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This article was published on: 11/01/2007

INNOVATOR SERIES: Customer Service

Customer Service Roundtable: Create Raving Fans

In an age where critics are everywhere, you must hold yourself to a high standard.

EDITED BY ROBERT FREEDMAN

Every residential real estate brokerage wants repeat and referral customers. Despite this, few brokerages look at customer service systematically. To learn how to build stellar customer service into your operations and bring customers back, REALTORŪ Magazine brought together three customer service experts and three real estate executives whose brokerages enjoy a reputation for providing outstanding customer service. In a wide-ranging discussion, they point out that in an age where critics are everywhere, you must hold yourself to a high standard.


Q&A Topics:



‘B’ for Industry Performance

REALTORŪ Magazine: What grade does the real estate industry deserve for customer service?

Chip Bell: “B.” When I walk into the office, I want to feel everyone is there to serve me, not just my sales associate. But there’s still that reliance on the relationship with the individual salesperson. That’s not a bad thing, but there have got to be ways to help me feel everyone in the office is working as a team. Right now, you’ll still hear someone say, “You’ll have to call Bill on that. He’s your sales associate.”

Bert Waugh Jr.: Most of the surveys you see on how people think about real estate professionals don’t paint a good picture. We as the brokers are the ones at fault, because we’re still hiring 100 percent of those who get into this business. It takes a beautician 1,700 hours to get a beauty license in Oregon; it takes a sales associate 150 for a real estate license. Yet we’re dealing in the single largest investment that people have.

David Jones: But what’s interesting about that poor public perception is many companies score very well individually. Through customer service surveys that we collect after every transaction, we know our ratings are pretty high. Now, unless those results present us with a false picture, our people are doing a good job.

Kelli Todd: The industry does get hit hard, but performance is still very local. We’re a participant in the same survey program as David — Quality Service Certification (QSC) — and have been getting high marks: about 4.78 out of a possible 5.00, with 80 percent of our associates participating. That’s something that’s been helping us get positive press out there. Incidentally, it’s also acting as a good risk management tool for us. [Editor’s note: QSC is a private, third-party operation that measures and certifies customer service performance for participating sales associates within a participating brokerage.]

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Top Customer Service Mistakes

RM: Where are salespeople missing the boat?

Bell: Not keeping promises. We and others have conducted research showing the No. 1 impact on customer satisfaction is the degree to which you’re reliable, that you can be trusted to keep your promises. So, a big mistake would be making a promise you can’t keep. And I think the other one is that sometimes we forget, in our quest to deliver world-class service, that unless we provide that core requirement — the one thing the customer came to you for—none of the other things matter. You know, if I’m on an airline and the service is terrific but the plane lands in the wrong city, I’m not going to be a happy camper.

Todd: One of the biggest mistakes can be summed up in the word communication. A lot of complaints could be resolved just by sales associates communicating more, whether it’s a positive or a negative communication.

RM: Is there a particular matter on which sales associates tend to be weak on communication?

Todd: Status of the transaction. They need to give status reports regularly, sometimes on a daily basis and at least on a weekly basis. The status reports will differ depending on whether they’re working with the buyer or the seller, but the concerns are often the same: where they are on the contract and contingencies, what the next step is, what’s happening on the other side, whether there are any red flags.

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Empathy

Traci Entel: When you talk about communication you’re really talking about empathy, being in your customers’ shoes. Your associates need to look at the transaction and the relationship from their customers’ standpoint, trying to solve their particular problems, versus letting their own problems or incentives interfere in that relationship.

Bell: All customers are different in terms of communication, so it’s important to take the time to say, “I want to know what your communication needs are. I want to know how frequently I need to talk with you. How detailed do I need to be? And how would you like me to communicate with you?” Getting those service expectations upfront can then make all the difference.

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Creating Better Practices

RM: How can you help your associates evolve into better providers of customer service?

Bell: We’ve been doing research about what loyal customers want and how that’s changing. Two things have popped up. One, we know customers want to be smarter. They gravitate toward organizations that help them grow. That doesn’t mean they want more information; it means they want more understanding. So, those organizations that figure out how to help their customers get smarter will win more often. And two, they want surprise, something that makes their experience unique. It’s the goldfish at the Hotel Monaco chain. There are a lot of pet-friendly hotels. But at Monaco, when you check in, they ask, “Did you bring a pet?” and if you say no, they ask, “Would you like one? We can arrange for our housekeepers to bring a goldfish to your room; we ask only that you give it a name.” When you stay there again, they ask, “Would you like Matilda to stay with you again?”

