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What is great customer service? Maybe a more critical
question to contractors should ask is, “Can contractors afford to deliver great
customer service in the highly competitive construction marketplace?” Not only
is the answer to the second question, “Absolutely!” but great customer service
is mandatory if the contractor wants to maximize its financial return.
The first phase of any project is defining it. Therefore,
the first step to delivering great customer service is defining that. Simply
stated, great customer service is exceeding the client’s expectations in all
areas of contact. The former CEO of Scandinavian Airlines, Jan Carlzon, explained
in his book, Moments of Truth: New Strategies for Today’s
Customer-Driven Economy, every contact with a customer creates a moment
of truth where you either meet the customer’s expectations or you don’t.
For those in the construction industry, this may be
difficult to accept because of the adversarial environment within the industry.
However, it offers contractors a great opportunity to differentiate themselves
from their competition. While the opportunities are greater in negotiated work,
there are still significant opportunities for improved customer service in
the highly competitive design-bid-build marketplace.
Rewards for Great Customer Service
Here is an example of a success story: A Delaware road
builder bid on a road project and was successful in being awarded the contract.
Unfortunately, the excitement quickly waned when the contractor realized it
had underbid the project. To save the day, the company president directed his
people to meet with the city officials and attempt to work with them in any
way possible to speed up the project so they could earn the early-completion
bonus and survive. The contractor’s efforts paid off handsomely.
Not only did the contractor complete the project early
and earn the bonus, he actually made a profit before the bonus, despite the
low bid. The bonus turned the project into a great financial success, but the
best news was yet to come. Other cities began calling his company to have them
design-build their next road in order to take advantage of their aggressive
schedule. This is a perfect example of a contractor in the competitive bid
market having been rewarded for providing great customer service. True, this
customer service was driven by the contractor’s desperation, but it still shows
it works.
The bonus and additional work are obvious benefits,
but the reality is that an adversarial environment wastes time and increases
costs. Therefore, when the contractor works to minimize the adversarial impact,
both the contractor and the owner benefit. While there may not be immediate
returns because some owners may still be skeptical and maintain barriers to
efficiency, a continued adversarial approach by contractors will definitely
not improve the situation.
The benefits of increased customer service in negotiated
work are virtually limitless. For example, a contractor approached all of his
clients and asked if there were any other services they could perform. The
contractor’s clients developed a long list of additional services. The contractor
examined the list and said, “We can do all those things, but we will need to
charge an additional 1 percent fee.” The clients responded, “Fine.”
This contractor, who makes $20 million a year, added
1 percent, or $200,000, in fees to its projects, yet the cost to provide those
services was only $18,000. The contractor realized a 1,000 percent profit on
this additional work, while making his clients happy. Offering greater customer
service created a win-win situation.
How Do You Deliver Great Customer Service?
Great customer service starts with improved communication
and collaboration with the client. For many contractors, this requires a shift
in thinking. I prefers to use the word client instead of customer because client
conveys the meaning of a relationship rather than a simple transaction. In
fact, one definition of client is, “someone under the protection of.” Therefore,
it’s the contractor’s role to protect the client. Often the No. 1 person the
contractor must protect the client from is the client.
The process starts with an open dialogue. The contractor
must use its expertise to help the client obtain the best value, and this starts
by first understanding what the client wants and needs, in other words, defining
the project. Unfortunately, this is often where a train wreck occurs. On projects
other than design-build jobs, the typical contractor believes it’s the architect’s
or engineer’s responsibility to define what needs to be done.
From a legal point of view, this may be correct; however,
it’s a poor business approach. The contractor is often held responsible in
the owner’s mind when something goes wrong or is unsatisfactory. While the
contractor may win in a court of law, the contractor certainly loses in the
court of public opinion. It doesn’t matter that it’s not fair. Instead, contractors
must be proactive in providing services the client wants.
Even when architects and engineers do their jobs well,
they usually focus on only the bricks and mortar of the project. But true customer
service goes beyond that. It includes services and the relationship. Some services
are identified within the specs, such as schedule, cleanup and how to submit
pay requests or change orders, while others are not. For example, in a speculative
office building, the owner may need to show the building to a prospective renter;
therefore, having the contractor providing a clean gravel walkway into the
building might be a service that wasn’t specified but would definitely be appreciated.
However, the greatest customer service is simply to
make the entire process user- friendly. In other words, make the process pleasant
for the client. The contractor actually builds a sound relationship with the
client this way—this is more important than most people think. Have you ever
nailed a project—you finished on time, on budget and with outstanding quality—yet
the owner wasn’t happy? The sound relationship was missing. There were probably
annoyances for the owner that the contractor thought were insignificant.
To understand why relationships in construction are
so important, consider the following. In most cases, the client is not qualified
to evaluate the contractor on its technical performance. Therefore, when someone
asks the owner about the contractor, the referral is based not on technical
competence, but on whether the owner likes or dislikes the contractor. Again,
this may not seem to be fair, but it’s reality. On the other hand, maybe it
is fair. In most situations, qualified contractors perform the technical work
within a fairly narrow range. Therefore, why isn’t it in the owner’s best interest
to select the contractor with whom it is easiest to work? After all, they have
other things they would rather be doing than dealing with the contractor.
The design-bid-build contractors might argue that this
is nonsense because all the owner cares about is low price. While public entities
may have to select the contractor based on low price, I guarantee they have
concerns other than just price. Even bureaucrats don’t want to come to work
and fight with the contractor every day. Therefore, if you learn to work with
them and make their lives easier, they often reciprocate by making your life
easier, which results in a cost savings similar to the Delaware road contractor
mentioned earlier. Also, many public entities have private corporate executives
sitting on their boards. If these executives believe your company is a quality
contractor that is easy to work with, they just might give you a call to work
on their private projects.
There is no magic bullet. Each client must be treated
differently. The only way to learn what they expect is to communicate with
them. The contractor is the expert; therefore, the contractor must use its
expertise to extract the needs of the client and offer solutions that add greatest
value. Some of their requests may cost nothing. For example, it doesn’t cost
anything to avoid confrontation. Free services should always be provided without
hesitation. When requests add costs to the project, the contractor can always
ask the owner if he is willing pay extra. You never know; he may say yes.
In the end, great customer service is simply the result
of excellent communication and collaboration between the contractor and the
client. Learn to listen to your clients’ needs and concerns. Each client is
unique. Maybe the best way to start the process is to ask the client the following
question when you meet her for the first time: “What are your concerns about
this project?” That question will get you off on the right foot.
I know a contractor who asked that question when he
met with the client after making the project’s short list. The owner spent
the entire interview discussing his issues. Not once did the owner mention
the contractor’s bid or price. Despite being the high bidder, this contractor
received the contract. Why? He simply started building the relationship before
the project started.
Go forth and build your business by serving your clients.
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