Key facts
- Taylor Morrison CEO Sheryl Palmer will discuss the importance of trust at the HousingWire Homebuilder Summit on Oct. 19-21.
- Palmer views trust as a scalable operating asset that makes other builder resources more effective.
- Berkshire Hathaway, which acquired Taylor Morrison, emphasizes customer centricity and reputation, according to Palmer.
- Palmer stated that Berkshire Hathaway's approach is to 'don't mess with our reputation.'
- The NAHB/Wells Fargo Housing Market Index fell to 32 in September, its lowest level in a year.
Taylor Morrison Homes Chair and CEO Sheryl Palmer is emphasizing the importance of building trust as a key strategy for homebuilders facing a challenging market. In an environment where buyer traffic is depressed and builders are resorting to price cuts and incentives, Palmer believes that accumulated trust across thousands of interactions can become a significant operating asset.
Palmer's perspective is influenced by Taylor Morrison's acquisition by Berkshire Hathaway, where she observed a strong focus on customer centricity and reputation. She recalled a conversation with Berkshire executive Greg Abel, who advised her to 'don't mess with our reputation,' a principle Palmer connects to Warren Buffett's view that reputational damage is more detrimental than financial mistakes.
This focus on trust is particularly relevant as market conditions tighten. The NAHB/Wells Fargo Housing Market Index fell to a one-year low of 32 in September, with a majority of builders reporting the use of sales incentives and a significant portion cutting prices. Surveys also indicate that higher mortgage rates are hindering the ability of realtors to attract buyers.
Palmer argues that building trust internally is a prerequisite for external customer relationships. She believes that a company's systems, people, and daily operations must foster trust for employees, which then extends to trade partners, suppliers, and ultimately, customers. This philosophy, which Taylor Morrison has been developing over the past seven years through initiatives like 'love the customer,' aims to embed customer relationships into the company's operational DNA.