Weekly Book Scan
At the International Builders’ Show in Orlando, Fla. last month, I had the chance to sit down with two authors who know a ton about generating customer loyalty. One was Jason Forrest, a sales trainer and coach whom I’ve known as a regular contributor to REALTOR® Magazine over the years. He introduced me to Paul Cardis, founder of Avid Ratings, a reputation management and customer service firm for the homebuilding industry. The two co-authored a new book, Service Certainty: The Secret to Customer Loyalty (MJS Press; Dec. 15th, 2016). Here’s an edited transcript of the interview.
Tell me how the idea for this book came about.
Jason: The idea came about just like any book comes from the need to solve a problem. My primary focus was on the sales side and helping homebuilders increase their sales. The problem was, we found that by increasing their sales, their customer satisfaction will go down.
Huh, really? I guess that makes sense, though it’s certainly an unintended consequence!
Jason: Yeah, definitely. I started formulating these ideas about why this might be happening, but I didn’t actually know if they were evidence-based. So since Paul is the industry expert and the wizard behind the curtain when it comes to the research, I really wanted to work with him on this problem. I would basically run my ideas by him and say, “Hey, this is what I believe will improve customer satisfaction. Do you believe this would work too?” We worked through that and then ended up coming up with 15 best practices to make it happen and increase customer satisfaction, service certainty, and customer loyalty.
Paul: Avid’s been working with builders for 25 years measuring customer satisfaction and customer experience, and Jason here has been an amazing leader in helping our clients to change their cultures improve so it was really just a natural fit to put these two worlds together and come away with a more practical book. With more than 30,000 books on customer service out there today, we were going into very red ocean. But one point that we both agreed upon was that making customers happy in an imperfect world hadn’t been written about. And in our business in real estate and homebuilding, let’s face it: We deal with a lot of imperfections in the process, and there really wasn’t a book that was realistic. Jason and I put something together here that I think does that.
Yeah, a lot of the books I’ve read talk about how to improve customer service in a perfect world. But they often lack best practices for real-life situations.
Jason: That’s what is so great about the book. So I’m a sales guy, and the normal trend is salespeople don’t like service. Like, if you’re really great at sales you think, “I want to sell you something and move on to the next guy.” So I had to learn how to convince myself first before I could convince anyone else. What’s great about this book—and this is why it’s so small that you can read it in an hour and a half or less—is that we wrote it in a way that it’s the minimum effective dose. Think of it this way: Water boils at 212 degrees Fahrenheit and if you increase the temperature to 213, 214, or 216, it’s still boiling. So you’re wasting energy doing that. We decided to make the book super simple so it’s applicable even to the person who says, “I really don’t like customer service. I don’t want to mess with it.”
What’s a way where sales-focused folks are getting service wrong?
Paul: One of the common problems we see is people who think the solution is, “Well we’ll just go and tell our customers to give us good reviews.” They try and game the system, and they get frustrated in the gaming. That mindset is also evident when you’re thinking “Buyers are liars.” You get mad at the buyer because they’re not happy, as if they came out of the womb that way. Well no, we created them. Of course, there are some buyers—a very, very small percentage—that are just difficult people. But in general we create these difficult customers, so getting your mind right is really an awesome thing and without having your mind right, you can’t move on.
Jason: Yes. It’s also important to think about the service journey. As soon as a customer signs a contract with you, that’s the highest level of emotional engagement they’re going to have with you. Think of it like getting married. The second a person gets engaged, they’re basically saying, “O.K., that’s it. I believe we should be together for the rest of our lives.” Well when you give the girl a ring your goal is to make sure that you provide an experience that’s just as good up to the point of her saying yes to the ring. You know the couple doesn’t need nine months to plan a wedding. They could do this thing in a couple of days, right? It’s a way to put them through purgatory to make sure they don’t do anything to fall short of expectations. It’s called an engagement, but it’s really a test! In the industry, on the day of signing that contract it’s like the engagement ring. You have to get to the move-in day, which is like the wedding day. The customer can easily take the ring off and cancel the wedding any time along the way if you don’t live up to the same promise you did in the dating-to-engagement time as the engagement-to-wedding time.
In gathering the examples you use in this book, did you guys get them from people in the field or did you create hypothetical situations?
