Selling Trust in a Transactional World

Sara and Dennis explore how the principles that power great retail—trust, relationships, and customer experience—offer a blueprint for fixing how value is created in housing and across the entire economy. 

Transcript

SPEAKER_01 0:05

Welcome to the Valuation Metric Podcast. This is a podcast about the risks, rewards, roadblocks, and revelations reshaping the way that we measure worth. I'm your host, Sarah Gutterman, CEO of Green Builder Media, North America's leading media company focused on green building and sustainable living. Across our economy, a quiet truth is becoming impossible to ignore. We're measuring value using tools designed for a world that no longer exists. We reward size over substance, first cost over full cost, transactions over lived experience. And nowhere is that misalignment more visible or more costly than in housing. Today's guest sits at a fascinating intersection of this conversation. Dennis Webb didn't start in home building. He started in retail, selling suits, running stores, mastering merchandising, and customer satisfaction. Then he crossed an unexpected bridge into housing, bringing key learned lessons with him. As vice president of operations at Arizona-based builder Fulton Holmes, Dennis has helped lead one of the most consequential shifts in modern home building, turning energy efficiency, indoor air quality, and healthy homes, from niche ideas into mainstream business strategy. Fulton Holmes was the first builder in the country to build every home to Energy Star version 3.0 and earned the inaugural Indoor Air Plus Leader of the Year Award. Dennis has now captured that journey in his book From Blue Suits to Green Homes, which reads part memoir, part playbook, and quietly poses a radical question. What if housing adopted the same rigor around value, experience, and trust that retailers embrace? Dennis, welcome to the valuation metric.

SPEAKER_02 2:02

Thank you. Sarah's pleasure being here. Your words are very good.

SPEAKER_01 2:07

Of course. Well, you live up to them. So, Dennis, you spent two decades in fashion retail before moving into home building, an industry that traditionally prides itself on being very different from retail. What did the home building world underestimate about what retail actually understands?

SPEAKER_02 2:26

I think the main the main differentiation, the main difference is the fact that retailers look at their customers as the most important part of their operation. And where home builders do not, home builders tend to look at their product that they build and their stock price and things of that nature as the most important thing, and many times forgetting the retail buyer at all.

SPEAKER_01 2:53

So in your book, From Blue Suits to Green Homes, you talk about fitting rooms, merchandising, and customer psychology. What surprised you when you realized how transferable or perhaps non-transferable those lessons were to selling homes?

SPEAKER_02 3:10

Well, the fortunate thing was is uh everyone at Folden Homes came out of the retail business. So it wasn't like I was completely swimming upstream. So we all had an idea. We all worked for uh the same company in uh in Los Angeles. It was uh called Eaglesons, men's clothing chain. We had 33 stores, and um we we knew how that operated, and we were very successful. In fact, that that operation launched Fulton Homes. And um without that that impetus on customer satisfaction and the customer coming first, Fulton Homes wouldn't have been nearly as successful.

SPEAKER_01 3:48

So retail really lives or dies on trust, repeat business and reputation. But let's be honest, our housing sector often lives on scarcity and urgency. How did that cultural contrast shape your approach at Fulton Homes?

SPEAKER_02 4:04

Well, when I first came into Fulton Homes, I thought this is a real archaic industry. Um, the the technology was not even there. We were handwriting contracts, there wasn't any talk, there was no websites at that time. Um it was just it was incredible. I just thought it was amazing that you know we could do as much volume as we were doing. You know, we were doing eight or nine hundred homes a year by accident, you know. And um all you had to do was open up a few models and not piss off the customers too much, and you'd be successful, you know. And I thought, well, gotta be, there's gotta be more to this. The buying experience was not a great experience, not only with us, but with everybody. And I said, well, what can we do to help change that? And that idea of trust and transparency was really at the forefront at that point.

SPEAKER_01 4:55

Fulton Holmes didn't just dabble in energy efficiency. You went all in, becoming the first builder in the country to build every home to Energy Star version 3.0. And that's a bold operational and marketing move. So, what convinced you that that wasn't just the right thing, but really a smart business strategy?

