PERCEPTION IS AT LEAST AS IMPORTANT AS REALITY IN THE HOMEBUILDING BUSINESS

Perception #2

Perception is entirely subjective and can be an immediate reaction or one that is formed over an extended period of time.  But regardless of the time frame, I believe that what we perceive becomes our reality and this subjective evaluation applies to everything in our lives; it is why we like some people, some companies and some new homes and may not like others. 

One of my favorite restaurant servers is a young man named Scott.  We first met him ten years ago when a new restaurant invited us to their “friends and family” opening and we have followed him as he has moved to several other dining establishments since then. He is very friendly and extremely personable and that more than makes up for the fact that he is really only adequate as a server, usually forgetting to bring requested items so that we often have to ask for them several times.  We always request him when making a reservation and although the service may have flaws, the overall experience is “perceived” as delightful so that we recommend him to friends.

My favorite hotel company is Marriott.  They do not necessarily enjoy the most convenient location, they are seldom the least expensive, they are not the most luxurious and I admittedly have had problems with various stays over the years. But because they went above and beyond any reasonable expectation fifteen years ago to satisfy a special request, my loyalty is permanent as I “perceive” this company as truly accommodating and exceptional.  I not only use them for my own business and personal travel whenever I can but also recommend them when possible.

On the other hand, my wife and I decided on the spur of the moment to take a weekend cruise last month.  We wanted get away for a couple of days and were not expecting much as only the lower priced cruise lines offered weekend cruises.  Much to our surprise, the cruise exceeded our expectation and I took the time to write to the president of the company informing him of our satisfaction.  The cruise itself raised my perception of the company but the response to my correspondence, an “insert name here” forty word form letter, suggested that the company really did not care about me as a customer and reduced my perception of the company below what it was originally. 

But by far the most memorable instance where I saw perception overruling reality occurred in the homebuilding industry.  When I first started in this business I was with a merchant builder based out of Chicago and after a few years had worked my way up to become their marketing director.   We had built an affordable condominium community in the western suburbs and, in an unusual winter season that saw multiple freeze-thaw cycles, ice damming took place and leaks occurred in the majority of the homes.  This was not a design or construction defect, as such, as the design and construction techniques were typical and followed industry standards for that area at that time. 

At the same time there was a local attorney who specialized in suing builders, having won a major case against Larwin that, as I recall, caused parent company CNA serious financial distress.  This attorney solicited the owners in our community and a lawsuit resulted, irrespective of the fact that we had already begun steps to repair the problems.  This attorney was fond of publicity and arranged for television coverage of the owners picketing the sales office on weekends, with several holding rats in glass jars, speciously implying that our poor construction had led to the appearance of the vermin.  As I recall from high school biology, the principle of abiogenesis was finally disproven in the early 19th century but apparently this was not known to the media or simply ignored as it was still newsworthy.

My response was to stop all advertising, close the sales office and be unavailable for comment when questioned by the news media.  During the middle of this unfortunate negative publicity which ran for several weeks, one Tuesday afternoon our sales manager and I were in the area and we stopped by the community’s sales office to pick up some files.  Not expecting company, we were surprised when Parker, a recent purchaser, walked in the door.  He mentioned that he also just happened to be in the area and had stopped by to see how construction of his home was progressing.  We were having a pleasant visit when the customer came forth with an unsolicited compliment – he said “I just want you to know what a pleasure it has been to do business with you.  I am so happy that I chose to purchase from you instead of that company where all of the buyers are picketing and suing the builder.”

By the way, the lawsuit was withdrawn after we presented the homeowners with an independent engineering report and agreed to make repairs as specified therein under the supervision of the local building department. The community subsequently achieved successful sellout, within the original budgeted time frame and profit.  We also changed our design and construction thereafter, eliminating gutters (which caused the damming), installing an extra layer of roofing paper at the eaves and raising our roof pitches, 

I learned a valuable lesson regarding perception.  Although the customer that came into the sales office that day had seen or heard something about the picketing and the lawsuit, he really had not paid much attention to it as he had not personally experienced any problems and his relationship with us had been pleasant and painless.  His perception of our company was that we were competent and capable builders, providing him the home he wanted at a reasonable price and value. 