Paul: It’s all real stories of actual builders and clients dealing with problems, and a lot of them were pretty interesting too. One particular story that we put in there was one that I affectionately call the “Lemon Man.” We had a customer who dumped 10,000 lemons in their own front yard and let them rot. They wanted to make a statement to the world to say, “Hey, this is a terrible builder and I’m very upset!”
Wow. That’s some serious conflict there.
Jason: Oh yeah. But I think one of the coolest concepts here, which is very provocative, is that a customer sometimes needs conflict in order to generate loyalty. Say a real estate professional takes a buyer out and the buyer is completely in control the entire day. Then buyer thinks they don’t need the help. They’re asking the real estate pro, “Why am I paying you so much money?” That’s why the agent must get into position of strength; they must be in charge. Now I’m not saying you want to actually cause problems, but you do have to create conflict. You have to set clear boundaries and sometimes that creates pushback from the customer. One of the things that we found in the research is that the more the customer is in control, the worse the service scores end up being. Along those same lines, proactively bringing up the conflict and extracting the concerns increases customer loyalty too. If a buyer calls and says, “I have a concern about such-and-such,” and the agent solves the problem then it’s one point to the customer. But let’s say the agent calls the client and says, “Hey I’m curious. Has there been anything that kept you up at night about this purchase you’re about to make?” And the buyer says, “Oh actually yeah…” Well if the agent then solves that problem, that’s one point to the real estate pro. It’s about you bringing it up. You bring it up, you solve it, and you get the credit. If they bring it up and you solve it, you will get no credit.
But that’s scary. I mean, it’s a big thing for an agent to make that phone call and ask if something’s wrong.
Paul: Sure. To be transparent and to own up to problems is a very big deal, because we have all been raised in a perfection mentality. But we are in a different world now, where authenticity matters more. So when things do get screwed up, do we bury them or run away from them? Or do we run at them? That is the key here is that you’re not going to have perfection, and brokers and agents need to embrace that that’s not going to happen.
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At the International Builders’ Show earlier this month, I was lucky enough to meet up with Mina Starsiak at the Owens Corning booth on the expo floor. Starsiak—a licensed real estate pro and REALTOR®—and her real estate attorney mother, Karen E. Laine, have been rehabbing and selling homes in the Fountain Square neighborhood of Indianapolis since 2007. The two recently caught the attention of HGTV, which enlisted them for the upcoming television series, Good Bones.
We talked about family dynamics in real estate, the teardown trend, being bold with remodeling choices, and more. Here’s an edited excerpt of our chat.
What’s it like working with your mom on these houses?
I’m definitely the business end of the partnership and my mom is kind of the dreamer. She’s the one always wanting to do spray-foam installation—which now is standard in all our houses—solar panels, channel glass, and she’s the one who found the colored shingles. She’s the one who really dreams everything up and I make sure that we can get it executed, business wise. So the first time we sold one of our houses and paid someone else commission, I was like, “I can do that too.”
It sounds like your guys’ dynamic is pretty different from how we would imagine a traditional mother/daughter relationship working!
Yeah, it probably is, very much so. I always joke with her whenever we come to these shows that she needs to be hooked to one of those backpacks that they make look like little stuffed animals, but that are actually leashes for little kids [laughs]. She’s so sad she couldn’t make it here, because the home shows are her happy place. She just wanders in to the booths and says “Let’s do this, let’s do that,” no matter how expensive it is. And then I’m like, “OK, we’ll talk about it.”
Tell me a bit about how you guys make your mark but still try to integrate your rehabs to your little pocket of Indianapolis.
Initially we didn’t even realize that we were doing anything special. We paint our houses funkier, different, bold colors. We use different tiles and tried to use color inside, and in different ways. And that fits with Fountain Square; it’s urban, it’s a little funky. We’re not really into that super modern style that’s really boxy. That’s not really what we go for. Most of the houses that we fix up don’t have a lot left to salvage, so we try to choose items we can bring back to life to help the homes stay consistent with the nature of the neighborhood and the block. We even think that through with the color choices outside. We’ll look at the five houses on either side and that goes into the question of, “OK, what color are we going to do here? Well, there are no blue houses on this block so let’s put a shade of blue in that pops.”
We stick in the same little area. We could make a lot more money if we jumped around the city. But we both live next to each other. When we moved in, our block had no fixed-up houses. And now there are only two that aren’t renovated! Our little area has changed pretty significantly, and not just because of us. It’s also other people who are doing similar stuff and it’s completely changed and it’s really cool. We are selling homes to people who are our neighbors.
