Forest Avenue Project, Roselle, IL

Selling Quality Over Price

It is all about price? Only if you let it be!

I recently made a sales call on a former customer. The company several years ago found a cheaper alternative to our product; cheaper not better. Before I even began my pitch she said, "It is all about price today. No one cares about quality. They only want the cheapest price." 

Today small locally owned companies, many who have done business for many years, are being attacked on two fronts. Big box stores advertise "low priced leaders." and "more saving, more doing." They use their buying power to negotiate lower prices but the vendor changes the product to meet the price sacrificing quality. 

Locally owned companies are also facing competition from new companies springing up many owned by employee laid off in the current economic recession. These companies have no business expertise, no commitment to the future, do not have the right equipment, no insurance, no resources to honor warrantees and often do not even have the basic skills to product the product. All they understand is low price. 

For example; I had a customer who sold a brand name faucet. She discovered through a customer that a Big Box store down the street was selling the same brand name faucet. She went and looked. the faucet had the same picture and even the same box but the part number was different. My customer bought one of the faucets. She compared the Big Box faucet to the one she sold. The Big Box faucet was four pounds less than the one she was selling. 

This retailer could have given up on selling the product because it was a tack on - do you want fries with that - and not her primary product. Instead she bought two postal scales. She set up the two scales in her showroom and placed her product on one and the Big Box product on the other. This display demonstrated that the add on product was worth more than a look alike even under the same brand. She also showed her customers that she sold quality not price. She was able to use this display to demonstrate that others were selling low priced versions of her primary product.

Look at your own product. Make a list of what you do better than the low priced knock off. Be ready to educate the customer. As you educate the customer you will likely discover that they are indeed willing to pay for quality if they understand it. When you sell quality you will also learn what they are willing to spend money and you will be able to modify your product if necessary or you pitch if your product already includes the benefit. 

Being the low price leader is easy. You just lower the price. If you lower the price you will need to lower the quality and cut corners or go broke. When you lower the quality you put your reputation and your company at risk. You cannot afford to be the lowest price so sell quality. If a customer is truly only interested in price than maybe they should not be your customer.

Sales: Ten Keys to Sales Success

               Sales is an art not a science. You can do everything right and not close the sale and sometimes the sale will just happen seeming magically and effortlessly. The following is a list of keys to sales success. These keys will not always open the door but will give you the best chance of making the sale. 

               Ten Keys to Sales Success

1.      Sell a good product with good service.  If you do not believe in your product you will not be enthusiastic. Constantly apologizing for your companies customer service or having to handle it yourself will limit your success.

2.      Be enthusiastic. If you are not excited about your product you will never succeed. See rule 1.              

3.      Be persistent. If you first contact does not succeed it may have been bad timing. Keep trying until you are sure you talked to the right person at a time when they were open to your product at a time when they could use your product.

4.      Know when to back off and regroup. Regrouping is not the same as giving up. Will a new strategy work.

5.      Learn to indentify leads who will never convert to sales. This is not giving up it is learning not to waste time on low value leads.

6.      Know your product and the value it brings to your customer

a.      Unique selling proposition

b.      Features and benefits

c.      Technical data

7.      Know the competition

8.      Know your customer (individually and collectively) and understand their needs.

a.      Not all customers are the same.

b.      What motivates them.

c.      What value does you product add to their product

d.      If you are selling wholesale know your customers customer

9.      Know how your customer uses your product

a.      Is your product your customer's key product, a secondary product, a component or a expendable tool or product

b.      Does your customer need your product? Does it make their process easier? How does it add to their bottom line.

10.   Be likeable, friendly and trustworthy. 

               Luck is when opportunity meets preparation. These keys are the preparation you need when you meet opportunity.

Working with Real Estate Agents

Tribbles hate Klingons and Klingons hate Tribbles. This little knows fact from Star Trek might very well been written builders hate real estate agents and real estate agents hate builders.  Ok so it is not that bad but real estate agents and builders have very different perspectives.

For Real Estate agents the product is the customer. For the Builder the product is the house.  This can be a critical difference particularly in overcoming buyer objections. If a buyer object to a window placement the builder will often have a detailed explanation ready why the window was place where it was or ways to relocate the window, a builder will overcome the objection. Too often a real estate agent takes the customer to his or her car and is off to look at anther home built by someone else. Rather than risk the customer they want to meet every need the customer expresses whether valid or not.

