meaningful customer feedback should be sincere, and match the nature of the transaction.  If you and your customer have just transactional relationship, i.e. a credit card company, or fast food at Tasty Tacos, maybe an index can help you compare your customer satisfaction to other transactional businesses. 

On the other hand, building a home is an intense, relational event and your survey should measure up to the importance of that experience.  This customer-focused survey should get their rational feedback (ratings) and emotional feedback (open ended questions/comments).  The ratings are used for benchmarking and emotions/comments are used to give the ratings “volume” and meaning, and to measure the reasons for and consequences of customer dissatisfaction.  Haven’t your customers invested a lot of time, money and life into a major joint venture and don’t they deserve the full opportunity to voice/share/communicate their experience highs, lows and feelings?  A conscious, brand-oriented builder can then use these comprehensive customer feedback data points, comments, feelings to develop a better future experience and expose customer dissatisfaction sources.

A Medical Doctor would never take one health-related data point, average or index it, and then proclaim a persons’ overall health or illness based upon this index.  No, a Medical Doctor would do a thorough examination take many data points, ask “how do you feel?” questions, then use the data and patient comments to make a diagnosis before prescribing an improvement treatment.  In home building it’s your customer satisfaction, reputation and brand equity’s health at risk….are you willing to depend on just one data point?

How’s that for an NPI explanation?

I apologize for being long winded – I am passionate about “Voice of the Customer” programs, because the customer, by virtue of making one of the largest purchases of their life – a home has earned the right to be heard.  Customers are what makes our home building world go around and in that regard, NPI does more harm than good.  In fact, I want to write an article about it.  Oh, wait a minute…I think I just did.

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Customers Satisfaction – What’s your favorite of the 7 practices?

During the last webinar and discussion Rob Bowman presented the 7 practices that helped Charter Homes and Neighborhoods earn the 2011 National Housing Quality Award.  Many of you asked for more details about Rob’s presentations so I have provided an excerpt of the article published in last October’s Professional Builder Magazine (website link here).  The article describes how customer satisfaction is more than great service and warranty — it’s about making the home-buying experience something truly special. 

Which of the 7 practices Rob presented has the potential to make the biggest impact on your organization?

“To deliver a high level of teamwork, Charter Homes & Neighborhoods focuses on seven best practices:

  1. Layering and circling back. Communicating your confidence in the next team member that buyers will meet in the process and what to expect is “layering,” while asking about their experience with the team member in the process before you and finding out how it went is “circling back.”
  2. No blame and fix it fast. Speed wins when it comes to resolving a homeowner question or issue, regardless if the answer is what they want to hear or not. And never place or discuss blame. 
  3. Teach quality. Take every opportunity to share with home buyers the special details and processes we use in building a quality home. While we shared it at the point of sale, we need to always give them facts to earn their confidence and let them know they made the right choice.
  4. Know the institutional message. When a home buyer has an issue or question, everyone on the team needs to know the same information, and provide the same answers. The message should be exactly the same story, told precisely the same way.
  5. Never quit. Bring an attitude of “never quitting on a home buyer” to the game every day. Separate the message from the messenger if you’re having trouble hearing or dealing with someone you perceive as difficult. The tough ones sometimes make us better, and we never want to think we can’t win them over.
  6. Be proactive. Always take the initiative to communicate with the home buyer, even if there is nothing other than good news or an update to share. There should be at least one call from the team each week.
  7. Own what you say. Ensure that anything you sell, say, or promise is a commitment you can make and will take personal responsibility for delivering. If you are ever unsure, let the home buyer know you’ll get back to them.”

Excerpt is from Professional Builder Magazine’s October 2010 issue, “2011 NHQ Award: Charter Homes takes customer service to a ‘special’ level.”

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Worth it? – Feedback from: “Customer Satisfaction – Is it worth it?

Last Wednesday we completed our 4th CED webinar that featured Rob Bowman, President of Charter Homes and Neighborhoods.  The program was very well attended with at least 50 home builder groups hosting the webinar for their teams.   The program lasted about 70 minutes including the Q & A session afterwards.  Overall I believe we received very positive and constructive comments about how we can improve future webinars.

