Most companies (agents included) fail customer service test

I was in a restaurant today with a client.  It was one of those "old school" places that was clearly family owned.  The client said that she used to eat there a lot when she was growing up.  But, here it is still going strong.  With all the chains around, you can't help but wonder what keeps this place alive.

Setting talking with my clients, it became clear what kept them alive.  The wait staff know everyone's name.  They greeted them like family when they came in the door.  The staff knew if they wanted coffee or tea, would return often to fill the cup and the order was brought to the table quickly.  

With electronic devices on the tables, pizza delivered to the door, prepared foods waiting at the food store to take home, this little place on the corner was doing just fine.  

It was all about service.  

Then, I found this recent article posted on the MoneyWatch web site.  

By Michael Hess

(MoneyWatch) Do you think your customer service is more on point than ever? That the cutting-edge technology you've put in place has brought your customer game to a new level? That your self-help processes make it easier and more frictionless than it's ever been for customers to get their needs met and issues resolved?

Well, there's a good chance you're wrong.

So suggests a recent study of what customers are looking for by American Express. According to the report (which was produced by an independent testing firm and is based on customer surveys), regardless of technology, resources or access to multiple modes of 24/7 communication, the attitude and desires of the customer -- and the things that determine whether she is likely to be happy or disappointed -- haven't changed with the times.

In other words, despite all the hype and noise of modern business, the customer service wheel has not been reinvented; in fact, according to most customers, "old-school" still rules. Among other things:

Most customers still don't think service is good enough, much less getting better: Only about a third of those surveyed believe businesses have increased their focus on customer service. Only 7 percent said that the customer service interactions typically exceed their expectations. And only 23 percent think that companies "value their business and will go the extra mile for them."

Most people will spend more -- significantly more -- for great service:Two-thirds of consumers said they are willing to spend more with a company that provides excellent customer service, and the premium they're willing to pay is nothing to sneeze at: 13 percent more, on average. Three-quarter say they have spent more with a company because of a history of positive customer service experiences. Conversely, over half have decided not to conclude a transaction with a company based on a poor service experience.

Quality personal connections still matter most: For issues like product assistance or returns, about 65 percent of customers prefer live phone or in-person assistance. For even more serious matters, that number jumps to 76 percent. Fewer than 10 percent favor web or email assistance for important matters. Fewer than one in five have used social media for customer service in the past year.

And those live interactions can be make-or-break propositions: A third of consumers cite "a rude or unresponsivecustomer service representative" as the most likely customer service issue to influence them to switch brands or companies. Customers also feel that small businesses generally "provide more personal service and understand both their business and customers better than large companies."

The one rule that has changed is the old adage that unhappy customers will talk about their experiences an order of magnitude more than will happy ones. For sure, the ease and power of technology have made it much easier, and more popular than ever, to complain. But technology has also made it much easier to praise, and that's reflected in the study numbers: on average, customers now tell 15 people about their good experiences and 24 people about their bad ones, while nearly half of consumers always tell others about good customer service experiences.

So the bad performers are getting punished in the court of public opinion more than ever, but the great ones are getting rewarded with more positive -- and far-reaching -- word of mouth.

The bottom line? In the words of David Byrne, "same as it ever was." Customers want access on their terms; fast, effective and personal service when needed; and courtesy, attentiveness and empathetic treatment. And they will pay more and be more loyal to those companies that hit the mark. So don't undermine your business with systems, policies and processes that seem like good ideas on paper, but in fact move you further away from what customers really want... and always have.

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.  

Detroit Zoo discounted tickets for City of Berkley residents

Detroit Zoo On Line Discount Program

We are excited to announce that our Berkley Parks & Recreation Department has joined the Detroit Zoo's Tickets & More Online Discount Program! Interested individuals may purchase discounted tickets for the Detroit Zoo over the Internet with the added convenience of printing your tickets at home and then presenting them at the Zoo entrance. Purchasing tickets has never been easier!

What’s more, a portion of your ticket purchase will support Berkley Parks & Recreation programming.

Purchase your tickets online by visiting your exclusive Detroit Zoo Tickets & More Discount Online Program ticket store in either of the following ways:

• From the city website or
• Go to tickets.detroitzoo.org and enter our exclusive store name: berkley

We hope you and your family enjoy the Detroit Zoo this season!

Any questions?  Contact parksrecreation@berkleymich.net.

Think before you pay off the mortgage ahead of time

It is everyone’s dream to pay off the mortgage and live rent free for the rest of your life.

When mortgage rates where 6% and 9%, there was a clear advantage.  You could save hundreds of thousands of dollars by paying it off in advance.  With mortgage rates at 4.5%, and lower in some cases, it may still be a good idea.  But, there are other things you should do first.

Pay off all short, unsecured loans first.  This means payoff the balances on those nasty credit cards before you put an extra dollar on the principal of you mortgage.  With credit card rates 13% and in some cases as high as 23%, the 4-5% on your mortgage is almost free money.  You gain so much more with no credit card debt than without any mortgage debt.

Think about emergencies.  For most people, it would take most of their savings to pay off a sizeable mortgage.  This would leave little for any emergencies or crisis that arises.  There are of course all the medical issues that you may face, but there is also the loss of a job or a bad turn in the stock market.  A cushion of about 6 month’s living expenses is what many financial advisors suggest.

