Quality-minded builders, remodelers, developers and contractors rely on our customer satisfaction surveying to help them provide exceptional service

In this month’s Remodeling Magazine, Ben Morey of Morey Construction and Martha Stinson of Trace Ventures shared how GuildQuality helps them reward and praise excellent service among their teams.

Morey says that perpetuating the client-feedback loop has been one of his “best tools” for maintaining morale and productivity. He shares survey results in meetings, and especially relishes placing printed copies of client comments on employees’ desks.

Thanks Ben and Martha, for sharing!

An interview with Kelly Rulis, Vice President of Customer Satisfaction & Experience for John Wieland Homes & Neighborhoods:

Click here to learn more about GuildQuality and our services for homebuilders, remodelers, contractors, and real estate developers.

Susan Bady, Senior Editor of Custom Builder Magazine, penned an excellent article on Payne & Payne, NAHB’s Custom Builder of 2009. I caught a picture of the award announcement at the Custom Builder Symposium in November, and had the pleasure of spending a good bit of time with most of the Paynes.

In our Newsletter from November, you’ll find an article on best practices, a webinar invitation, member news, and an invite to beta test a new GuildQuality service.

We recently connected with the owners of three Case Handyman & Remodeling franchises in San Jose, Twin Cities, and Birmingham.  These owners shared their views on the current market environment and how they were using GuildQuality to gain an edge.

Jim Kabel of Case San Jose said that as an owner you want to “trust, but verify” that you are doing a great job for homeowners.  His feeling is that third party feedback is the only way to get an accurate picture.  He surveys all of his remodeling jobs (but not handyman) and reads every completed survey response at monthly team meetings.  Jim reviews performance trends quarterly, and has built customer satisfaction scores into the company performance dashboard.  Everyone on the team receives every completed survey response in real-time.  “The great reviews are incredibly motivating to the team.”

Bob Mock of Case Twin Cities has created a similar culture of quality in his business, and shares that he was surveying in the past before implementing GQ.  “We did receive a high response rate to our internal surveys, but we weren’t getting the detail and the insight on the total experience working with us.”  These insights are often the small issues that homeowners may not be comfortable sharing with you directly.  These issues can usually be resolved quickly, delighting the client and helping to create raving fans.  Bob summarized the importance of surveying and measuring feedback, by saying ”the client is in control today and they know it.  They are value conscious, and we have to find ways to verify our value.  GuildQuality helps us do that.”

Tom Coan of Case Birmingham uses GuildQuality feedback in the sales process.  “If we are to maintain a higher margin business in this climate, you have to be clearly differentiated.  Service is one place to make a proposition, and it’s tough to communicate without GQ.”  Tom shares surveys with his lead carpenter and sales person and reviews scores at monthly meetings with the team.  They identify 1-2 issues that can be improved upon each month to continuously set the bar higher.

Key message from these owners — it’s not enough to do great work.  You have to measure the feedback, and share it with your prospects, clients, and employees.  Building a culture of quality in your company will lead to profitable growth.

We recently had the pleasure of spending about 45 minutes with three remodeling leaders as they talked about how their businesses deliver a superior customer experience and how their focus on quality manifests itself in their company culture, systems, and processes.

We recorded the conversation and it is now available on NARI’s website.  Click here to listen.

Special thanks to Bruce Case (Case Design/Remodeling of Bethesda, MD), Todd Jackson (Jackson Design and Remodeling of San Diego, CA), and Greg Harth (Harth Builders of Spring House, PA), for being generous with their time and insights.

As different as their businesses are, all three of these great leaders share a passion for quality, and work diligently to elevate the stature of our profession to a level commensurate with its importance in our lives.

This morning, Dennis DuRoff posted my talk from yesterday on how and why GuildQuality uses social media. In it, I describe the various ways the GuildQuality blog, Twitter and LinkedIn help us to service our members and grow our business. I also talk about social media’s direct relevance to customer satisfaction in building and remodeling. how builders and remodelers are using Facebook, and how consumer rating sites like Kudzu and Google Local fit in to the picture as well. I close with a brief description of what GuildQuality does to help boost our members’ presence on the web and participation in the online dialog. The talk lasts an hour.

UPDATE: Following are the answers to questions asked by attendees, that we didn’t have time to answer during the webinar:

“How much time do you spend on all this social media stuff?” I am our company’s primary marketer, and it is safe to say that I’m also the face of the company. Including the time I spend writing our blog (which provides 95% of the content for our newsletters), I probably spend fourty five minutes a day on social media for GuildQuality. Most of that is our blog, a good bit is with Twitter, and the remainder is with LinkedIn.

