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Warranty, Service, Home Readiness Keys to Satisfaction
A home builder’s warranty program, customer service and home readiness are the key factors driving customer satisfaction, according to J.D. Power and Associates, the California-based marketing information services firm that releases an annual new-home builder customer satisfaction survey.
“Homes that are delivered on time and that are complete typically result in fewer problems and warranty visits, ultimately boosting customer satisfaction levels,” said Paula Sonkin, executive director of the real estate industries practice at J.D. Power.
J.D. Power annually asks buyers about their level of satisfaction based on 10 characteristics, including the builder's warranty and customer service, home readiness, sales staff, workmanship and price.
As the market changes, the J.D. Power rankings are becoming more important to prospects, said customer relationship management pro Steve Lewkowitz of Pivotal Corp., a member of NAHB’s Business Management and Information Technology Committee. “One of the things people are usually going to remember is their last experience” with a builder, which is the move-in experience, said Lewkowitz. That helps explain the top drivers of customer satisfaction in the J.D. Power survey results, he added.
The characteristics, and their percentage contribution to customer satisfaction, are:
- Builder's warranty/customer service (20%)
- Home readiness (16%)
- Builder's sales staff (14%)
- Construction manager (13%)
- Quality of workmanship/materials (13%)
- Price/value (8%)
- Physical design elements (6%)
- Builder's design center (4%)
- Recreational facilities (3%)
- Location (2%)
“Customer care is really one of the biggest criteria” for home owners in evaluating their experience with a home builder, Lewkowitz said. That includes the quality of the home, the relationship with the people building it or doing warranty work on it and the communication mechanisms for the builder, subcontractors and the home buyer.
“People want to be communicated with. They want to be kept current on the status of their home,” Lewkowitz said. If communication is good, then home buyers with a problem are “going to be more willing to wait for a situation to be resolved. Home owners are much more prone to recommend the home builder or purchase from them again if they have had a good relationship with the builder during the warranty period. In addition, it is a critical factor that prospects are strongly considering when purchasing their homes,” he added.
Most Frequent Problems Cited
In the latest survey, home owners reported an average of 14 problems with their new home, a 7% increase over 2005. More than 90% of new-home buyers reported experiencing at least one construction problem with their new home.
The most frequent problems reported, according to the survey, included landscaping, kitchen cabinet quality and finish, and heating and air conditioning; however these factors varied somewhat by market.
The study, now in its 10th year, includes satisfaction ratings of builders in 34 of the largest home building markets.
Nationwide, customer satisfaction has remained at its current levels since 2004. Markets experiencing the largest customer satisfaction improvements are Albuquerque, N.M.; Ft. Myers/Naples, Fla.; Minneapolis; and the San Francisco Bay area, according to J.D. Power.
J.D. Power's 2006 New Home Builder Customer Satisfaction study is based on responses from 60,927 buyers of newly built single-family homes, who provided feedback after living in those homes for four to 18 months.
For more information, visit www.jdpower.com/homes/ratings/home_builders/index.asp.
 NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market
With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.
 ‘Customer Service for Home Builders’ Available at BuilderBooks.com
“Customer Service for Home Builders,” available through BuilderBooks.com, provides what you need to give your customer service program new life. The publication includes forms, checklists, documents and a resource guide.
To view or purchase this publication online, click here, or call 800-223-2665.
 ‘Warranty Service for Home Builders’ Available at BuilderBooks.com
“Warranty Service for Home Builders,” available through BuilderBooks.com, shows you how to clearly communicate warranty procedures and expectations to home buyers, and how to effectively follow up on work requests.
This book and CD include everything you need to get your warranty system up and running.
To view or purchase this publication online, click here, or call 800-223-2665.
 NAHB Has More Than 250 Resources to Help You Run Your Business More Profitably
Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to more than 250 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more.
Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources.
Local and state home builders associations can link directly to www.nahb.org/biztools from their Web site and give their members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance that members need to succeed.
Subscribe to NAHB’s Business of Building e/Source
NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format. Business of Building e/Source is available free to NAHB members and their employees.
To subscribe, visit www.nahb.org/BoB on the Members Only side of the NAHB Web site.
 Survive Changing Markets
Bill Webb, MIRM, shows you how in “Sweet Success in New Home Sales,” available through BuilderBooks.com. This book provides powerful techniques for selling more homes and making more money in leaner times. This book lays out the proven approaches for crafting and delivering sales excellence.
To view or purchase this publication online, click here, or call 800-223-2665.
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