Referrals From Happy Customers
Any of us in the manufactured housing industry could agree that if all the buyers of homes we build and sell could be described as happy customers, then our business would be more fun and more profitable. The most expensive thing that ever happens in our business is our failure to sell homes. A part of that failure is our lack of “easy-to-sell” referrals from happy customers. Happy customers, more than unhappy customers, will commonly send buying referrals back to sellers. Here a differentiation between “satisfied customers” and “happy customers” needs to be made. As a matter of fact, a customer who has had his complaints addressed to his satisfaction may be usually unlikely to send a referral. He may not be comfortable sending a referral if he believes his referral must expect problems that require his complaining to fix those problems. We simply must not accept that customers who are “satisfied” that all their complaints have been addressed are likely now “happy” customers. That sounds challenging to our ordinary, everyday, comforting opinions on how well we are doing when all customer complaints have been “satisfied,” especially when those satisfied customers may have waited weeks or months for their complaints to be addressed. They may be “satisfied”, but they certainly are not likely “happy.” Our quest is for happy customers who will send referrals to us. To the extent that our numbers of happy customers are growing, our referrals and sales will grow accordingly.
Referrals from happy customers could be, and should be, a significant source of new business for any truly professional sales operation. How to create happy customers versus those who are less than happy will be the purpose of this paper. Too often, in today’s manufactured housing industry, a very low percentage of new sales are triggered by happy customer referrals. Why is that and what is the “cure?” In this paper one may be able to see where the “cure” could lie. For many years truly successful long-term independent retailers created happy customers by being responsible for, or holding accountable for, all the customer experiences. Those truly successful long-term retailers experienced high numbers of referrals. Those highly experienced retailers would say that the success of their business was largely attributable to those referrals from happy customers.
In today’s world more and more retail outlets are operated, not by owners, but by managers working for large companies. My sense is that these managers are either simply not aware of their ability to create more business from referrals, or they have not been taught or trained in that direction. Perhaps even their leaders or trainers are inexperienced or unaware of the potential additional business that comes from generating referrals. My experience is that approximately 70% of referred prospects buy on the first or second visit. There have been independent retail operations that experienced 40%, 50%, and more of their sales from referrals. That never came easy, but a retailer’s success depended upon those referrals. Can that happen in today’s environment? Why not?
As we move through this presentation of a process or processes to create happy customers it should be apparent that our goals are twofold:
(1) Eliminate or seriously diminish a customer’s need to complain about anything once he has occupied the home. (makes for a “happy” customer)
(2) Generate referrals. (from then “happy” customers)
Over the last few decades, the numbers of independent retailers have dwindled as large multi-factory, multi-retailer companies have replaced them. These large vertical companies, with their “semi-autonomous” divisions have, too often, shuffled (at least partially) the responsibility for creating “happy customers” from one division to another. No one division appears to take total responsibility. (at least in this writer’s observations).
In our “latter day” manufactured housing industry “customer satisfaction” has come to mean “no unresolved complaints at this time” or the complaining customer has simply given up on asking for help. If there were complaints which were “satisfied” over some extended period of time, particularly if those complaints were for manufacturer or retailer or installer failures, the absence of current complaints may or may not indicate that the customer is pleased with the experience. Absence of happiness may mean absence of referrals. Absence of referrals means reductions in the number of sales.
The manager of a factory owned retail outlet, however well intentioned, has not been trained to think the same way as does a successful long-term independent retailer. That manager has most likely been placed in his job, principally, to sell houses, and the more significant part of his pay is derived from commissions or short term profits from sales. While the manager will genuinely want his customers to be happy, he will assign much of the customer experience, beyond closing the sale, to installation contractors, customer service personnel, office personnel, and others while he concentrates on the next sale. Those assignees, while trained to be nice and helpful, are not likely to feel as passionately about customer happiness as one could expect from a manager or an owner. This passion for customer happiness is probably not felt at a factory level. Understandable. We will come back to that later.
