Scott named to NHQ Executive Council Minneapolis, MN -February 10, 2010- Charlie Scott, Principal Partner of Woodland, O'Brien & Scott, a customer satisfaction research and consulting firm. was recently named to the National Housing Quality Executive Council, a group of 29 home builders, remodelers and housing consultants who are fully committed to serving the industry with practical advice concerning all crucial aspects of the home-building and remodeling businesses. The Council was launched by Reed Construction Media, a division of Reed Business Information that includes Professional Builder, Professional Remodeler and HousingZone.com.
Charlie Scott will continue to deliver proven, actionable advice through weekly blog posts at http://www.housingzone.com/blog/1970000797.html and through ongoing participation in articles, industry roundtable discussions, education sessions and conference calls. He will be contributing in the areas of leadership; strategic planning; performance management; customer satisfaction; human resources; construction quality; trade relationships; business results and sales and marketing.
“I have always appreciated the Reed Construction Media philosophy of keeping their fingers on the pulse of the home building industry,” says Charlie Scott. “Today's electronic communication tools has accelerated the information exchange within the home building industry and Reed Construction Media has called on leading builders and industry experts to help disseminate developing trends. I am honored to be one of Reed Construction Media resources.”
About Charlie Scott
Charlie Scott has more than 20 years of first hand home building business experience. Charlie is a principal at Woodland, O'Brien & Scott, the industry's original customer satisfaction research and consulting firm. Woodland, O'Brien & Scott (WOS) provide sales education/ training, customer satisfaction research, consulting, referral sales leads and performance benchmarking services to many of the top quality and brand conscious homebuilders in the industry. Woodland, O'Brien & Scott's unique marketing position is their 70+ years of first hand homebuilding management and experience. WOS uses their firsthand experience to interpret their clients' customer feedback and turn the “data” into written and actionable improvement opportunities.

Woodland, O'Brien & Scott's clients typically see short and long term improvement in the key customer satisfaction measurements such as: Willingness to Refer, Customer Enthusiasm and Referral Sales. Their top clients have won numerous industry awards but more importantly, have improved Gross Sales by increasing their internally generated Referral Sales (up to 45+%), even during the recent soft market. Woodland, O'Brien & Scott have also helped their clients improve sales skills leading to higher conversion ratios by strategically implementing customer care and referral sales programs.

Charlie is an internationally known customer satisfaction expert and has presented keynote addresses in the United Kingdom and India. He has also been a frequent speaker in the USA at the Urban Land Institute, International Builders Show, the Benchmark Conference, etc. He is also a competition judge for local Sales and Marketing councils and the NHAB Research Center's National Quality Award. Charlie is a magazine columnist and author of “Construction Knowledge 101.”

Part 1 - Customer Referral Sales To quantify the financial return on customer care, Woodland, O'Brien & Scott combed through our database of over 200 home builders to find a study group of 20 builders who had shown significantly improved customer satisfaction ratings over a four-year period. The selection criterion was a substantial and consistent improvement in the key categories of "Customer Willingness to Refer" and "Customer Enthusiasm." The study group's performances covered various time frames from 2000 through 2009 to minimize the influence of the ebb-and-flow market conditions.

The group was asked to complete detailed questionnaires asking for their financial reports for the corresponding time period. They provided us with sales and financial data that we used to evaluate the association between their improved customer satisfaction and their performance in "Customer Referral Sales," "Warranty Costs," "Gross Sales," "Hard Cost Reduction," "Realtor Cooperation," and "Employee Satisfaction."

The results of each of the performance categories will be discussed within this and the next five newsletters, starting with this issue’s topic: Customer Referral Sales.

Customer Satisfaction’s ROC as Measured by "Customer Referral Sales"

Our Return on Care (ROC) Study revealed that when customer satisfaction, as measured by consistently improving "Customer Willingness to Refer" and "Customer Enthusiasm" improved, then 100% of the time "Customer Referral Sales" also improved.

Over the four-year time period, the study group improved "Customer Willingness to Refer" from an average of 80% up to an average of 92%. More importantly, these builders improved the number of customers who were highly enthusiastic about their builder (aka "Customer Enthusiasm"*) from any average of 38% up to an average of 63%.

This customer enthusiasm rating is a much better predictor of the customer’s propensity to refer, and correspondingly, EVERY builder in the study saw their "Customer Referral Sales" improve to an average of 32% of sales. On average, this improvement equated to an additional 37 "Customer Referral Sales" units per year! This average increase of 37 "Customer Referral Sales" sales units multiplied by the average contribution dollars per sale ($20,000) reflects the potential for an incremental sales increase of $740,000 annually!



Study Update…
Since the time of the study (before the market collapse), referrals for many of our clients have risen to as much as 45 to 50% of sales, illustrating the increasing value of customer satisfaction for survival cash flow, maintaining and gaining market share, and the durability of referrals as a source of sales.

In Our Next Issue… Part 2 of our Customer Satisfaction Study will feature “Customer Satisfaction and Lower Warranty Costs."

*Customer Enthusiasm is a Woodland, O’Brien & Scott proprietary calculation taking into account weighted Key Areas of Performance indicators plus a customer’s Emotional Connection calculation based on each customer’s ratings and customer commentary.