Why Net Promoter Score (NPS) matters for the home building industry

NPS for home builders constructive software

As a residential builder, your reputation is everything. One bad experience can sour homebuyers and spread quickly through online reviews and word-of-mouth. That’s why tracking your Net Promoter Score (NPS) is so crucial. NPS measures customer loyalty and can give you a clear view of how your business is performing from the perspective of your customers.

Understanding Net Promotor Score (NPS)

Smart and profitable homebuilding companies are obsessed with customer experience, but relying on traditional customer satisfaction surveys alone often doesn’t deliver the full picture.

This is where Net Promoter Score, or NPS, comes in. Developed in 2003, NPS has become one of the most widely used metrics for tracking customer loyalty and brand sentiment. By asking one straightforward question, it can reveal a wealth of information about your company’s customer experience strengths and weaknesses.

So, what exactly is NPS? NPS is calculated based on a simple survey question, for example: “How likely are you to recommend our company to a friend or colleague?” Respondents answer on a 0-10 scale.

Those who answer with a 9 or 10 are considered “Promoters” — loyal enthusiasts who will keep buying from you and referring others. Those who answer with a 0-6 are “Detractors” — unhappy customers who may damage your brand. Scores of 7 and 8 are neutral “Passives”.

To calculate your NPS, take the percentage of Promoters and subtract the percentage of Detractors. An NPS can range from -100 to +100. Generally, a positive NPS is considered good, with +50 and above being excellent.

Constructive Client Success Manager, Emma Lord, explains: “The NPS system provides insight to a business on their overall customer sentiment. Your NPS score indicates what the overall customer sentiment is based on the number of Promotor, Passive, or Detractor scores received, in relation to the number of scores that are received overall.”

“It’s estimated that a response rate of 30% or more will be enough to determine what the customer sentiment is of all customers, even those who don’t respond. Of course, the higher the response rate, the more accurate data you will have.”

“Put simply, it’s a measure of how likely someone is to recommend your building company to someone else,” adds Nigel Stacey, Data Engineer.

Of course, NPS shouldn’t be used as the sole metric for measuring customer experience. But when combined with other feedback channels, it can be an invaluable way to keep a pulse on your customers and ensure you’re delivering a consistently great experience.

Let’s look at how NPS offers home building companies several key advantages:

A powerful customer loyalty metric for home builders

Building a new home is both a major financial and emotional decision. Clients put an incredible amount of trust in their chosen home building company. An excellent NPS is measured proof you are worthy of that trust.

“Building a home these days is not perceived by the general public to be only about the destination — the finished product of the home — but also about the ‘journey’ to get there. Clients expect and demand a positive experience end-to-end from their builder,” says Emma.

Constructive Intelligence Analytics — NPS Response Details

A great NPS gives you a competitive edge when prospective clients are comparing builders. Positive word-of-mouth and online reviews can be your best advertising and reassure potential clients of your ability to deliver.

With a high NPS full of Promoters, you’ll get more referrals and positive reviews from happy customers, significantly reducing your marketing costs, boosting buyers’ confidence to sign contracts and increasing your sales.

Tracking customer sentiment

An NPS question is simple and straightforward for both companies and customers, giving you an easy way to track customer loyalty over time — something traditional satisfaction surveys can’t measure well.

If your NPS starts dropping, you’ll know immediately that your customer experience needs improvement before serious reputational damage occurs. Constructive Intelligence Analytics can show you exactly where your gaps might be, and what action to take.

Emma advises tracking your NPS across the entire timeline of a home build.

“Builders rely on their reputation within the industry and the public to get new business. These days, ‘word-of-mouth’ is not just limited to anecdotes from friends, family or colleagues. Social media and online review platforms have opened up for anyone to share their experience in relation to any business — and for anyone to read.”

“A poor reputation in the public domain can destroy a business, so builders need to know, understand, and care about, their clients’ feelings and experiences.”

“Constructive Intelligence Analytics Online Engagement KPIs help builders recognise how they’re tracking with customer engagement in relation to other builders using Constructive,” explains Nigel Stacey, Data Engineer.

Constructive Intelligence Analytics — Online Engagement KPIs

“Intelligence Analytics shows exactly where you’re improving and excelling over time. There’s even a helpful ‘tips’ column explaining how you can improve your ranking within each metric with links to best-practice, expert recommendations, or you can always reach out to your Client Success Manager for extra help.”

Use Constructive to track and improve your NPS

Utilising automated surveys within Constructive Customer Portal, you can tie your NPS data to specific phases, processes and employees to identify drivers of loyalty and areas for improvement.

“Asking your clients the NPS question (rate from 1 to 10) at multiple key milestones throughout the build process is key — there is no point only asking a client how their experience went at the end, when it is too late to fix anything,” guides Emma.

Nigel agrees: “Include an NPS question in every survey throughout the build process. Flag those NPS questions in Constructive so results are recorded and available for analysis in Intelligence Analytics.”

Emma continues: “You want real data in real-time. This way you can pinpoint successes, share these with the team and encourage clients to continue to provide feedback. Show you care when things are good but will still be there for any hiccups if they arise.”

“Use survey tools, like Survey Monkey or Qualtrics, to set up your NPS questions which can be seamlessly integrated with the Constructive Customer Portal Surveys feature. This means clients can go back to their home build Customer Portal and easily access their survey to complete it at a convenient time.”

“We also provide tracking via Constructive Intelligence Analytics on your response rate and NPS and can break this down per survey so you can track any trends in a low point of your process that might need work, or by staff member, so you can celebrate employees providing a great experience.”

Constructive Intelligence Analytics

“Even if things are going well from the client’s perspective, it’s still encouraging for them to know you are reading their responses and are engaged with how they’re feeling. Embed the conversations about this into your staff training so client surveys are perceived with positivity and not just a complaint opportunity.”

Develop Promoters and Passives, reduce Detractors

Our experts at Constructive unanimously agree communication is the key to a superior client experience.

“Use Constructive Portal and its additional features — like Progress Emails, Documents and Photos — to constantly update your clients on the progress of their homes. An easy-to-use, self-serve platform keeps clients happy and reduces the build-up of inbound emails and calls for your staff from clients chasing updates. Your team is now free to focus on providing proactive, rather than reactive, customer service,” says Emma.

Nigel adds, “Proactive education can be delivered about each step of the process via automated Progress Emails. Giving clients a good experience is about setting clear expectations and delivering on those, and communicating any deviations as soon as possible.”

Emma agrees. “Clients are aware hiccups may arise throughout the process and can be very forgiving and understanding if you work hard to rectify their concerns and communicate transparently.”

“Address any negative feedback immediately. Acknowledging and fixing a problem at the time it occurs provides an opportunity to turn things around and the potential to move that client from Detractor up to Promotor, or at least Passive, quickly.

“Showing clients you are listening, and care, will likely result in a higher score the next time you reach out to them.”

“A strategy of focusing on Passive clients is also key. The ability to lift a Passive client to a Promotor takes far less effort than turning a Detractor’s experience around — in particular, if you’ve left it too late and are only asking them for their feedback at the end,” Emma advises.

There are many ways builders can work to improve their NPS, such as focusing on open communication, offering Online Selections and creating a survey strategy. But the first step is simply committing to obtaining and measuring NPS accurately and using that data to drive change. Don’t let unhappy customers slip through the cracks and ruin your reputation — let NPS be your radar for detecting any dissatisfaction so you can address issues head-on. With a great NPS, you’ll build more than just homes, you’ll build a stellar reputation.

Get started with Constructive.

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