The Three R’s

Customer satisfaction—along with reputation, repeat business and referrals—without a doubt is one of the most valuable tools a remodeler can have in his marketing arsenal in an evolving remodeling market.

Even so, less than half of those responding to a Qualified Remodeler survey said they always surveyed customers to determine their level of satisfaction. Ninety percent of those remodelers who surveyed their clients asked if those customers would hire them again. Eighty percent asked if their clients would recommend their remodeler to a friend, according to the survey.

Surveys, according to those responding, were generally done in-house and delivered in person, by postal mail or email. Only 21 percent used a third-party survey service to create, circulate and tabulate their surveys. One-third of the respondents said they had been surveying clients for more than 10 years.

“The importance of reputation is universally recognized today,” says Geoff Graham, founder of Atlanta-based GuildQuality, a company that performs third-party customer satisfaction surveys for its clients. “During the last five years we’ve seen a lot of wheat cut from the chaff in the remodeling industry. Our data shows the failure rate for businesses with very low customer satisfaction rates is 10 times higher than that of companies with very high recommendation rates [from satisfied customers].”

He adds: “What we have left are really good businesses and lots of new competitors trying to enter the market and gain share despite not having a strong reputation. We also have generally wary consumers whose perception is colored by the reputation of the remodeling industry for poor service. On top of that, consumers are extremely price sensitive because they have less money; they’re closely scrutinizing the companies with whom they’re making investments.”

As a result, homeowners are much more focused on the reputation of a company they may be considering hiring and are doing their due diligence in terms of customer satisfaction and whether the company is going to be in business after their project is complete.

Delivering Great Customer Experience

Remodelers have made big gains in delivering a great customer experience, and most professional remodelers are already doing a really good job, Graham feels. “Now, remodelers are looking to articulate their quality service to help prospective customers make informed decisions and have a clear expectation of the experience they can anticipate,” he says.

Remodelers are making significant investment in personal time and marketing to articulate the quality of their work. They’re also getting help from product manufacturers, Graham says, citing a cabinet manufacturer who coaches remodelers about how to share customer feedback with potential clients through the sales process, walking them through what a great customer experience looks like and the remodeler’s history of service. He sees a trend among manufacturers helping remodelers sell their customer satisfaction stories.

One of the prominent things that come up in a Web search of most remodeling firms these days is a list of reviews resulting from customer feedback. “Articulating that value for prospective customers has become a very big deal for remodelers,” Graham says. “Getting the word out about their businesses via social media makes it easy for potential customers to see what kind of experience they can expect to have if they hire that contractor.”

Exceptional Remodelers

“The focus today is on really exceptional remodelers and using the feedback they receive from customers to articulate their quality and distinguish themselves from less experienced competitors, such as home builders who got into the remodeling market or people who’ve been laid off by other remodelers starting their own companies,” Graham says.

Asked whether customers are more difficult to satisfy today, Graham noted the average recommendation rate for companies GuildQuality surveys has changed negligibly. “They remain very high and seem to be hovering around the 91 percent range, keeping in mind these are people who invest in customer satisfaction surveys, so they’re certainly not representative of the entire industry,” he says.

“I think customers are more demanding and want more for their dollar; there is greater anxiety about pricing,” he notes.

The rate improvement in customer satisfaction scores has slowed, Graham says, although it’s still very high. “It’s easier to go from 85 to 90 percent than it is to go from 90 to 95 percent,” he explains. “From when I started the company almost 10 years ago, the industry has dramatically matured and advanced. The pace of innovation has accelerated during the downturn as remodelers have innovated to survive. It was a lot easier to make money, be less experienced and stay in business six years ago. Now, it’s almost impossible to stay in business and not be extremely professional.”

GuildQuality conducts formal customer satisfaction surveys for its clients, while social media provides informal customer reviews. Graham doesn’t see social media as competition. “The empowerment of customers who have their voices heard via social media has put a needed spotlight on the customer experience. That customer empowerment coupled with the economic downturn has made delivering exceptional service a top priority for all great business owners,” he says.

“You just can’t survive by delivering poor service; you will die much faster if you do. Eventually one of your influential customers is going to start sharing bad things about you and that can completely demolish a remodeler, especially one who is highly geographically focused,” Graham says.

“The black swan will eventually come to visit any remodeler who is not focused on delivering a great customer experience. That threat is a very real one and not just a perceived one. The pace at which poor businesses will fail has been accelerated,” he adds.

Exciting Times

Graham thinks it is an exciting time for remodelers “whose challenge is to focus on what matters and ignore those things that don’t,” he says. “One of the things they can always focus on is quality of service. An exceptional company can turn all their customers into marketers for them.”

He adds: “At some point you could have a convergence of marketing and service so just through the delivery of your product you are marketing your service. The experience your customers receive becomes marketing collateral they’ll share with other people. I don’t expect that to happen anytime soon for most businesses, but if you’re exceptional it could happen.”

