That should come as no surprise—customer expectations have been ratcheting up for years. Not long ago the mere fact that you offered ENERGY STAR appliances put you on the cutting edge; today, buyers expect them. Now the same is happening with ratings, as the Real Estate industry works to raise public awareness of HERS scores and other energy-efficient and healthy home certifications and incorporate them into appraisals. The hope is that homes with these certifications will become the baseline.
This is great news for housing quality, but it only confirms the need to further differentiate yourself. One way is to provide a great customer experience—known by the acronym CX in marketing circles. This is an experience that leads people to enthusiastically embrace your homes' performance benefits. "Homebuilding has become commoditized," says Jimmy Diffee of Bokka group, a CX agency for homebuilders. "There's a lot of room for the high-performance builder to create a premium experience and to charge a premium price."
The key to creating that CX is measuring the right things and acting on the data. Of course this is something a lot of successful builders already do; for the high-performance builder it's a matter of adding to the things you measure and improve.
The Experience Pyramid
The first and most important item to measure and improve is build quality. One builder who did this successfully is Kevin Estes of Estes Builders in Sequim, Wash. Estes won a gold award from the National Housing Quality (NHQ) program a few years ago then signed on as an evaluator. After scrutinizing a couple of dozen builders, he has concluded that while most make it a priority to correct big problems they tend to fall short when it comes to annoyances like anemic HVAC airflow. Unfortunately, such annoyances generate the most customer complaints.
Estes' NHQ involvement led him to create a formal quality assurance, or QA program. The rewards have included more referrals and a 70 percent reduction in warranty claims. "By taking steps to create a pain-free experience you end up with really happy customers," says Estes.
Improving quality is more than inspections, however. "You need robust plans and work scopes, as well as training programs to ensure that trades and employees execute those scopes," says Glenn Cottrell with IBACOS, a national QA firm. The inspection program has to include feedback loops that help you prevent defects from re-occurring.
Cottrell says that most builders already have the basic elements of an effective QA program. "All builders have plans and scopes of work, but are are those plans and scopes detailed enough? They already have training but does it reflect their construction playbook? They already do inspections and get warranty calls but are they using the data from those events to make business improvements?"
But as crucial as quality is, it's only the first step. Anyone who has looked at an NHQ application (and if you haven't, you should) knows that the program helps builders improve all parts of the business, and Estes credits those cumulative improvements to his enhanced CX.
Diffee illustrated how this works in an August 2019 Professional Builder article. In it, he writes that the work needed to create a great customer experience is like constructing a pyramid with three tiers. He ties each of these level to a specific type of customer satisfaction score.
The Base. This is a quality home, the place where QA earns its keep. Success here will earn you a good Customer Satisfaction Score, in which customers rate their experience with the house itself. Diffee says that this is as far as most builders go.
The Middle. If you want to move beyond build quality, the first step is creating a friction-free build process for the homeowner. This includes things like great customer communications and working with buyers to personalize the home. The measurement for success at this level, according to Diffee, is the Customer Effort Score. A high score says that you're easy to work with.
The Pinnacle. The best builders work to create an enjoyable build process. They is make emotional connections with buyers and practice great communication at every phase of the build. Activities like giving buyers more opportunities to see their home under construction will also help, as it will get them excited about the home's high-performance fixtures. The goal here is a stellar Net Promoter Score. That means you're getting reviews and a high referral rate.
There are two caveats to all this. One is that, as with a physical pyramid, the upper tiers depend on the ones below. The other is that there's no one-size-fits-all—the specifics needed for success will depend on the builder, the market and the product.
Before planning the experience at each level, you need to know what customers want. Surveys are an important tool for getting that knowledge, but rather than a long, post-project survey Diffee prefers short questionnaires at important points during the build. This approach will help you make course corrections and if done consistently will yield an emotional profile of the typical customer at each point. That will help you plan better experiences going forward.
As an illustration of this, consider the middle-tier example of a customer deciding whether to choose the option of solar panels and a battery backup. "Say you wait until after move-in to survey them," he says. If they felt too rushed during the selections process they may have passed on the option, and may regret that decision later. "But if you survey them right after the appointment you can take corrective action. That will also give them confidence that you're acting in their best interest."
Getting The Words Right
Although quality is the first area the builder needs to focus on when seeking to improve CX, the actual customer experience starts with marketing and sales. If they're not getting excited about your options—or even your standard performance features—it's time to scrutinize how you talk to them.
For instance how do your marketing materials and salespeople present budget numbers? EEBA's publications and educational programs advise builders to focus on monthly living costs rather than payback, to help buyers understand whether or not they can truly afford the home.