With some of these really old, run-down homes, is there ever a temptation to just tear it down and start over?
Oh yeah. A lot of the homes we do, people—even our subcontractors—will say, “We should’ve torn it down and built new!” That’s how bad some of the properties are. The problem is, if you tear down and start new there’s nothing to draw your inspiration from. My mom comes at it more from a feeling prospective, and she says you have to have something there to work with. It’s not that the past defines the remodel, but it informs the resident’s decisions in the house.
If it’s a blank slate, for me, it’s almost too many options. I’m the one who does the start of the floor plan. We’ve built two new-construction houses and they were the hardest floor plans I ever did because there’s nothing to start from. When I have a foundation I’m like, “Okay it’s kind of a math equation. I can do this, this, and this. I need a bathroom…” and it just happens.
Even if the financially smarter decision is to tear down and build new, it just doesn’t feel like there’s as much heart in it.
Do you have any advice for people who are rehabbing houses and making bold choices—whether in terms of color and style or avoiding the teardown trend—where subcontractors and others are trying to talk them out of it?
The biggest hurdle is knowing your options. It’s tricky. In general, construction is a man’s world. But my advice would be to just ignore that. Say what you want. Do your research and know what you’re talking about. You can’t come into a conversation and represent your own ideas, thoughts, opinions, and feelings if you don’t know what they are or if you haven’t taken the time to figure it out. Just being informed so you can go in feeling comfortable with what you’re asking your contractor to do.
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As a real estate professional, you’re surely aware of how important it is to stay abreast of the trends that affect your business. I’m betting your browsing history is filled with housing stats, news about local business developments, and features on design trends, among other things.
But what if you could access information that would help you see the future? Perhaps I’m being a bit fanciful, but I think demographics provide that glimpse into the crystal ball that all savvy business people crave. And that’s why I recommend you take a look at Big Shifts Ahead: Demographic Clarity for Businesses (2016, Advantage Media Group), by John Burns and Chris Porter. It lives up to the title, describing demographic shifts and interpreting what they mean for the future of business. But the authors do a couple of things that make their analysis more consumable and actionable than other writing on demographics I’ve consumed in the past.
One of the ways in which they differentiate their work is by diverging from the method society usually uses to define a generation. This is important because the way researchers measure variables makes a big impact on the conclusion of any study. We tend to define generations as groups of people born in the same twenty-year timespan or so, which I’ve always felt makes it tough to draw solid conclusions about what each group really values. As someone who is a year or two too young to be part of generation X, I’ve always been conflicted by the millennial label. But because Burns and Porter define their groups by the decade they were born in, I’m more at peace. I fit their definition of the 1980s “sharers” really well, even if I do share some important characteristics with my “balancer generation” friends born in the late 70s and the younger “connector” generation that came after me in the ’90s.
I also like how the authors admit when something surprises them. It sounds like a small thing, but when researchers and academics are taught how to write, they aren’t schooled in the whole “if it bleeds, it leads” philosophy like us ink-stained journalistic types. They often “bury the lead” to borrow another well-worn cliche from the news world, and lead instead with the assurances and steady hand of academia. Yawn. But Big Shifts Ahead is different. One item that surprised me was the prediction that young adults “incomes will grow faster than most believe” (fingers crossed I’m still young enough to qualify for that crystal ball item). Their style choice also provides me with more trust in their conclusions, because it’s an indication the authors aren’t seeking data to fulfill their preconceived notions about the future.
Finally, the authors use methods of storytelling that make the information easier to internalize. They use real-life stories of people who are emblematic of the trends they’re trying to explain. They use color in their graphs and data presentations, and are sensitive to non-data-driven readers. And finally, they aren’t afraid to make up new terms to explain emerging trends. Though it doesn’t roll off the tongue exactly, I liked their use of “Surban,” which provides shorthand for the growing demand for smaller homes with little yard space in more urban areas, “bringing the best of urban living to a more affordable suburban environment.”
Overall, this book dives deep into many of the trends that will define real estate over the next few decades, and the authors aren’t afraid to make specific predictions about what we’ll see. Of course, no one can truly know the future, but a little glimpse at what might be ahead certainly won’t hurt you. Ooh, and pro tip: You can download a chapter of Big Shifts Ahead here for free to get an idea of what I mean.