Customer Relations

In this six-part series, we interview leaders at Pulte Homes, the first national company to win the National Housing Quality Gold Award. In these conversations we share with you the practices that helped one of the nation's largest home builders achieve the NHQ, the hardest award to win in home building. We kick off this series with Erik Pekarski, national vice president of customer relations.

Q Describe Pulte Homes' journey from a customer satisfaction-based organization to a company and a culture-focused on customer relations.

Pekarski : Our journey is an evolution not revolution. The company's founder, Bill Pulte, started building homes 53 years ago with the goal of customer delight. He believed then — and he's right — that delighted homeowners tell people; satisfied homeowners don't talk. Delight is what gets repeat and referral customers.

The mechanics of the customer process are captured in our Customer Satisfaction Measurement Survey (CSMS) put together by Steve Berch, vice president of segmentation. Steve will be the first to tell you we put this survey together as tool, to validate what we had already found out and as barometer to know where are going. We didn't devise it to run everything off the numbers. Run everything off the numbers and you separate yourself from the homeowner. Guide your business from a satisfaction standpoint by the numbers and you'll get to good, but the great piece comes in the personal touch.

We looked at customer service 10 years ago and knew we had to develop that piece. J.D. Power gave us solid feedback on what homeowners are telling us and four to five years ago homeowners told us:

• the most important thing is their relationship with customer service
• home readiness
• the relationship with the sales team

Take away all the garbage and what customers said was: there is a promise that people made and we want you to deliver on that promise.

I was, but I shouldn't have been, shocked at what mattered to our customers. I thought the drivers were going to be price and location. Think about a meal in a restaurant. If I order a steak and the steak arrives slightly undercooked, but I have a great relationship with my server, I don't care. Chances are I won't even mention it. But if the steak is perfect and the relationship with the server sucks, I won't go back.

Using that concept alone, we should have understood right from the get go the relationship as the driver of satisfaction. It is as basic as it gets.

Q Small cost purchase like a dinner in a restaurant and a high-ticket purchase like a home, and you'll swear that the satisfaction drivers are the same?

Pekarski : They are. People focus their time on relationships. I don't believe it the cost is a factor. What changes the drivers is the nature of the transaction — is it personal or is it impersonal? I don't care to have a relationship with the FedEx driver. My relationship with that organization is based on its efficiency, its performance, not a one-on-one encounter with the driver.

We strive to build a quality home. Our national construction vice president, Cris Cash continues to work on making sure our houses are of the highest quality with the best products inside. That is half the job. We understand that if we don't have an outstanding relationship with every customer, we're only doing half the job. We've changed tremendously in the last four years to focus on building relationships as well as we build houses. This lead us away from the service-based approach of find it and fix it. That is the definition of what a service department does. Service is the, "I'm sorry" brigade. Service is reactive rather than proactive.

We went from a service approach to a customer relations orientation. We are so serious about this opportunity we renamed the service department the customer relations department. Do we still do service, do we still fix things — of course. Those are the tasks that are PART of the job, but it is not the entire job. So much more wraps around it. Now our customer relations department focuses heavily on repeat sales and referrals. Each staff member understands that his contact with the homeowner is the final frontier on whether Pulte Homes will get repeat sales and referrals. It's a heroic moment: they can build a relationship with a long selling window and capitalize on the value they've created.

Sales, by definition, has a short, intense selling window with a hard close. To be successful, salespeople must understand what the hot buttons are for their customers, they must understand segmentation and know how to get the order.

It took us a while to get here, but finally we understand that customer relations is long-term selling with multiple closes. Our customer relations staff understands that there are going to be situations that need to be over come — overcoming objections. They understand the need to know your customer 100 percent, i.e., if we spend all day talking about the inner workings of a light bulb and all the homeowners cares about is the size of the closet the light bulb illuminates, we're wasting their time and ours, and not communicating value — hot button training. They understand the need to know where each homeowner comes from so they can deliver the most meaningful information. Did that home owner graduate from MIT? If yes, talk about hot checking the house. Are they in an industry that suggests they're more expressive than analytical? We want to make sure that we explain how the house is built so it will continue to look good. We cover all the bases with each homeowner, but if we don't know what target consumer group we're talking to, we can't possibly expect to emphasize the right information for every homeowner.

Take all those pieces — segmentation, hot button training, overcoming objections — and extend that basic sales training over a long period of time to customer relations, you get the pay off. We use the exact same training curriculum for both groups. An outstanding customer relations person should be able to walk into any target consumer group community and curtail what he or she does to those homebuyers.

Not everyone in our organization is there yet. So that means we have to look at where our people are and match them accordingly. For example, an individual just graduated from college, started a brand new family, and just bought a home. There is a pretty good chance that if we put that employee in a community where people are buying their first home, there will be a connection. That is good for our home buyers. Moving from a reactive, service-driven company to a proactive, relationship-driven company means we're understanding buyer needs ahead of time.

