Are Customers Your #1 Priority? – 7 Steps To Make Customers Your #1 Priority
by George Hedley

There are lots of ways to make a profit? They include cutting costs, reducing overhead, improving field productivity, accurate estimating, making no mistakes in the field, and having an excellent training program. All of these will give you a small improvement in your bottom-line, but not enough to make a significant difference.

The easiest way to make more money is to create it! Profit starts with revenue. The more profitable revenue, the more profit. Revenue comes from customers. To make more profit, develop more profitable customers. Are customers your #1 priority? Do you have a business plan to enhance customer relationships? Studies show it costs and takes five to seven times more money and time to find a new customer than to keep a current customer. Maximizing profit is dependent on customers Ė current, repeat, and loyal.


Look at Your Calendar

Think about what really happens every day. Most business owners and project managers spend at least ninety percent of their time doing the work at hand. You multi-task as you manage employees, subcontractors, suppliers, and projects. Your only customer contact is during project meetings, bid negotiations, or haggling over change orders, field problems, and schedule updates. You take repeat customers for granted and assume if you do a good job, they will put you on the bid list for their next project.

When new customers call with project opportunities, you immediately drop everything and put them first. You call your existing customers and cancel meetings to allow time to wine and dine potential customers. You put on your best clothes, take them to the finest restaurants, and present them your shiny brochure filled with glossy photos of your companyís accomplishments. All while current customers wait for you to return their calls or fix a project problem. Sound familiar?

Your calendar doesnít lie. How much time do you invest creating deep customer relationships versus getting projects built? Do you take time transforming current customers into repeat customers by spending quality relationship building time with them? Or better yet, do you make time to take your loyal customers out to lunch, or a ball game, or a monthly round of golf on a regular basis? Just like with your friends and loved ones, building relationships take lots of quality face to face time enjoying each other in fun settings.

Does your company have an action plan to convert repeat customers into loyal customers? A customer loyalty program takes concentrated effort and will return big-time to your bottom-line. You can be a repeat customer of K-Mart or Wal-Mart, but you arenít loyal as youíll shop anywhere the products are available. Repeat customers will use your company again if your price is low enough or it is convenient, but they are not loyal. Loyal customers will only use your company, period! Loyalty is based on relationships and trust earned over time.

  • How many repeat customers do you have?
  • How many loyal customers do you have?
  • Which repeat customers can you make loyal?

You are in the Relationship Business!

Profitable service, engineering and contracting companies require more than being able to build on-time, under-budget, with excellent quality, value, and service. It is about convincing customers to hire you at your price.

People buy services based on:
- Perception of Value
- Relationship

Create a positive perception of value – Customers need to know your company has the qualities and capacities to complete their project in a workmanlike, competitive, and timely manner. You have lots of competitors who can build and perform the same as you. There isnít much perceived difference between them and your company. Customers ask your company and others to propose or bid on projects. They are comfortable awarding jobs to any of the lowest pre-qualified engineers, contractors or subcontractors they perceive as the same.

Perception of value can be created over time using marketing, advertisements, brochures, word of mouth, third party recommendations, and reputation. You can enhance your perception of value by improving your bid completeness, proposal package, or project presentation. It is extremely hard to win contracts based solely on your perception of value unless you are the low bidder.

Develop deep customer relationships – Once customers perceive your company can handle projects adequately, you can then start building a relationship with them. Relationships are more powerful than your track record. Think about the time you knew you were low bidder and the best engineer or contractor for a project, but didnít get awarded the job. You probably lost it based on your competitorís relationship with the customer. A strong relationship is the best way to improve your competitive advantage. By making repeat and loyal customer relationships a priority, your bottom-line will improve as you get jobs based on relationship more often than price.

7 Steps To Make Customers Your #1 Priority

1. People First and Paper Last!
Delegate paperwork and getting the job built, but never delegate building and maintaining customer relationships. Customer focused company owners and managers spend at least fifty percent of their time with customers in face to face relationship building sessions. This includes meals, sporting events, industry meetings, and sitting on boards of community organizations. I am a member of a private golf country club in our community. Almost every time I go to the club, the owner of a large and respected general contractor in our area is there. He always has three guests with him including architects, engineers, real estate brokers, developers, or his construction customers. Sometimes he even is entertaining my customers!

Put customer time into your calendar. Make it a priority. I try to schedule at least three meals plus one golf game with current or potential customers every week. Phone calls donít count when building relationships. Job meetings donít count. Doing good work also doesnít count. The only way to build customer relationships is in a relaxed setting where you can really get to know the person.

2. Help Customers Make a Profit!
People want to help those who help them. Look for ways to help your customer make more money. Be more of a business partner than a provider of construction services. Before I meet with customers, I try and identify how I can help them be successful. I come prepared to share a business tip or trick that will help their bottom-line.

