Mirman’s 10 Laws of Managing Buyers’ Expectations
Homebuyer satisfaction is determined by the gap between buyers’ expectations and the builder’s performance. Therefore, there are only two ways to increase homebuyer satisfaction:
- Improve the performance of your employees and trade partners
- Lower the expectations of your buyers.
While much attention is given to the latter of the two strategies, it is the rare builder who talks in specific terms about how to lower buyers’ expectations or trains staff to systematically manage their buyers’ expectations.
Yet, the proactive management of homebuyers’ expectations is the new frontier in strategic approaches to homebuyer satisfaction. Builders hoping to raise their buyer satisfaction ratings and competitive rankings to the highest levels cannot accomplish this by simply improving their staff’s performance. To maximize effectiveness, the wise builder must raise performance levels while actively lowering buyers’ expectations.
Universal Versus Learned Expectations
We all share a set of universally held expectations about a new home. These aren’t things we picked up in school—we didn’t learn them in a book, and our parents didn’t teach us to expect these things. We just managed to absorb these beliefs.
For example, we all expect that when we move into our new home, the roof will not leak, the locks on the front door will work, the toilets will flush, and the lights will all go on when we flip the switch.
On the other hand, there are many expectations that the buyer develops as a result of what the builder promises or infers. The buyer learns to expect things as a direct consequence of inferences made in your advertising and PR or by your sales, design, service, and construction personnel. Statements made by sales personnel anxious to make the sale can have a profound impact on the buyer’s expectations, such as: “We have the highest quality of any builder,” or “We are known for service that is immediate and always right the first time.”
Mirman’s 10 Laws of Managing Buyer Expectations
Before initiating a proactive process to manage the expectations of home buyers, here are some guidelines that you will find useful in organizing your firm’s priorities. Here are my 10 Laws of Homebuyer Expectations:
Law #1: The stronger the expectation, the stronger the dissatisfaction when the expectation is not met.
This is particularly true with universal expectations, such as “The roof will not leak.” A problem in any of these areas will overcome all the positive satisfiers that the builder had previously achieved. In a similar fashion, explicit promises made by members of your team will also create significant dissatisfaction when they are not kept. Example: “We will correct all walk-through punch list items within five working days after move-in.” Once you make a specific promise, you are obligated to meet or exceed this promise, or you will suffer the justified anger of a dissatisfied homebuyer.
Law #2: The more the expectation directly relates to the buyer’s comfort, the stronger the dissatisfaction when the expectation is not met.
This most commonly relates to HVAC, plumbing, or appliance malfunctions. For example, buyers absolutely expect their plumbing system to work perfectly from day one. A failure in any part of this system will create enormous dissatisfaction.
Law #3: The stronger and more universal the expectation, the less impact this issue has on the buyer’s satisfaction when the builder’s performance meets expectations.
Here’s the bad news about universal expectations: when you perform well and meet these expectations, you gain nothing. None of your buyers will run out and refer their friends to you as a result of their toilets flushing. When it comes to universal expectations, you will earn no points for doing it correctly, but you will get slammed if you fail to perform on a larger expectation.
Law #4: The greatest disservice to customer service and construction personnel is done by salespeople who—in a misguided effort to seal the sale–make promises about construction quality or speed of service that are totally unrealistic and unattainable.
When this occurs, the service or construction rep rarely finds out why he constantly seems to be digging himself out of a hole that was inadvertently dug months before by the salesperson. The best strategy to take here is for sales, design, construction, and service personnel to meet and discuss exactly what all four parts of the team will be consistently promising to their buyers.
Law #5: Most homebuyer dissatisfaction issues are the result of the builder’s failure to live up to the very expectations he has established for the buyer.
Most homebuyer dissatisfaction does not stem from leaky roofs or faulty plumbing or other universally held expectations, but from the builder’s failure to meet the standards that the builder set for the buyer. These learned expectations often create unfulfilled promises. In other words, we too often set ourselves up for failure by over-promising and under-delivering.
Law #6: The development of a program to improve homebuyer satisfaction cannot be successful unless the builder also consciously includes steps to systematically manage the homebuyer’s expectations:
- Ensure the reliable completion of all promises, even those that are made inadvertently.
- Once the purchase contract is signed, make every effort to honestly lower the buyer’s expectations. This is not to be confused with manipulation. This is not conscious deceit: it is conscious realism. It is the difference between promising a perfect house on final walk-through versus reminding the buyer that there is no such thing as a perfect house.
Law #7: If the builder does not set standards or timelines for performance:
- The buyer will establish his own standards for you.
- These standards will almost always be more challenging than you would have set yourself.
Law #8: Only promise a level of performance which you know you can beat 95% of the time.
You are much better off promising to respond to all phoned service requests within 4 days and beating that target 95% of the time than you are promising to respond within 2 days and only meeting this promise 50% of the time. Simply meeting a buyer’s expectations results in a satisfied buyer. To get delighted buyers who are much more likely to proactively refer their friends, we must exceed their expectations.
Law #9: There are no universal standards for promises made to buyers with regards to timelines for performance.
Consequently, there is nothing inherently better about a promise to respond to phoned service requests in 1 day vs. 2 days or to clear a punch-list in 10 days vs. 15 days—as long as you beat your promised timeline 95% of the time.
Law #10: You do not gain a reputation by raising expectations through a promise of performance excellence or speedy service.
Your reputation is earned by the degree to which you meet or exceed your commitments to provide the buyer with a delightful purchase, closing, and service experience. If you are trying to build your reputation and solid referrals from delighted homebuyers, the key is to take proactive steps to ensure your buyers have realistic expectations.
Higher Performance, but Lower Satisfaction Ratings?
Most of Eliant’s client builders build a quality home, but many still get lower satisfaction ratings than they believe they deserve. Although a bit of an oversimplification, this is because the better they get, the more they promise. If expectations are allowed to rise at the same pace of improved quality and service, satisfaction ratings will not improve.
Salespeople always seem to over-promise a bit, and unfortunately, many of the problems later experienced by design center/options/customer service personnel can be attributed to the promises made or inferred by sales people overly anxious to “make the promise, make the sale.” It takes a strong, professional salesperson to recognize the long-term importance of honesty in the sales presentation.
If more of our salespeople acted in a manner consistent with the belief that their goal is to ensure that today’s buyer eventually becomes tomorrow’s buyer, we would have more sales people making realistic promises and, consequently, more buyers whose expectations were being exceeded.
Based on what our best clients are doing to better manage buyers’ expectations, here are just a few of our top tips:
- Get sales, design, construction, and service personnel together to agree on what their promises will be and stick to that script. Meet twice a year to reconfirm the accuracy of these promises.
- Start making part of each salesperson’s bonus based on their buyers’ satisfaction with the overall home buying experience in addition to the sales element of that experience.
- Make absolutely certain every promise can be beat 95% of the time. This includes everything from “I’ll call you tomorrow by noon” to “We will complete your walk-through items within 5 working days after move-in.”
- 25% of the sales person’s discussions with the buyer about quality and customer service should be to educate the buyer about the process, and 75% should be to properly set expectations (e.g. “Since this is such a complex process, you should expect to find some things that are not perfect once you are in your new home. Most people do. All you have to do is call Steve and he will return your call within 24 hours.”)
Improved satisfaction ratings can only occur through a systematic process of managing your buyers’ expectations. It will not happen by accident.
Start the process today!