The job of a customer relations manager at Pulte Homes is to make sure that each customers relationship and experience with Pulte Homes is better than any other relationship they've ever had. We don't necessarily sell homes; we sell an experience. This relationship piece is critical. We look beyond the structure of the house and sell an afternoon by the pool, an evening in front of the fireplace, the tick marks on the wall that mark the kids growth. If we aren't, then a house is a hotel and nothing more the sum of its parts.

This relationship piece has gone full circle. We focus on operational excellence, but right along with how we drive our finances and how we build our houses, we have deployed relationship experts drive repeat and referral business. We want larger market share and we think that is a big piece of how we will get it.

Q Let's back up and fill in some of the specific pieces. The shift from a customer service mindset to a relationship-based business necessitated a different kind of hire. Describe each end of the spectrum.

Pekarski : It starts with understanding and trust. If you're in sales and you're a manager, you're an expert in selling. If you're a construction superintendent or manager, you're an expert in building a home. If you're in customer relations, it's the same thing — you're an expert in building a relationship.

With that, you must have an understanding of how we build a home. That we can teach. Now, for customer relations manager candidates, we look for a person with a solid handshake, a great smile and an ability to relate to a lot of different people. We want people with the ability to understand needs and be sensitive to those around them.

At colleges and universities we recruit business majors, theatre majors, political science, etc. By the way, we still hire a lot of construction graduates as well. With Pulte's training programs in place, with an orientation process that infuses culture the minute they walk into the door, with exposure to a piece of every department, we can succeed.

Customer relations managers must be great business leaders. They have to understand every other department and how it touches the customer. A great customer relations manager learns how to drill down when a customer tells them "everything is going great." Imagine this conversation, in response to "great":

CSM: Glad to hear it, now let's break it down. Tell me about your experience with the sales department. Was it a good experience?

Homeowner: Great.

CSM: Construction — did everything go well there too?

Homeowner: Yeah, it was great.

CSM: So where are you at?

Homeowner: I'd rate them a 9.

CSM: Was there somewhere we screwed up so we didn't get to 10?

Homeowner: Nine is good.

Pekarski : We know we screwed up somewhere. We didn't blow the door off, we didn't come out of our shoes far enough. It is the customer relations manager's job to know what that is.

CSM: Okay. Mortgage. What was that experience like?

Homeowner: It wasn't very good.

Pekarski : As a service oriented business we simply say, "I'm really sorry about that, we'll fix it next time." Well, we can't fix it next time. The next time is when they buy a house. The moment is gone.

A great business leader keeps asking questions. What about the mortgage process? Where was it at? He or she doesn't know the whole thing was lousy. Specific information! Homeowners don't like confrontation — nobody does — so they speak in generalities. We train our CSMs to get to the specifics.

CSM: Did we get you approved right away?

Homeowner: No that way okay.

CSM: What about your relationship locally? Paper transfers go okay?

Homeowner: Yeah, that was fine.

CSM: How about Denver?

Homeowner: No that wasn't great. I was giving up a lot of information and I didn't feel like I was getting the kind of calls back or service I expected.

CSM: I want to talk to our vp of mortgage because I want to fix this for your neighbor. The good thing is it sounds like 90% of the mortgage experience went well. We just missed from one piece.

Pekarski : This whole conversation happens because we've spent the last two months through the construction process building a relationship with this customer. They are not uncomfortable talking to us because they know that individual well.

We want people to feel good about their home. We have these conversations not to influence people who don't want to be influenced. We want them to understand that not everything is bad because if everything is bad, we can't fix it. We have to isolate and identify where we fell down or we can't move forward. So if the whole mortgage experience was bad, I assure you we don't have the talent to fix it. The drill down process is to find out exactly what went wrong. We find this out two months before the survey.

That is the difference between a service-oriented business and a relationship-oriented business. Service orientation is about Pulte. Pulte is going to be here for you, blah, blah, blah. A relationship-oriented business is "I'm Nikki and I'm going to be here for you. I live right down the road. I have a Pulte home too. Whatever problems you have, I'm here for you. Here's my cell, home and office number. I'm going to work you through it."

Sometimes there are problems. Our customers have one person to call. They don't have to think about what Pulte is going to do. They only have to think about the relationship they have with Nikki, Sue or John.

The piece the personal relationship gives us is information long before anyone gets a survey. Our surveys go out 30 to 45 days after a buyer closes on his or her home, our community managers don't get that information until at least five months after the homeowner moves in. The edge up of being able to find out early what's going on, and then have the opportunity to correct it, it's the best thing we could ever do for our homeowners and for our company.

We invest in this relationship building because it's hard to get repeat and referral business for an $11 billion company. It's a lot easier to get it one great CRM at a time.