Home builders

What’s Wrong With Home Builders Warranty Service

Manufacturers often refer to their warranty services as customer service or customer service. But sometimes the interests of the construction company in this area overshadow the interests of its customers. This can be a big deal for today’s homebuyers, as customer expectations for warranty service are at an all-time high.

You can attribute this to the automotive industry and its “bumper-to-bumper” policies, which cover most problems encountered in the first three to five years of owning a new car, giving customers almost complete assurance that the automaker is responsible. of its product and its manufacture.

It follows that when these same buyers buy a new home, they assume that they will receive the same treatment as when they buy a car, even if the cost of a house is 10 times that of a new car. . Realistic or not, that’s what today’s buyers expect.

Another reason the warranty phase of a homebuyer’s journey is so important is because it’s one of the last things a customer remembers from the entire experience. They think, “I just moved into a brand new house and I can’t bring in my builder to fix things. They don’t have to worry about my house after it’s built.

Even though everything before this point has been fantastic, the warranty experience is what buyers will remember – and what will make them more likely to write or post a negative review, no matter how good everything is. the rest.

The third and main reason is that selling homes online depends on your warranty. In fact, aside from online reviews of your business and homes, the biggest trust factor in dispelling doubts and allaying worries about buying blind online is your warranty.

Trust is key for these buyers, and if you’re considering selling homes in the future, you need to get it right.


Home Warranty: What Home Builders Are Getting It Right Now

The CEO of a top 50 builder once said something to me that underscores why the home warranty is currently not meeting buyers’ expectations: “We can’t afford to invest more money in guaranteed only what is absolutely necessary.”

I understand the logic, when almost every manufacturer’s current business model presents warranty service as a cost center. Repairs hurt the bottom line and therefore should be minimized to maintain profitability. Therefore, determining what is or is not covered by a warranty becomes a major point of contention between the builder and the buyer.

The reality is that nearly every builder’s customer survey results drop after the home is delivered because the expectation that the builder will take care of the customer if something goes wrong is not met in the eyes of the builder. Buyer.

Although they often use their warranty as a sales tool with a message “Don’t worry, we’ll take care of you if something goes wrong”, the reality is that customer survey results from almost all manufacturers fall after the delivery of the house because that expectation is not satisfied in the eyes of the buyer. And the only way to turn the tide is to rethink how warranty fits into the bigger picture of your business.

There are other reasons why the warranty can negatively affect the customer experience. Consider the difficulty of managing business partner schedules. Imagine this scenario: It’s three weeks before Christmas and a homeowner notices nails sticking out of the paint in the dining room where the holiday family gathering is to take place. Fixing this unsightly problem probably means frequent calls between you and multiple trades people who have to make multiple house calls on different days, a process that actually takes weeks or months (certainly not three days).

But through it all, the buyer doesn’t know that the paint sub has 30 more homes on its schedule and that touch-up job got lost in the redesign. All they know is that their diners are staring at a large piece of unpainted drywall in the brand new dining room – that’s not the lasting impression a builder wants to leave. And many builders don’t realize it, but we often make it difficult for buyers to submit warranty claims. We force buyers to use unfriendly online forms or clunky back-office systems, assuming they remember how to find them or log in. I know of more than one builder who actually disabled their live chat because customers were using it for service requests instead of sales inquiries.

How to Fix the Home Warranty Process

The first step to take is to remove all barriers to submitting warranty claims.

Keep it simple, with a prominent phone number or live online chat, preferably both, and aim for response times measured in minutes, not hours or days. If a customer prefers to text or email photos or video of the issue, enable this opportunity and tag the images in their file.

Also understand and respect that not everyone is comfortable with your technology. Find out what’s easiest for buyers, using a CES (customer effort score) to measure it. With that, at the end of each service call, ask, “How easy was it for you to handle your problem?” The best warranty experiences are painless from request to resolution.

The greatest opportunities await builders willing to rethink how warranty fits into the bigger picture of their business.

Then, empower your frontline associates to focus on the relationship. Someone who bought you a house inherently wants to believe it was a good decision. They want to feel like the person answering the phone supports them and will do whatever it takes to resolve issues.

Most customer service reps I’ve met really want to help, but often they’re not empowered to do so. My advice: Do not put inexperienced “admins” in the front line with the sole responsibility of data entry. Hold them accountable for follow-up throughout a warranty resolution. Some of the best reviews I read were about customer service reps going above and beyond, sometimes going to the customer’s home themselves to fix a towel rack or do touch-up paint.

Rethinking Home Warranty: A New Business Model for Home Builders

The greatest opportunities await builders willing to rethink how warranty fits into the bigger picture of their business.

Consider reframing your warranty program as a chance to indulge yourself rather than a cost center. What is the value of a satisfied customer compared to a dissatisfied customer? Factor this equation into your business model to make it a point of differentiation that can lead to increased market share.

Also, instead of seeing homes simply as a product, think about the experience of actually living in one of your homes; that is, consider the long-term service strategy, creating new value for buyers long after closing. This approach can create new revenue opportunities that offset typical repair costs and result in customers for life. For example, companies such as Virtuo partner with builders to offer new home buyers concierge services, including moving, lawn care and cleaning services.

Here’s another way to think about it: like the “Dollar Shave” Sales Model a first low-cost product (the razor) – potentially below cost – followed by consumables or subscriptions (the blades), where the real profits are made. Some builders are already taking this approach with great success, and we’re only just beginning to scratch the surface of the multi-billion dollar home services industry.

Done right, the experience of living in a new home should be the most enjoyable part of the home buying journey. In most cases this is the case, but builders usually do not receive credit due to a poorly executed (or short-sighted) warranty program. It’s time to rethink the status quo and raise the bar on customer experience.