 Real estate agents like to get paid quickly and if they have to wait until a home is built than the commission is delayed.  Some agents will steer customers to existing homes just to avoid the delay.

When you work with a real estate agent you are working not only with the agent but with their office and also with all the subscribers to their multiple listing systems. If a customer is interested in seeing a house and they call the listing office they will likely get whoever is on desk duty that day. The desk agents are often the least experienced agents.  Experienced or not the desk agent may know little or nothing about your project.  If the customer is with an agent who found your project in the multiple listing service they may know nothing about the product and have absolutely no loyalty to you.  

We were having difficulty with a spec home that had been on the market longer than the rest of the neighborhood. I was so concerned that I had a friend of mine and his wife shop the real estate agent for me.  The couple called the agent and was referred to the desk agent.  When they told the person answering the phone they would rather talk to the listing agent they were told that the agent would be busy all day but Joey knew the project well and had shown the house several times this week.

When they met the agent at the house he showed them through the house getting in the way rather than adding to the presentation. Near the end of the tour my friend looked out the window at the back yard. He was looking at the yard when the agent said, "and behind that tree line is the highway.  In the winter you can see it and if you think that is bad wait until they widen the road. " Joey was not someone we wanted showing our homes.

Most real estate agents have little or no more expertise regarding home construction than the general public. What they do know often comes from word of mouth from other agents who have the same limited information or even faulty information.  This does not, however, keep many from offering an inexpert opinion on things they do not understand.

So how do you deal with these varied perspectives?  If you can set up a program to pay the real estate agent at contract instead of closing you may gain a few sales.  Even with a real estate agent doing the bulk of the lifting you need you own sales people to do the presentations of the homes and be ready to overcome objections. WE found the process went best when we registered the customer to the agent then got the agent out of the house. Many will object because the customer is the product but try. Paying the agent is painful enough but having to pay an agent who almost screws up a deal is worse.

Do training programs for agents in the area. You will not get everyone but you will get some and you may build some loyalty. It has been my experience that if you have a luncheon you get the agents looking for a free lunch not those interested in selling your homes.  I found you got more return for your effort if you did a training presentation.

The current market has driven out many of the weak agents but it has also driven out many of the good ones. If you are going to turn over such a critical business function as sales remember you still need to control the process. The more you can do in house the better it is likely to work.

Of course, like many things in the housing industry, use of real estate agents vary by region, some areas use agents nearly exclusively and some not at all. If you are in area where it is a necessity it is even more critical you control the process.

Original content copyright 2011 Thomas Robinson

How to Prevent an Ice Dam

An ice dam is a condition which develops along a cold eve where snow on a roof melts over the warmer living area then runs down and refreezes at the gutter or eve. Water then backs up under shingles and leaks into the living area. Most new home warrantees exclude this condition but try explaining to a new home buyer who just spent hundreds of thousands of dollars on a new home that the water leaking into their living room is not covered.

There are a number of steps that can be taken to reduce the number of incidents if not prevent them all together.  Cold well ventilated attics are less prone to ice dams because the roof is not as warm a vaulted ceiling area or an area that is not properly vented. Try to avoid vaulting roofs all the way to the underside of the rafters and provide good ventilations.

We installed a membrane such as Grace's Ice and Water shield above the eves. The membranes prevented backed up water from entering the living space. This simple detail virtually eliminated the problem. It worked so well that we added the membrane to other problem areas such as roof valleys and where dormers me roofs. We also used it on roofs with shallow roof pitches.

If the membrane is not installed during construction there are a couple things you can do. First us a roof rake to remove the snow before it builds up. This can be problematic in heavy snow of overnight snow fall.  The only prevention is installing a heating cable in the gutters, downspouts and in diagonal patterns above the eve. These cables will form paths for water to run off.  This method works reasonably well as long as you remember to turn on the cables.  Your new homeowner will likely not appreciate the cable on the roof.

Original Content copyright 2011 Thomas Robinson

New Home Sales Back to Basics

With new home sales somewhere between mission impossible and nonexistent it is more important than ever to get all the basics right. With every article in the media telling the home buyer that they can buy homes at pennies on the dollar it can be easy to fall into the mindset that sales is all and only about price.  It can be if you let it be. In this article we will discuss selling the area first.

