Setting Realistic Customer Expectations

By
Education & Training with BuilderRadio.com

This week we speak with guest, Tom Stephani.

Most of the ‘clients from hell’ are clients that we create on our own.

We create our own clients from hell by not creating, setting and maintaining realistic expectations from the very get go.  We have a lot of things that we do as an industry that we have to be very, very, very careful about, especially in these times when the custom client has the opportunity to go to any builder within the marketplace to have their home built.  And there are a lot of people that are promising things and not delivering on those, and so we need to set expectations from the client level first.

First of all, we have to create a commitment to do what we say we’re going to do when we said we’re going to do it; and do it with a smile.  We know that homebuilding is a process.  We have to think about the fact that what we’re selling is really our expertise to bring a project from concept to completion.

Time

One of the first expectations that clients have said in the past is that it took too much time. One of the key things that I try to do with a custom client is set them down at the very beginning, either through a custom home building seminar or on a face-to-face meeting – or both, and explain to the customer that they have to be prepared to commit time and effort to the project.  We’re going to be doing all the things that builders do; organizing the work and getting all the ducks in the row and get on all the people in place to do this project.  But the homeowner is still going to spend a lot of time making decisions both at the beginning of the project and also during the project.  We’re going to need them to commit that time to us.

As salespeople, we want to make everything look like this is going to be a walk in the park.  We’ve got lots of competition and these customers are playing us against each other, and so we don’t want to raise the specter that the owner is not going to have this beautiful, wonderful, easy experience in building their home.  We want to make sure that they feel comfortable and confident that it’s going to be a great experience for them so we don’t want to raise these issues.  But quite honestly, it’s either raise them now or raise them later.

We’re creating a partnership here as opposed to a home buyer / home seller relationship.  I’ve never thought of myself as a seller of a home.  I’ve always thought myself as a partner with my customers and it usually works out much better that way if we both get on board with that.

Choices

One of the other things that we want to do is narrow the choices for the customer because the complaint has come back that there were just too darn many choices to make.  And one of the reasons that consumers choose us – and this is especially true when we get into the green processes and products – is that we narrow the choices for them and make it an easy path for them to decide what they really want in their new home.  If we offer up too many choices or they bring a ton of different concepts to the table, it becomes extremely confusing and they have a hard time making those decisions.  And when they have a hard time making decisions that delays the project; it creates all kinds of issues for our trade contractors and suppliers.

What we want to do is narrow the choices and set that expectation that they do not have a complete world global-choice menu here.  We have certain ways we do things.  We have certain products that we recommend, and we feel comfortable with them because of our experience with them.  Customers appreciate that.  And too often when they come to us with a concept or a product or a process that we’re not comfortable with or we’ve had experience with that has not been good in the past, we’re too afraid to say, “You know what, that’s not really the right way to go.  Here’s a different path that we think is a better path.”   And in that case, we don’t have the customer whipsawing us around during the design, specification, and construction process for that matter.  I think that’s one of the key things though that I learned really early in my career.

Quality

One of the other things is we have to define quality too.  I mean, everybody wants quality and we all build quality.  The problem is that quality is in the eye of the beholder and we have to define what we mean by quality to our customers.  We have to explain exactly what standards we’re building to, what types of things that we’re going to be putting into their home; and what level they’re willing to pay to have what they perceive as a quality product.

We have to define our quality statement very early on in the process. Even though it’s a subjective measurement, we have to become as objective as we can in our quality discussions with our customers because what they think is quality and what we think are quality are two different things.

Our definition of quality is a merging of good design with appropriate products and materials, and installed in a workmanship or excellent manner in the home.  It’s not the price of the products.  It’s not the size of the home.  It isn’t dictated by whether you have granite countertops and all the best stainless steel appliances in the home; it’s how we take all those pieces and put them together and merge them together in a quality product.

What we have to do is listen to the customer and figure out exactly what they’re looking for and to see if we can deliver it.  In some cases, we’re going to find that we may not be able to deliver it.  If our proposition or if our way of building a home is to deliver the finest quality with the finest materials and the finest products that we put into a home, and the only thing that our customers’ care about is the glitz and glitter stuff and to make it as big a showcase as they can for the least amount of money; we may find that we’re at odds with our philosophies of what we want to provide.