Send something to help your customers make a profit at least four times a year. Send business articles, books, tapes, technical specification updates from your suppliers, magazine subscriptions, photos of jobsite challenges, new code updates, changes in the law, or industry studies from your association. When you send things to help your customers, you reinforce your relationship with them. Include a little handwritten note like: ďI thought this would help your business. It helped me provide better customer service.Ē

3. Constant Customer Contact!
Think how you cultivate personal relationships and build true friendships. Trusting relationships are built over time with lots of one on one contact, conversations, experiences, and fun. In business you get distracted with constant pressure of making a profit and getting projects built. It isnít natural to stop and take time required to build deep customer relationships. So you continue bidding lots of jobs and selling low price. This wonít generate above industry average net profit.

Put your customer relationships first by keeping a ďConstant Customer Contact ChartĒ to tracking business relationships. List all your old customers from the last three years, loyal and repeat, current, potential target customers you would like to do business with, and those who refer you work. Put them into one of the categories labeled: loyal customers, repeat customers, old customers, new target customers, and referring parties. Next rank them A thru F based on how easy they are to do business with, and five $$$$$ís thru one $ís for their potential to become loyal customers who generate profitable work for your company. When completed, list them in order of their rankings.

CONSTANT CUSTOMER CONTACT CHART

V=Visit
M=Mail
Easy of Business Ranking Profit & Loyalty Potential Jan Feb Mar Apr May June Jul
Local Customers
EZ Development A $$$$$ M V M V M V M
Best Friend Inc. B $$$$ VM   VM   VM   VM
Repeat Customers
TrumpedCorp. A $$$$ M V M V M V M
Master Builders C $$ VM   M   VM   M
Old Customers
Acme Dynamite C $$ M   M V M   M
Smith & Western D $ M   VM   M   M
New Target Customers
11-7 Retail Stores A $$$$ VM   VM   VM   VM
Hibi Builders B $$$ M V M V M V M
Referring Parties
Topline Realtors A $$$$ M V M   M V M
Alpha Architects B $$$ VM   M &nbps; VM   M

4. Spend Time With Top Customers
You now have your customers listed in order of importance to your business. You know where to concentrate your customer relationship time and which customers are your top priority. Keep track every time you meet with customers and note your visit on the Constant Customer Chart with a ĎVí for visit. Make it a goal to see every ĎAí or $$$$ and $$$$$ customers and targets at least every two to three months.

Most local service companies only have five to fifteen major customers who provide them with the majority of their business. To keep in touch and build relationships with them requires less than twenty meetings every three months, or an average of two per week. Donít forget, your goal is to convert potential target customers into repeat customers, and repeat customers into loyal customers who only use your company for all their construction needs.

5. Be in the Right Place at the Right Time!
You know lucky people who seem to always be in the right place at the right time. In my business, I noticed subcontractors who spend a lot of time in our office, get the most work. Luck? I donít think so! By making customer relationship time a priority, youíll land jobs just because you made it easy for customers to ask you questions and advice on projects they are currently working on before they go out to bid.

One of the best ways to be available is to get involved in organizations where your customers hang out. These include industry associations, community groups, political campaigns, or charity organizations. Ask your top customers where they spend their time and ask them to help you get involved.

6. Show You Care!
The number one reason customers stop working with companies is an attitude of indifference. They donít think you care about them. Customers want to know you care about them, their business, their challenges, and them as people. Keep personal files on each of your customers. Track their family, schools, hobbies, goals, vacations, activities, and major life events. Before you meet with them refer to it and then ask them questions about their personal life. This caring attitude will set you apart and solidify your relationships.

To show your care, send your top customers a handwritten note as often as appropriate. Mail out to your entire customer list at least every two months. Send materials that will help customers improve their business. Ideas to send include: how-to ideas, tip sheets, new product brochures, code updates, business articles, or new industry trends. This constant customer contact will also help you build deep relationships over time.

7. Get Lots of Referrals
Want to double your business with profitable work? Get a referral from each of your customers. People donít walk around telling friends or business associates how great your company is unless asked. Most company owners wait for their customers to refer them business to potential customers. This rarely happens. You get referrals by first earning them and then proactively asking for them. Getting lots of referral is easy. Go visit your top twenty customers. Tell them your business growth goals and show them your target customer list. Ask who they know who might need construction services. Donít ask, donít get. When you ask, youíll get!

Time is money. Meaningful time with your customers is big money. Remember, doing a good job, quality workmanship, bids, faxes, emails, job meetings, and phone calls donít count when trying to build relationships. Make it a priority to invest at least fifty percent of your time with customers. This will return more profit than youíll ever make out in the field with your crews. Rearrange your calendar, put customers first, and watch your bottom-line grow!


George Hedley is the best-selling author of “Get Your Business to Work!” As a professional speaker and business coach, he helps entrepreneurs and business owners build profitable companies. E-mail: gh@hardhatpresentations.com to request your free copy of “Everything Contractors Know About Making A Profit!” or signup for his e-newsletter. To hire George to speak , attend his 'Profit-Builder Circle' academy or find out how he can help your company grow, call 800-851-8553 or visit www.hardhatpresentations.com