New home sales start not with the home but outside the home. The saying goes the three most important ingredients in home value are location, location and location. That has not changed. Find out if the new home buyer is from the area. In our sales office we always had a large scale map that showed the area around our projects. The scale was large enough to include nearby shopping malls and other important facilities.

Next in progression we had a map of the more immediate area including the most important ingredient of location; schools, schools, schools. Make sure you get all the information on the local schools that are served by your location. The school districts will likely be eager to help you with information from test scores to number of National Honor Society members. School districts have to sell the public on their value so they will have the information for you. 

The immediate area map should also include recreation opportunities. We always believed the recreational opportunities for the children were the leading attractions; little league, soccer, dance studios, parks, even movie theaters. Do not forget the adults; golf courses, bowling alleys, etc. We once sold several homes in a subdivision because of a nearby snowmobile trail including to several customer who had never been on a snowmobile but liked the idea.

The municipality, park district (if different) and Chamber of Commerce will also have information that can help you sell the area.  Hospitals and medical facilities are important. Access to assisted living facilities for elderly parents of your customers may be appropriate. Even if you do not display it on your map have it on hand should the topic come up in conversation.

Once you have sold the area move into the benefits of the neighborhood in which the home is built; all cul-de-sacs, near transportation, wide streets, wood lots, etc. Pay particular attention transportations to major employment centers such as train, highways even busses if price range appropriate. Without selling the neighborhood you may find that you go through the entire process to lose the sale to the deal killer that you could have discovered within minutes.

If you do hit a roadblock can you sell a built to order on their lot in a location that may be better for them? Are you set up to build on an individual lot instead of only in one of your projects? If not what does it take to set up to do individual lots.  Building only in locations where there is corporate infrastructure can be more comfortable and even less expensive but in this market you need to be flexible and be ready to take advantage of opportunities as they come. It may take some emotional strength to avoid trying too hard to sell a location that will never work for the customer so you can move another lot but losing the sale does not help your bottom line either.

Once you have sold the area, municipality and neighborhood you are ready to begin selling the home. In future articles we will deal with selling the home.

Original material copyright 2011 Thomas Robinson

Three Types on Two Story Homes

It is an over simplification to say that there are only three types of two story homes but the vast majority of the mid priced homes follow simple logical patterns  that divide homes into three basic types. By asking questions of your customers it is likely that you can guide them to one of these three types making design easier for you and still letting them believe the home has been custom designed just for them.

A typical home has either five or six rooms on the first floor; kitchen, breakfast, family room, living room, dining room and sometimes a den.  The kitchen and breakfast area are next to each other for obvious reasons and in nearly every case adjacent to the family room. Because kitchen is more enclosed due to cabinets and cooking areas the breakfast area is almost always between the kitchen and family room. While I have done the opposite – kitchen separating the family room and breakfast – it has not worked as successfully. Even the home owner for whom I built it regretted the decision after the fact.

The kitchen-breakfast-family room area makes up the primary family living area. The family will spend most of its' waking time in these three rooms and even when entertaining this is the area most often used.  For privacy these three rooms are nearly always at the back of the house away from the street.  

The dining room will logically be next to the kitchen.

The resulting layout has the family room, breakfast and kitchen along the back of the house with the dining room in front of the house next to the kitchen and the living room the other side of the front door in the front of the house. This is a very functional and therefore popular plan. Nearly every builder has a version of this plan in their portfolio and it is usually their most popular five room plan. 

This layout also places the family room adjacent to the living room. If the client likes having additional entertaining area you can open the living room to the dining room. If the family likes separate spaces so one member of the family can escape to read in the living room while the rest of the family watches action movies the family may want to close off the opening and create separate use areas.

If the family wants a "den" you need to determine why they need it. If it is to be an office work area with possible client visits the buyer will likely want the office den at the front of the house. If this is the case you put the family room behind the garage with the breakfast and kitchen along the back.  To create more room at the front of the house the den is placed next to the kitchen but at the back of the house.  The den office and the dining room are then placed either side of the front entry. If the dining room is placed next to the living room so that a single large room the dining room table can be expanded into the living room to accommodate large gatherings.

If the den is really a guest bedroom then the room can be created by sliding the garage forward and placing the family room behind the garage.

