Satisfaction at Every Level
It wasn’t the main topic, but customer satisfaction was a recurring subject of discussion at a focus group of custom and semi-custom home builders I moderated recently. Held in Las Vegas at the same time as the International Builders Show, the session revealed a shift in builder reliance upon manufacturers for “customer satisfaction,” as opposed to dealers and distributors.
The purpose of the focus group was to explore how builders choose “green” products. In discussing their selection process, the participants made it clear they look to manufacturers for “green” and other product information they need, in turn, to reach out to and educate their customers. The builders indicated they have all but given up on dealers and distributors to be knowledgeable about what they are selling. “I wish I could go directly to the manufacturers I like,” said one participant, “because my local dealers know less and less about the products they are selling.”
The weak new construction market has produced cutbacks in staffing at all levels, and these builders suggest they have seen the impact at the dealer and distributor level in the product knowledge arena. They increasingly perceive dealers as order takers only.
One consequence of that is that price has taken on a larger role in the decision process. Builders don’t look to dealers for product knowledge and satisfaction, and frankly many dealers are willingly shedding this responsibility. So the one way left for builders to compare one dealer to another is on price.
For dealers and distributors, I would suggest the message is that there is a clear opportunity for differentiation in the market. Having an educated and knowledgeable support staff that can help builder customers increasingly makes you unique.
For manufacturers, this really ups the ante for determining whether end users are happy with products and services. One can’t tell about a product, sales team or rep’s success by looking at sales sheets by regions anymore if customers in a particular area are unhappy with the information and services from the local dealers.
We forget we are in a “sell-through” rather than “sell-to” environment. Manufacturers need to remember that the local dealer is an extension of their sales and delivery system.
In my last column, I urged manufacturers to develop a report card—a method for measuring customer satisfaction. So what should the report card be measuring? Yes, it’s important to assess whether the local dealer and or distributor is satisfied with the product, service and delivery. But, now more importantly, a manufacturer should also test the builder, remodeling contractor, and ultimate consumer.
A manufacturer may be smart to view their local dealer/distributor as the order in-take and delivery service only, given the current mood of builders, remodelers and consumers. Many manufacturers have discovered ways to by-pass the locals—except for these services with great success. Of course, it may also be more powerful for the manufacturer to understand which are the strongest dealers and distributors are in any one given area, since each manufacturer can only afford to have so many of their own folks in a market. A customer satisfaction report card coming from those folks who install and use the product can help determine that.
The sentiment of the builders at this focus group says to me that market research must cover the entire supply chain. A manufacturer needs to do more than just ask its dealers or distributors “How are we doing?” Do the research yourself so you know the satisfaction levels of everyone involved from your back door to the consumer, unfiltered. You need to get a full report card, read it and take action on it where necessary to grow not only your business but your market reputation.