Entel: I’m sure if you asked all of your sales associates, “What are the top five questions you get?” you’d learn that 70 percent of the questions they hear are the same. Once you know that, you can create materials for your associates to use with their customers based on those questions. That frees up your associates for more interpersonal interaction. You can also use your sales associates as innovators. Ask them to imagine the kinds of things that they think they’re going to encounter in the next six months. That’s a way to get ahead of the curve in anticipating your customers’ needs. Remember, your associates are the people closest to your customers, so access associates’ information and ideas.

RM: What companies, outside of real estate, stand out as understanding the customer well?

Entel: Humana, the insurance provider, has oriented itself around the customer. A large part of its customer base is in New Orleans. When Hurricane Katrina hit, it put itself in those customers’ shoes and made many in-the-moment decisions about relaxing policies. The company enabled its front-line people to make decisions that in other companies only the heads of departments would be able to make. In one story, a woman who actually was no longer a Humana customer called them because she just didn’t know what else to do. Her husband was very sick. This sales associate at Humana was able to find her a very generous doctor, who offered his services for free.

Barbara Everitt Bryant: Southwest Airlines. It says, “We’re going to pack you in without a reserved seat, but you’re going to get a good price as a result.” And their pilots use humor to smooth things over. Publix, the Florida supermarket chain, is innovative. It put in ATM machines before anyone else did, for example.

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‘Recovery Moments’

RM: At times even the best sales associate drops the ball on customer service. But these failings can put the company in an even stronger position if the follow-up is handled right. Isn’t that the case?

Entel: Yes. There are times when brokers are going to have a blip on their radar screen. We found in our research that recovery moments can be very important. If you have a course of action for dealing with complaints, your customers will walk away from that encounter with a positive feeling, which is very important given how critical word of mouth is, especially in the realty space.

Bryant: The customer satisfaction literature shows that complaint management, whether you’re a department store or a real estate company, can end up being a positive if you handle it well.

Todd: We’ve had some really good results with our responses to complaints. When our customer satisfaction surveys show someone’s unhappy, either a senior staff member or our attorney calls the customer to see what we can do. The customer is happy that we tried to rectify the situation. Often, the customer just wants to vent, because people have different expectation levels. But if there’s a real problem—bad plumbing, a roof leak—we try to get the sales associate reengaged with the customer to get the issue resolved. On a risk management level, we believe this has helped eliminate litigation.

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Getting Buy-in From Independent Contractors

RM: You mention that you try to reengage the sales associate. That raises the issue of how much you can do when your sales associates are independent contractors, as most of them are.

Waugh: What helps is having a customer service program, like we have with QSC. Survey results are made available on a Web site that consumers can see. So, we have that accountability. But more than that, the sales associates are paying for their renewal fee in the program, and if they don’t renew, their E&O insurance is affected. The deductible goes off the map. But even without that incentive, it’s hard for a sales associate to look me in the eye and say, “I don’t agree with giving great value and service.”

Todd: Our associates’ participation in QSC isn’t mandatory. But we tell them that, if in your service delivery you don’t complete areas for which we survey satisfaction levels, we’re not going to give you online leads. That’s something we have control over. So, we’re able to say that we want only people who take the steps measured by QSC to handle our online customer base.

Entel: Even though your sales associates are independent contractors, there’s a reason they’re part of your company, and that makes them a representative of your brand. It becomes very important for the leaders to demonstrate the company’s values and illustrate how you want your sales associates to represent that brand.

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Bad Customer Reviews

RM: What do you do if you have a customer who’s unreasonable? Can you weed these people out of your responses?

Bell: This is an instance in which collecting open comments is helpful. If you don’t collect them, you deny consumers who look at your survey results the opportunity to recognize that a low score is the result of a “crazy.” Because if they read the comments, they’d go, “Well, that explains it,” you know? This was somebody who comes from a different planet.

Bryant: It’s what in statistics we call outliers.

Bell: The public would recognize that this response is an aberration. And that’s something that having a good reputation for the brokerage will help neutralize.

Jones: Consumers are realistic. They recognize people periodically are going to get a bad rating. And if responses are always too good, that doesn’t look real. And it might in fact not be real. You might be getting false results. You’re not getting the real story.

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Collecting Stories

Entel: The point that was made about “open comments” is important, because it helps you get meaning from your surveys beyond the quantitative data. You want to get your customers’ stories. Not only does that help you, but it makes them more articulate to their friends and family about what you do well. Those stories can be meaningful to your sales associates. They become points of pride when customers detail what it was that really touched them. It’s also a good way to reinforce positive behaviors.