There are any numbers of variations most significantly the location of the powder room and first floor laundry, if desired, but  the vast majority of two story homes will fit into one of these three templates.  When we designed a custom or semi-custom home before we started the plans would ask the family a couple of questions:

·         Do you need a den? If no we started with the first plan.

·         If you want a den what is the purpose; extra bedroom or office

o   If bedroom we would start with the plan with the den behind garage

o   If an office we would start with the plan with the den in front.

·         If the family is usually together we would open up the family room to living room. If the family wanted two separate areas we would either close off the family room or put it on the opposite side of the house.

Select the first floor plan that meets their need and you have a semi-custom template from which to work.

Relight the Stove

            Note: the following customers were never a problem before or after the incident described. They were model home buyers. The following story is absolutely true. The story also has very little education value except it is a great story.   

            Over the years, we had done a very good job of training our buyers to submit all service requests in writing. Having requests in writing reduced misunderstandings and we were able to establish a procedure to make sure the request was routed to the correct trade contractor or material supplier for correction.

            When our receptionist told me one of our home buyers, who had been in her home about six months, was on the phone I picked up the call with some concern. Mrs. Buyer said her stove used to work but was not working and could I please tell her how to relight the pilot light. I was almost certain all the stoves we installed were electronic ignitions but I took her number and told I would call her right back.

             I called our purchasing manager, Darlene, who assured me that none of our stoves had pilot lights. I called Mrs. Buyer back and told her there was no pilot light. I then asked her if they had checked the circuit breakers. She immediately assured me that her husband had checked the circuit breakers as they had been instructed during the new home orientation.

            I then asked her if her heat was working. It was near Thanksgiving so if the gas had been shut off for some reason, she would likely have noticed. She again assured me that the heat was working and the gas service was on.

            I called Darlene back on her cell phone. She, by chance, was in Mrs. Buyer’s neighborhood so I asked her to stop in and see if she could see anything obvious before I had Mrs. Buyer call the appliance company for a warranty claim.

            Darlene went to the Buyer's home and knocked on the door. Mr. Buyer answered and took Darlene to the kitchen where there was no stove. There was a burn mark on the wall where the stove had been. It seems they had had a minor stove fire but had needed to call the fire department. The fire department had disconnected the gas and electric from the stove and placed the stove in the garage to get the smoke smell out of the house. Mrs. Buyer was out trying to relight the stove in the garage. 

Original Content copyright 2011 Thomas Robinson

Verbal Agreement

Have you ever heard, "but the sales person told me __________." I have had customers sit in my office and tell me that my salesperson promised things that not only do we not do but that we never did. I also have had customers tell me that I promised them things that I was confident that I never promised.

I believed the customers were sincere as it was unlikely both partners could lie so convincingly. I was also pretty sure I was not yet going senile nor were my salespeople over promising. I began to believe that the customers were shopping a number of builders and they had been promised something someplace else and mis-remembered who told them what. Either that or when discussing their new homes one would say to the other, "what did they say?" They would discuss the issue and become convinced that we said something we did not.

The issue was not common but happened often enough that we felt we wanted to proactively deal with the issue. We discover the following clause which we added to the end of our contract.  We Left about ten lines of space to write in verbal promises. We rarely had a customer add anything and if they did we could deal with it before we started.

Record in the space below any and all verbal commitments that any representative of Robinson Development has made to you.  If no additional commitments were made, please write none.

____________________________________________________________________________________
____________________________________________________________________________________

Original Content copyright 2011 Thomas Robinson

When to Say No to the Customer

One of the most difficult customers to deal with are the Negotiators.  The Negotiators are on a mission. Sometimes to get a specific item they want but just as often to get as much as they can.

There are a number of books on negotiating that all tell the reader how to get whatever they want by negotiating. In reality they are not negotiating as much as trying to manipulate someone to get a desired result.  One example given in one of these books is if you are looking to buy a car always tell the car salesperson that you like the car you are looking at but hate the color, even if the car is your favorite color.  The strategy is to make the salesperson think you do not like the car so he will lower the price to induce you to buy the car you wanted all along. The trouble with this particular tactic is every car salesperson has heard it a hundred times and all the good ones have read the same book.

