By Ron Coleman
There are four key outcomes that will make you a successful contractor.
These four key outcomes will differentiate you from the competition in the eyes of:
- Your customers
- Your employees
- Your sub-trades
- Your suppliers
And as a result, you will keep your very banker very happy. And by focusing on these four key outcomes you will:
- Delight your customers
- Empower your employees
- Keep your sub-trades on track
- Improve your supplier relationships (thus reducing your costs).
The right message
Most of the contractor websites that I review have one thing in common. They tell me all about the business. How great they are, how long they have been in operation, how good their people are. They are professional, responsive, knowledgeable, caring, etc.
After reading these websites I can’t see any significant difference between them. Did the same person write all of them? Did they all use the same template?
Which of the following statements would be most likely to encourage you to use my services?
“I am an accountant with 30 years of experience working with HVAC contractors.”
Or
“I have helped hundreds of HVAC contractors, just like you, increase their profits by over 50 percent. Let me to help you achieve this increase for your business?”
You don’t care about me; you only care about what I can do for you. And your needs must be the focus of our communication. So, as a contractor, what can you do for me? I really don’t care if you have been in business one year or 30 years.
Let’s see how this impacts your relationship with your customers.
If you were to do a survey of your customers what would they say most frustrates them?
Let me save you the bother of doing the survey. Here are the results, and common sense will provide the answers:
Pricing:
We often price our work low in order to get the work or to “get our foot in the door.” When we do this, we need to skimp on service or charge extra to make a profit. If we don’t make a profit, we go broke.
I have done customer focus groups for residential HVAC contractors and asked the question:
“It’s the middle of winter and you have no heat. Rank the following three outcomes in order of priority:”
- How quickly can you deal with my problem?
- How good a job will you do?
- What price will you charge me?
It should not be a surprise that price always comes third.
Schedules:
Staying on schedule is very difficult. Often jobs start late but the completion deadline does not change. As a result, we finish late and have an unhappy client. Often late completion can cost the customer lost production.
Quality:
When our prices are low or when the schedule is tight, we may skimp on the standard of work. This is another sign that we won’t be getting repeat business.
Repeat business:
Your customer wants to use the same provider as often as possible. This gives them a level of comfort and gives you the right to charge a fair price for your work. By building on avoiding these frustrations for the customer we can solidify strong relationships with customers who will pay for the value we bring.
The right approach
Here is the approach to take:
On-budget:
Set a price with the customer and show them that it is realistic. Have testimonials from past customers that prove this. These testimonials can be as simple as a 30-second video clip on your smartphone and on your website or it can be a detailed letter/e-mail from a customer or engineer or architect who can attest to this.
Make sure that any price changes are as a result of change in scope of work and that the quote for those changes are added to the budget price. Make sure your customers are aware of how painful it is to them when a project overruns their budget. You may need to take the lifetime value of the project into account as it is not only capital costs that should be considered, but also operating costs.
On-time:
If the start schedule changes, insist on getting an extension of time. Also, for all changes, get an extension of time. Again, follow the testimonial advice in the previous paragraph. Projects that are delayed can have a very detrimental impact on your customer. Imagine a hotel closed for renovations, or a new build and they have taken bookings for the expected opening date only to find they cannot get occupancy on time. How often do you see new condo developments being delayed? Have you ever seen one completed on the expected date?
To Standard:
Your customer is expecting a certain standard and is entitled to it. Shoddy workmanship will lose you any chance of getting repeat work from that client and you will spend a lot of money rectifying your errors. Don’t ever try to cover up shoddy workmanship or undersized equipment.
Goodwill:
The customer is getting comfort from using providers that he has used before. You also get comfort in knowing how you will get on with the customer. By achieving the first three outcomes your likelihood of getting a repeat customer goes way up. Fail on any of the previous three outcomes and you will automatically fail on this one.
It’s not just the customer
In the above, I have talked about the relationship with your customer, but at the beginning of this article, I also mentioned employees, sub-trades and suppliers. So, let’s see how these four key outcomes can impact each of these other three key components of your business.
Imagine using these four key outcomes as the basis for performance evaluations of all your employees. By setting standards for each employee for each key outcome, both you and each employee can monitor their performance.
This is the basis for ‘Measure, Monitor, Manage’. These four outcomes should be the foundation of your relationship with all your employees. Your employees should be coming to you showing how they are meeting and maybe exceeding their benchmarks. The only downside is that they will realise how valuable they are to your business and you may have to increase their remuneration, but wait, you are making more money so you can afford it!
Your sub-trades:
This is a no brainer. If they don’t buy into the process you can’t afford to use them because if they fail, you fail.
Your suppliers:
The key to implementing this with your suppliers is to give them sufficient lead time. For most items, apart from specialty items, this means giving them three days notice of what materials you want. This will improve your fill rate significantly.
Benchmark their performance on these four outcomes and you will get better pricing and more accurate supply thus, saving you money.