Is providing excellent customer service important in today’s competitive marketplace?
Winning more work seems to be everyone’s top priority today. Most construction business owners and managers use every waking moment trying to figure out how to lower their bids, reduce their costs, cut their overhead and trim their margins to get more work. Is this the only solution?
Several years ago, I got a call from Jim Didas, the CEO and co-owner of Range and Civil Construction, LLC (RACC) with their main construction office located near the rural town of Junction City, KS. He wanted to meet with me and his two business partners for a few days to update their business plan.
RACC is a heavy civil construction company specializing in military projects. As I got to know them better during our phone calls in preparation for the coaching and strategic planning retreat, I began to question their business strategy. Their company mission statement is:
“No Problems – Just Solutions!”
The mission of Range and Civil Construction, LLC is to provide unparalleled construction services with efficiency and effectiveness. RACC is committed to 100% customer satisfaction through a partnered approach with our dedicated management team, experienced employees, comprehensive safety program, quality control systems, schedule-driven commitment, and cutting-edge methodologies.
Their number one company key success factor is to “Please and satisfy our customers to obtain excellent evaluations, build with excellence, superior quality, safe projects, and meet project schedules and deadlines.”
This seemed like a contradictory business strategy in the public works marketplace where price is usually the deciding factor to win contracts and work. But as I probed deeper, I realized they had designed their business development strategy focused on securing projects and customers who value excellent customer service more than, or at least equal with, low price.
RACC started with a focus on the customer
The three co-workers had been thinking about going into business together for a long time and saved enough money to take the big plunge. They finally made the big decision and started RACC in early 2007. Together, they had many combined years in building all types of civil construction projects, earthwork, utilities, roads, retaining walls, pre-cast concrete, bunkers, and ranges for the Army Corp of Engineers and many other government entities. They decided Jim would be the company leader, Brian would handle the office administration and finances, and Duke would handle the field and equipment.
Once in business, their initial goals were to install a professional organization consisting of a supportive bank, a reactive bonding agent and a construction oriented accountant. That being accomplished, they needed to land their first contract. They tried to rely on their old contacts and customers but soon realized that they would have to find new customers and opportunities if they were going to make it on their own.
During their first year in business, they obtained bonding, got organized, invested in computers, developed systems and procedures, and bid over 20 pre-selected jobs within their target size and customer criteria until they landed their first contract in 2008. Their first few projects included performing earthwork and installing aggregates on a modular range, demolition work, and site-work and utilities on a military project.
RACC’s key to winning work today is based on choosing jobs where the customer’s selection criteria is not solely based on price. They seek customers who also value excellent work, construction performance, partnering through problems, a thorough understanding of the system, teamwork, a perfect safety record, and the ability to obtain top customer satisfaction ratings.
Their focus is primarily on military construction including MATOC (Multi Award Task Order Contract) projects, HUB (Historically Under-utilized Business) zone projects, IDIQ (Indefinite Delivery Indefinite Quantity) projects, 8A projects, and SED (Socially Economically Disadvantaged) projects. For more information of these types of opportunities, visit www.sba.gov.
When bidding projects, they always look for creative, innovative ways to implement their construction plan and satisfy the customer as their primary objectives. These strategies include improving the mandated schedule, offering value-added engineering ideas, providing a safe work environment, implementing productivity improvement, and providing quality control methods.
The estimating team also looks for ways to build the project faster, with the best possible solution and job specific equipment. When jobs can be built faster, it reduces their overhead costs and satisfies the customer.
For their first few projects, Duke and Jim supervised and ran the jobs and new employees themselves with a goal to develop a winning team focused on satisfying their customers. Over time, they hired experienced and qualified managers, field foreman, supervisors, engineers, surveyors, operators and laborers who had positive ‘get it done’ attitudes and wanted to strive for building with excellence.
To maximize their bonding capacity, they avoided the temptation to use their initial capital to purchase equipment. Instead, they made arrangements with equipment companies to lease them the exact equipment they needed to efficiently build each project.
