What is the Most Important Department in Home Building?
Need a topic for your next executive meeting? Wait until the meeting starts and ask, “What’s the most important department in home building?” You’ll usually hear a comment, “We’re sales. We’re the most important. We need a contract to being the process.” The construction manager will add, “Its production. Without someone to build the house we don’t have anything to sell.” The accounting manager will say, “None of you know what we spend to build our homes, without accurate numbers we would go out of business.”
I’m in information technology, so I’m usually in the room to explain why the projector won’t work. (Just kidding – I hope). I’m going to give my answer but let me explain something first, I think all the departments are important but the most important should be the one that has the greatest impact on your customers. We can all agree that to stay in business you have to achieve happy and satisfied customers. Your goal should be to create a home buying process that allows your customers to refer their friends and coworkers. It is referrals today that bring customers tomorrow.
A few years ago, I decided to research the question. I was standing in a small circle of neighbors at a block party, “How many of you know the name of the sales person that sold you your home?” Out of the five people in the group, only two remembered the name of their sales person. How could they forget their sales person? No one could say how many times they met with their sales person, and the majority of the group didn’t have a lasting impression of the entire sales process.
We spent many operations meetings talking about the selling process and how to streamline the contract process. Wasn’t the sales person the most important person in the sales process? Shouldn’t the customers remember their sales person? Who do they remember?
My next question, “How many know the name of the warranty person that did your service work?” Four of the five knew his name. They not only knew his full name, they described him and remembered their interactions with him. Was this the answer?
One commented, “He was very friendly. He took the time to talk with my kids and they loved that. They still ask about him.”
Another person said, “He was great. He was nice, he explained what he was doing and everything was fixed quickly.”
I learned that the last person who interacts with our customers leaves a lasting impression of our company. The last person often determines whether we can count on a positive referral.
Since that event I have had many conversations about the importance of warranty departments. In my work as a consultant, I have learned some important factors that help design and operate an efficient warranty department.
The biggest mistake most home builders make when staffing their warranty department is that the warranty department is treated as the training ground for production teams. Your warranty technicians should be your most senior and seasoned field staff. It should be a badge of honor to join the warranty department. It is your warranty team that is the last contact point with your customers. To be successful your warranty department has to understand all the facets of construction to know if the reported issue is an installation problem with your trade partner or a material defect that should be covered by a manufacturer’s warranty.
The first visit to a customer’s house should be to review reported problems and record what is going to be addressed during the warranty process. What a lot of home builders forget is to track unwarrantable issues. That’s right. You need to track what you’re not going to fix. By tracking every reported issue you can confirm if a specific concern has already been evaluated and why it hasn’t been addressed. Some customers think that if they keep asking the same question they will get the answer they seek. Only accurate service records can show why the repair was denied in the past.
When your warranty technician goes to a customer’s house, give him all the tools he will need to succeed. He should have a list of the reported warranty issues and what they are going to review with the customer. Include a list of all past service work for the home. It’s important for him to know what was repaired during his previous visits to the home. Only when he has the whole picture of the completed and uncompleted service work can he make a fair decision of what needs to happen to move forward.
Make sure your warranty technicians give customers a verbal or preferably written expectation of the time frame needed to complete the repair. If the repair requires multiple trade partners, then schedule them for the same day and call the customer with the date and time. If the appointment has to get skipped due to the weather, then call your customer, and quickly reschedule a new date and time.
When it comes to deciding what is covered by your warranty manual, apply the rules equally to all customers. A neighbor told me, “I wasn’t mad that he didn’t fix the crack in my driveway. I was mad because someone down the street had a crack smaller than mine and they kept complaining and eventually someone came out. Why should theirs get repaired and mine wasn’t?” We failed with that customer because we didn’t apply the rules fairly. A customer shouldn’t be treated differently based on who hears the problem or how often they complain to get something fixed.
One of the easiest ways for a home building company to generate additional sales is to completely satisfy their current customers. Delivering a well-built home with the fewest defects in the shortest time possible isn’t possible without communicating with your customers. When it comes to your warranty department, communicate often with your customers, record the contact points in your automated system and apply the warranty rules fairly and equally. Only by developing an efficient warranty department can you be sure you’re last contact is the one you want you want your customers to relay to their friends.