SPEAKER_02 5:13

Well, this was right after the crash of 2006, and um everyone was kind of scrambling to figure out how to um differentiate themselves from the competition. And we thought that there was a many ways we could do it, but probably the most important and impactful was energy efficiency. So energy efficiency really was kind of at that point was pretty much energy star. Uh the other, the other groups had not formed yet, uh, either Zero Energy Ready or Indoor AirPlus or WaterSense, they weren't quite around. So we kind of went head-on with uh Energy Star and we worked with the people at Energy Star and they were great. Um, John Pass and Dean Gamble and and Zach Shadeed, they were just a pleasure to work with. And I said, We what if we uh kind of took the bull by the horns and said, let's do version 3.0 a year and a half before anyone else. And that'll help us understand how it works. It'll help the manufacturers get their products right, and it'll help the uh installers, particularly in air conditioning, really kind of figure out what they need to be doing because we thought that uh 3.0 was going to be the real strong point, and it turned out to be. But we were, we had it, we were doing uh 3.0 a year and a half before it actually became the official uh version of uh Energy Store.

SPEAKER_01 6:37

And how did that translate into your sales strategy? Did your buyers value that? And did they purchase your homes because of your approach to higher performance, which yields lower operating costs?

SPEAKER_02 6:52

Or was it attracted to them? Some did, and then others didn't, you know. Uh it was uh a matter of training our sales associates who are marvelous people. We have the best of sales associates in the industry. It was a matter of training them and really making um that energy efficiency uh a value to the customer. And it really translated into lower energy bills and more comfort and things like that. And once we got past that hurdle, then it became much easier. And then what happened in this market, and Phoenix was a very competitive market, is when we finally kind of started going out and saying, okay, we're building all our, we were advertising in, we were building all our store um on our homes with that energy star 3.0. All the other guys said, well, we better start doing that because they're doing it. And so we kind of led the pack. And as it turned out, Phoenix became the number one energy star um market in the country.

SPEAKER_01 7:47

That's fantastic. You started a movement. Exactly. So, you know, many builders still today treat sustainability as a cost center or a risk. But Fulton Homes has treated it as a brand driver and value differentiator. So, what did you see um early on? And then what do you see today as the business case for performance, wellness, even energy uh independence in the home that you're able to incorporate internally, but then also message externally most effectively?

SPEAKER_02 8:23

We have the advantage of being local. And so with that, we have a tremendous uh advertising budget compared to the public's. And we can say things that they can't, and just there's a lot of advantages. And so we were able to not only look at uh energy efficiency as a platform, but community service and philanthropy and giving away, you know, billions of dollars to educational uh facilities in Phoenix, and it was a matter of putting it all together, and it wasn't just one thing. So the educational uh philosophy of uh uh philanthropy and energy efficiency and healthy homes and all that became part of the brand. And that helped, and then we were very honest with our customers, and we told them like how much stuff cost before they bought the house, and other builders weren't doing that. And we just thought it was the way to go because we looked at it back in the retail business as what do our customers want? What are they looking for? And I think they're looking for builders that they have a high degree of trust. And with that trust, if you use transparency as the vehicle to get there, then you'll achieve your goal.

SPEAKER_01 9:41

In this podcast, I talk a lot about um value versus values-based decision making. And um, in retail, just as an example, retail doesn't sell fabric, it sells how an outfit makes you feel, how it fits your life, how it signals your identity. Um, whereas, you know, again, housing really still just sells square footage. Uh why is that such a missed opportunity?

SPEAKER_02 10:08

Because they don't put the retail customer first. And they they don't understand how that works. You're right. We don't we're looking at dollars per square foot or something of that, which means absolutely nothing. How does the house live? How that how does it make you feel? What is your uh your pride ownership, ownership when it comes to curb appeal? Um, how do you feel just working with that builder? If you're if you're living in a house for many years, is that builder um a pillar of the community, like we are, versus a public builder that is pretty much in uh a non-existent name? So I think we have a tremendous advantage. We're able to take all these elements and look at cause marketing and things like that as a vehicle in which to build that trust with each customer.

SPEAKER_01 10:59

I I think you just hit the nail on the head right there. Fulton really embodies the nexus between value and values. You utilize values, whether it's home buyer values or community values, uh, to drive value, meaning business profitability, uh, enhanced uh brand reputation, uh differentiation, et cetera.

SPEAKER_02 11:25

And community outreach is so important. So people want to feel good about the house they live in. They want to feel good about their builder, they want to feel good about their community. When we when we do all our advertising, we don't talk about okay, come buy a full-not home. We tell about what we do for the community and how we give back to the community. And no other builder does that. And so we're in a tremendous um spot to be able to really take our message. And it's it's been the same thing with energy efficiency.