Customer focus equals company growth
Their company mission and vision has paid off. Their company has grown from $0 to $16 million plus, and they have maintained a perfect safety record with zero lost time accidents. Their customer satisfaction ratings are almost 100% excellent. And now, other large prime and specialty contractors are approaching them about joint venturing projects together to expand their business. Excellent work and good news travels fast!
Building a business which provides excellent customer service takes a major commitment and large investment in systems, people, training, technology and innovation. To ensure RACC achieves the highest ratings from its customers, they go way beyond the normal call of duty most contractors follow. Some of their extraordinary standard operating procedures include:
- Daily safety meetings on every project
- Regular in-depth communications with their customers
- Full week of training every winter for all of their foreman and supervisors
- Mandatory 10-hour OSHA course for all new employees
- Annual 30-hour OSHA course for all foreman and supervisors
- Regularly scheduled ongoing task training for all field personnel
- Full time Quality Control manager on staff
- Ongoing technology training in software, equipment and GPS
- A full service surveying and engineering department
8 business building secrets from Jim Didas, CEO of RACC
1. Secrets to building a great company
I try to act like a Super Bowl winning coach and always remember that I run a business, not a project. We must continually focus on the eight traits of great companies. (For a copy of George Hedley’s ebook: ‘Must Do To Grow & Profit’ email firstname.lastname@example.org). I also try to hire right and believe in our people.
Let go and delegate. I often use the command: “Manage it!” when people ask me to solve their problems for them. And of course, please the customer!
2. Secrets to working with three owners
The best thing is being able to break up our company management into three distinct categories: administration and finances; equipment management; and estimating and production. This way we can all focus on attention to detail and the ability to trust things are being taken care of. If in doubt, we attempt to have fun with it!
3. Secrets to building a great team
- Hire up
- Explain the mission
- Provide clear goals for customer satisfaction, safety, quality and budget
- Ongoing training
- Manage the process
4. Secrets to doing quality work
Focus on the details, explain and train expectations.
5. Secrets to keep your perfect safety record
- Mandatory daily safety meetings on every job
- Weekly tactical meetings on every job
- Provide regular safety training sessions
- Discuss potential hazards at the beginning of every task
- Create a safety culture by embracing quick hazard recognition and corrections
6. Secrets to making money in the type of construction you do
Focus on the details, communicate production expectations, execute work superbly but quickly, please the client, and beat the estimates.
7. Keys to sustained growth
We hold a two-day strategic planning retreat every year and update it every six months to stay on track. Knowing what future projects are being funded to keep the pipeline full. Focus on bonding growth.
8. Any other tips for other contractors to succeed
- Management — Focus on execution; that’s where the money is made.
- Field — Focus on execution; that is where the money is made.
- Production — Do it right once!
- Scheduling — Tie the construction schedule directly to the budget durations.
Financial — Secure enough operating capital to support growth and bonding.
- Equipment — Rent unless utilization provides an equity position.
- Estimating — Create a thorough scope, and then price the scope.
Focusing on a single strategic objective and seeking customers who fit within your company mission guarantees success. By not wavering in their top priority to satisfy customers, RACC has been able to grow their top-line revenue and bottom-line profits. They have built a long list of happy customers who trust they will do an excellent job.
They have also been able to build a strong team of experienced management and productive field employees dedicated to a respected fulfilling mission. Are you willing to get focused on providing the best customer service possible? Try it! It might also work for your company!
George Hedley CSP CPBC is a professional construction BIZCOACH and popular industry speaker. He helps contractors grow, make more profit, build management teams, and get their businesses to work for them. He is the best-selling author of “Get Your Construction Business To Always Make A Profit!” available on Amazon.com. E-mail GH@HardhatPresentations.como sign-up for his free e-newsletter, start a BIZCOACH program, attend a 2 day BIZ-BUILDER Boot Camp, get a 33% discount at www.HardhatBIZSCHOOL.com online university for contractors, or visit www.HardhatPresentations.com for more information.