In our housing business we had customers who had read these books and when they wanted something they were not entitled to by contract would express displeasure over some item then try to turn the expressed displeasure for what they really wanted.  We had a customer call us about a scratched cabinet after they moved into the home. The "scratch" had not shown up on our list of incomplete or damaged items on the walkthrough and upon inspection the "scratch" was on the side of a cabinet and nearly invisible.  We could repair the item with a dab of touch up wax but the customer wanted the entire cabinet replaced which would have been costly and disruptive to the family.

After a few minutes of discussion he said "You know what, we really do not want to put up with the hassle and put you through the expense. How about you give us a wine rack for under our counter as compensation?"  I discussed the issue with my superintendent and discovered there had been a number of similar "trade offs" during the construction and the customer was talking bad about us to other home buyers in the community but was telling all the neighbors how he got us to give him free stuff.

I called the customer and told him that because the item was not on the walkthrough list we would not be doing any work on the cabinet. We told him we would give him the touch up wax if he wanted to make the repair himself.

He asked me if I was sure that I did not to make him a happy customer by giving him the wine rack. I told him that it was unlikely we would ever make him happy. I told him I knew what he had been say about us to his neighbors. I also told him that giving in to a made up warranty claim was unlikely to make him happy.

If your customer has a legitimate complaint deal with the complaint even if it is more expensive and time consuming than the proposed alternative. Giving in will only open you up to future similar claims. If your customer does not have a legitimate complaint tell them so politely but firmly. If the customer threatens to withhold their satisfaction or happiness it is more often time to call their bluff.

Original Content copyright 2011 Thomas Robinson

Harassment Clause

While we always tried to identify bad customers before the contract was signed it was not always possible.  As we grew and I was less involved in the contract process we had a few that went to contract that should have been weeded out in the contract process.

We had one customer who was a retired engineer. He would come to the construction site every morning with a lawn chair and sit and watch the construction. Often he would go up to the trades people and ask questions about what they were doing and question why they were using a particular tool or material. In the evening he would go to the library and do research. Often he would bring a do-it-yourself book to the home and ask why the tradesperson was not using a certain technique. It not only slowed down the construction but was upsetting all our trades' people.

We used pre-fabricated wood I-beams on our floors because they were more uniform, shrunk less and provided quieter floors. Our customer had envisioned traditional lumber. He questioned the carpenter who explained that that the product was superior to the traditional lumber. The next morning the engineer customer came to the job site with a bucket full of water with an I-beam cut off he had taken from the jobsite the night before floating in it. It had, of course, swollen on the cut edges.  He believed because the truss absorbed water it was inferior. Our Carpenter contractor was ready to walk off the job.

To deal with situations such as this we had the following clause in our contract;

32 .ADDITIONAL REMEDIES:  :  If Purchaser in any way harasses Seller or any of its employees or subcontractors, or interferes with construction of the residence or conducts unauthorized visits to the site, or makes repeated complaints to third parties, or indicates a fundamental unhappiness with the residence or the project, or otherwise indicates any material lack of creditability in Seller or Seller’s ability and willingness to perform its obligations under this Agreement, then Seller may, in its sole discretion, terminate this Agreement by notice to Purchaser and refund to Purchaser any earnest money payments made by Purchaser.  Seller shall not be obligated to return or pay to Purchaser any deposits or payments for upgrades, extras or non-standard items which have been installed or made or cut to order.  Upon such termination of this Agreement and return of earnest money payments, Purchaser shall have no further remedies against Seller.

I took a check in the full amount of his deposit and went to his current home and knocked on his door. When he answered I explained that we were canceling the contract under the clause above and handed him a letter to that effect. He took the letter but refused to accept the check. Within an hour I received a call from his attorney. After a short conversation his attorney – who was also Mayor of the village where we were building the home - sent me a letter saying that if we completed the house the home buyer would cease all harassment and in fact would not visit the house until completion. We did complete the home.  As the final walk through approached we were concerned about an explosion of pent up frustration but the process went smoothly and we never received a single warranty call from this home owner.

A harassment clause such as the one suggested in this article will not only help you once you get into this situation but it may also help you in the weeding out process. The more a customer objects to the clause the more likely they are to be a problem. 