Waugh: Our survey process allows for detailed commentary. At the end of our survey we have a free forum where the customers can fill in what they’d like. There’s a power to those comments.

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New Exposure to Complaints

RM: Is it hard for companies to protect their brand, given the growing number of social media Web sites on which people can be exposed to your company and post complaints?

Todd: It makes you more accountable and pushes you to be transparent. You know if you’re going to have a dissatisfied customer that the person’s bad feelings can quickly be communicated. There might be a Web site about you, for example.

Jones: Regardless of how people come in contact with you, there’s a human on the other end, whether it’s behind a computer screen, face-to-face, or over the phone. And it really boils down to having people who understand the importance of customer service.

Entel: There’s an analogy here between real estate and the health care industry. The relationship between patient and physician has historically been the most important one in health care, but now there’s a lot of interference with that from the insurance company and the Internet, which has a ton of information for patients. Physicians probably feel the same way as you do. Sure, there’s information out there, but a lot of it might not be accurate. So you have a harder job, one, because patients and customers expect you to know what they know and, two, because you have to reeducate them when they’re misinformed. That’s a hard thing to do, especially at the beginning of a relationship. I would say, rather than fight against the Internet, make it work for you. The same instantaneous communication that can hurt you when you have a dissatisfied customer can help you when your customers have positive stories they want to share.

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Trends to Watch

RM: What’s innovative in customer service?

Bryant: The combination of personal service with automation: Express parcel delivery, dominated by FedEx and UPS, gets high ratings in the American Customer Satisfaction Index every year. With automation, you can track exactly where your package is, and yet that person who comes to the door and who has a very tight schedule is always very personable. I don’t know how you would combine automation with customer service in real estate. Maybe it’s just being more responsive by e-mail to those who use e-mail to seek information. [Editor’s note: The ACSI is a national measurement of customer satisfaction at 200 companies in 43 industries in the United States.]

Entel: The real innovation here is that the companies have taken the burden off their front-line people as the only ambassador for service and made it a company charge. At my firm, we call this the empathy engine. Company leaders don’t leave it up to the person who helps you to the car or that hands you your bag to be the ambassador for service. They, as a company, rally around to create the right experience for customers.

Bell: I would add that these successful companies have taken the time to describe the specific experience they want their customers to have. You know, we’d say that Starbucks, the Ritz-Carlton, and Nordstrom all have great service, but you’d never walk into a Starbucks and say it feels like Nordstrom. They’ve taken the time to describe what the customer will feel, smell, hear, and taste that’s unique to the company, and then they make sure every single thing in the organization is aligned with that experience. The way people are trained, selected, and managed is all aligned with the experience I want to create.

Bryant: Starbucks is a very interesting example because in the ACSI, its quality is rated absolutely top-notch. But its value — you know, quality for price — is much lower. It’s able to charge more than customers actually think their product, coffee, is worth because of the experience.

Bell: The customers come for the coffee, stay for the inviting warmth, and return for the human connection. The company makes sure people are trained around that mantra.

Jones: So it really just boils down to culture.

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Continue the Conversation ...

Ask questions of roundtable participants and share your views. Our customer service roundtable participants will answer your questions through Nov. 7.



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REALTORŪ Magazine’s 2007 Innovators Series lets you sit in on freewheeling discussions with thought leaders. This month we focus on customer service.

THE EXPERTS:


Chip Bell, founder of the Chip Bell Group in Dallas, is the author or co-author of several bestselling books, including Service Magic (2003: Dearborn Trade Publishing).


Traci Entel, principal of Katzenbach Partners in New York, researches and provides business consulting on ways to improve the quality of interaction between frontline staff and customers.


Barbara Everitt Bryant, Ph.D., consultant and lecturer with the National Quality Research Center at the University of Michigan in Ann Arbor, was managing director of the American Customer Satisfaction Index from 1994 to 2001.


David Jones, president of Coldwell Banker Howard, Perry & Walston in Raleigh, N.C., launched a formal customer service management program a little more than a year ago and has seen one office, Raleigh Crabtree Valley, receive 100 percent customer satisfaction in its first year.


Kelli Todd, president and CEO of RE/MAX All Cities Realty in Los Angeles, has been involved in a formal customer service program for more than six years.


Bert Waugh Jr., CEO of Prudential Northwest Properties in Portland, Ore., oversees 750 sales associates in 22 offices throughout Oregon and Southwest Washington.