2009 International Builders Show Las Vegas, Nevada January 20, 2009 3:30-5:00 pm Referral Heaven Increase Referrals & Reduce Warranty Costs Carol Smith (719) 481-6247 www.cjsmithhomeaddress.com Deserve Referrals Superior housing value: opinion in customer s head Superior relationship: opinion in customer s heart Preview The Satisfaction Message Align Expectations Warranty Excellence Beyond Warranty Referral Program 1
Preview The Satisfaction Message Align Expectations Warranty Excellence Beyond Warranty Referral Program An 8% Increase in Customer Satisfaction = Increase in revenue 8-19% Decrease in warranty costs 17-24% Increase in profits 13-28% Independent 4-year study, involving 200 communities in 7 cities by Professor Kenneth A. Merchant, Marshall School of Business, USC 95-96% 96% Optimum level: Optimum level: balancing cost & return 2
Impact of Warranty Service Eliant Surveys: By year end, more than 41% of a homeowner s referral decision is based on satisfaction with warranty Woodland-O Brien: The average builder loses nearly 25% of their homeowners willingness to refer during warranty Avid Ratings: How well production builders handle warranty service seems to be the dominate factor in customer satisfaction Customer Follow Up: Our data shows warranty satisfaction is the greatest influence on referrals after one year in a new home JD Power & Associates Warranty service 16% (20%) Construction manager 15% Home readiness 13% Sales staff 13% Quality 10% Price/value 12% (8%) Preview The Satisfaction Message Align Expectations Warranty Excellence y Beyond Warranty Referral Program 3
Warranty & Maintenance Expectations Sales Design Construction Orientation Warranty Sales Overview Product - Included - Selected Quality - Walk the show home with home buyers: - Inside & out, basement & garage Warranty service - Types & duration of coverage - Contact: emergency, standard visits, random requests - Homeowner guide for details Direct detailed questions to warranty Selections Realistic displays Model home familiarity We want you to make informed decisions 4
Frame Stage Tour Plane & shim studs Glue & screw floors Pipes protected Insulation is next Drywall shrinkage repairs Squeaks still possible Ventilation & inspection After work in the attic Homeowner Orientation Use, care, warranty Long term performance Refer to homeowner guide - Refresh memory. - Here s where you ll find. - Good information, including a diagram. - Troubleshooting tips for mechanicals. - Reporting procedures described - Forms During Warranty Warranty guidelines Inspection conversations Repair technician conversations Letters confirming i maintenance responsibilities Updates or reminders Community workshops/seminars 5
Preview The Satisfaction Message Align Expectations Warranty Excellence Beyond Warranty Referral Program Avoid Buyer Abandonment Thanks for the dough! Now go away Drop in Homeowner Satisfaction Between closing & year end: 8-11% typical, as high as 35% 6
Avoid Buyer Abandonment Transition service Builder-initiated warranty visits Friendly policies Long term relationship Transition Services Moving preparation Packet Maintenance & touch up kit Move-in day Check for questions Survival kit Reserve parking Clean drive & walks Tools & materials Connection services (note: includes a liability) After move-in Sales visit with thank you gift Selection consultant visit with product samples Construction visit to answer questions Welcome to warranty letter Builder-Initiated Warranty Visits We d like to confirm that your home is performing to the standards we promised 7
Reporting Convenience Welcome requests via Email Company Web site Fax Mail Drop-off at the sales or construction offices Same form for all methods Included in our homeowner guide Available at all offices On the Web site Email Warranty Requests On-Line Warranty Guidelines 8
Inspections Explain that you will - Determine what is needed - Do some repairs? - Issue work orders to trades? Research as needed - Talk with colleagues - Review file Check cosmetic surfaces Inspections Review maintenance List follow-up tasks Review decisions One by one All at the end Reference homeowner guide Set Repair Expectations Timing Children Pets Furnishings, personal items Timing Personnel Noise Dust 9
Builder A Warranty repair: 5 days Actual: 8 days Homeowner: 3 days late Builder B Warranty repair: 10 days Actual: 8 days Homeowner: 2 days early Both homeowners experienced the same response time Avoid Agreeing to do something you should not do and then doing it badly: I already did them one favor agreeing to do this. Now they want it done right! Scheduling Repairs Work date Computer support Administrator Call prior to confirm appointments Site visit Direct contact between Oversee work home owner & technician 10