Original Content copyright 2011 Thomas Robinson

Fire the Customer

In our housing business we worked hard to identify, locate and bring leads to the table. Often as we were negotiating the contract and sometimes even after we went to contract things would not feel right or even begin to go wrong and we would recognize that a customer would be more problems than the contract was worth. Firing a customer is hard emotionally and can be difficult legally.

The saying goes eighty percent of your problems come from twenty percent of your customers. I always thought the ratio was more like 90/10. The sooner you identify problem customers the easier it is to disassociate. As good as it might feel to "fire" them that process can have legal and public relations consequences that you may not want.

A real bad sign of problems was when one of or the other of a couple took complete control of the process particularly if the lead partner was condescending to the other partner. If they argue openly in front of you it is also a bad sign but in my experience not as bad as only one controlling the process because it often means the disagreements are going on outside of your presence and you can be caught in the crossfire.  You cannot be a marriage counselor so do not try. If you get bad feelings that the customers are not on the same page it is often better not to even go to contract.

There are other signs of problems. The "researcher" was one of my favorites. He would often start out a conversation by saying "I know you are the expert but," and then would launch into a monologue on what he had found n the internet or at the library. As we were moving through the process he informed me that he had purchased a CD that had contract forms he intended to use for his new home purchase which included a penalty clause if we were late on completion which he had needed to use on a previous new home purchase.

I told this customer that we had a standard purchase agreement prepared by our attorney and that we did not use third party contracts particularly ones purchase off the internet. His response was "We'll see."

The process of selecting a lot and completing final drawings was usually a two to three month process for us but with this customer it took us nearly six months to finally get to the contract signing.  We completed the contract and sent it to his attorney for approval. The Contract came back with his penalty clause written into the pre-printed form. When I told him we would not accept this clause he told me he had done his "Due Diligence" on us and although we had an excellent record of on time completion so had his last builder and he had need to enforce that clause on that builder. In the process he told me the name of the other builder who I happened to know through the builders association.

I called up the other builder and when I asked him about this customer he said "RUN." Turns out the project was delayed because the customer kept changing his color selections while the home was being built. When it was finished the builder had paid him the "penalty" just to get rid of him.  We told this customer we would not be building him a home.

Most of our customers were great.  Living through the bad ones is a nightmare. Identifying a bad one before you get involved is financially rewarding and great for your mental health.

Original Content copyright 2011 Thomas Robinson

Simple Residential Construction Schedule – Tips on Using

Following the instructions in my three previous articles on scheduling you have now prepared a simple and workable schedule for a typical home. This schedule is a starting point. In this article you will learn a few tips on using the schedule.

The first step is it to get it out of your computer and put it somewhere where you look at it every day. I had one manager who kept all the schedules in a notebook.  His projects never seemed to run as smoothly as our other projects. It was hard for me to review his schedules to see where he was on any given day. Keeping the schedules in a notebook was his way of hiding his problems.

Once you add the starting date for your project and have the spread sheet calculate the schedule save it in a separate file then print the schedule. You want to save it because as you will see you want to be able to tweak the master as you work the schedules to continually improve it. Tape the sheets together. I liked to trim the top or bottom of the pages and tape them together so it looked like one long spread sheet.  Tape the reassembled schedule to a large wall or pin it to a bulletin board in an area where it is easily viewed.

As you complete each item on the schedule highlight the item. I liked to do it with an orange highlighter so I could see the marking from a distance but still read the words. Crossing the items off will make it harder to backtrack if you make and error.  Look at it frequently if not daily and update as necessary. As you work the schedule you will discover problems with times it takes to complete items, sequencing and even some items you have forgotten. Make sure you make corrections to your master so you do not repeat the problems.  

Be careful about adding time.  It the roofing is taking five days when you programmed in three why is it taking five when you though it should take three?  Was you assumption wrong or is there something wrong with the planning or even the trade contractor that can be corrected instead of just adding days to you schedule. Remember each day costs you money in overhead and interest.  

Often it is easier to add time than fix a problem. You should also test assumptions occasionally. If you have programmed in three days for the roof can it be done in three. It is harder to spot under scheduled times than over.

If you line up all the schedules of multiple houses on the wall the highlighted portions should create a smooth slope from the oldest project to the newest. This is not a perfect indicator but it is a great way to quickly spot possible problems that need be looked into in more detail.