One of the most expensive operations by factories or retailers is the well-intentioned chasing about the countryside responding to customer complaints, many of which are realistic, many of which may not be. (Some common complaints center on wall and ceiling finishes, out of adjustment doors, and missing items like light globes and window screens.) This writer contends that factories and retail outlets have, in good faith, fallen into this costly approach to customer service purely from the absence of a better plan. (Statistics will show that factories spend 10’s of thousands of dollars each month on this approach.) The sad thing is that with all this hard work, with all these expensive miles driven, with all this expensive energy expended, the service may have been impossible to perform in a timely manner or in a fashion that may or may not have satisfied the customer. Happy, at least pleased customer? Questionable. This writer contends there are solutions to how factories and retailers can eliminate a huge percentage of these endless customer visits and the huge costs relative to same. Factories, retail managers, and retail salespersons should come to realize that the new buyer with whom they are working today, properly handled, could very well be the source of new sales during ensuing days, weeks, months, and years. Mishandled he could have not only failed to refer new customers, he may very well discourage potential buyers who otherwise may have been new customers. What a terrible loss!
Any of us should come to realize that the hoped-for great customer experience may come less from the product (regardless of features, low pricing, good financing, etc.) and more from other factors. How was he treated from his first visit through all the processes that got him comfortably into his new home? How professional and attractive was the environment at the sales center? How knowledgeable and helpful were persons with whom he engaged? Were all processes to complete a purchase and a delivery carefully explained to him? Did the sales center people perform as promised? Were there no surprises, particularly unpleasant ones? Were unexpected delays or problems dealt with quickly and responsibly? How all these factors are handled will have significantly more long-lasting positive or negative effects on the happiness or unhappiness of the customer than how well he liked the features etc. of the home he purchased. If we truly care about the “customer experience” then we must focus on the processes of the sale and delivery, making certain the customer gets more than and not less than he expected.
Referrals from customers should be a very natural result of their happiness with what they bought, how they were treated, how they respected the process. Most of us are pleased to refer friends, relatives, or simply acquaintances to sellers of anything we buy when the experience was a happy one. For one thing, when a referral buys the same product at the same place as did we, we feel validated in the buying choice that we made. However, if our buying experience was fraught with difficulties, we are unlikely to make referrals. Beyond that we may discourage others from repeating our experience. An axiom we should consider is that a buyer either got more than he expected or less than he expected. The safe approach is for the seller to always be sure that the buyer, in his experience, got everything he expected and then some.
What will follow is a recap of recommended actions and behaviors of factories, retail managers, retail salespersons, installation contractors, and services techs. What will be described is a process that has been done quite successfully in several places at various times over the years. The process will first appear to be quite tedious and quite expensive. But the net expense will be measurably less than that of the common traditional approaches described earlier. More importantly, the proposed process will result in a much higher percentage of happy customers—happy customers that send referrals—new buyers that we otherwise may never see—profits that we may never realize. The process will require commitment from everyone involved. The reader of what follows can begin to see any number of circumstances he believes to be either too complicated, or too difficult to accomplish. Again, the end result will be less expensive, less complicated and less difficult to create happy customers than the more traditional processes we described earlier.
The focus of all parties to the process must be twofold. First, is the virtual elimination of endless after sale service calls. Next is the creation of happy customers who refer buyers. The participants are the factories, the retail sales centers, the retail salespersons, the installation contractors along with any other parties involved in the sales process.
First, the factories. For the new process to work the factories must have a final quality control operation that disallows any house being shipped with defects or shortages. The quality control operators must view the house in the same manner as would a new homeowner. There are no missing items that will, once in place, properly finish “the look” the homeowner will experience. There are no missing or misfitting trim pieces, exterior doors, interior doors, cabinet doors, light globes, window screens, etc. etc. etc. The quality control operator must be held accountable for any shortcomings in the construction and appearance of homes before they are shipped.
If retailers subsequently discover shortages or imperfections, the factories must be prepared to remedy such as quickly as possible. Generally, the retailer must do a thorough check for shortages or imperfections as soon as possible once a home has been delivered to him, or to a customer’s site. He should follow the same process for a home to be placed in inventory for sale. The retailer should not ever take materials or components from a recently arrived home to satisfy shortages in a home that was incomplete.