Diffee and other homebuilder CX consultants say that most builders do a good job presenting facts and numbers, but they also point out that facts alone won't clinch most sales. Unfortunately, many builders still fall short when it comes to making emotional connections, and it's costing them money.
Your marketing materials and sales conversations need to help customers understand how life in a high-performance home feels different than life in a conventional one. "Say that you offer a filtration system that removes 99.9 percent of airborne bacteria," says CX consultant Paul Cardis, principal at The Cardis Group and founder of Avid Ratings. “You need to help customers understand how they will experience that benefit."
That means, for instance, learning how to talk about comfort rather than furnaces and air conditioners. Charlie Scott, another CX consultant and former homebuilder finds a lot of marketing is too focused on equipment. "When I was building high-performance homes I found that people didn't care what equipment we used," he says. "They didn't care whether their heat came from electric, gas, propane or solar. At the end of the day they wanted the most affordable and comfortable 72-degree environment possible, so we learned to focus on the experience."
That's not to say you can't get customers to value your equipment. In his consulting work, Scott finds that builders who succeed at getting customers to embrace their energy-efficient or healthy home features do a lot of prep work. "You need to ask the right questions. Does anyone in family have allergies? How about sensitive skin? Do they have have pets?" He says that amplifying the problem made customers more likely to embrace solutions like high-efficiency air filters and humidifiers, as well as to mention them when writing reviews.
When it comes to surveys, Scott says that they can also help builders improve their marketing and sales results by showing which terms register with customers, and which ones don't. "When I was in the survey business, my company did over a million surveys for builders, many of whom were building high-performance homes," he says. "Do you know how many times customers used the builder's Net Zero or Green language? Almost never, even though the builders invested a lot of money promoting those terms."
The most successful high-performance builders not only survey to get the terms right, but aim their marketing squarely at their core customer. For instance an advertisement used by Thrive Homebuilders in Denver shows young mother feeding her baby. The tagline: "What she's breathing is as important as what you're feeding her."
Once that young mother calls the company, however, it's up to the sales staff to strengthen the emotional bond. According to Sandy Stegall, Community Sales Manager for Thrive's Vitality Collection, that means actively listening and tailoring the conversation to their motivations. "If I find that they came to us because of our healthy home message, I'll go a bit into those features. If not, I'll wait to find out what's important.
This sounds like Sales 101, it is. But Stegall, whose background includes doing sales for a couple of national homebuilders in different markets, finds that most builder salespeople aren't great listeners. Instead the companies they work for train them to follow a rigid script. The script will include questions, but those questions are meant to be manipulative. "As a comparison, I think what makes us successful here at Thrive is that we really seek to understand the customer's needs then use the information to address those needs," she says.
Continuing The Experience
Just because you got someone stoked about your high-performance features during the sale doesn't mean they will remain so. You still need to keep them engaged during the emotional ups and downs of the build process.
Why bother making this effort? The answer is that a great home won't earn you high Customer Effort or Net Promoter scores. Whether you earn those will depend in large part on how customers experience the build process.
Good CX during the build includes a lot of elements, from accurate scheduling to a communication process that keeps customers informed of their home's progress, to a dedicated rep they can call at any time.
CX can also be reinforced with carefully-planned walkthroughs. For instance Scott sees walkthroughs as show-and-tell opportunities for the builder to explain how details like insulation, well designed and sealed ducts, humidifier equipment and other elements will help customers stay comfortable healthy. Seeing these items at rough-in stages makes people more attuned to those benefits after they move it.
The work to create a great reputation even continues after customers move into their home. Cardis points out that the final part of earning high Customer Effort and Net Promoter scores is warranty service, which means taking ownership of how everything performs. "If there's a problem with the new air exchanger you put in the home, you need to own it," says Cardis. "It's tough and will cost you money but it will also create longtime trust."
CX Is The Future
That point of all this is that the ability to create trust with customers will be a key to success going forward. A January 2019 article on Bokka's website does a great job driving this point home.
The article, titled The Important Metrics to Track in Your Customer Experience Program, cites a 2017 Gartner Marketing Survey of B2C Chief Marketing Officers from a variety of industries. According to the survey, 76% of those CMOs said they expected to have to compete mostly or completely on the basis of CX within the next two years. However only 2% of those same CMO's said their company was getting strong metrics.
It's probably safe to say that things aren't much different with homebuilders and that there's plenty of room for improvement. It's also a huge opportunity if you're a builder specializing in high-performance, Zero Energy homes. These homes are premium products in customers minds, so at some level they will expect a premium experience. Giving it to them will give you a real edge.
"We know that measuring and taking action on the correct metrics can be the difference between a successful CX initiative and an unsuccessful one," says the article. "So let’s discuss how to go about choosing which metrics to measure."