Predictables Impact Satisfaction Results

In a story, that is, unfortunately, all too common in the world of residential construction and home improvement, a St. Louis doctor and his wife had a very bad experience with a remodeling contractor. In 2004, they initiated a $200,000 room addition and kitchen remodeling project, and trouble signs began to surface almost immediately.

After only a few days of demolition, the project sat unattended for more than a week. And despite serious misgivings, the couple chose to soldier on, pushing the contractor to stay on schedule. The project proceeded, in fits and starts, until many weeks after the original project completion date and much of the work was yet to be completed. Then came an unusually long absence followed by some bad news. The contractor was going under. He was filing for bankruptcy.

In the end, the doctor and his wife lost most of the $150,000 they had already paid. Later, they found a new more competent contractor to finish the job, but by then almost a year had passed and they had been seriously nicked financially in the process. Ultimately, the couple had the means to recover and move on.

Case closed, right? Not really. This one bad experience has had ripple effects throughout the high-income community where the couple resides.

First, there was the serious strain that this mishap put on the friendship between the couple who referred the contractor to the doctor. The referring couple had worked with the contractor on a smaller job and were relatively happy with the outcome. So when their friends asked his name, they were willing to give a recommendation.

Second, both couples say they have told the story as a cautionary tale countless times in the ensuing years. And though the exact dampening effect that this negative retelling has had on the local market is hard to calculate, certainly many remodeling projects were delayed or scrapped on account of this single circumstance. Indeed, management experts at the University of Pennsylvania’s Wharton School of Management who recently studied the effects of satisfied and dissatisfied customers have confirmed the age-old truth that bad news travels faster than good news. They even have put numbers to it.

• The average person who has had a problem with a particular product or service eventually tells nine other people about the bad experience. The research also found that with each retelling of the bad experience, the listeners each retell the story several times but with added embellishments to the severity.
• On the other hand, satisfied customers are much less vocal. On average they tell five other people about their good experience with a product or service. Not wanting to be like the couple who referred a bad contractor to a friend, people don’t want to be held responsible when something goes wrong. Even if their own experience is positive, they are more likely stay silent with that information.

That is why for the third straight year, Qualified Remodeler has partnered with RenovationExperts.com to survey consumers who had recently remodeled their homes. The goal is to set benchmarks for quality service to help remodelers identify the areas where relationships with their customers go off the rails, often silently, at levels that are below detection. In addition to the negative embellishment research from Wharton, other management expert studies have found that smaller business relationship missteps lay in the weeds in the background, until the service provider pointedly asks for feedback. Specifically, they found that:

• only 4 percent of all customers with problems complain to the company about their problem;
• the cost of acquiring a new customer is five to seven times greater than retaining new ones.

The Results

This May, we asked a sampling of 1,000 consumers who recently remodeled their homes to rate their contractors on scale of 1 to 10, with 10 being the highest and best score, on overall satisfaction with the job that was completed, the professionalism of their remodeler, the timeliness of their work, the fairness of their price and lastly the quality of their workmanship.