SPEAKER_01 11:57

So pretend for a minute that I am a large builder, uh CEO of the city.

SPEAKER_02 12:02

Sorry to hear that.

SPEAKER_01 12:04

And I come to you and I say, look, we are actually building homes that are healthier, more resilient, uh, cheaper to operate, but buyers don't seem to pay for it. What would you tell me that I'm getting wrong in my messaging? And from a marketer's lens, why is the industry struggled so much to tell the proper story to get the actual value for high-performance homes that they deserve?

SPEAKER_02 12:28

Because they don't understand what that buyer and that customer is looking for. It isn't just the $50 a month they're going to save on their electric bill. It's how the home makes you feel and how how you operate within your own sphere and your family, and how you kind of you look at your home as a as a castle and how you kind of just say, This is this is me. This is this is what I do. It's more than just the dollars per square foot or something of that nature. It's really it's uh it's it's the internal part of you know, how do I live in this house and what are my memories and what are the things that I can take away with a great experience?

SPEAKER_01 13:13

So beyond the messaging, you mentioned a little earlier about the friction involved in the buying experience and that Fulton has really tried to remove that friction. How have you done that? Because right now, the home buying experience is pretty stressful, especially when we when we uh survey our cognition, excuse me, utilize our cognition smart data to survey uh our younger audiences, they're kind of overwhelmed by that home buying experience because, again, it's very stressful. So, what has Fulton done that other builders can learn from uh to remove that friction?

SPEAKER_02 13:47

I think the big thing is be honest with them. And we're the only builder I know of that will tell all of our buyers or would-be buyers how much the home is going to cost before they buy it. So we give them a printout, not a printout, but an online portal that uh has all the prices of everything we offer. And we offer 2,300 options. And many of our uh standard features are much better options than the uh the uh public guys have, and we point that out as well because we show everyone what we carry online. So even before they buy the house, they have a total idea of what that thing costs. They see pictures of it, they see descriptions of it, they see how it works, they see how it lives and things like that. So everything in their house is pretty much uh explained to them before they even buy the house. And then before they go to the design center, we have them uh come to our design center beforehand on a browse night every other Thursday night for three hours and work with salespeople and designers and things like that. We've also put that whole idea of transparency into our sales presentation. So the sales part, the salesperson is so important when it comes to delivering the idea of what the house is going to cost, what's gonna include, uh, what are the energy features, how the spray foam works, and all that stuff. And so we do a great job of training those people and making sure that they can communicate that with their customers.

SPEAKER_01 15:22

Uh so all of our cognition data shows exactly what you just said, which is uh that home buyers in every generation are looking more at full cost and full value of homeownership, and that they're more interested in understanding those long-term costs, operating costs, um, not just utilities, but insurance costs. Can I get lower insurance premiums? Can I, you know, what are my maintenance costs going to be rather than just understanding that upfront cost because they're really understanding that difference between full and first cost.

SPEAKER_02 15:59

We're particularly seeing it with millennial buyers. They really want to know everything that's going on and they want to have a clear idea of what the total cost of ownership is going to be. And when we're honest with them, we tell them so many times that they're looking with our competitors, they don't even know how much stuff costs in the house. If they want to do extra, we'll offer uh extra filter options and things like that. We can show them how that works and what it'll do, and you know, how the healthy home uh works and how by having indoor AirPlus uh just alone would would help with that uh that whole aspect of understanding the the comfort of a house and the healthy home and how that and how that works.

SPEAKER_01 16:44

So that leads me to another question. Um I want to pivot and talk a little bit more about the concepts in your book because one of the most powerful ideas in your book is that the sale isn't the end of a relationship with a buyer, it's really just the beginning. How should that mindset change how homes are designed, built, sold, and supported?

