It’s All About Expectations

Setting clear and proper expectations can be the difference between a customer being a Raving Fan, or being raving mad.

by Mark Hodges

Recently, I was talking with an Avid client whose Avid Reports indicated a serious gap in their homebuyers’ assessments of “being kept informed” and “communications” throughout the buying process. Further analysis of their buyer profiles gave us a good indication about why this gap was occurring. We learned that over 60% of this builder’s customers were first-time homebuyers.

Why was this discovery important? Because the experience of buying a new home is not only emotional and scary, it is also entirely mysterious. And because anxiety and frustration occur more intensely whenever someone doesn’t know what to expect from an already anxious experience.

I asked about the builder’s formal interactions with their buyers, and how they went about setting expectations for what the new home buying experience would entail. The short answer was not much. They didn’t conduct Pre-Construction Orientation Meetings, for example, and all other communications were informal. Their buyers were for the most part left to set their own expectations which were, unsurprisingly, lofty and unrealistic.

This neglect was a formula for the results they were experiencing – customers who were unhappy, not so much with their homes, which they rated highly, but with the entire experience from contract to closing and beyond. The builder wasn’t so much doing a poor job building the homes, but they were doing too little to help their customers know what to expect throughout the buying process.

Building a home of high quality is a minimum requirement for a successful homebuilder. It’s a ticket to entry in terms of achieving customer loyalty, nothing more. What sets great homebuilders apart from merely good ones is their programmatic focus on providing a great homebuying EXPERIENCE for their customers. And a great experience begins with setting clear and proper expectations, particularly for buyers who are purchasing a new home for the first time. (Which in my anecdotal experience is MOST new homebuyers!)

So, how do great builders go about setting clear and proper expectations? They do so by institutionalizing formal interactions with their buyers throughout the buying and building process. They instruct buyers on “What to expect at the Design Center”, “What to expect during the construction process”, “What to expect if you want to make changes during construction”, etc.  These formal, scripted events take the mystery out of the process, clearly explain what the buyers’ obligations are, and what could go wrong (like snowstorms or permitting delays) – essentially a list of what the buyers can and should expect while their home is being built. An informed buyer is much better prepared for the uncertainties and occasional issues that can arise during this complicated process. It’s your obligation as a builder to make the processes clear and understandable.

As Paul Cardis noted in his book Service Certainty, setting clear expectations and preparing buyers for some of the uncertainties of the buying and building process can “inoculate” your buyers against the unexpected, better preparing them for the occasional and inevitable disruptions that can cause great anxiety for the uninformed.  In short, the more they know about the process and their role in it, and what could happen, the better able they are to deal with unwanted surprises.

As I mentioned, the builder we spoke of above doesn’t conduct Pre-Construction Orientation Meetings, instead leaving the buyers to wonder why construction hasn’t started (permit delays), why they can’t change their cabinet selections even though their first choice hasn’t been installed (lead times), or why unaccompanied site inspections are prohibited (safety), etc.

Our Avid Advisors can help your company to discover best practices of effective expectation-setting and communications, and help you to implement them in your business. All you need to do is ask. We’re here to help you to create Raving Fans of your customers, and to avoid making them raving mad!

 

 

How the Homebuying Experience Has Changed!

by Mark Hodges

Reflecting on my early days in the homebuilding industry (yes, you have to go back to 1983), I was struck by just how much things have changed in the way homebuyers go about shopping for a new home.

In “the old days,” potential customers went to the one source available to them to find new home communities in their area – the Real Estate section of the newspaper. There they found ads usually showing one elevation, perhaps a floorplan, and other basic information about the community. Armed with only that information, they hopped in the car and traveled to the sales office. There they met me (or someone like me) who introduced them to the builder, community, products, features, and site plan, hoping to find the right home with the right features, on the right home site, built by the right builder. In short, they came knowing very little, and the sales process took weeks.

Fast forward to today (really fast) and the experience is completely different. Today, homebuyers first “travel” to the builder’s website, where they find virtual tours of all the available homes, information on each home’s features, available options, and site plans with all available home sites. If the builder uses GoTour®, they find Star Ratings and other important information about the builder, and even information about the products the builder installs in each home. In short, when they finally decide to visit the community, they have already chosen the best home for them, identified the right home site, and even chosen many of the features they want in their new home.

Imagine just how much better informed today’s buyer is before they set foot in the sales office. Instead of asking basic questions about the community, home styles, and features, they can now come asking about the Elm model and about home site #16. They’ve already reviewed the builder’s Star Ratings thanks to GoSocialTM (if the builder is smart enough to use this product) and they know pretty much what they want. Now it’s just a matter of confirming their needs and matching them to the home and features they’ve already selected. Wow!

While we don’t have the data yet to confirm it, I strongly suspect that sales conversion rates are much higher when a customer visits a community to confirm what they’ve already explored via GoTour®. Imagine how much more smoothly the sales process can go when a prospective buyer arrives with a wealth of information – much more than could be found in a newspaper ad!

Now, consider the process of selecting options. In my day, my “design center” consisted of some Formica counter chips and a few cabinet doors lining the walls of the laundry room in the model home. There was no such thing as today’s design centers, where buyers tour literally hundreds of displayed products in gorgeous galleries. Now imagine that they’ve viewed all those products (and their Star Ratings) on GoTour® before their first visit to the community. All builders know that option sales contribute greatly to bottom line profit, and our research shows that buyers spend on average 20% more on options they’ve seen on GoTour®!

Today’s homebuyers are much better informed, much more interested in real consumer feedback about the builder and the products they use, and much more prepared to make a buying decision, much more quickly. This is the power of Avid’s industry-leading products – GoSocialTM, GoTour® and GoSurvey®. A builder who chooses to invest in all these services has a much greater chance of making the sale, selling more options and improving the customer experience by acting on feedback through the GoSurvey® process.

The only question is, why would a builder leave it to chance? Meeting the needs of today’s information-hungry Millennials and greeting well-informed buyers to their first visit at your community is worth the investment many times over. One thing’s for sure – using these valuable tools beats even the most clever newspaper ad, every time! If you’re not already using these products, you should learn more about them as soon as you can.