“How do you link Flickr to Facebook, LinkedIn or Twitter?” Facebook and Plaxo have some built in widgets that enable you to auto-feed your Flickr photos to your personal account. I don’t believe Facebook can do that yet for Company Pages or Groups. LinkedIn does not offer a way to connect to your Flickr account. You can set up your Twitter account to automatically post a tweet of Flickr uploads (or blog posts, or anything that can have an RSS feed) with Twitterfeed. Detailed instructions are here. Twitterfeed isn’t the only game in town, but it is what we use, and it’s worked fine for us. It is also worth noting that Flickr’s terms of use explicitly prohibit commercial uses, so if you intend to try and sell stuff with Flickr, make sure you read this.

Regarding Facebook Groups versus Pages (for your business presence on Facebook), one of the audience members added the following comment, essentially restating more emphatically my counsel to use Pages: “The skinny from those at Facebook is that much more energy (from the company) is going into Pages and Groups are fading to the background.”

“What are your recommendations for Security Settings for Professional and Personal Facebook and Linkedin Sites? How much should you reveal on public areas Etc?” On my profile pages, I avoid publishing anything that I don’t want anyone to see, and so I go ahead and make everything public. If you are interested in publishing things that you don’t want others to see, I encourage you to really think about whether or not you ought to publish it. GuildQuality does have a private discussion group on LinkedIn that is limited to our members, employees, and others that are “close” to us. Keeping it private keeps it from being dominated by people trying to sell their stuff (sales pitches seem to dominate the public groups on LinkedIn). Flickr and YouTube offer privacy settings that enable you to share some personal things (pictures and videos) only with authorized users. I stick to my “don’t post it if you don’t want someone to see it” strategy with those sites as well, though I ocassionally “privatize” pictures/videos in which my children or wife are looking just too darn cute for public consumption.

“What are costs of these sites?” Most of the social media sites I described, including Yelp, are free. Kudzu (another consumer rating site) offers some premium services for a monthly fee. Flickr charges $20 per year for a premium account (which you will definitely need if you want to use it regularly). You can have a GuildQuality account for as little as $30 per month, and the more folks you survey, the more you pay. You can also pay a little more to increase the number of Listings and Examples of Work you post in your public Guildmember profile page.

“What are good apps to use on the iPhone for all of these links?” I probably do 90% of my Twittering when I’m standing in line, in the dentist’s waiting room, etc. The iPhone’s web browsing capabilities make it easy to get your geek on wherever you are. Yelp has a nice iPhone enabled website. I use the Twitterrific application for Twitter, and I understand a lot of people really like Tweetie. Facebook and LinkedIn both have their own decent iPhone applications.

“How does one setup a company page on linked in or facebook?” First, you’ve got to have a personal account with Facebook or LinkedIn. Assuming you do, and assuming you are logged in, click here for Facebook and here for LinkedIn.

The leader: Facebook.

When presented with an opportunity to click on a link to a social network — either after they’ve completed a customer satisfaction survey or when they are viewing a Qlist profile page — customers are about three times more likely to visit your Facebook page as they are to visit any other social network.

Facebook seems to be the overwhelming champion based on my review of about 2500 pageviews from the last 30 days. When one of those pages displays a Facebook icon, one out of 24 pageviews results in a click. The next best performer is the consumer rating site Kudzu at 1 out of 59. Then Yelp and Twitter at about 1 out of 65. Only 1 out of 85 customers clicked on a Google Local or LinkedIn logo when given the opportunity.

Worth noting, so far only about 40 members have incorporated any social media into their Qlist profile or post-survey-submit page, and “pass-thru” rates vary dramatically from member to member. Some members haven’t gotten a single pass-thru to one of their social networks, many are tracking around 33%, and one is at 50%. Given the dramatic variances from member to member, my findings may change in a couple months.

But one thing is for sure, as more and more consumers engage in social networks, these rates are only going to increase.

We recently published some information about the correlation between customer satisfaction, growth, and business failure. In response to some questions, here’s an elaboration on that post, with an attempt to answer the question, “How much more likely am I to succeed or fail, based on the quality of my reputation?

If your recommendation rate was less than 80% one year ago, there is a 79% chance (about 4 in 5) that you are still in business.