This is the opportunity now to determine that maybe this customer isn’t the right customer for us, and maybe the figure that maybe this builder isn’t the right builder for them either.  I mean, if we have different philosophies, you can’t build for everybody.  You can’t be the right builder for absolutely every customer, and so we have to determine and ferret out these expectations early on and determine and make sure that we can provide what they’re looking for.

What’s included?

One of the other things is that we have to make sure of is that there is an understanding and an expectation of what’s included and what is not included within the construction project.  We have to make sure that the consumer understands that the specifications and the plans detail and the schedule of options and the schedule of features that we’re putting into that home is actually what we are promising to do.

Everything beyond that is going to be an additional cost.  A lot of customers have this frustration at the end of the project that ‘everything was extra.’  And the reason for that, I believe, is because we didn’t spend enough time at the front end finding out exactly what they were expecting.  Let me give you a quick example.

Most electrical layouts are done by the architect or the design professional, and they’re done to code.  We often find, though, that the owner’s expectations are substantially over and above what’s required by code.   We have to addressed that early on and create a realistic expectation – “Okay, we’re just providing just code-based, you know, we’re just doing the lighting plan to the code right now.”  Know that if when we get into this as we start talking about down lights and cabinet lights and all of that stuff, that’s not included in the pricing at this point and we might add some additional budget money because as builders, we know they’re going to want to do that when we get to that point.

So it’s our responsibility in my view, so let them know ahead of time and make sure that they recognize that they’re either going to have to add to the budget later or we’re going to have to build some additional monies into the budget right now to cover these kinds of things so that they’re not coming away feeling bruised and abused after we’ve presented them with all these additional billings, for things that they consider as part – they were really part of the whole project to begin with.  The reason that a lot of builders don’t put that money in is they don’t want to be perceived as a high priced, over the top builder.  And certainly we’re always being compared to our competition, so we have to be very, very careful on that.

Same with appliances and same with kitchen cabinets, it’s just too much to make those decisions.  Those builders and customers that don’t do that early in the process—make all those decisions—really aren’t going to know what those things are going to cost.  I feel it’s important for us as builders, at the very beginning of this project, is to explain to them if we’re going to put allowances into these things, number one, we’ve got to have a real number to hang out hat on.  What I mean by that is that we go out and get a bid on some cabinets that will be appropriate – if there were cabinets, for instance – we would go out and get a bid on those cabinets from an appropriate supplier for an appropriate level of quality for that particular project.  Most likely the owners are going to go out and spend more than whatever our allowances are because that’s just human nature.  And so we have to tell them that upfront.

Communication with Trades

One of the last things that we have to discuss, especially with the higher end client, is that very often they would have interaction with our trade contractors and suppliers, but most usually our trade contractors and they don’t recognize and understand that the trade contractors come from a different viewpoint – from the standpoint of their level of sophistication, if you will, and communication skills and ability to interact with especially the high end client.  And so we have to explain to our customers that as the builder, we direct the trade and suppliers.  Certainly they’ll have interaction with those folks, but it’s our job to direct these folks on the job so that we get what the customer is expecting.

We have to create and maintain these realistic expectations before, during and after the project so that the customer is happy.  We want referrals; that’s the key.  If they’re happy, they’re going to refer people to us.  If they’re unhappy, they’re certainly going to tell people what we did wrong and it’s so easy to turn a good client into a bad client by not creating these expectations appropriately.

To listen to the audio interview click herehttp://builderradio.com/blog/?p=1308

Comments (2)

Cherry Wings Realty
Cherry Wings Realty - Traverse City, MI
Your Traverse City Michigan Realtor

Jerry:

Some very insightful things in this blog.  Some that I have not thought of previously.  Thanks for the information.

Mar 07, 2010 10:08 PM
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

Great blog as usual Jerry.  I will reread and make changes. Thanks for the post...

Mar 08, 2010 06:06 AM