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Sitterle Homes Honored for Superior Customer Experience

San Antonio design leader garners 2011 AVID Diamond Award for America’s best home builder customer experience.

 

 

 

Sitterle Snapshot


Company: Sitterle Homes

Headquarters: San Antonio, Texas

Principals: Frank Sitterle, Jr., and Jeff Buell

Employees: 60

Operations: San Antonio, Austin, and Rio Grande Valley, Texas

Market segments: Move-up families, empty-nester/retirees

Product: Single-family homes, “garden homes” (zero-lot-line detached)

2010 Closings: 124

2010 Revenues: $42,882,000

 
 

Take an HD Video Tour of a Sitterle Home

 
 
 

Is there a connection between demanding home buyers and quality home builders? If you’re like many builders, you dismiss such questions as sound and fury signifying nothing. But there may be something to it — witness the case of Sitterle Homes, a San Antonio, Texas, builder that may owe its success to the whims and expectations of perhaps America’s toughest home buyers.

It’s not surprising that Sitterle does well in a statistical analysis of the customer experience provided by home builders across the United States. The firm has a reputation for quality that it defends in every arena of business operations. And Sitterle is already profiled on AvidBuilder.com as a design leader in the San Antonio housing market. But for this builder to rise above all others in the United States in the eyes of its home buyers is quite an accomplishment, especially given the demanding nature of its customers.

Yet, that’s just what Sitterle did to win the 2011 AVID Diamond Award, bestowed on the U.S. home builder with the best customer satisfaction ratings across a broad spectrum of categories measured by Madison, Wis.-based AVID Ratings.

Tough to Pass Muster

Sitterle is a luxury and move-up builder, joining a number of firms across the country in that niche, but this company does it in perhaps America’s foremost military town. In fact, Sitterle targets active and retired military officers as its primary market in all of its communities, which works because San Antonio is also a preferred retirement destination for many military personnel. Because of this, Sitterle is able to expand its market beyond those officers stationed in San Antonio now to include all of those who yearn to return in retirement, drawn by fond memories of their time in the Texas Hill Country. Of course, the firm also sells to non-military families, but those sales are primarily the result of targeting military people.

When builders gather at national events, they often compare notes on who has the most demanding customers, but the demographic Sitterle targets has to be among the hardest to please anywhere. “Our approach is that if we can satisfy these very demanding military officers, it will pay dividends with all our other customers,” says Sitterle principal Frank Sitterle, Jr., who runs the company with partner Jeff Buell. The surprise is that Sitterle delights these spit-and-polish customers at a higher rate than other U.S. builders please less-critical clients.

Paul Cardis sat down with Frank Sitterle, and Jeff Buell of Sitterle Homes, winner of the 2011 AVID Award for Best Customer Experience, to learn what sets this builder apart from their competition.

Best Where It Counts Most

The AVID index score, upon which each builder in the AVID system is ranked, is a weighted measure that combines a builder’s total home buyer satisfaction score, the “would recommend to a friend” score, and the percentage of home buyers making actual positive recommendations. Sitterle achieved an AVID index score of 284.518, higher than all other builders in the United States. That total came from an average score of 93 percent in total home buyer satisfaction, 93 percent in overall product satisfaction, 93 percent in overall service satisfaction, 99 percent in “recommend to a friend,” and 61 percent in buyers making actual, documented recommendations.

Sitterle’s top scores came in these areas of operations:

1. Time taken to correct walk-through items (16.78 points above U.S. housing industry average).
2. Number of walk-through items (+14.40).
3. Condition of job site (+13.60).
4. Quality of walls (+12.87).
5. Quality of workmanship (+11.99).

“If you want a roadmap to the top of the mountain in customer satisfaction, this is it,” says Cardis. “Score high on all the product quality measures, don’t close the house until it’s totally complete, keep the number of items at the final customer walk to a minimum, and when you do have items, treat that as an opportunity to prove how good you are by fixing them very fast.”

Cardis acknowledges, however, that there’s more to it than that: “What shines through when you visit Sitterle communities and talk to customers is the quality of the personal relationships the Sitterle team builds with clients,” he says. “They really do treat customers, and each other, like family and friends. On the “would recommend” question on our surveys, 12 of Sitterle’s 14 communities hit a 100 percent positive response. You don’t get that kind of loyalty without building strong personal relationships, and maintaining those relationships over the long gap between first contact and the warranty period.”