Retirement.  While it may be a while off, you should make the maximum allowable amounts in all retirement accounts.  You will live longer than many generations before you.  You will want to insure that there is enough for a pleasantly long life.

School for the kids.  For young families you may want to invest early in savings for them.  That includes 529 plans, other college savings account and Michigan’s savings plan.

You should plan on paying off the mortgage by the time you retire.  There will be a comfort that comes with no rent due while you are on a fixed income.  Also, you may need the mortgage interest discount in the years leading up to retirement. 

If you are late in a 30 year mortgage, take a look at what you actually pay in interest payments compared to the amount that you would need to pay off the principal.  There is more mortgage interest pain in the early years than later in the life of the loan.  If you pay off you mortgage late in the life, you may not be saving that much. 

How fast should you pay it off?  First, ask yourself when you will want to retire.  Then, calculate how much more per month you need to pay to be mortgage free by retirement age.    

I am not an expert on mortgages and I am not a financial advisor, so this should not be used as financial advice.  But, these are common issues that many financial advisors suggested that I researched for this post.  You need to talk with an accountant or better yet, a financial advisor before making any changes in your personal finances.   

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.  

Lenders reduce required credit scores for FHA loans

BY E. SCOTT RECKARD

February 27, 2014, 9:00 a.m.

Here’s some welcome news for first-time and lower-income mortgage borrowers: Home loans insured by the Federal Housing Administration are getting easier to come by.

The average credit score on FHA-backed loans declined steadily in 2013, Inside Mortgage Finance reported Wednesday.

The trade publication said FHA borrowers’ average debt-to-income ratio – a measure of how much of their earnings are needed to keep up with housing and other debt payments – rose noticeably as well. That's another sign that banks have eased up a bit.

The trend appears to be continuing, as actions by No. 1 home lender Wells Fargo & Co. illustrate. Since January, Wells employees have been allowed in some cases to qualify FHA borrowers for home-purchase loans with credit scores as low as 600. That’s considered subprime territory and down from a previous threshold of 640.

The FHA theoretically allows credit scores as low as 580. But lenders, buffeted by defaulted loans and demands that they buy back troubled mortgages that they sold, generally have set standards higher since the mortgage meltdown.

A Wells official said the bank consulted with the FHA’s parent, the federal Department of Housing and Urban Development, and with advocacy groups before making its decision.

“All loan applications are fully underwritten and documented, and borrowers must demonstrate ability to repay,” Wells spokesman Tom Goyda said.

Inside Mortgage Finance said Ginnie Mae, the government agency that issues bonds backed by FHA loans, had reported that as of January 2013 the average credit score on an FHA loan was 701, and the debt-to-income ratio was 38%.

Last month, the average credit score was down to 680, while the average debt ratio had risen to 40.3%.

The average credit score in securities backed by Fannie Mae and Freddie Mac fell last year as well and the debt-to-income ratio rose.

Get your price and move on to your next home sooner!

Take a piece of advice from someone that has been in marketing and advertising for more than 30 years.

“As a retailer, you want to be ahead of the market,” says Ron Katz of the Oakland Press.  “By the time buyers get into the market, if you aren’t already there, you will miss out.”

Katz’s 30 years of experience ranges from planning advertising and marketing campaigns, as well as buying and selling advertising.  He knows well that planning ahead means everything in marketing.  When a buyers are ready to make a purchase, if your product isn’t already in front of them it won’t be considered.

“There is something else that is important also,” Katz continues.  “Those that are ahead of the market are more likely to get full price or better for their products.  But, after the build up and peak of the market, what inventory is left needs to be discounted to encourage buyers to make a purchase.”

Can we apply some of this thinking to real estate?  Well, the retail and real estate markets work very much the same in many ways.

Let’s take a look at the real estate market cycle from mid winter through early fall.

In Berkley and the Woodward 5 Communities, everyone knows that spring is a good time for real estate sales.  (Late summer is also a great time, but more about that a little farther into the post.)  It is a good time of year because buyers move into the market in February and early March.  They can only look at houses that are currently on the market.  If your home isn’t there, it won’t get shown.  Research shows that houses that are shown in February and March get a better sale price to list price ratio.  Or, in more straight forward terms, get more money than those that wait to list their homes.

What about the late summer season you may be thinking right now?  The late summer season is partially driven by those people that sold in early spring.  After the sale of their home, they become buyers and look to settle somewhere before fall and the holiday season.

But, something happens to the market.  In late summer, the inventory of homes on the market begins to rise as well as the number of days individual homes are on the market.  Some of the homes on the market are owned by people that waited to get into the market, only to miss the peak.  

There are other reasons people wait.  It could be that they need to prepare the home, or perhaps they need to wait for situations to change in their lives or, life, for many reasons, forces them move.  Those are understandable reasons.  But, if your home is ready, consider mid winter to very early spring to list.    

What happens in the real estate market is just like what happens in the retail market.  With rising inventory, longer time on the market and buyers beginning to leave the market, the sale price to list price ratio begins to fall.  Or, again in more straight forward terms, housing prices begin to fall.

From this, there are three lessons to learn.  

Get into the market early to:

• maximize your exposure to buyers;
• to sell at a much better sale price to list price ratio; and,
• to get your next home before fall and the holidays settle in.

This suggests that if you are considering selling your home this year, think mid winter.  If you wait, you might get caught in the real estate cycle.  

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.