The Ultimate Question and learning from homeowner experiences

The length and complexity of the new-home buying process means there will be several occasions where each home buyer's relationship with the builder will be stressed. New research into the most successful companies shows how soliciting direct feedback often and responding effectively creates authentic relationships with customers.

Identifying, managing and learning from Detractors is discussed in detail in the book The Ultimate Question by Fred Reichheld of Bain & Company.  This book describes how companies such as Enterprise Car Rental have grown into the largest car rental company in the world almost exclusively using referrals. They accomplished this using a simple question and feedback that focuses the company culture on the quality of their customer relationship. View the first chapter of the book.

The Ultimate Question in the context of the home building industry and this book is: “How likely is it that you would recommend your home builder or remodeler to family or friends?”  A home buyers’ response to this question is graded 9 to 0 and segmented: when strongly positive – as a Promoter; neutral - as Passive; and negative – as a Detractor.

Using this simple metric Reichheld describes how companies better manage customer relationships and improve processes that impact their level of satisfaction.  The Net Promoter Score (NPS) is the percentage of promoters minus the percentage of detractors.  He argues convincingly that this measurement may be the one of the best determinants for a company’s future performance.

To monitor the home buyer's experience builders may consider multiple mechanisms to facilitate feedback. Traditional satisfaction surveys alone can be a dissatisfier so Reichheld suggests simple survey methods that enable immediate responses, particularly when customers become Detractors.

For homebuilders this might mean creating more touch points to enable feedback at closing, during move-in, or in the warranty and post-warranty periods. This could be as simple as a "Tell us about your experience" button in an email or on a website that automatically initiate follow up and a rapid response from your customer service team to remedy any problems.

Some marketers claim that The Ultimate Question is oversold, oversimplified and sloppily researched.  However most experts agree that there is much to be gained by implementing the principles set forth in this book.

In today's difficult marketplace capitalizing on referral sales is crucial as the budget strings tighten.  Tracking and managing your Promoters can help you build and increase your referral sales base. But understanding the quality and quantity of Detractors is even more important. And NPS scores may help builders to determine that some housing projects should be terminated. Getting timely and actionable feedback about the home buying experience is crucial to ongoing success.