[In-Depth Look] The Key to Sustainable Growth in Home Remodeling is AS Management

Due to the novel coronavirus infection (COVID-19), with the spread of remote work and the untact economy, homes are evolving from spaces for eating and sleeping into places for working, exercising, and enjoying. With changes in lifestyle, the home has now become a workspace. The company has transformed into a place for meetings or control where work is checked, supplemented, and new tasks are assigned. When tired from work, homes are changing into places where people listen to music, watch movies, exercise, and rest intermittently.

Home remodeling tailored to individuals' lifestyles is emerging as a new business. The "Smart Home," which supports personal work, promotes efficient economic activities, psychological stability, and motivation for life, is appearing as a new market. Koreans have a stronger desire for ownership of their homes than any other nation. Moreover, they tend to have high vanity and competitiveness to show off to others.

This tendency can also be detected in the recent surge of broadcasting entertainment programs introducing homes. Recently, home remodeling companies have rapidly grown into mid-sized enterprises with sales exceeding trillions of won. The smartification of home remodeling is expanding its sales area into the distribution industry through large gallery exhibition halls. Smart homes are evolving into a creative convergence big-tech industry and a job-creating industry by combining various technologies such as electronics, IT, electricity, sensors, robotics, artificial intelligence security, and design with human aesthetic sensibility. Home remodeling is a highly integrated business that can provide technology, emotion, and convenience to customers.

On the day families move into a newly renovated home with high costs, they will feel the emotion of happiness. But what if defects and malfunctions begin to appear in the remodeled new home? The AS (after-service) counselor repeatedly gives customers the dry answer that "a professional technician will call," and customers anxiously wait for the AS technician depending on the malfunctioning part. Due to the rapid increase in demand for home remodeling, the necessary skilled construction personnel are not supplied smoothly, which eventually results in defects and repairs. Customers suffer from AS issues related to defects, caught between the agency in charge of the construction and the remodeling company.

Within the current AS system provided by home remodeling companies, it is never easy to connect with a responsible person who can discuss customer complaints, compensation, and repair issues regarding defects. As a result, customer dissatisfaction grows proportionally to the amount invested and sometimes escalates to anger. AS is the final contact point where companies meet customers to handle complaints and restore trust. Recently, dissatisfied customers at AS contact points spread their difficulties through SNS, leading to a decline in the company's credibility. This results in losses by losing not only the concerned customers but also potential customers.

Restoring broken trust is not easy in terms of cost and time. Conversely, customer service that does its best to solve problems becomes a source of creating loyal customers as well as new customers through the process of trust recovery. Furthermore, efficient AS functions and organizations also serve as new sales channels that lead customers to a subscription economy.

Rapidly growing home remodeling companies must establish AS management strategies to maintain optimal customer satisfaction alongside increasing demand and respond systematically. Training and investing in professional technical personnel for construction input, thorough supervision, and prompt AS must be conducted simultaneously. Besides research and development of technology and services to create innovative smart homes, a portion of profits should be invested in AS management. Securing appropriate counselors and repair technicians, providing kindness training for AS personnel, and implementing integrated communication management linked with consumer complaint handling systems must be carried out and invested in from a strategic perspective.

Companies that focus only on expanding sales and fail to practice AS management will lose consumer trust in the near future and face rapid decline. The home remodeling market is no longer a monopoly of specialized existing companies. It will become a new competitive arena involving various companies, including large furniture and IT electronics manufacturers, portal and platform operators, and large distributors. Therefore, business models for smart homes will evolve in various forms. Hence, the important fact is that only home remodeling companies that establish and practice communication processes prioritizing customer convenience and satisfaction and innovative AS management systems can achieve sustainable growth.

Kim Ik-seong, Honorary President of the Korea Distribution Science Association · Professor at Dongduk Women’s University