My first job out of college was in Customer Service for a national homebuilder.
I had little idea what I was doing.
The marching orders were three-fold:
- Make our homeowners happy.
- When in doubt, use your best judgement.
- If you don’t have a “best judgement,” ask for help.
That was really it.
Simple, but not easy.
That first few months were rough. Solving problems after the home is complete is challenging… when you’re not exactly sure how the home went together in the first place.
I listened to my customers closely. Sometimes too closely, but the overwhelming majority were good people. I listened to my tradesmen closely. Sometimes too closely, but the overwhelming majority were good people.
Those first few months I was like Mikey (later Rudy and then Samwise Gamgee…) in Goonies on a quest with some friends. My team was young. There were four of us who had all started around the same time. We were all kinda clueless.
Like Goonies, money was relevant, but it wasn’t the primary goal. In Goonies, the treasure of One-Eyed Willy is a means to end – to stop developers from building a golf course on top of their home.
For us, money was relevant sure, but it was validation. We were clueless college kids. Another paycheck meant They would let us come back next week.
Recognition for my hard work and effort meant more to me than money. The letters homeowners sent to corporate kept me going for weeks. The 2-minute “Attaboy” phone call from the division president kept me going for months.
Sure, had there been a monetary reward for making my customers happy – yeah, I would have enjoyed it. But I’d like to believe my behavior and efforts wouldn’t have changed.
But would they have?
After I moved on from Customer Service the job became Customer Relations. And while I abhor clever business euphemisms, I agreed with the name change. Business is about relationships with your customers.
The title change to Customer Relations came around the time the esteemed JD Powers came to town… to measure Customer Satisfaction. That’s when the metrics and incentives stepped to the forefront.
The three-fold marching orders didn’t change per se, but they got more specific.
Make homeowners happy… or at least 94% happy and ideally with a “My Home is Complete!” score.
Goals and Objectives are good. Metrics help us know when we get to where we are going. So… why not incentivize people to help us get exactly what we want?
Over at Professional Builder’s Housing Zone, Charlie Scott wrote an excellent piece on Customer Satisfaction Bonuses. A flurry of Comments on the Lean Building Linkedin site showed what an controversial business facet this is.
It wasn’t long thereafter [after JD Powers] that the effectiveness of these “pay for satisfaction” bonuses came into question. Clearly, some home building companies’ satisfaction ratings began to improve, but were these improvements due to the financial incentive, or that customer satisfaction was now consistently being measured and therefore began to conform?
Homebuilders confirmed what economists know: Incentives work.
Want 94% customer satisfaction?
Set it as a goal. Communicate the delta from where we are now to the 94%. Add some monetary reward. Carrot for those at or above 94%… Stick for those below.
You’ll get your 94%.
Does this 94% represent meaningful differentiation for your customers?
Building strong relationships with customers is hard work. You may have a customer for life who scores your product at 88%. You may have a customer who will never buy from you again but scored the product at a 100%.
Now you got your 94 average… but what does this score really means for the business? Where is the business insight?
Three-quarters of the way through Goonies, the team arrives at a magic waterfall lined with coins. They think they’ve hit the motherload. They start shoveling the money in their pockets.
“We did it!”
“We made it!”
Then they hear voices. They look up. They realize they are at the bottom of the Old Moss Garden Wishing Well.
Dejected, the group is faced with a decision. They can take the easy way out – jump in the bucket and be pulleyed up by bad boy Troy (the son of the rich developer). Take Troy’s Bucket and they give up on the dream of saving their house.
Or they can journey on – with more Risk, more Uncertainty… and see what happens.
Don’t you realize? The next time you see sky, it’ll be over another town. The next time you take a test, it’ll be in some other school. Our parents, they want the best of stuff for us. But right now, they got to do what’s right for them. Because it’s their time. Their time! Up there! Down here, it’s our time. It’s our time down here. That’s all over the second we ride up Troy’s bucket.
In business, short-sighted monetary incentives are like Troy’s Bucket. They’re the easy way out. If numbers are what you want – apply the formula and introduce the carrot and the stick and you’ll get your numbers.
What’s significantly more challenging is building a culture singularly focused around taking care of the customer. Period.
Simple, but not easy.
Bradley Hartmann is founder and el presidente at Red Angle (www.redanglespanish.com), a Spanish language training firm focused on the construction industry.
Categories: Jobsite Leadership