The more you work the schedule the better it will become. Do not be afraid to add items. One of the fireplaces we offered as an option required a sheet metal cap installed after the siding was complete.  It was difficult to spot from the ground and so on one house we missed it and forgot to install the cap.  During the next rain water showed up on the interior wall. Once we diagnosed the problem we add a zero day work item to our schedule. We also added a zero day item just before our drywall that reminded us to check for the cap.  You can add whatever items you like from inspections to reminders. You can even add an item such as "remind the office to schedule closing." Whatever makes your process better.  

Original Content copyright 2011 Thomas Robinson

Managing Customer Expectations – Homeowners Manual

Did you ever receive a customer complaint and take it to your staff only to get the response from your employee, "Well what did they expect?"  

Managing your customer's expectations will lead to happy customers and more referrals. The key here is manage not manipulate.  It starts with your advertising. Are you promising something you cannot deliver? You have likely heard the adage "under promise and over perform." The problem with this theory is that continued over performance will raise expectations even if you promise less.  Promise what you can do then do it.

Our housing business created a Homeowners Manual that told the customer what to expect from signing the contract to warranty.  To develop our Homeowners Manuals we used a template written by Carol Smith and distributed through the National Association of Home Builders. The template is extremely helpful but needs to be reviewed thoroughly and adjusted to your geographic area and construction methods. You also need to prepare the instructions on the various procedures such as closing to your area. We found that more information we included the better. We even prepared a page with names and phone numbers for the homeowner to contact for establishing utilities, garbage pickup, cable TV and water service. We also included information on the municipality, Park District, school districts and emergency numbers.

The maintenance portion of the manual includes maintenance instruction on everything from vacuuming the floor to instructions on changing the furnace filter. At the end of each section the standards for the work item and warranty for the item is listed. The standards were practical and achievable. All our employees and trade contractors were required to have copies of the Manual available so they knew the standards we had contracted to meet.

Also included was a detailed description of closing procedures. We included a page of contacts the new home owner would need such as phone numbers and address of municipality, utilities, cable TV, garbage removal, emergency numbers and recreational facilities.

We would give the full Homeowners Manual to the home buyers when they signed a contract. We had them sign a receipt. The receipt included a clause that if they found anything in the manual with which they disagreed they could cancel the contract within forty eight hours.  If they did not cancel they were tied into the standards and policies in the manual. We never had anyone cancel their contract. We had happier customers and therefore happier employees and trade contractors.

The template for the Home Owner's Manual can be purchased HERE. You can also email me and I will send you a copy of the table of contents from our Manual.

Original Content copyright 2011 Thomas Robinson

Listening to the Customer

We all believe we listen to our customers. Sometimes we listen but do not hear what they are saying.

In the early nineties, we were building townhome-style duplexes in Hoffman Estates, Illinois. We were just a few miles from the huge new Sears Headquarters facility. We were trying very hard to target some of the employees moving to the new facility hoping they would spread the word about their new home.

Our sales person, Betty, was a seasoned new home sales person and real estate agent. She was very excited when a women being transferred into the new Sears facility visited our project several times. This buyer was considering our project and another in a neighboring town. Our homes were larger and were closer to her work. She said she like our layout better. The only issue is all our units had basements and she did not want a basement.

Betty used her experience to translate that to mean she could not afford or at least did not want to pay for a basement she would not use. Betty reported this belief to the owners of the project who worked with Betty to put together a package of discounts, credits and special financing which eliminated the premium for the basement.  

After several weeks of working with the buyer, Betty received the call she never expected. Her customer had purchased the other home. Betty was so disturbed by the lost sale she went to see the unit that the woman had purchased. It was smaller, it backed up to an arterial road and Betty was certain our layout was better as were our standard features. Worst of all, the unit was more expensive even without the discount package for the basement.

Betty was so confused by the choice made by this customer she was sure she understood, she called the customer to congratulate her on her new purchase and ask her the rational behind her decision. In response the lost customer replied, I told you I didn’t want a basement.”

Betty then asked the question that never occurred to her before, “Why don’t you want a basement?” The woman then explained that Sears has a very good warrantee program on their sump pumps. She worked in the warrantee department and any time there was a sump pump failure she got the call. She had heard so many horror stories about sump pumps she would never buy a home with a basement.

Original content copyright 2011 Thomas Robinson