The Key to Sustainable Profit

Statistics indicate that only 33% of all contractors actually make a profit every year. Yet profitability is essential to a business. Most businesses concentrate on building sales but, it is not how much you make every year but how much you keep after overhead, job costs, staff and a fair salary for the owner. If you want to sustain profit and establish a competitive advantage build a strong customer service program in your organization. Building strong relationships, generating referral opportunities; and developing loyal repeat business will result in selling more business that can generate higher profits for your company. The advantage of using a strong customer service program to build profits is that the tactics you employ aren't expensive or elaborate, but they do have to be consistent and genuine.

The fact is most customers are struggling with the same disappointment: too many companies promising service excellence and not delivering. Think about the last time you had a negative buying experience. Did an e-commerce site fail to respond to your e-mail query? Or maybe a sales associate at your neighborhood computer store didn't know the difference between a floppy drive and a hard drive. Perhaps you were left on hold for an inordinate amount of time when you called a company's toll-free line.

Negative buying experiences are almost always linked to poor customer service and these days it's rare to find good customer service, even though most businesses claim that they put people first. Good customer service is essential for all businesses, and it is especially important for companies who sell durable goods to companies who secure most of their business via bid. Why? Because margins are tight.

Here are six simple ways you can build a customer service program and build profit at the same time.

  1. Model your expectations. Vital to modeling your expectations is making sure your words and actions are one in the same. Allocate a budget, develop a long term plan and follow up on the results. Show everyone in your company that customer service is a really important thing to do, that it's worth your time and that you hold yourself and them accountable. You have to walk the talk for it to take hold in your company.
  2. Give your people the tools to build customer service. It's not good enough to talk about the company's customer service program; you must give your people the right tools through training. Training at all levels of the company - managers, project managers, sales people, drivers and crews. Market your customer care program across departments including accounting, operations and the front office. Remember, customers don't want systems that require them to take accountability for a problem or service, or employees who are bound by the system and allowed no initiative. Training empowers people to make the right decisions for your company.
  3. Monitor your customer service program. Help each member of your team know exactly what their responsibility is. When working with a general contractor, use precise schedules with milestones and deadlines. For the project manager, use exact goals for job cost and profit. For the project administrator, use monthly deadlines for invoices and shop drawing approvals. For the supervisor and crews, use quality and safety milestones that can be tracked and scored. For subcontractors, use mandatory requirements such as job meetings, inspections, notices and documentation. These actions ensure a service that drives profit.
  4. Don't leave customers hanging. Repairs, callbacks, mistakes and e-mails need to be handled with a sense of urgency. Customers want immediate resolution, and if you can give it to them, you'll probably win their repeat business. Research shows that 95 percent of dissatisfied customers will do business with a company again if their complaint is resolved on the spot. While training helps reduce errors and costly rework, mistakes happen. Take care of problems quickly and it will keep everyone's costs down.
  5. Brand your company. Branding your company in the minds of your customer means paying attention to their needs and ensuring their experience with your company helps them make money. Let's face it; the general contractor wants a subcontractor or supplier who is able to balance providing great service with exceptional quality while delivering a profit. Your customer service program will help you do that and keep you in the minds of your customers between and during projects. Make a list of your top customers and visit them in a relationship building setting at least every two or three months. These settings must be face to face and can include breakfast or lunch, trips to the ballgame, dinner meetings at local associations, golfing, fishing or hunting. Anything that gets you together in a relaxed setting where you can get to know each other. Find out how you can do a better job for them and give them better service. Build trust and confidence. Laugh, learn and grow closer. Send them business articles or books to help them overcome their problems. Give them advice on how to increase their business or improve productivity. Discuss how they can do a better job and make more money. The key is to show them you care about their future success in any way you can. Reinforce your vision and goals with them to build a strong picture of your company so you will be first of mind or at least on the short list when a job arises.
  6. Reinforce good service. Good customer care deserves to be recognized. Each manager should write a hand-written note of accolades for good deeds, good performance and exceeding customer care expectations. Publish good deeds in your company newsletter, via an e-mail blitz to employees, and post them on bulletin boards.

Customer service can be used to dissect and identify a trove of insights about what customers' value in business. Remember, customers are speaking to you when they buy. If your sales and profits are declining take a look at your customer service program. Yes, your bids, products and services must be priced right. They must be competitive. But, price is just the prerequisite for getting into the game. Where the possibility for real profit comes from is in how you meet the customers' needs.

Linda Hanson, CMC, is a certified management consultant and author of 10 Steps to Marketing Success. She writes, speaks and consults on marketing, management and customer service issues and can be contacted at www.llhenterprises.com. Sign up for her free newsletter The Superior Performance Report.

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