Even-Flow, Measurement Key Results

It would be hard to find a builder anywhere in America with a stronger sense of mission, or more dedication to maintaining close personal contact with customers, than Boulder, Colorado's McStain Neighborhoods. Principal Tom Hoyt positioned his team of eco-idealists for green building greatness behind a mission statement entitled "Building a Better World." New president Eric Wittenberg now has McStain on a track for higher customer satisfaction scores by strengthening measurement methods and moving into even-flow production.

McStain's NHS combined score of 177.8 is just over 2 points behind Ginsburg in the category of builders closing between 100 and 500 homes a year. That runner-up position is good for an Excellence award in the 2002 National Homeowner Satisfaction competition. But there are strong signs that McStain is a threat to take the top spot in its division next year, before perhaps moving up to menace the big builders in 2004.

"We're staffed for production of about 500 units," Wittenberg offers, "and we'll reach 350 this year, then probably 450 next year. Customer satisfaction measurement is vital to keeping us focused where we need to be in the midst of that growth. That's why we're moving from three to five full, third-party surveys during the home buying experience between first sales contact and a full year after closing."

McStain also now has South Florida builder George Casey, a leading pioneer of even-flow production at Arvida Corp., on the firm's board of directors. "Even-flow should help us," Wittenberg says. "When you have peaks and valleys in production, you run the risk of unevenness in the customer experience as well. You can provide great service one week, then bad the next because your people are overloaded, trying to close too many houses. We've just started on an even-flow system. We'll start closing houses under the new processes in January."

Meanwhile, McStain will try to maintain or even strengthen already tight relationships with buyers, who now get phone calls from salespeople every week and supers every other week.

To hit the inevitable quality goal of delivering defect-free houses at closing, McStain has its customer service staff do internal quality control checks (inspections) of homes a week before the home orientation walk with customers -- which is, itself, a full week prior to the pre-closing walk. "We believe quality is systemic, not heroic," vp of construction operations and development Kent Hogan says.

Customer services manager Bob Clifford has six warranty technicians in the field and four of them have experience in residential remodeling (not including Clifford himself). "Remodeling teaches people how to work in customers' homes and maintain good relationships," he says. "They also learn how to schedule trades to get in and get out fast without too much impact on a family trying to live in the home."

It will be fun to see if McStain can improve already solid customer satisfaction scores next year in the midst of strong growth in closings. And what will happen to the referral sales rate, which the firm now reports at a staggering 27%?