If your recommendation rate was between 80% and 90%, there is a 86% chance that you are still in business.

If your recommendation rate was between 90% and 95%, there is a 96.5% chance that you are still in business.

If your recommendation rate was greater than 95% one year ago, there is a 98% chance (about 49 in 50) that you are still in business.

So in the present climate, about 1 out of every 5 businesses that deliver a poor customer experience (where poor is less than 80% recommendation rate) fail, whereas only 1 out of 50 superior performers fail.

Said another way, superior service providers are 10x more likely to stay in business than poor performers.

It is worth noting that the national average among builders and remodelers is in the low 70% range, and the average among our members is in the low 90% range. Using these stats, the average non-Guildmember is at least 6x more likely to go out of business than our average Guildmember.

GuildQuality was pleased to power Remodeling’s first ever Big50 Service Excellence Award. I had the honor of announcing the award winners at Friday’s event.

Remodeling’s Big50 Service Excellence Award was created to recognize exemplary customer service in the remodeling profession. A remodeler’s ability to deliver a consistently exceptional customer experience is worth recognizing and celebrating. Not only does it improve the lives of those customers who experience it directly, but it solidifies the business’ reputation as an accomplished professional – one worth referring and one worthy of repeat business. And for all of those entrepreneurs who make a living improving, expanding, repairing or rebuilding homes, the great work of a wonderful remodeler elevates the stature of our entire profession.

Four remodelers are the recipients of the 2009 Service Excellence Award. To identify the winners, GuildQuality interviewed more than 2,000 customers about their remodeling experience. The competition was unbelievably fierce, with the 50 candidates being among the most accomplished remodelers in North America.

Those four remodelers are:

Tim Lemke Construction, Mendota Heights, MN

Shawn Lober Construction, Danville, CA

Roberts Construction Group, Evanston, IL

Zimmerman Associates, Lakeland, FL

Congratulations to this year’s Big50 Service Excellence Award Winners, as well as the other 46 2009 Big50 Remodelers (including ten of our Guildmembers).

In October, I published some summary stats contrasting customer satisfaction among our members that have grown (in number of customers), those that have shrunk, and those that have shut their doors.

Michael & Dave just updated that data for me, and the results aren’t surprising. I intend to post more elaboration later, but in the meantime, here’s the summary: (just added the chart below)

Growing Businesses: Active businesses that have increased their number of customers in the most recent 12 months relative to the prior period. Average Recommendation Rate in the most recent 12 month period = 96.1% (up 2% from six months ago).

Shrinking Businesses: Active businesses that have had fewer customers in the most recent 12 months relative to the prior period. Average Recommendation Rate in the most recent 12 month period = 95.6% (up 3.5% from six months ago).

Failed Businesses: Businesses that have closed down in the last twelve months. Average Recommendation Rate in the most recent 12 month period = 74.3% (down 6.5% from six months ago).

The recommendation rate gap between growing businesses and failed businesses has more than doubled in six months.

Qualified Remodeler profiled the work and progress of one of our long-time members, Boise-based Strite design+remodel. The article also described Strite’s focus on the customer experience, and their use of GuildQuality in monitoring performance and setting goals.

I have had the great pleasure to participate in a roundtable facilitated by Jim Strite. He’s a true gentleman, a seasoned professional, and a caring business owner.

His closing commentary is indicative of Jim’s positive philosophy:

“Regardless of (economic) conditions, you have the capability of responding to those conditions,” Strite said. “… It’s easy to reiterate the gloom and doom because it’s all over the news. It’s more challenging to look for the positive and to look at the areas that we can influence and change for the better.

“That is a very challenging thing for company leadership to get that culture built so that people are looking at the glass half full versus half empty,” he said. “Yes, the market is down, but look at all the opportunities. There are still people out there who want to do remodels. The question is how do we find those people, and how do we better service those people so they tell other people?”

The following post is courtesy of the Remodelers Advantage PowerTips newsletter. RA is hosting two day Sales Workshop (“Building and Managing a Winning Sales Team”) on November 20 and 21 in the Baltimore area. To find out more, click here.

Cooking Up Sales

Here’s a fun and easy way to do some soft-sell marketing: Host a dinner for clients and prospects – and let the clients do the talking (and selling) for you.

