HIGHER CONSUMER EXPECTATIONS
Purchaser expectations have altered significantly in the last 5 years (this is undoubtedly not unique to the new build sector) and consumer spending behaviour can be tracked by the nation’s economic history of ‘boom and bust’.
1996 to 2006 marked the latest growth in consumer spending and a housing boom. Access to easy credit made it possible for people to realise their dreams by the purchase of a dream home.
With the downturn came fear and uncertainty about employment leaving many consumers with the highest level of personal debt since records began. Those homes not repossessed by the mortgage provider were no longer an investment but a burden. Against this backdrop, today’s consumers primarily seek best value for money looking for a combination of quality against best price, meaning that they are more willing to shop around for goods to get best value and as a result their expectations are greater. Consumers of new builds have a natural and warranted expectation that their property will be in perfect condition at the date of purchase, as would be a brand new car on collection from a dealer showroom. Such consumers typically purchase a new build because it fits their needs for no hassle living. They have made a conscious choice of not wanting the responsibility of fixing or refurbishing their home to fit their tastes – they purchase a new build because the glossy marketing reassures them that a new home will fit their busy lives and provide a lifestyle to suit their work/play choices.
Today’s average consumer sees no limit to the extent of service they feel entitled to receive. It’s critical that developers understand this and embrace the idea that one phone call or email to an exceptional customer care team will ensure that they pick up any problem and own it through to completion; don’t ever let anything become the customer’s problem to chase. Summarising the consumer’s outlook:
High expectation of product quality
Unrealistic expectation that a new home means no homeowner maintenance
Misguided about technology performance
Takes little to no personal responsibility for anything that goes wrong
Expects immediate attention and remedy when something fails
Can be highly compensation focused when seeking problem resolution
In so many cases, the industry while taking great leaps in material and technology performance, acts largely as it ever did when it comes to business processes and management. Although representing 6% of UK Gross Domestic Product, modern day business practices are sadly lacking in many areas. Assessment of key weaknesses:
New build product quality has suffered post economic downturn
Project management is disjointed
Sales and marketing can over promise
Construction can under deliver
Some developers don’t fully understand their warranty obligations
And the universal problem is that no one party ever takes ownership of the entire project i.e. from plan to the end of the warranty period.
Complaints arise from many levels of dissatisfaction (some reasonable while others not) but all have to be managed in a timely and professional manner and this is where the industry lets itself down.
When complaints are ignored or mishandled it leads to costly disruption of future development and brand/reputational damage in the worst of cases. The increasingly litigious consumer on the other hand has advanced rapidly in their ability to complain and how to leverage the moment by utilising all means freely at their disposal.
Digital technology promotes immediacy i.e. the vast majority of communication is by email – and as soon as the ‘send’ button has been pressed the consumer expects a response.
Furthermore social media has empowered the consumer providing easy channels to reach or influence the most powerful of corporate executives a 140 character comment on Twitter or an escalating groan through Facebook.
Property Warranty Manager Augusta Lynch at After Build shares her feelings on this increasingly critical matter. “I’ve always worked in and around complaints and compensation and you come to recognise the difference between the legitimate and the outlandish fairly quickly. The important thing is, don’t panic. This isn’t an industry wide problem – it’s a national problem and if you have customers you have to face up to it. I’ve been working with many of our customers to put in place complaint and compensation policies that are robust, modest and effective.”
As with so many new developments in our sector, the key is to respond proactively to protect yourselves and your contractors.
We encourage our customers to recognise the positives of acknowledging and effectively managing complaints. They can provide you with a new level of data and genuinely allow you to improve your services. Doing this the right way will improve your customer satisfaction and will only limit your liability, not leave you wide open.
If it’s something you’re not sure about, talk to the experts, talk to the warranty providers and any other regulators that you answer to, everyone’s struggling with their stance on this at the moment and guidance is more available than you might think.