Sitterle takes a little different approach from most production builders to nurture those relationships. The salespeople remain the primary customer contact from first visit all the way into warranty; there’s no handoff. “Sales and construction work as a team,” says Sitterle. “Salespeople are paid on commission, but they also have bonus programs based on customer satisfaction, as do our project managers and construction supers, who receive bonuses based on quality measures and production time.

“That’s a critical role AVID performs for us,” Sitterle continues, “Because our customer satisfaction is measured by an outside third party, there’s no danger of internal biases. There’s no subjectivity, and our employees and customers know that. But it really doesn’t take punitive programs or even rewards to get sales and construction working together as a team. People want to do a good job. They want to treat everyone the way they’d like to be treated themselves. It’s a culture we live by in everything we do.”

   

Award Skips a Year


There’s a curious change in the timing of AVID’s award announcements this year, one that means there are really no winners in 2010. This year’s awards are still based on data from 2010, but AVID decided to wait until spring of the following year to announce the winners.

“We want to give the builders who win our awards the ability to market their triumph for a full year, beginning with the spring selling season,” says AVID CEO Paul Cardis. “That’s why we put off our announcement of the winners from the fall, when we used to do it, to the spring. We’re now like the Oscars, crowning our winners early in the following year.”

   

Cardis is unreserved in his assessment of Sitterle’s performance. “The fact that they are building for such a demanding profile of buyer, and still achieving such high scores, tells you what kind of company this is,” he says. “I would compare them to Four Seasons or Ritz Carlton in the hotel industry. It’s the same kind of culture: a team with a goal to be the best at everything they do. And they are getting it done.”

Design Impacts Customer Satisfaction

The comparison of Sitterle to Ritz Carlton or Four Seasons brings an interesting question to mind: What role does the firm’s design leadership position play in satisfying customers? Those premier hotels are certainly beautifully designed properties that create an environment where you also expect the best of service.

“Keep in mind that the data is just the data,” says Cardis. “It may not be their emphasis, but it is what they’re getting done. Viewing Sitterle’s homes, they show like million-dollar mansions, just in a smaller footprint … especially the ‘garden homes’ (Sitterle’s term for its zero-lot-line detached homes targeted to retired empty-nester military buyers).”

There’s no doubt that the homes are beautiful and Sitterle is delivering them in mint condition. Of course, it doesn’t hurt that housing dollars buy more in San Antonio than in many other areas of the country.

When you have such an outstanding product, Cardis theorizes, no one wants to come up short in workmanship or service. From salespeople to supers to the last tradesman on the job, everyone is paying attention to every detail of his or her work. Cardis believes that creates a culture of excellence that translates into achievement across the company. It may be another reason for builders everywhere to consider going after that elusive position of market leadership in design.

Sitterle does not dispute that design leadership plays a role. “We stress a culture of quality in everything we do, so it starts with design,” he says. “People have come to expect excellence from us and we just keep striving to get better every day.”

Buell emphasizes that doing things right is habit forming. “It’s a habit for our houses under construction to be swept out after each trade finishes work. It’s a habit to call customers after they close to check how everything is going for them. It’s a habit that if someone calls with a problem, you make that the first call you return.”

Segmenting Production

Sitterle is a little different in the way it builds houses, as well. It starts with the form of organization. Below senior management, Sitterle imposes another level of management — the project manager — to oversee field operations. The construction supers report to the PM. There are two PMs in San Antonio, one in Austin, one in the Rio Grande Valley. The PMs report to director of operations Keane Carroll.

Sitterle has divided its production processes into 26 stages and insists that each stage must be complete before work begins on the next stage. Buyers walk the site before construction starts, before drywall, and before closing. Inspections by the PM and super happen before the start of construction, at foundation, before insulation, before drywall, before paint, before carpet and hardwood, before closing, then again to ensure that all walk-through items have been completed. A final meeting with customers introduces them to the warranty process. That’s the formal schedule, but it’s often amended by special meetings with customers.

“The key for us is setting expectations with buyers before construction starts, and then communicating with them every week all the way through the schedule,” says Jeff Buell. “Then we stress completing the home at every stage, not just at the end. If you get closure at every stage, it actually speeds up production, and it makes a big difference in the quality of workmanship. We don’t close houses that are not done. A lot of builders pay lip service to that, but we really stress it. The less you are in people’s houses after they move in, the better!”