I was most impressed with this session based on the sustained engagement by all the participants during the question and answer session.   I am sure we could have kept Rob engaged for another 10 or 15 minutes with your excellent questions and Rob’s thoughtful responses.  This has always been our goal – to have a sustained discussion where we can exchange useful ideas about at topic.   I felt badly to bring this part of the webinar to a close due the time constraints we imposed.   We have hosted several 90 minute sessions and we received feedback that these were too long. 

I was also pleased that 15 of 16 respondents indicate “high or very high” likelihood of attending the next webinar and discussion as part of the Customer Experience discussion program.  Only one respondent was “medium” on attending the next webinar program.  

I will send you and update soon about the schedule for upcoming webinars.  Thanks for participating and I welcome your comments..

If you have more interest please view the report below in PDF format.

Survey Results (PDF)

Customer Satisfaction - Is it worth it? Survey Results, Cover Page
Survey Report Cover Page

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Rob Bowman, Charter Homes and Neighborhoods – “Customer Satisfaction: Is it worth it?”

I am pleased to tell you that we have 50 webinar locations signed up for the webinar tomorrow at 2:00 PM Eastern (March 16th) when Rob Bowman, President of Charter Homes & Neighborhoods will present “Customer Satisfaction – Is it worth it?”    Tomorrow’s webinar will be a lively discussion about the payback and tradeoffs for organizations focusing on Customer Satisfaction.  Please join us as we learn from the experiences of the 2011 National Housing Quality Award Winner.

Click on the enroll now link to register, if you have not done so already.

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Customer Satisfaction – Is it worth it?

I am very excited to offer a webinar featuring one of the most popular programs at the International Builders Show last month.  The “Customer Satisfaction – Is it worth it?” presentation was one of the jewels of the Internation Builders Show according to Charlie Scott of Woodland, O’Brien and Scott.

The primary webinar presenter will be Rob Bowman, President of Charter Homes & Neighborhoods, based in Lancaster, Pennsylvania.  Charter Homes and Neighborhoods received the 2011 U.S. National Housing Quality Award. The National Housing Quality Award represents the one of the homebuilding industry’s highest recognitions for quality achievement and operational excellence.

Here is what you will learn:

  • Four out of 10 Charter home-buyers are referrals and its “willingness to refer” rate has jumped from 80 percent in 2006 to 92 percent today
  • Charter has been able to maintain pricing and grow gross margin in an extremely competitive, price-driven market
  • At what point return-on-investment diminishes for customer satisfaction
  • Investment required when creating a customer-centric organization and culture

Rob’s presentation is a case study that describes Charter Homes’ philosophies, teamwork, values and their return-on-investment for excellence in customer satisfaction.  His presentation will be 60 minutes and will include several breaks for questions followed by a 10 minute Q and A session at the end.  Please reserve the date of Wednesday March 16th at 2:00 PM Eastern Time.

– Click on the enroll now link to register.

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Prerequisites to Customer Satisfaction – Webinar Video Segments

“Prerequisites to Customer Satisfaction” that was recorded on September 22, 2010. The webinar has been divided into 5 video segments featuring Charlie Scott, Woodland, O’Brien & Scott, Brooks Powell, Powell Homes, and Chip Pennington, Shea Homes, and their customer satisfaction strategies. 

Thanks again to the presenters, to those of you who have provided your comments and ideas to us, and all of you who have participated in the surveys to make these topics and discussions possible!

Introduction to Prerequisites to Customer Satisfaction by Charlie Scott:

Delivery of Customer Satisfaction – Strategies and Best Practice Examples:

Best Processes for Achieving High Levels of Customer Satisfaction:

Customer Handling Examples by Builders that Achieve High Levels of Customer Satisfaction:

The Payoff when High Levels of Customer Satisfaction are achieved:

Thanks to Constellation HomeBuilding Systems for making these videos available.

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