For the past 4 years, the folks at Thompson Remodeling, Inc., in Grand Rapids, Mich., have been hosting monthly dinners in their well-equipped kitchen showroom. They hire a husband-and-wife team of chefs whom they’ve known for 15 years and spend a couple hundred dollars to have the chefs prepare a sumptuous dinner for a couple of past clients, a couple of current clients, and a pair of prospects.

“During dinner, we don’t talk about business at all,” says Ben Thompson, general manager of the design/build remodeling firm. “We talk about hobbies, favorite meals and recipes, and everyone’s families. The past and current clients say nice things about us to the prospects. We sit back, keep our mouths shut, and we get sales.”

Lately, Thompson’s financial planner has been hosting dinners at the showroom. “It works pretty much the same way as our company-hosted dinners do,” says the remodeler, “except the planner pays for the meal and it’s his past, current, and prospective clients who join us in the kitchen. I’m there, too, and I put in a good word for him because he’s done great work for me. We sometimes get sales from those dinners, too.”

The client cuisine nights are becoming legendary. Recently, Thompson’s CPA called him up and told him he’d like to host a dinner, too. The remodeler is all for it. “It’s a phenomenal way to connect with people,” he says. “We’re providing a service for businesses we believe in and we get to spend time with people who might be potential clients for our company.”

Looking for other ways to improve your sales team? Building and Managing A Winning Sales Team PowerMeeting has the answers. This 2-day meeting in Baltimore, MD will put you on track to have hard hitting, high performing players on your team.

Unfortunately, even some of the building and real estate companies that rely on GuildQuality have not been able to carry forward in this challenging market. We know of 12 members that have filed for bankruptcy in 2008.

Of course, when I hear that kind of sad news from one of our members, the first thing I do is check out their account. I noticed enough unhappiness among customers of businesses that are shutting their doors, that I did a little number crunching. I quickly learned that, as a group, they earned the recommendation of their customers 83.3% of the time.

83% is considerably below average for our Guildmembers, so it got me thinking a good bit more. I asked David on our engineering team to pull me all data for all of our members who 1) have been with us for at least two years, and 2) have surveyed at least 15 customers in each of those two years (to get some meaningful data). Here’s what I found:

If you had more customers in the most recent 12 months than you did in the prior 12 months (I called that “Positive Growth” in the chart above), you were among our top performers with a 94% recommendation rate. If you had fewer customers in the most recent 12 months relative to the prior 12 months (“Negative Growth”), your recommendation rate was 4 points lower.

Some other observations:

90% of “positive growth” members have a recommendation rate above 85%

82% of “negative growth” members have a recommendation rate above 85%

42% of members that filed for bankruptcy had a recommendation rate above 85%

If you have a recommendation rate below 85%, you are 6.2x more likely to close your doors than if your recommendation rate is above 85%.

One of the points I try to reiterate in my presentations is that your reputation is your greatest asset. It earns you premium pricing when the market is strong, and it’s your warm blanket when times are tough. Our data clearly supports that assertion.

I just finished examining financial information from 457 recent remodeling projects for which we had survey responses. From the data, it looks like…

Gross Profit Margin = (0.0424 x Satisfaction Index) + 0.4155

Per that equation, if 50 customers were completely unsatisfied (zeros across the board and would not recommend) the remodeler would earn an average GPM of 41.55%. If 50 customers were completely satisfied (fours across the board and would recommend), the remodeler would earn an average GPM of 45.79%.

However, that equation assumes a linear relationship, and isn’t really a reflection of reality. In actuality, the influence is more dramatic on the far left and far right ends of the chart. GPM tweaks up and down in the extremes: when comparing the 50 most satisfied (avg GPM of 49.0%) and the 50 least satisfied (avg of 40.5%), the difference is actually 8.5%.

These customers are all from roughly the same period, so I theorize that the increases in GPM are attributable to a smoother experience. They don’t reflect any increases a member would ultimately realize from continued improvements in reputation. Those gains would certainly come (and some other research suggests they will be significant), but the positive trend I see here is likely a reflection of the direct and immediate benefits of less call backs, less fee disputes, etc.

Bigger gains in profitability come when the stronger reputation begins to earn the company premium pricing. But judging from this data, there are immediate financial benefits from delivering an exception customer experience: Jobs are more profitable when the customer is happy.

On a $10,000 job, the contractor makes $60 more by having a very happy customer (95%) as opposed to a moderately satisfied customer (80%). For a $400,000 job, the same improved satisfaction increases the gross profit by $2,400.