The art of setting and managing expectations.

Continued from page 1

First, builders need to improve the performance of their employees and their trade partners. The steps that will generate the greatest improvements were covered extensively in BIG BUILDER'S special issue, “Cashing In On Customer Satisfaction,” (mid-June, 2003) and are re-examined in the stories that follow in this issue, albeit from a different perspective.

The second way for builders to maintain the gap between what is expected and what is delivered is to conscientiously lower the expectations of their home buyers by setting realistic performance targets. Builder representatives need to “pull a Joe Torre” with every home buyer—not by making promises that impress, but by setting expectations they plan to exceed.

There are many reasons why this second step may be more important than simply counting on strong performance. Perhaps the five most important reasons are:

Still not sure about the impact of expectations management on satisfaction ratings? Let's contrast two approaches. The first is by Builder ABC, which emphasizes impressive expectations; the second is by Builder XYZ, which emphasizes honest expectations.

Impressive Expectations: To really impress buyers, Builder ABC aggressively lets every new buyer know about its zero defect policy. It stresses that punch-lists at closing are rare, but if one is created, it will be cleared within three days after move-in. Buyers are impressed with the promises.

Honest Expectations: Builder XYZ also wants to impress, but realizes that the goal is to have a buyer who is as much impressed with the final performance as he or she was with the initial promise. XYZ tells every buyer that punch-lists occur in most cases, but that the punch-list will be cleared within 30 days.

Performance: Both Builder ABC and XYZ then perform exactly the same: Eighty percent of buyers have punch-lists at closing, and the average time to clear a punch-list is 20 days.

Which buyers are more likely to say they are delighted on their survey?

ABC's Outcome: ABC inferred there would be no punch-lists, but gave one to 80 percent of its buyers, yielding negative results. And it promised repairs within three days but delivered in 20 days, resulting in a major loss of trust points.

XYZ's Outcome: XYZ inferred a strong likelihood of a punch-list and gave one to 80 percent of buyers. The result was no surprise since expectations were met, and there was no gain—but also no loss—of trust points. Meanwhile, it promised repairs within 30 days but delivered in 20 days. The better-than-expected performance yielded positive results and a major gain in trust points.