And I came to realize that perception can be far more important than reality.  Therefore, do we in the homebuilding business not need to do everything possible to improve the customer’s perception of our company, our product and ourselves?  The following is a partial list of what I have found this year in developments around the country that needs to be corrected to create the image we must convey to be perceived appropriately to create more sales:

*  Be certain that our web site and all other advertising and promotional materials are correct and up to date;

*  Have advertising that not only excites the market but also creates the image of professionalism that we need to convey;

*  Be socially responsible – “green” when possible, and visibly involved and active in the community and several relevant civic and charitable organizations;

*   Have our sales office and model homes open for business during advertised operating hours;

*  Have our signage leading to and within the community kept clean, complete and well maintained;

*  Make certain that our entrance and the route to our community sales center are attractive, well landscaped (whatever the season) and free of debris;

*  Make certain that every aspect of our community – the sales office, the model homes, the available homesites, the homes under construction, the construction trailer area, even the closed and occupied homes, are all clean, attractive and free of debris;

*  Keep our model homes in pristine condition inside and out, including landscaping with year round color;

Keep our sales office in pristine condition inside and out, including fresh flowers;

*  Have the sales staff be neat, clean, presentable (dressed appropriately) and ready to do business during advertised operating hours;

*  Have current and correct home plans and other collateral material in the sales office;

*  Train our sales personnel to become friends of the visitors, experts in the local housing market who are ready, willing and able to assist the visitors in every way they can, whether the visitors purchase from us or not;

*  Follow-up with all visitors within 48 hours of the initial visit (and respond to web inquiries within 24 hours) and continue to stay in touch with visitors, prospects and purchasers on a regular, consistent ongoing basis;

*  Always be truthful when dealing with customers – this applies not just to the sales personnel but to everyone within the organization;

*  Be pro-active, not reactive – again, this applies to everyone in the organization.  Problems may occur; when they do, do not ignore them, find appropriate solutions and communicate the solutions to the customer as quickly as possible;

*  Be a friend of the brokerage community – cooperate from day one and make the real estate brokers an integral part of your team;

sold #5

By themselves, each of these items may seem trivial, but you never know what a prospective purchaser will notice and respond to, either positively or negatively, and create his or her perception of you, your company and your homes.  In this market, every sale is critically important and we need to be certain that we are not contributing to a single sale being lost.  But that’s just my opinion.

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3 thoughts on “PERCEPTION IS AT LEAST AS IMPORTANT AS REALITY IN THE HOMEBUILDING BUSINESS

  1. Mr. Levitan; Very well stated, and I have forwarded your article to my friends with open subdivisions. My interest is more Industry oriented. Aren’t we tired of being berated for; over developing, money grubbing, poor stewarts of the environment, opportunistic manipulators of public policy? When in fact we are; respondents to consumer demand, building only what the market can absorb at the most minimal and competitive profits (if any), protecting our environment as much as possible while conforming to codes and development standards. We are the providers of THE AMERICAN DREAM, on which the majority of participants base their entire net worth. I have spent over 40 yrs, in this industry cherishing these values and ethics. I know I’m not alone, but who is telling the PUBLIC? Our direct costs of matl’s & labor has increased less then 12% over the last ten years. ALL other increases have been in governmental imposition first, land costs second. The public needs to know who is pricing them out of THE AMERICAN DREAM.

  2. Good evening, Daniel
    I totally agree with you regarding perceptions. First perceptions are very important and without a doubt will either start the relationship with the customer out on the right foot or on the wrong foot.
    I believe that the home building companies that provide the most positive first impressions with their customers and continue to build on these positive first impressions will be successful in any market.
    Thank you and please keep up the good work.
    It’s a pleasure to know you.

  3. Thank you Daniel for your great article. Regardless of the market condition we will successfully sell ourselves and our homes simply by a stellar presentation, keeping promises and follow-up with our trusted customers. Companies and sales professionals that make this a priority will succeed!

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