Too often many retailers show homes to prospects which may be incomplete. Light globes are still in a box. Window screens are in a closet. Appliances are strapped such that they cannot be opened and examined. Window blinds are not adjusted to how they should look, etc. etc. etc. Sometimes there are obvious defects which have not been addressed. (The retailer cannot know that he has all the required screens and light globes unless they have been put in place.)
While the foregoing paragraph describes some reasonable retailer activity, his absolutely most important activity is his relationship with the prospective customer. Conversations and commitments must be handled such that the customer expectations of what, where, when, and how anything will happen as a result of his purchase are to be held strictly in check. Perhaps one of the most glaring inadvertent failures by retail personnel are the inexact, easy to misunderstand, comments that allow the customer to have expectations that are not followed by realities. Retailers simply must thoroughly explain the sequence, preferably in writing, of a definitive list of events and activities that must occur, in order to accomplish a professional delivery, installation, and customer acceptance. Once the recommended process is described in some detail it will become more clear that “too loose,” “too inexact,” too subject to misinterpretation” comments can result in confused expectations of the customer. If the retailer or retail salesperson has established himself (or herself) as someone knowledgeable and trustworthy, laying the parameters of what the customer should expect from the retailer and what the retailer should expect from the customer should be easy enough to do. Customer questions or declarations must be dealt with directly and honestly. With the right relationship with one’s customer, one should be able to do that with little difficulty. The end result would be a happy customer who will be inclined to send referrals.
Here I will inject a serious opinion about which many readers will not agree. This writer’s opinion is that the home sale should not be considered complete until and if the home has been delivered, set, and accepted by the buyer. That would presume that the buyer, under some legitimate circumstances, could reject the sale and the seller would be required to return it to the seller’s place of business. While that description of when the sale is complete may never fit with industry practices, sellers would behave better towards buyers if they would think that way. (Appropriate training and the timing of compensation could get them there. Such an attitude would result in happier, referral-prone customers.)
From the outset the retailer must have a clear picture of how the delivery and installation of the home to the customer’s site can be done efficiently. The retailer or the installer must visit the site with the customer to establish exactly how the home will be positioned at the site. Beyond that there must be an understanding by the customer of exactly what he must do in preparation for the delivery, and when that must be done. From that point a projected schedule should be worked out for the delivery and installation. (The retailer or the installer must give the customer a detailed description of exactly what will be involved.) The retailer should have daily conversations with the delivery/installer team and with the customer to give up to date adjustments or reaffirmations as to the scheduling. The home gets delivered and installed at the customer’s site. As quickly as possible the service tech and perhaps the salesperson will visit the home to see that everything is complete and problem-free as possible. To the extent that shortages and imperfections are spotted and fixed, the subsequent gathering of all the parties at the home to finalize the sale can be concluded with little waste of time. Earlier, in all conversations with the customer, there must be an agreement between the retailer, the installer, a service tech, and the customer that they will meet at the customer’s site once the installation is spotlessly clean and complete (from the retailer, installer, and service tech points of view.)
