Homebuilders Refining Their Services

In light of the economy’s condition, homebuilders are refining their services to meet the needs of their customers.

The Valley’s housing market continues to ride real estate’s proverbial wave, sometimes enjoying the crest, and right now just trying to survive the trough.

While the current down market isn’t good for homebuilders, it is providing homebuyers higher quality and stronger customer support to go along with the lower prices.

“Salespeople were in an order-taking mode for 10 years,” says Paula Sonkin, vice president of the real estate and construction industries practice at J.D. Power and Associates.

During the housing boom, Sonkin says homebuilders were unaccustomed to servicing the client beyond the initial point of sale. Now they are recognizing the importance of negotiating and developing relationships — new skills they have to learn as customers demand more sophisticated service.

Since a salesperson’s ability to meet clients’ changing needs generally has been subpar, homebuyers are turning to construction managers and on-site project managers who have become exponentially more important over the last year, Sonkin says.

“It’s a huge opportunity for builders, who are making sure construction managers have the people skills to communicate with the homebuyer,” Sonkin says. “Now builders and construction managers are having regular meetings with salespeople. We know the role of the salesperson has changed.”

Another example of how the slow market is good for buyers is better quality of construction. The J.D. Power and Associates 2007 New-Home Builder Customer Satisfaction Study was recently released and shows an increase in home quality since 2006. Sonkin says that’s partly because builders are constructing fewer homes, so they have more time to fix problems before the buyer moves in. According to the survey, satisfaction among homebuyers has remained high in Phoenix and across the country. Phoenix’s overall average for customer satisfaction is 107, while the national average is slightly higher at 111.

The survey shows these four builders rank first in the Phoenix market in their respective categories:

  • Overall Customer Satisfaction: Centex Homes
  • New-Home Quality: Trend Homes
  • New-Home Design: T.W. Lewis Company
  • Mortgage Originator: CTX Mortgage (serving Centex Homes)

The global marketing information services firm annually surveys people who have purchased new homes in 34 markets nationwide. The 2007 study ranks only new homebuilders who closed 150 homes in the 2006 calendar year and whose buyers submitted at least 50 usable surveys about the builder. The Valley, Sonkin says, is a highly competitive market because there are more homebuilders here than in most other places.

“If you think buying a car is a big deal, let’s talk about building a home,” says Sonkin, relaying what J.D. Power III told her 13 years ago as he was on the cusp of embarking on a new business endeavor.

“We did nothing but our homework for two years,” she says, explaining the company set out to uncover what needs existed in the homebuilding industry that the firm could help meet. As it turns out, there was significant need, and the J.D. Power and Associates New-Home Builder Customer Satisfaction Study was born. Builders can purchase the full-length version of the survey, which comes with complimentary consulting services provided by J.D. Power and Associates. Now in its eleventh year, the survey provides current information to industry leaders.

“(The study) is designed for J.D. to work with builders to better (their business),” Sonkin says, adding that the company oftentimes helps builders differentiate themselves from competitors on quality or design. “Our goal is to raise the bar in terms of customer satisfaction with consumer benefits.”

Centex Homes-Arizona started purchasing the survey four years ago.

“The (J.D. Power and Associates) brand is recognized by consumers as credible. The information captured in the survey is terrific,” says John Michell, president of the Arizona division of Centex Homes. “It validates some of the things we have worked so hard to achieve, and it puts a spotlight on areas where we still have opportunities to delight our customers. The team at J.D. Power gives suggestions on ways to improve customer service and training we provide our employees.”

Tempe-based T.W. Lewis Company, which ranks first in new-home design, does not purchase the study because it employs its own third-party surveyor, Woodland O’Brien & Associates, to poll its buyers and provide monthly feedback.

Still, T.W. Lewis Company President and Chief Operating Officer Kevin Egan says J.D. Power’s study has much to offer.

“(The study) would probably be beneficial to a homebuilder that rated poorly or one that lacks sophisticated survey systems,” Egan says. “The biggest value in the J.D. Power survey results is it validates what we’ve been doing, which is designing homes that fit our buyers’ needs and lifestyles.”

Fore more information on the companies mentioned,  please visit the corresponding websites:

www.centexhomes.com/phoenix
www.jdpower.com
www.twlewis.com