Editor's note: Al Levi knows what it takes to make your business run with less stress and more success. Contractors, just like you, seek his advice regularly. Al has agreed to let us share with PM readers some of the questions he gets and the answers he gives. The focus is strictly on problem solving and handling the day-to-day operations of a successful contracting business.
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Customer ComplaintsDear Al,
I'm frustrated with customers calling us to do work, accepting it, and then when the spouse gets home, getting grief because they felt the other was taken advantage of.
What can I do?
Dear Buyer's Remorse,
I understand how frustrating this is. You take the time to train your staff to properly explain what you propose to do, and you're upfront in quoting a price that they accept, and at the time are grateful for getting the work done. Then, you get a call from an irate spouse who is many times either looking to be a hero or prove to the significant other that he or she is an idiot for being taken advantage of. Either way, you're put on the defense.
I'd like to tell you there is a sure way to stop this from occurring. But, there isn't. What you can do is minimize how often it happens. Try to review what happened with your tech, who should have written out what was proposed and accepted -- with all the necessary signatures.
After explaining the value of what you did to the customer, ask them how you may gain their satisfaction and then give it. But, also ask what they want you to do the next time to gain the proper approval before starting the work. Put this information on your service dispatch history. If they call again, you'll know what you're up against.
A one-time negotiation about pricing with new customers is acceptable. And I would let the customer know this. Some people will respond favorably if you've successfully explained the value of what you do. Others are just determined to not allow you to make the profit that you deserve. But if it happens again and it wasn't due to poor workmanship, make a note to settle and mark it as "a customer we will no longer serve."
I charge a minimum service fee for responding to a call for service. Many people object. I explain that the minimum service fee will be waived if they approve the work but there are still those who object. They say, "Why should I pay you just to come and tell me what's wrong and what'll cost to fix it?" I've thought about waiving the minimum service fee altogether to get away from the hassle. What do you think?
Dear Minimum Grief,
Before you give up on charging a minimum service fee, I think that you may be missing some benefits. The fee makes you different and it gives you an opportunity to explain what you'll be doing for that fee and why it has value.
The minimum fee also helps screen people who only seek free advice and a diagnosis and are not really interested in having you do the work. Do you need those people as customers? If they're unhappy with the minimum service fee, they're not likely to like your other pricing because you know the true cost of doing business.
Even if you choose to eliminate this fee, which can be done if you're slow and want more work, I expect you'll still have customers calling to complain about prices. Guess what? If you were charging too little to cover your costs, some people will still complain. That's human nature.
Sometimes they want to see your reaction. Know what it costs to do business and make your decision after you look at the numbers.
You might want to consider options like a sliding minimum fee that changes depending on when they want you to come. You might charge more money for night and weekend calls and less during normal business hours. This might chase away some business, but not your real customers.
There are options on applying the whole minimum fee if the work is done at the time of the visit. You may like applying just a portion of the fee. Or, you may refuse to waive the fee altogether. It's your choice.
Market to your preferred customers and be thankful that those who don't see the value of what you do for the minimum service fee won't be wasting your time and energy.
I've been fighting with my techs for years about writing legibly. Here in the office we struggle to know what was done and to enter it properly in our computer. When they happen to write legibly, they either write too little, too much or the wrong thing. Then when a customer complains, it's nearly impossible to accurately explain what was done and why. The customer sees little or no value of a scribbled job ticket or a one-word description.
If you never told them what to write, where it goes and had them demonstrate they can write legibly, you're training them that anything is acceptable.
Years ago, I faced a similar problem. Customers actually called to complain that our tech had finished his work and now he's sitting in his truck writing something for 20 minutes!
It caused us to redo our flat rate manual and operations manual so that the language clearly described what we proposed to do for the customer before we began. The description was in plain English, which made it easier for the customer to know what they'd be getting. And since it was standardized, the office personnel found it a snap to enter the information in the computer.
The techs were glad to copy from the book rather than have to reinvent the wheel each time. And when there was a complaint, the staff knew what had been done so they were better prepared to handle the call.
Re-examine your flat rate manual to see where you could make it more tech-friendly and it'll make it more customer-friendly. An operations manual also helps in this process because following a set procedure on most calls will be spelled out in this manual and it'll be in synch with the flat rate manual.
Once you've rewritten the tasks in both manuals with the input of the techs, I know you'll find greater compliance and happier customers who better understand what they are getting and the value of it.
PM Columnist To Award 'Business Makeover'Consultant and PM columnist Al Levi will help one PM reader remake his business.
Sponsored by Slant/Fin and PM, Levi will give away a two-day personal consultation. In that time, Levi will evaluate current business systems and operations, and help develop a new game plan.
In addition to the initial consultation, the contractor will receive feedback and support from Levi for six months. A final follow-up visit will determine progress. An article in a future issue of PM (with the identity of the winner kept anonymous) will tell the story.
To enter, go to Levi's Web site, www.appleseedbusiness.com or fax a request to 212/202-6275.
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