Increasingly, consumers are taking their grievances about businesses online, and home builders aren’t immune to the onslaught of criticisms being shared at cyber speed via social media platforms such as Facebook and Twitter. And sharing complaints with friends has recently gotten a lot easier thanks to new online service called Gripe.

Gripe bills itself as a “better Better Business Bureau for the Twitter age.” Located at Gri.pe (not Gripe.com) it is becoming all the rage for Internet savvy customers. The concept although rather simple, is more powerful than anything before it. Basically, Gripe pushes customer complaints to its members’ Facebook and Twitter followers, and does it all via Internet-connected devices, with special apps for the iPhone and Android smartphones.  Already reaching more than 1.6 million direct members and rapidly climbing, this service is poised to raise the bar in customer service in all industries, including home building.

On May 28, The New York Times reported on Gripe, bringing this dotcom to the forefront of the sea of companies vying for our attention. The article shares how Whirlpool, the parent company of Maytag, was blindsided by a customer who protested to her Twitter followers that she experienced a horrible time trying to get her Maytag washing machine repaired. This action caught the attention of Whirlpool executives, and the woman’s machine was soon fixed. Brian P. Snyder, Whirlpool’s senior manager of social and emerging media, readily admits that Whirlpool provided this customer with “an unsatisfactory customer service experience.”

Essentially, this customer was unable to get the kind of service she deserved and only through social networking tools like Facebook and Twitter — and now Gripe — was she able to finally get resolution. Subsequently, Whirlpool has set up a Facebook pages for its Maytag, KitchenAid, and Whirlpool brands and allows negative feedback to be posted so that the company can more readily deal with legitimate complaints and be more effective at service recovery.

Home builders are not immune to online consumer assaults. In fact, some builders have already discovered that disgruntled customers are already hammering them with negative posts on their Facebook pages. Now with Gripe, angry customers can send a “one-click billboard” to advertise their frustration and dissatisfaction to their Facebook friends and Twitter followers.

On average, Facebook users have about 125 friends. Furthermore, their friends can easily share this bad experience with their friends by reposting it to their Facebook account. Just imagine if 50 unhappy customers used Gripe to quickly alert their Facebook friends and Twitter followers to a grievance they have with your company. If 50 unhappy customers post to Gripe with an average of 125 Facebook friends each, and 10 percent of their friends repost the complaint, and 5 percent of their friends’ friends repost and only 1 percent of their friends’ friends’ friends repost it, it totals 1.183 million people. Ouch, indeed!

How much do you spend on positive advertising to reach more than a million people?  Even more troubling is if these customers visit your community Facebook site and decide to gang up and post their outrage on your Facebook site. You could be forced to shut it down and suffer significant losses in business from customers turned off by the negative aura around your company.

Paradigm Shift

From a larger perspective, customer feedback is becoming ubiquitous with the Internet itself, and it can’t be stopped. Until now, the home building industry has been spared from the brunt of this revolution.

Yelp is a similar service that has been around for years, and while powerful in the restaurant, hospitality, and entertainment industries, it has not been big on reviewing home builders. However, the new competition brought on by Gripe will most likely cause the folks at Yelp to conceive a similar Facebook/Twitter posting service and open it up to more industries.

Savvy builders already realize that it is just as important to invest in customer loyalty initiatives that generate positive word-of-mouth advertising as it is to invest in traditional marketing. Those that ignore this paradigm shift will see negative word-of-mouth advertising nullify their traditional marketing, wasting precious capital and severely damaging their company’s brand.

The bottom line: People trust customer feedback and they don’t trust promotional advertisements (or what Chip Bell and Dave Patterson describe in their new book Wired and Dangerous as “third-party talking heads”). Gripe serves up customer feedback from regular people dealing with a wide range of businesses, and that’s what makes it so powerful.

Sure, a lot of online merchants post customer ratings and reviews, but Gripe has the potential to thrust the home building industry and the entire real estate market into the world of online customer complaints. Its not a matter of if, just when, and that time appears to be soon.

Consumers are now awake to their newfound power enabled by the Internet. In fact, for better or worse, all they have to do is threaten to go public with their issues and they can get the attention of high-powered executives. Whirlpool Corporation, with revenues of $18.4 billion in 2010, fell to their knees begging for forgiveness when one customer with a $1300 washing machine complaint posted it on Twitter. This story indicates that this powerful weapon is already damaging home product manufactures. Next will be the home builders themselves. Soon, the sigh of relief experienced after J.D. Power announced that it was cancelling home builder rankings will be replaced with a look of apprehension as consumers increasingly go online to rant about problems with their builders.

Paul Cardis is founder and CEO of AVID Ratings, the leading provider of customer loyalty research and consulting to the home-building industry. Through the AVID system, home builders improve referrals, reduce warranty costs, and strengthen their brands. He can be reached at paul.cardis@avidratings.com.