By Ron Coleman
The economy is starting to heal after the world shut down due to the global pandemic. This is the time for business to rebuild. This is also an opportunity to significantly improve the way businesses are run. There are four key outcomes that will make a successful contractor. These will differentiate one company from the next in the eyes of the customer, team members, sub-trades, and suppliers. As a result, this will keep your banker extremely happy.
The four key outcomes are on-time, on-budget, up-to-standard, and customer goodwill. By focusing on these four key outcomes, a contractor can delight customers, empower employees, keep any sub-trades on track, improve supplier relationships, make additional profit, and increase the business’ value.
Any and all communication should be customer-focused first. Don’t simply tell the homeowner how good your business is, tell them exactly how you can help them.
Oftentimes, when interviewing a potential employee, the individual will tell the interviewer how wonderful they are. Rarely do they tell the interviewer how they can add value to the company. Use this lesson and apply it to your sales approach to the homeowner. Spell out why they should use your services to benefit them.
If you were to survey your customers, what would they say most frustrates them? I have done customer focus groups for residential HVAC contractors and asked the customers to prioritize how quickly the problem can be solved, how good of a job has been completed, and what price will be charged. Each and every time, the price always came third.
Meeting customer expectations
Incoming phone calls often mean a customer has an emergency. If they have no heat or burst pipes in the middle of winter, their first question is going to be how soon can you get here? This means that managing scheduling is of the utmost importance.
Contractors will often quote work low in order to get the job. When this approach is done, services are usually skimped, or extra charges are issued just so the contractor makes a profit. If there isn’t any profit, we go broke. We either exceed the budget or lose money. There is no in-between.
When prices are low or when the schedule is tight, the standard of work can sometimes be forgotten. This is another sign that there won’t be a repeat customer.
Customers want to use the same provider as often as possible. This gives them a level of comfort and gives the contractor the right to charge a fair price for completed work. By avoiding customer frustrations, we can solidify strong relationships with customers who will pay for the value we bring.
If the start schedule changes on a project, insist on getting a time extension. It is good practice to get time extensions anytime there is a change. Imagine a restaurant closed for renovations and they have taken bookings for the expected opening date only to find the restaurant can’t get occupancy on time.
For service work, develop a planned maintenance program. This allows you to do preventative maintenance that will reduce the number of emergency calls and will also allow you to schedule your workforce better. You will increase labour efficiency, reduce overtime payments, and have happier customers by servicing them better. Always keep your customers informed of your expected arrival time at their site.
Give priority to repeat customers, especially those on planned maintenance. Be less supportive of the one-off calls.
Staying on budget
Set a price with the customer and show them why it is a realistic bill. It is a good idea to collect testimonials from past customers that prove this. These testimonials can be as simple as a 30-second video clip posted on your website, or it can be a detailed letter/email from a customer or engineer who can attest to this. Make sure that any price changes result from a change in the scope of work and that the quote for those changes is added to the budget price.
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. This is true for retrofit or new installations. Consider flat rate pricing for service work. If you are charging on a time and materials basis, make sure you spell out your charge-out structure.
Your customer is expecting a certain work quality standard and is entitled to it. Shoddy workmanship will lose you any chance of getting repeat work from that client and will cost money to rectify any mistakes.
Humans are creatures of habit. Customers tend to find someone they are comfortable with and stick with them. The four outcomes explained at the beginning of this article can help improve your customer relationships, but it can also help with employees, sub-trades, and suppliers.
Imagine using these four key outcomes (on-time, on-budget, up-to-standard, and customer goodwill) as the basis for performance evaluations of your team. By setting standards for each employee, for each key outcome, both you and the employee can monitor their performance.
This is the basis for measuring, monitoring, and managing. These four outcomes should be the foundation of your relationship with your entire team. They should be coming to you, showing how they are meeting, and possibly exceeding their benchmarks. The only downside is that they will realize how valuable they are to your business, and you may have to increase their remuneration.
For the sub-trades, this is a bit of a no-brainer. If they don’t buy into the process, you can’t afford to use them because if they fail, you fail.
Lastly, to be successful at implementing this with your suppliers, the key is to give 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 with a myriad of benefits.
Many of us are looking to retire or take more time off. That’s one of the biggest lessons we got from the pandemic. Look at the resistance of office staff to going back to work in their offices. The pandemic has changed the way we do business, but it is up to us to control our business going forward. :