Back in the March issue, I talked about removing a customer's biggest fear. Any news story about one family getting ripped off by a contractor gives our whole industry a black eye. Being proactive with information about your company, its integrity and financial strength can put that fear to rest with most. But what do you do about the customer who is not satisfied with the information you have given him and wants more?
What these customers may ask for is a breakdown of material and labor costs, more detailed information about your company's financial conditions, or a bank escrow statement showing their deposit is being held and can only be used for their specific job-related costs. They get these ideas from shelter magazine articles, consumer publications and other sources not closely related to our industry.
Your first thought might be to show him the door and say, "I guess we're not the company for you." Considering how busy the remodeling market is overall, maybe you can afford to be this selective about whom you do business with. So there's a simple answer to our question. Don't give them any more information!
But this simple answer is not the right answer. The most important reason this approach is incorrect is that you never know when the train will stop. Even though indicators show the level of remodeling in this country will remain close to present levels and even expand, there are also indications that a slow down will occur in the near future. When, and how severe is anyone's guess. But rest assured, it will happen.
In my opinion, every potential consumer is also a great potential marketing resource. If you have the attitude that when times are good, you can be less aggressive and let the troublesome ones go, you lose the opportunity to turn that unsatisfied client into a satisfied customer who will be your best source for repeat business, as well as great referrals.
Too Much, Too LateI bring this up because of a situation I was made aware of recently. A friend of mine, the owner of a remodeling company, was asked to provide a complete financial statement to a client after his wife had given him a large deposit for a bathroom renovation.
The husband was an accountant and wanted to review the state of the business before he would continue with the deal. The sales person asked if he had had a chance to check out some of the referrals already given, and if he would like to contact some suppliers and subcontractors to get a feel for how the business paid its bills. The accountant said he was too busy to track down the referrals and it would be easier just to look over the balance sheet since he is familiar with that form of information.
Even though his wife had signed the contracts and written the check, he was now finally getting involved in the purchase process. Not wanting to lose the work, the designer asked the boss to help out.
Seeing red flags up all over the place, the owner needed to step back and figure out his next step. First off, this situation proved that the best way to work with clients, regardless of market conditions, is to have all of the decision makers involved from the get go. When couples meet with the designer, they both can be given the education, not to mention the financial information needed to make an intelligent decision. When it's busy and only one of the two partners are sold on you and your process, the potential for back pedaling is heightened.
Secondly, even if the company owner could calm an accountant's fears today, the poor lines of communication between the husband and his wife could cause problems once the job is under way. If the wife was making all of the decisions upfront, but the husband had other things on his mind, the worse case would be misunderstanding and debates to occur in the middle of the work. Possible future draw requests could be hard to collect, or the final payment could be held because he didn't think some detail was correct.
The cost in time with return visits to change details, order different materials, or any number of other expenses, easily could take the profit out of this job. Most importantly, this client never would act as a referral and lead generator - the lifeblood of any business.
Finally, while I'm for sharing some financial information, the accountant's request for that much financial information never should be honored - no matter who is asking. In the accountant's mind, the request may seem reasonable. But by letting him control and change your established policies, you are giving him the message that he will be able to control and change more in the future. Making a stand upfront puts you back in the position of expert, and re-establishes the proper relationship.
Your CallSo what would you do?
I helped my friend write the husband a letter, which included the following statements:
"Since all of our past clients have seen the importance of having a relationship based on trust, and have also established a clear line of communication during our projects, I suggest that you, your wife, my design associate and I sit down in our office so that we have an opportunity to discuss your reservations. I would also like to, at this time, review in detail once more the contract and scope of work, and establish the correct line of communication as to who will be making the day-to-day decisions while we are working on the job."
I also told my friend to send back the client's deposit check, even though he did not ask for it, and tell him that all ordering and processing would be put on hold until after the meeting took place. You have a signed contract, but by returning the money, you have the right to stop any more work until the deposit has been given to you again.
It goes without saying that in this scenerio a fresh signature by both parties must be made part of that office meeting. By getting the check back, the husband and wife have the chance to have their own meeting before deciding whether they want to take the time to meet with you and your salesperson.
My friend didn't like the idea of giving back the deposit but agreed that the red flags were there. The decision might have been harder in a slower market. But with plenty of good leads and a good-sized nest egg set aside, it would not break the business if this project was lost.
A few weeks later I received a call from my friend, who said he wrote the letter and sent the check along. The meeting was quickly set up the following week, and both clients met with the owner and the designer. The meeting went as expected; the accountant was satisfied that the company would indeed be able to stay in business between the time the deposit was made and the job was started without reviewing the financial statements.
The go ahead was given to re-start the materials and trades ordering. The wife was established as the lead person to communicate with during the project. Most importantly, the potential for a smooth-running job with a great referral was restored.
It could have gone either way, but even if the job was lost, the accountant cannot have anything bad to say about your company. Maybe he would have that opportunity with another one of your competitors. You just never know.