Facebook, Twitter and websites are important, but they aren’t everything, Graham says. “They are tools that can accelerate your business, but the foundation is delivering a great experience; those tools will be useless if you don’t deliver a great experience.

“The friction is being removed from getting the words of customers out, whether it’s from the customer doing it directly or from customer survey feedback,” Graham adds. “We’re moving in the direction of greater transparency in the customer experience, and it’s happening whether you like it or not, whether you start your Facebook page or not.”

One downside, consumers are becoming over-saturated with surveys. “Every business recognizes the need for customer feedback to help them improve the quality of their work, but it has become so mainstream that surveys become noise. It has put a lot of pressure on us to make feedback as easy and seamless as possible. I think where our members have been most successful with the survey process is where they set the expectations that the sharing of feedback by the customer is a part of the process, just as much as picking paint colors or appliances is part of the job,” he says.

Evolution of Customer Satisfaction

The remodeling industry along with the importance of customer satisfaction has changed over the years, says H. Dale Contant, CR, president of Atlanta Design and Build, Marietta, Ga.

“We’ve evolved over 16 years, particularly in how we work with our clientele. As we grew to be a larger company with several project managers and more processes and systems, I wasn’t always able to be the front man who—for lack of a better term—schmoozed with the clients and made sure everything was going well on each job.”

Contant relates he put a system in place to get a sense from clients after the job was completed about how it went, but he soon believed he wasn’t getting a good response and feared the results might be somewhat biased. His solution was to engage an outside firm to conduct third-party satisfaction surveys.

“We felt it is important to know how we’re doing within 30 days after a job is complete. What feelings did we leave behind? What good dollars did we place in their happy bank? It really helped us define and tweak some of the things that we’re doing today,” Contant says.

Making the Customer Happy

Contant says he understands craftsmen in the field are not always the best communicators, and they don’t want to do paperwork and keep track of communicating with homeowners. “They just want to demo and build back beautiful stuff that makes the customer happy,” he explains.

Accordingly, Contant shifted some of the responsibility for communication back to the office—letting homeowners know when the drywall crew was scheduled or when the tile contractor was coming, for example. “l don’t think you can ever overcommunicate,” he says.

Contant put together a jobsite notebook, which he says has been effective. “It’s a communication log between the homeowner and my lead carpenters and me or whoever the job supervisor may be. It helps communicate with people who might be at work all day and have forgotten to ask something. Or we might tell them we had to turn off the breakers, and they might have to reset their alarm clocks.

“Some folks don’t use the notebook at all; they prefer to communicate by email and text, and that’s OK,” Contant says. “We let them know we keep a mailbox at the office full of their emails if that’s their favorite way of communication.”

Contant says he has looked into electronic or virtual alternatives to the notebook system but isn’t going to rush into it. “Some clients are not [comfortable with electronic communications] yet,” he says.

Most remodelers think they’re great at customer service, but having a satisfaction survey, particularly a third-party survey, can help confirm their belief or show areas that need improvement. “It’s not sugar-coated data,” Contant says. “We can’t sway an answer and can’t ask a question in ways to get the answers we want; it’s just better data.”

Information Overload

One of the things that has made customer satisfaction more problematic is the amount of information available to customers online—and not necessarily accurate information, Contant adds.

He tells a story of a customer who found tile online at 15 cents less per square foot than he could provide but failed to take into consideration the cost of freight or whether it was all from the same dye lot.

Information overload, indeed, affects customer satisfaction. “I wish I could only have customers who were trusting, who really wanted to work with a professional and didn’t feel like they had to micromanage every penny,” Contant says. “I understand we’re all trying to save a buck now, but sometimes we’re looking for savings in the wrong places.

“Thank goodness for referrals and repeat customers. They already know and trust us; they really don’t question a lot of things. They just want to make sure they’re getting a great price, and we work hard at that,” he says.

He describes one client who wanted to revisit and rethink everything after the design and selection process had been completed and the job was about to begin.

“She wanted to make sure she got the best deal possible, but she ended up coming back to what she had selected in the first place,” Contant said. “I call it paralysis by analysis.

“The job turned out beautifully, and she’s happy with it,” he adds.

“As long as we deliver a good product at the end, I think we’re always going to please our customers,” Contant says. “They might not be 100 percent satisfied with the journey, but we tell them upfront they will be ‘going up the mountain sometimes.’ We leave an article that talks about the euphoria you have in the beginning of a remodeling job; then, you feel like you’re going through the desert; when the end is in sight, there’s still a little bit of a journey to go; but when it’s done, it’s a wonderful thing.

“Are we 100 percent perfect all the time?” Contant asks. “No, we have to make corrections,” he answers, “but I want the customer to know we’re making those corrections.”

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