With so many details, a lot can go wrong in home building. One builder contacted me about an unresolved situation with an angry buyer. Although the buyer had originally moved into the home thinking everything was okay, he later started posting negative comments on Facebook. He included pictures of the home and its supposed defects—but these were actually photos from the walk- through and had been corrected before he moved in. His hostile behavior was shutting down sales and compromising the company’s reputation.
Our team recommended meeting with the buyer and including the company’s owner, which made quite an impression on the buyer. He was immediately disarmed when he realized the top dog cared about his concern. After the first meeting, the homeowner agreed to stop posting. Although the buyer initially wanted a cash buyout, they worked through the issues and came to a more reasonable solution. They reestablished the psychological respect, trust, and certainty that had been lost.
Special Weapons And Tactics (SWAT) is a division of many police forces specially trained to handle the most extreme situations. In day-to-day customer encounters, service recovery is an excellent strategy, but in the most extreme cases, when we’ve tried service recovery and customers still feel they are at war with builders, we need a much more aggressive strategy to stabilize the situation and potentially turn the toughest critics into the biggest fans.
Having an in-house SWAT team serves builders well. Difficult customers bring
the emotion of all the hopes and dreams they have tied up in their home into the discussion. When they feel their dreams are threatened, only the most aggressive approach will ease their minds.
Every builder will benefit from a crew ready to go into action when a potentially hostile situation emerges. The toughest customers require special care. And it’s worth it. According to the Avid database across thousands of homebuilders, leading builders who take a comprehensive customer approach have been able to reduce their percentage of hostile customers to less than one percent, while the rest of the industry has on average seven times more disgruntled customers. Working with the toughest customers can yield tremendous return on investment.
Not everyone immediately agrees, however. At a Homebuilders’ Association event, one prominent consultant argued that homebuilders should not focus on satisfying their toughest customers. Instead, she argued, builders should devote their resources to making happy customers happier. Her rationale was that it’s too difficult to turn disgruntled homebuyers into loyal advocates and more fruitful to turn moderately happy customers into ecstatic ones.
This simplistic view ignores the fact that we live in a digitally connected world, and companies have the power to recover the toughest buyers. It is critical for all companies to engage in this conflict resolution to maintain their brand as well as their bottom line. Homebuilding is a local business, and it doesn’t take much to tarnish one’s reputation and kill future sales. In 2007, Sprint Nextel publicly “ red” (dropped) its most difficult customers, angering subscribers and igniting a social media backlash. In the subsequent years, Sprint Nextel hit troubled times as it lost millions of customers and faced dropping revenue. This example, although drastic, exemplifies the need to make a proper recovery plan for difficult customers, rather than just writing them off. The silver lining for Sprint Nextel was a remarkable recovery over the following decade plus, which Gerardo Dada, in a blog post for Bazaar voice, attributes to its shift toward customer centricity.
Create an aggressive exit strategy to avoid getting burned. Below are four key steps to building and utilizing a SWAT Team.
1) Identify potentially hostile customers in advance.
Have active CRM (customer relationship management) programs in place to identify buyers who may need intervention. The CRM program manages work ow and documents warranty requests, as well as the customer’s history and touchpoints.
In addition to CRMs, third-party CSS (customer satisfaction survey) programs allow teams to properly assess performance (absent of bias), ag low scores, scan the internet for public reviews, and read comments to identify potentially hostile situations. Through examining data and obtaining knowledge of the customer’s experience, the team can determine the status and address issues before they explode.
2) Build your SWAT team.
Your SWAT team should include a project superintendent, a warranty representative, and an executive from the main office who is authorized to make warranty repair decisions. The key is to assemble a team that will show homebuyers you take their concerns seriously. Also, by involving top-level personnel, the SWAT team will be able to offer solutions and quickly resolve matters without needing additional approval.
3) Document all actions.
The team should meet with the homebuyer at the house, which might require evening or weekend appointments, address each area of concern, and determine an appropriate action. It helps if SWAT team members can empathize with homeowners and ask, “What would I expect the homebuilder to do if this were my house?” Document all discussions and actions for future reference.
4) Provide immediate follow-up and resolution.
Track all issues and action plans to reach resolutions in a timely fashion. Preemptively address further dissatisfaction by alerting customers to any delays they can expect with repairs and remedies. Finally, present the homebuyers with a service recovery gift that reminds them how much the company appreciates their business and how important the homebuyer/builder relationship is.
Just as police stations would be happy to never deploy their special forces, builders hope to keep SWAT teams in reserve. But when a situation calls for specialized experts to deal with irate or hostile customers, having a team prepared to spring into action is a valuable insurance policy that is far superior to turning a blind eye.
Instead of getting defensive in the face of conflict or writing off our toughest customers, we need to strategically appeal to both happy and unhappy customers. A customer management strategy that addresses only moderately happy customers is not just ill-advised; it’s dangerous to a builder’s long-term success. Clearly, builders should focus their service efforts on the areas of greatest opportunity, but they also must have a process for dealing with those severely dissatisfied customers who can create a public relations nightmare.
Avid Ratings’ data suggests the typical builder can expect around 7.5 percent of their customers to make a negative referral. That’s why we are staunch advocates of neutralizing your toughest customers AND appealing to your happier customers. This is about more than keeping one buyer happy. It’s about protecting future business, too.
This article is excerpted from the book Service Certainty by Paul Cardis and Jason Forrest.
