10 Key Tips For Increasing Homeowner Referrals

Several years ago, I wrote an article for Builder Digest: “Forget About Satisfying Your Customers”, in which I referred to a list of ten steps suggested by Eliant for improving homeowner referrals. Since that article appeared, we have received hundreds of requests for our list and have been happy to send our suggestions to all who have requested them.

To be honest, I am not certain if these are the Top Ten, or just ten of the best. But these are all important contributors to a customer-centric culture.  The purpose of this list is very straight forward: The pursuit of home buyer satisfaction has only one legitimate overall goal increased referral sales. Pro-active referrals come from buyers who were delighted with the experience you delivered. Your strongest sales force is, therefore, an army of Delighted homeowners who will pro-actively rave about your quality, your integrity, your service, and their overall EXPERIENCE.

10. Presidential Contact. Each new buyer should receive a call from the company president or other high executive 4-6 weeks after move-in. Ask about the purchase and move-in experience; how it could have been improved; how you can help now. Author Steven R. Covey (Seven Habits of Highly Effective People) once wrote: “Seek first to understand and then to be understood. Most people do not listen with the intent to understand: they listen with the intent to reply.” So remember: The purpose of this call is to learn and impart the impression of a caring, empathetic home builder (and that is not an oxymoron). Do not become defensive, argumentative. Listen and learn. And NEVER PROMISE to make this call; this is a Planned Surprise.

9. Measure Buyer Satisfaction. Since homebuyer satisfaction is the foundation, the catalyst for referrals, how can you hope to improve that which is not being measured? Answer: you can’t. Without measurement, there is no accountability for improvement. Survey every buyer and report results for each community, as well as each sales person, service representative, design consultant, customer service rep, etc. Eliant’s suggestion: Survey new buyers 20-30 days after move-in to evaluate their perception of the sales, closing, and initial service process. Then, at 5-6 months, once they have had adequate time to learn about their home and how it works, survey again and ask them to rate your quality and service. Survey again at 10-11 months after move-in to determine your customers perception of their home’s quality and the service provided since move-in.

8. Company Newsletter Publicizes Buyer Satisfaction. Your company newsletter, mailed and e-mailed to every home buyer on your list, should continually remind every homeowner of your successful pursuit of delighted customers. Share your scores and give examples of how you responded to customers suggestions. Tell stories about your sales or service personnel who went above and beyond to assist their customers. Put it on your website, too. Sometimes you need to blow your own horn before your customers will go out and blow it for you.

7. Start Every Meeting With A Success Story. Training your staff to look for opportunities to exceed customer expectations is not enough to generate consistent excellence. This behavior must be stimulated, reinforced. To help maintain a corporate customer driven culture, ask your managers to report examples of employees who did something special for one of their customers. Then, every sales meeting, every customer service meeting should start with a re-telling of this story. The Nordstrom legend started and is being maintained by the constant re-telling of such stories. Your legend is about to be born.

6. Provide Incentives For Generating High Buyer Satisfaction. Of the hundreds of homebuilders who utilize Eliant’s Home Buyer Surveys each month, the best performing builders incorporate buyer satisfaction scores into their performance evaluation and bonus compensation plan. It’s relatively cheap insurance and practically guarantees stronger referrals. But, be careful: Your compensation plan needs to target only those issues having the greatest impact on future referrals. Eliant research has identified the top five issues having the greatest impact on referrals: Primary on this list is your customers Willingness to Recommend score. When it comes to the customer-sensitive performance of key builder personnel, the old adage holds true: You don’t get what you expect, only what you inspect. Buyer survey data provides the glue for your accountability system.

5. Knock Next Door. Pro-active customer service is better than reactive service. Once or twice a week, every customer service rep should knock on the door of a new homeowner: “Hi, I m Dave with Customer Service. I’m 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 is a larger repair, pull out your cell phone to immediately call in and set up an appointment. If the new homeowner is not in, leave a specially-designed door-hanger on the door knob which lets the homeowner know you stopped by unannounced. You’ll be the talk of the community. Homeowners will shower you with heaps of praise. Heartfelt thanks. Referrals. Warm letters to your Mom.

4. Quarterly Action Plan Meetings. The only thing worse than not surveying your customers is to survey and then ignore the results. Surveying home buyers sets up expectations that things will improve, that personnel will change, upgrade their performance, increase their visible customer sensitivity. These changes require planning and accountability.

Each department (sales, construction, escrow, design, service, purchasing) should hold a quarterly meeting to review survey results and determine actions necessary to improve home buyer satisfaction. The meeting should always start with a review of the previous quarter’s objectives and survey results.

3. Hold An In-Model Focus Group. Between 6-12 months after move-in, invite a small group of Plan 3 homeowners to a catered focus group dinner in your Plan 3 model. Here s why: Thinking about building a similar product again or soon building the next phase? Who knows more about how your homes work than your current homeowners? Bring some of them together and ask them to re-design their home. They will be impressed with your interest and will help you improve your design and features. Result: Improved designs, stronger buyer loyalty, and more referrals.

2. Get Your Name In Re-Sale Ads. As a builder, the highest form of praise is to have your buyers use your company name in their ads when selling their home. The immediate inference is that the seller is really proud of his home, proud to be one of your customers. It exclaims volumes about your quality, your reputation, and it comes from the most credible source: the homeowner. What could be better? Offer to share the cost of your buyers re-sale ads if they use your company name in their ad (i.e. ABC Home). If you pay $20 per ad submitted, up to $100 maximum, you’ll get five ads which help build your reputation. Best advertising you ever bought.

1. Homeowner Referrals: It’s Not About the Quality of the Homes you Build, but the Experience You Deliver. After 30 plus years of monitoring the customer’s perception of the home purchase and ownership experience, we have learned that building a quality home does not ensure a strong referral rate. Buyers now expect high levels of quality construction as part of the deal; high quality simply qualifies you to then go out and earn the buyer’s referral. Referrals come from homeowners who have been delighted with the experience you delivered at each phase of the purchase through ownership process. Growing from a product-centric to a successful customer-centric builder is all about the way you treat your buyers, about handling buyers the way you would want your Mom to be treated if she were a homebuyer, about doing the small unexpected things (Planned Surprises) that WOW your customer. It’s all about the experience you deliver!

The future of your firm depends on your ability to include your home owners as part of your sales force. A strong level of homeowner referrals is one of the key elements distinguishing the great builders from the good builders. How do you want to be perceived?

Category: Best Practices
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