Communication is important, and so is flexibility, because Sitterle builds homes that include lots of customization, options, and upgrades. “We will schedule a meeting with the buyer anytime we reach a stage where there’s a critical custom change. We always want to make sure we get it right the first time,” says Sitterle. “The salesperson communicates every week to tell buyers what’s going on. We don’t want them to find something before we do. If a window gets broken, we call right away to tell them it happened and when we’re going to fix it. Nobody likes surprises. The critical thing is to establish trust, so they don’t think they have to babysit the house all the way through construction. These retired military guys will do that if you don’t get their trust. They’re around a lot, even when they do trust you.”

 

Diamond-Level Relationship Selling


Sitterle director of sales Larry Allen, taking note of Sitterle’s requirement that salespeople remain the point of contact for buyers all the way into home warranty, says Sitterle recruits a different breed of salespeople to handle that role. “We require them to do a lot more hand-holding than other builders, so we recruit people with backgrounds in high-level customer care,” he says.

To illustrate, Allen says he just hired a new sales agent not from another builder, but from Southwest Airlines. “Their mantra is that they’re in the people business; they just happen to own an airline,” Allen laughs. “We like to hire salespeople who come from industries with high levels of customer care. That service experience is more important to us than sales experience.”

Every week, Sitterle sales agents meet with the builders of the homes they’ve sold and relay news of the progress of construction (with pictures) right after the meeting. Buyers have the sales agents’ cell phone numbers, as well as e-mail addresses, and often contact them after hours or on weekends.

“Military buyers are a good target for us,” says Allen, “not only because they are demanding, but because they are process oriented. That’s just how their brains work. They are all about process, and they want to know about our processes. It’s not enough to promise them that a house will be delivered defect-free. They want to know how you do it over and over again. Once they understand the process, and see it in action, you have their trust.”

 

Carroll says every buyer is different, and Sitterle insists on learning what makes each of them tick. “We have to get to know them all, set their expectations, and then manage them,” he says. “The weekly updates come from sales because that’s what the customers expect and want, but our builders also meet with the buyer numerous times during construction, like when it’s necessary to double-check a custom change or option. We never want to make a mistake.

“It’s really the culture of the company that makes people want so badly to do a good job,” Carroll continues. “We’ve been in San Antonio for 47 years, the owner’s name is on the door, and Sitterle has always been known for quality. That’s a big part of it.”

Carroll has worked for Sitterle for five years, but says he knew what kind of company it was long before he took a job with the firm. “Especially in a military town, word of mouth travels fast, and it’s vitally important,” he says. “No one wants to be responsible for damaging the trust that exists between this company and the home buyers of San Antonio.”

One More Leadership Move

It isn’t just in design and customer service that Sitterle forges a leadership position, it’s also in building science and technology. The most recent example, just in the last few months, is the move Sitterle has made from using fiberglass batt insulation to polyurethane foam sprayed into the walls and attic, including the underside of the roof, with the goal of improving energy efficiency.

“We did a lot of research on it,” Carroll says, “and decided this is something that everybody will be moving to in the future. It’s that much better. And we always want to be on the cutting edge of that kind of movement, not following all the others.”

The change required rewriting the scopes of work for multiple trades, including not just insulation, but HVAC, framing suppliers, framing contractors, and mechanical trades. “Our trades understand that we have to sell houses for them to have houses to build,” Carroll says, “so they understand that change in part of the world we live in now. The days of building the same way, year after year, are over.”

Take a Look for Yourself

If Sitterle sounds like a company you’d like to emulate, you could climb on a plane and visit San Antonio to see what it does and how it does it. Campanas is a development in the master-planned golf community of Cibolo Canyons, in the Texas Hill Country just north of San Antonio.

Sitterle has six furnished models there, all in the zero-lot-line ‘garden home’ product category aimed directly at retiring military officers. Campanas is an amazing project, especially when you consider it was conceived and executed in the midst of the Great Recession. (But remember, a recession doesn’t necessarily impact the decisions retiring military officers make about where to live and when to buy.)

One thing we’d like you to notice is the degree to which these houses target male buying decision-makers. From floor plans to merchandising, these houses tilt toward a masculine point of view to an extent exceeding any we’ve ever seen. One model even has a den with an entire wall decorated with cigar boxes. (Think about whether you’d do that in a half-million-dollar move-down model.) Sitterle obviously knows these buyers well.

Bill Lurz has been reporting on every aspect of the home-building industry since 1970. A former editor-in-chief of Canadian Building and senior editor of Professional Builder, Bill is currently editor-in-chief of AvidBuilder.com. He can be reached at bill.lurz@avidbuilder.com.