Up to this point the customer has not been allowed to have his keys or to enter the home. The big day, when a happy customer will be created, will be the meeting, by appointment, at the customer’s site. Present should be the customer or customers, the retailer or the retail salesperson, the installer, and an equipped service tech. The first activity should be a “walk around” of the home with the installer pointing out to the customer important details of things like pier construction and anchoring and pointing out where the customers electrician and plumber will make their connections. (At any point that the customer’s electrician is discussed, the customer must agree that his electrician who connects power to the home must also check all electrical outlets in the home. If any are not functional, he should repair. Similarly, his plumber, having connected water and sewer lines, must check for leaks in either water supply lines or drain lines and repair any he finds.) The retailer and the customer can closely examine the exterior of the home to see any flaws in the siding or trim plus any shortcomings in the paint. Next the group (including the customer) will enter the home to make inspections. These inspections must be thorough and detailed. If the customer sees what he believes is a defect and the retailer/service tech agrees, the service tech will immediately make the corrections. Sometimes, a defect the customer perceives is not, in fact, a defect. The service tech and the retailer should expect an occasional situation like this and be prepared to gently persuade the customer that what he sees is as it should be. Every room, every closet, every exterior and interior door, every cabinet door or drawer, every appliance must be examined and have the customer’s acceptance as having met his expectations. If not, the service tech must make corrections or adjustments. There should be a document that identifies every part of the interior with a place for the customer to initial when he agrees there are no defects. One would expect a dozen or more areas for inspection. As these inspections are completed in all areas, with customer sign offs, the retailer or service tech should photograph the same area for customer files. Every area: exteriors, walls, ceilings, floors, windows, trims, paint, etc. must be considered. All customer noted, and agreed with, defects must be dealt with before the meeting is concluded. Then, the retailer should explain to the customer that, after this day, over time, there could be various issues that can appear as the ground settles and causes small cracks, or something needs to be better sealed. Perhaps some painted surface needs to be touched up. The service tech should now go over the contents of the box of materials for the customer’s use. In the box there will be caulks, sealants, and paints for both interior and exterior applications. The service tech should identify every item and explain to the customer how it may be used. It would be helpful if the service tech described examples of “fixes” the customer could perform.
Next, the retailer, with help from the service tech, should show and explain all the individual warranties for items like the refrigerator, the range, the dishwasher, and any other “appliances”. The customer needs to acknowledge that he understands it will be his responsibility and not the retailer, not the factory, to follow those warranty instructions to get repairs or replacements. He should understand that the factory nor the retailer is allowed by the manufacturer of those appliances to do any work on them. Then the manufactured home warranty must be presented to the customer. It should be pointed out that the customer has one year to discover “defects in materials and workmanship.” The retailer should explain that it is extremely rare for there to be defects in the basic construction of the home (the frame, the walls, the floors, the ceilings), but should there be, then the factory would be required to honor the warranty and make repairs. Understandably, the majority of customer complaints center on cosmetic issues. The customer made his choice on which home to buy, at least in part, on the “look” of all parts of the interior. So, with the customer’s acceptance of the “look” of all the interior and exterior portions of his new home, with his understanding that beyond this day of inspections and corrections, future cosmetic defects from whatever cause, will be his to correct. That is what makes for a happy homeowner from whom it will be very rare to hear complaints during his one-year warranty.
The retailer, at this point, should be comfortable to recap all that has led to this moment. He should express his own confidence that the homeowner should be justifiably proud of both the quality and the beauty of his new home. He should express his gratitude to the buyer for his business. Here it would be a great idea to thank the customer for his time and cooperation with the process and present him with the keys to his new home plus a nice gift. (needs to be something of real value to the customer-something he can expect to use in his new home). There should be handshakes and congratulations all around. The retailer should take the opportunity to remind the customer that he will always be happy to take a call from the customer any time about anything about which he may have a question. At the end the retailer may take another opportunity to say to the customer that his own personal success depends largely on new customer referrals from nice folks like this customer who are happy with their purchases. He could say that if the customer knows anyone amongst family, friends, or acquaintances who are, or one day could be, in the market for a great manufactured home, referrals will be greatly appreciated.
Processes as described in the foregoing, in other places, at other times, have resulted, in most cases, zero complaints from the happy customers who were led through the processes described herein. In one case a successive group of 20 new manufactured home sales, from one particular retail group, were followed for more than a year with zero complaints from any of them. There simply were no reasons for complaints. Additionally, a substantial number of referrals regularly came from this group.
It could be imagined that, in today’s world, any and all processes leading up to that final visit with the homeowner at his home site could have variations. However, it should be noted that during all of the earlier activities the preparation for and the focus is on that final visit. That visit, carefully executed, is what can create a happy customer, who had a great customer experience and who will send referrals to create even more happy customers.
Anyone reading the foregoing and having questions, opinions, or disagreements with what has been proposed should feel comfortable and welcome to express such to me at any time in any form. I may very well learn from what you have learned from your experience and adjust my opinions.
H.A. (“H”) Cowan
PO Box 2734
Presidio TX, 79845
(817) 201-6474