by George Hedley
For the past 35 years I have done business with thousands of subcontractors, suppliers, architects, engineers, consultants, attorneys, vendors, and brokers, as well as an untold number of retail outlets and stores. Based on my experience, I have only found a few companies who back their promises with actual results and care about putting the customer first. It's not difficult to satisfy customers and give them what they want if you focus on a single concept: integrity - doing what you say you'll do every time. Customers don't know what to expect when you don't consistently deliver what you promise.The old business motto to under-promise and over-deliver is a flawed concept that creates confusion and a lack of trust and with customers. Under this motto, customers ask themselves: "Is their promise the actual date they will perform?" "Did they under-promise to give themselves some leeway in their commitment?" "When will they really deliver?" "Are they telling the truth?" "What's the real deal?"
Customers just want what you promised and what they paid for. As I have said many times, the number one ingredient to building a profitable business is
You keep customers by giving them what you promised and committed to deliver. And when you don't give customers what you promised, you lose them to competitors. And without customers you have no business! So keeping customers is easy: give customers exactly what's promised.
When you go to a fast food restaurant, you want quick service and competent service. At a casual restaurant, you want fair prices, good food, consistent quality, and a clean facility. When you visit a prime steakhouse, you pay top dollar and want an incredible meal, a great experience, impeccable service, served in a fabulous environment, by the best waiters in town. It's easy to figure out what you want when you are the customer.
At Wal-mart, customers want the lowest prices but don't expect the best service. When you use Fed-Ex to deliver a package, you expect to pay more and demand the best service. When you go to Nordstrom to buy a sport coat, you expect to pay a fair price and get great help from competent employees who'll give you smart advice to make you look the best possible. When you buy Mercedes or BMW, you expect perfect quality and don't mind paying more for it.
Now think about your business. Put yourself in your customer's place. As a customer of your business, what would you want and expect?
Excellent Good Average Poor
Are you providing what your customers want? Where can you improve? Customers will pay you based on the service they get. If you treat them poorly, they ask for lower prices. If you are average, you get the going rate for your work. If you provide excellent service and quality, you can demand top dollar.
Put Your Money Where Your Mouth Is!
In your business, which is most important to giving customers what they want?
- Meet or Exceed Customer Expectations?
Most business owners and managers say their goal is to exceed customer expectations. When is the last time your expectations were exceeded by a company you use? Less than 5% of companies ever exceed their customer's expectations. In fact, less than 25% actually meet their customer's expectations on a regular basis. My premise to succeed in business is simple. Do what you say you'll do. Period! No questions! If you just do what you promise, you'll be in the top 5 to 25% of all companies you compete with and be able to charge top dollar for it.
At the heart of building a successful business is the concept of "INTEGRITY". Integrity is doing what you say you'll do. If you commit to deliver on a certain date, that's expected without excuses. If you tell your customer you'll be there on a certain day, you'll be there without exceptions. If you promise you can handle a bigger job than normal, you'd better figure out how to make it happen even if you don't have enough money to hire extra people. If your contract calls for certain things you don't usually do, do them without question. If you have to work overtime to keep your commitments, do it.
Are you living a lie?
Do you understand the basic meaning of integrity? Most business think they have integrity but their actions speak louder than words. They often make too many promises and do what's best for themselves instead of their customers and what they've committed to do. I call this the big lie. When you don't do what you say you'll do, you're living the big lie that less than promised is OK with your customers. Guess what? It's not OK. Excuses and circumstances don't give you a pass either. Plus your customers will remember your actions for a long time. And they will tell their friends about your lack of commitment to do what's right. And then guess what? When you don't have impeccable integrity, your customers will only give you the next job if you're low bidder by a lot.
Your Promise Is A Contract
Realize that your promise is a binding contract between what you say you'll do and your actual performance. When your promise matches your performance, you have integrity.
Consider everything you promise to do when you sign a lengthly contract. There is often more than meets the eye. Most written contracts have numerous clauses that require strict conformance. But many companies don't like to do everything required by the contract and try to skip things that seem unneccessary to them. I've had many arguments with subcontractors who don't want to follow the contract they signed. They think the normal industry practice or what we required on the last job is all that's required to complete their contractural requirements on this project. This good 'od boy attitude creates stress on our business relationship as one party is asking to do less than required and still get full pay for their work. This seems like a lack of integrity to me.
For example, our subcontract requires written prior approvals on extra work in order for subcontractors to get paid. Therefore, when subcontractors don't submit written requests for change orders before they perform the work, we have the right to reject the request. The subcontractor who didn't do what their contract required, then complains the general contractor is unfair. The problem is really not doing what one agreed to do.
When you tell the truth and do what you agree to do, whether verbal or written, your customer knows what to expect, all the time. When you sign contracts or make promises, and then change your commitment or attempt to alter the written agreement after the fact, your customer gets confused and upset with your integrity. These issues become evident when the promise and results differ. In other words, the customer didn't get what they were promised. For example:
Promise Made: Actual Results:
- Specified materials - Substitute materials to save money
- Full value - Requested change orders not justified
- Full warranty - Didn't send crew for service calls
- On-time copmpletion - Can't man job properly
- Full time supervision - Drove by twice a day
- Competent supervision - Foreman can't read plans
- Clean jobsite - Cleanup only at end of job
- Trained workers - No training program for workers
- Financially sound - Not enough capital for job size
- Technically competent - Doesn't use email for instant contact
- Team player - Damages others work without repairing
- Trustworthy - Shows up late to jobsite
- Professional - Doesn't follow contract
- Fair Pricing - Overcharges for changes or labor rates
Don't under promise & over deliver!