SPEAKER_02 17:06

So just like in the retail business, if you don't have repeat customers, you're not gonna make it. Builders don't need repeat customers. And in fact, they don't even encourage it. So you have uh uh so you treat your customers badly. And it doesn't really matter because they're not gonna buy another home. Very few people buy more than one new home in their lifetime. Okay. Well, we've turned that upside down and we said, well, why don't we market this and why don't we try to make people buy several homes? They're in different stages. You might have a young couple, all of a sudden they're they need a bigger house because they they're starting a family, and we'll build three or four different series in the same community and we'll market that customer. And if we treated them right, which we think we have, and they've had a great experience, they'll stay in that same community and buy a larger house from us. And so we purposely say, okay, I'm gonna have a smaller house, I'm gonna have a medium house and a large house and an extra large house, and we'll we'll market that customer. And salespeople are all working on the same platform. And we might be in a community for five years, six years, maybe even eight years, and because we'll have 2,000 houses in there. Well, all of a sudden, they can just do whatever they want. Plus, the fact they don't have to move, they uh they don't have to move communities, they just move across the street or down the street a little bit. The schools are the same, it's close for employment and things like that. So the idea of repeat customers is just so common for us, and it's not uncommon. We have many, many customers that uh uh buy three or four homes from us. And then the same thing is happening. So, okay, the kids have gone. They've been living in a 3,500 square foot two-story house, and they go, they don't need this, you know, the kids are gone. They're they're they've starting their own families, and we need to move down. And so we need a 1800 square foot single-story house, but they still want nice things. So we'll give them a smaller house, but it's less upkeep, easier to work, and things like that. And so we really look at that customer as a customer for life.

SPEAKER_01 19:17

It's really interesting how you've leveraged the living experience to drive referrals, brand loyalty, long-term profitability in a way that I think the industry has really underestimated and undervalued and underdeployed.

SPEAKER_02 19:32

I'm not so sure the public companies like their customers. I think they don't like them.

SPEAKER_01 19:38

It's the hidden secret of housing, right?

SPEAKER_02 19:40

Yeah, and the reason they don't like them is because they're they're they they think they're they're a pain and they're demanding and they think they're gonna sue them and things like that. So they're very defensive. So that's why that's why they don't build like new built homes. They'll build all specs. So instead of having to be with them for six or seven months, they're only with them for a few weeks. And they can handle that. And they don't train their salespeople to be able to handle their own customers. So what difference does that make? So they're not really set up for repeat customers at all.

SPEAKER_01 20:12

Let's talk a little bit about where housing needs to go next. We've entered this time of rising climate risk, volatile energy prices, historically low buyer confidence, perhaps because of the things that you've just mentioned. From your vantage point, what will separate the builders who thrive from those who struggle in the next two, five, 10, 20 years?

SPEAKER_02 20:37

I think the builders have to have the mindset that the customer is the center of the universe. And that's the most important part of their business. And get away from what the stock price is or what the product is, and falling in love with some new technology or something like that, and really concentrate on basics and taking care of your customer and being completely transparent with them and being honest with them and getting what they want, giving them what they want, just ask them what they want. You know, one of the simplest things I learned a long time ago was find out what the customer wants and give it to them. And then when I say that, they go, Well, we can't do that. Or, you know, there's all these reasons why they can't. Well, they can. Okay. We've proven that. But I think that once a customer sees that you care, you know, that's the difference. The other guy, they can't see that this public guy cares because they don't care. They really don't. I've gone to conferences where the public guys are getting up and they're talking about everything. And the thing they they never talk about their customer. Why? Because they don't really like their customers. And until they like their customers, they're not going to be successful.

SPEAKER_01 21:46

Talk to me about the evolution of customer demand and expectations in your experience, because obviously that's evolved over the last couple of decades since you've been in the housing. Sector. Where how has it evolved particularly over the last decade? And what are you seeing today with respect to top expectations, demands in general, but then maybe even categorize it into, you know, boomers and Xers versus millennials and Z's, because I think those are kind of good separate buckets for those consumers.

SPEAKER_02 22:24

I think I think the consumer has very, very high demands. And kind of the retail business really kind of presented that to them and said, okay, we're going to really take care of these customers. And Nordstrom became the legendary customer service uh giver, and they were the they were the model that everyone achieved, you know, and tried to tried to kind of copy and everything like that. Um, and then the car business went that way, and they kind of looked at, you know, finding out what the customer wants and things like that. But home builders did not even, they still don't do that, you know. So they haven't found that. Okay. And then uh there's always been a distrust between this the salesman and the consumer. Consumer doesn't like the salesperson, they're too picky and things like that. It's why, and we even do that, we we put up fences around their models. I mean, they're trap fences, we trap the people in. It's the craziest thing in the world, you know. But but we do it, and it's a it's just a a norm, and we keep doing the same things over and over again. But over the years, the customer has demanded a lot. And most industries have really gone forth and done that extra mile. Uh, but then the internet came along and changed the way people buy things, and uh now they they just assume not deal with that salesman because they were so bad. And unless you made that move to be able to be a customer service advocate, it was very difficult. And so even a store like Nordstrom is is floundering compared to where they were just because of the habits of consumers today. But in all the industry, other other industries, the consumer is really smart and they're very educated, and they know exactly what things are, and they know what the price of things should be, and yet you have builders charging ridiculous prices for stuff, and they don't blink an eye, but they don't tell their customer what the price is so they can get away with it. It's the craziest thing in the world. It's the only industry that you buy something and you don't know the price of it. I don't know if any industry you do that except this business. Except us, because we tell them what it costs. Sometimes, you know, it's we we put our cards on the table and we say, well, that's not so bad, you know. And they they they expect it. And it's just the way of doing it. It's just a matter of making sure that customer understands that you care about them and you have that transparency.

