Editor’s Note: This is the eighth in our 2008 series of “Get Your Business to Work,” written by our regular columnist George Hedley.
For the past thirty-five 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 one 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, customers are the No. 1 ingredient to building a profitable business.
You keep customers by giving them what you promised and committed to deliver. 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---just give them exactly what you promised.
When you go to a fast food restaurant, you want quick, 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 and 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 FedEx 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 a 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. What would you want and expect as the customer?
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. But 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 in giving customers what they want---to 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 percent of companies ever exceed their customers' expectations. In fact, less than 25 percent actually meet their customers' 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 percent of all companies you compete with and be able to charge top dollar for it.
The concept of "integrity" is at the heart of building a successful business. 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 businesses 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 for their customers and don't keep their commitments. 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 the 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. You have integrity when your promise matches your performance.
Consider everything you promise when you sign a lengthy contract. There is often more to do 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 was required on the last job is all that's required to complete their contractural requirements on this project. This good ol' boy attitude creates stress on the business relationship as one party is asking to do less than required and still get full pay for their work. To me, this shows a lack of integrity.
For example, our subcontract requires prior written 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 will then complain that the general contractor is unfair. The problem is that the subcontractor didn't follow the agreement.
When you tell the truth and do what you agree to do, whether verbally or in writing, 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.
|Promise Made:||Actual Results:|
|Specified materials||Substitute materials to save money|
|Full value||Requested change orders no justified|
|Full warranty||Didn't send crew for service calls|
|On-time completion||Can't man the job properly|
|Full-time supervision||Drove by only 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 e-mail 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 and 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 1, you better finish on July 1. And the word "finish" means finished! Finished doesn't mean you still have final touches or other 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. When you don't make the date, you will be 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.
- Be Reliable-Make sure your customer can count on you to do what you've promised, when you've promised it. Don't make excuses or 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 working on their project. Be overly pro-active in your communications, and call your customers every few days.
- Be Empathetic-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 he or she is 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 all from one source.
Customers lose repect for you when they can't trust you, are uncertain about your performance, don't know what's happening, can see the dates slip without an honest or proactive explanation or are uninformed about changing conditions. Honesty is the only policy in every instance. The truth will always surface eventually. Customers respect and trust honesty---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 did work 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 in 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 the right thing and told the developer about the uncomfortable situation. He listened, thanked me for the information and asked us to meet with him and the construction manager to discuss the facts. In the meeting, the construction manager denied the claims and proceeded 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 construction 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 proactive 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 problems can you solve to make their job better? How can you act like a partner rather than a vendor?
Promise + Performance = Integrity
Companies rated the highest on proactive customer service keep customers 50 percent longer, have lower marketing and sales costs by 25 to 50 percent, make a higher return on sales by 5 to 10 percent and make 5 to 15 percent more bottom-line profit. When asked, customers place higher value on reliability, responsiveness and empathy than a good quality product or 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 the work is not enough. You must give customers exactly what you have promised to perform.
Construction Business Owner, August 2008