Just do what you promise! People don't want or expect you to do more or finish early. They just want what you told them you'll do. When you promise you'll finish on July 1st, you better finish on July 1st. And the word finish means finished! Finished doesn't mean you still have to come back to do final touches or little things to complete your work.
You create drop-dead deadlines by making promises and agreeing to do something. If you can't make it happen, don't agree to the deadline. Never tell people what they want to hear just to make them happy. Because when you don't make the date, you are now in the doghouse forever and won't be trusted again. When asked for a firm committment date, don't quickly say:
"We'll have it done by ..."
"I'll send it to you by ..."
"We can get started on ..."
"I'll think we'll get the materials by ."
"After the . finishes, then we can start."
"We can get the first part finished by ..."
"I'll try to have a crew there on ..."
Before you set deadlines, make sure you know the actual date or drop-dead date required by your customer to make them satisfied (not happy). If they don't trust you, based on your prior unkept promises, they'll ask for an earlier date than they really need to allow for days they anticipate you'll be late. Ask before you commit: "What's the latest date you really need this done to make your schedule?" After you hear their answer, give them a realistic date you can commit to and make without excuses.
Customers lose repect for your integrity when they don't trust you, are uncertain about your performance, don't know what's happening, the dates slip without an honest or pro-active explanation, or are not informed about changing conditions. Honesty is the only policy in every instance. The truth will always surface eventually. Customers respect and trust honesty about the news,. whether it's good or bad. Besides, if you can't be trusted with little truths, how can you ever be trusted with bigger things?
Years ago we were working for a construction manager who asked us to pad our construction budget and pay a few of his expenses from the extra money. I felt this was dishonest and not in the project developer's best interest. I was put into the middle of a tough situation. The construction manager was the person who approved our invoices, change order requests, and workmanship. But the developer was our ultimate customer. I decided to do what's right and tell the developer about the uncomfortable situation. He listened, thanked me for the information, and then asked us to meet with him and the construction manager to discuss the facts. In the meeting, the construction manager denied the claims and proceded to yell and scream obcenities at us. Guess what? The developer fired him and we finished the project. Ten years later we still build for this developer and the contruction manager is out of business selling used cars.
Give Customers What They Want
The moral of the story is to give customers exactly what they want: the truth! Does it cost more to find new customers over and over or keep the ones you have? When you stretch the truth, your customers are always looking for other providers as you make their lives miserable. New customers are harder to find than keeping the ones you have. All it takes is straight and pro-active communication. Communicate about what they expect and how you can deliver it. Do your customers want it faster, better or their way? What do they really want and need? What will make them satisfied with your performance? What problenms can you solve to make their job go better? How can you act like a partner versus a vendor?
Companies rated the highest on pro-active customer service keep customers 50% longer, have lower marketing and sales costs by 25 to 50%, make a higher return on sales by 5 to 10%, and make 5 to 15% more bottom-line profit. When asked, customers value reliability, responsiveness, and empathy higher than providing a good quality product or a lower price. Building projects for customers seems like it should be easy. Bid them, get contracts signed, and then build them per the plans and specifications. If you provide quality work, they'll hire you again and give lots of referrals. But the survey shows just doing work is not enough. You must give customer exactly what you have promised to perform, and then go and do it. In summary:
Be Reliable - Make sure your customer can count on you doing what you've promised, when you've promised it. No excuses. No commitments you can't keep. Don't assume providing the industry standards or how you've done it for other customers is enough. Consider each project a new opportunity to deliver as promised.
Be Responsive - Be available, accessible and respond promptly to customer requests. Keep customers constantly informed of everything happening on their project or account. When customers don't hear from you, they don't think you're getting ready to start work or working on their project. Be overly pro-active in your communications and call your customers every few days.
Be Empathic - Show customers you care about them, put them first and treat them special. Remember your customers are the only way you can build a profitable business. Treat each customer like they are worth at least ten times the contract amount. If you are doing a $50,000 job for someone, remember they can give you several more opportunities plus refer you to many potential customers. It all can add up to well over $500,000 of total work from one source.
Entrepreneur, best selling author, and professional speaker George Hedley helps business owners and contractors build businesses that work. He is the author of the "The Business Success Blueprint Series" available in 8-workbook & audio CD sets. Contact him to speak to your organization on his proven system to build profits, people, customers and wealth. Construction company owners are invited to attend his 2-day 'Profit-Builder Circle' boot camps. E-mail George at email@example.com to receive a free copy of his book "Everything Contractors Know About Making A Profit" or signup for his free monthly e-newsletter. Visit his website and on-line bookstore at www.hardhatpresentations.com.
3300 Irvine Avenue #135
Newport Beach, CA 92660
Phone (949) 852-2005
Fax (949) 852-3002
Email: firstname.lastname@example.org website: www.hardhatpresentations.com
George Hedley owns a $75 million construction and development company and
Hardhat Presentations. He speaks to companies on building profitable businesses,
leadership, and loyal customers. He holds 3-day in-depth "Profit-Builder
Circles" open to construction company owners in an interactive roundtable
format every 3 months. His "Profit-Builder System" includes proven
tools to always make a profit, build equity, create wealth, win profitable
jobs, motivate your people, and enjoy the benefits of owning a profitable company.