SPEAKER_01 24:49

If there were two or three key lessons from the retail industry that, and and that could be sales or marketing or even operations, uh, that you could instill into the housing sector, what would those be?

SPEAKER_02 25:07

Well, it's uh one of its selection. And retail always has been a very found on selection and and quality and uh good, better, best type things. And so really the whole merchandising idea in in homes has to do with it. And and energy efficiency is merchandising. It's instead of having uh you know bad insulation, you have spray foam insulation. Instead of having this, you have that. And so um you you bring in fresh air into the home as opposed to letting stale air stay in the home. And people have healthier homes because of that. So these are things that people want, and you just you you give it to them, you know, and you you point out. And it's just a matter of finding out what that customer wants and giving it to them. It's not that hard, you know. Um, but builders struggle with that.

SPEAKER_01 26:03

Dennis, your career suggests something profound that value is not created by cutting corners or cutting costs, but rather it's created by understanding people deeply and designing systems that serve them over time. With that in mind, let me ask you the last couple of questions that I asked to all of my podcast guests. I talk a lot about value per square foot. What does that concept mean to you?

SPEAKER_02 26:28

Well, it's not just it's it's it's everything. It's it's it encapsulates everything. It caught it capsulizes and encapsulates all the dollars that you spend. Uh, but it also capsulizes the things you don't spend, the things that are intangible. How about house makes you feel? Is that a higher value? If it looks better, if you have better options, if you have more comfort, and you're not having to worry about uh uh things breaking, things like that. If you have a comfort zone that's really high, that's gonna, it's just so much more valuable than looking at a dollars per square foot figure, because the size of the home matters, the quality of the home matters, the energy efficiencies matter, everything matters. Uh, but how it relates to that customer and how that customer feels about it, that's what is gonna determine what they're gonna pay for that house. That's value.

SPEAKER_01 27:26

If we're successful in shifting the valuation metric in the housing sector from price per square foot to value per square foot, what happens? Who wins and what gets disrupted?

SPEAKER_02 27:37

The people that win, the people that build are building a better house, and the people that are listening to their customers and they're giving their customers what they want. And the people that will lose will all the people that don't do that. It's as simple as that.

SPEAKER_01 27:53

I love that. And my final question: if listeners could remember only one idea from you today, one seed that might change the way that they value the world around them, what would that be?

SPEAKER_02 28:08

I think it's uh how how you want to live in your home and what your lifestyle is and how you feel about it, and what the comfort is, and how other people are seeing your your your adventure there, and how you and your family uh live in that house and really make it your future for memories and things that have just happened in your lifetime. And it's a big part of your big part of your lives. And we have that opportunity to really make it better. We're we're we're building the American dream. Do it right, for God's sake.

SPEAKER_01 28:46

Dennis, your story reminds us that value really comes from intention. Retail has taught you that customers know when they're being respected, when quality is real, and when a promise is empty. Home building at its best should do the same. So as we continue this journey towards value per square foot, Dennis's work offers a power offers a powerful reminder to us all. Homes aren't commodities, they're lived experiences. And how we market, measure, and value them shapes everything that follows. If you want to rethink how value is created, whether you're building homes, brands, or careers, I highly recommend Dennis's book, From Blue Suits to Green Homes. Dennis, where can they find your book?

SPEAKER_02 29:34

It's on Amazon.

SPEAKER_01 29:36

Go to Amazon. Thank you so much, Dennis, for joining us on the valuation metric. Let's keep measuring what truly matters.

SPEAKER_00 29:44

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