Warranty Repairs One trip repair Read the work order Take all needed items Schedule enough time Make an appointment If you are running late, CALL! Park a clean vehicle in the street in front of the home Refrain from smoking on the homeowner s property Warranty Repairs Check the work area: report cosmetic damage Protect the work area Ask to use electricity or water Use other facilities only if invited to Conditions inappropriate? Leave & reschedule Showmanship 11
Bring Cleaning Supplies in First Look for Extras to Do Leave a Token of Appreciation Starbucks Subway Local ice cream shop 12
Completion of Warranty Items Traditional Say 30 days Take 45 Current best practice Say 15-21 days Take 5-10 Suspend category: safety valve Homeowner s schedule Weather Back orders Follow Up Phone Fax Email Post card/letter In person Emergencies Ongoing situations Incomplete work orders Complete, unsigned work orders Complete, signed work orders 13
Sample report screens courtesy of Homsoft Timely Reports Warranty ID Total Warranty NonWarr Courtesy %Warr %NonWarr %Courtesy Doors 600 255 2 343 43% 0% 57% Carpentry 555 350 15 190 63% 3% 34% Plumbing 519 435 7 77 84% 1% 15% Painting 458 128 55 275 28% 12% 60% Drywall 439 219 43 177 50% 10% 40% Flooring 224 88 22 114 39% 10% 51% Electrical 214 76 0 138 36% 0% 64% HVAC 206 105 0 101 51% 0% 49% Windows 176 95 6 75 54% 3% 43% Siding 134 78 0 56 58% 0% 42% Cabinetry 129 45 4 80 35% 3% 62% Landscaping 116 12 48 56 10% 41% 48% Concrete 109 23 48 38 21% 44% 35% Miscellaneous 66 0 0 66 0% 0% 100% Masonry 51 23 0 28 45% 0% 55% Roofing 39 8 0 31 21% 0% 79% Appliances 37 0 0 37 0% 0% 100% Home Owners Assn 36 5 31 0 14% 86% 0% Tile 35 23 0 12 66% 0% 34% Preview The Satisfaction Message Align Expectations Warranty Excellence Beyond Warranty Referral Program 14
Beyond Warranty Long Term Relationships Maintenance Services Within normal visits Menu (for a fee) Property management services After move-in selections Post cards exchanged at the sales office Commonly needed tool or material Sales person asks for referrals Prospects would be impressed by this exchange Service Sweep: RSVP Service Sweep: RSVP Window cleaning Yard treatment Filters Light bulbs in high fixtures Batteries for smoke detectors Annuals in spring 15
Informational Support Seasonal newsletters Email reminders/updates Seminars/workshops (bring a friend) Organic home care Routine maintenance Interior design projects Landscaping techniques Closet organizing Tax benefits of home ownership Social Activities Community directory (on-line for easy updates) Meet your neighbor receptions High end: catered house warming Holiday or seasonal events Community involvement Preview The Satisfaction Message Align Expectations Warranty Excellence Beyond Warranty Referral Program 16
Referrals: You Are Here Establish a benchmark Develop a method of tracking Set a goal Establish a data base Communicate Track Referral Program Some customers give referrals without prompting, most need to be asked Rehearse Role play at staff meetings Before, during, & after the sale All personnel 17
A homeowner comments on the great treatment We ll provide the same careful attention to anyone you refer to us - Zahra Coulter, Landmark Homes, Calgary Give em Something to Talk About Sponsor local school ss sports team Be a green-built innovator Participate in charitable building programs Silent auction model furniture, proceeds to charity Host holiday events All of the beyond warranty activities Make It Easy to Refer Referral methods readily available At each business location Web site Homeowner guide Warranty visits Referral option on voice mail 18
After Referrals Express appreciation Update everyone who gives a referral Follow up again after the sale Tokens of Appreciation Send something unique Special cake Spring bouquet Donation to a charity Pick a gift from the web site Duplicate gifts to referrer & referree Repeat gift on the referral anniversary (Confirm such rewards are allowed by your state real estate commission) Review The Satisfaction Message Align Expectations Warranty Excellence Beyond Warranty Referral Program 19
Resources HomSoft, a product of Warranty Management Technology, Burnsville, Minnesota, www.homsoft.com or call Tracey Gundersen, 952-201-5036. Survey Companies Eliant www.eliant.com Woodland-O Brien www.woodlandobrien.com Avid Ratings www.avidratings.com Customer Follow Up, Inc. www.customerfollowupinc.com JD Power & Associates www.jdpower.com Carol Smith books available from BuilderBooks.com or at 800-223-2665: Beyond Warranty Building Your Referral Business, 2008. Homeowner Manual A Template for Home Builders, 2 nd ed, 2001. Meetings with Clients A Self Study Manual for Frontline Personnel, 2002. Thank you for joining us! Referral Heaven Increase Referrals & Reduce Warranty Costs 20