Do Any Of Us Care About Truly Satisfying Our Customers?

DavidC

You may be alluding to the use of the capacity based markup as promoted by Jerrald Hayes, where all of your OH and a portion of your profit is placed on your labor rate. That's the method that we are using and I have found it easier to recoup OH accurately. But you still need to markup materials to meet your profit goals.

When we switched from the volume based markup, taught in Michael Stone's book, our labor rate skyrocketed but the bottom line to the customer was about the same. The difference to us is we can go into a labor intense job with little or no materials and still recover our OH gracefully.

On the other hand a material rich job with little labor could rob you of some deserved profit. We still markup materials to assure our profit. Selling at cost is a loss.

Good Luck
Dave

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www.CookContractingLLC.com

outlaw

If you are meeting your profit goals than in it is fine. However, When reading some of your other post, you seem to be critical of others that do.

I have an hourly goal. I meet this by marking up the whole job (labor and materials). However, with the recent price increases of materails, I can lower my gross profit and still meet my hourly goals.

tbonustomus

I personally feel that customer satisfaction is the most important service you can offer. Your gut feeling with that client on your initial meeting is crucial. Breaking the ice and them letting down their walls to begin trusting you is crucial. Once you've earned their trust the last thing you do is betray it. This is what gives our industry a bad reputation. I've been in the construction industry most of my life from underground utlity work to ground up construction. Some industries i've been in I've failed due to customer service and quality; however, when you deal directly to the consumer, I.E. home owner then your number one priority is taking care of your client and making them a raving fan. The difference between a happy customer and a raving fan is this....
A happy customer will be a referal for you if somebody calls them, they may even offer up your information if a friend or colleague asks them if they know anybody who does the type of work you offer.
A raving fan is one who goes to work or talks to their family about what an incredible experience their project has been. Great communication, timely, on budget, great attitudes, etc..

This is a proven fact and i've lived it. I spend around $25,000 per year on advertising the last two years to literaly receive nothing in return. My firm is 95% referrals and that is totally dependent on creating "RAVING FANS".

duckdown

There are way too many butchers in our profession who run from job to job without regard as to whether they can do it to perfection. I have turned down jobs that were profitable and from good customers only because I didn't think I could do top notch work.

Mike(VA)

Did I miss something here? The OP in the link wasn't an HO, he owned a theater. What he was asking for was for a commercial application and I can understand him looking for, and wanting, it done the right way since it either had something to do with fire code or sound dampening.

Agreed that if this was a HO, it would be a PITA. HOWEVER, I would rather have a HO trying to educate himself on what is to be done rather than just letting it happen. If an HO brought something similar to me but my experience said he didn't need all of it to get a good install, I would feel more comfortable explaining why since it is apparent that he has some idea of the process. The more educated HO's we have out there, the better for all of us who try to do it right.

There are limits to satisfying a customer, but each of us have to determine just what that limit is.

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I EXPECT THAT SOMEDAY I WILL SEE THE FRUITS OF MY LABOR. IS IT SOMEDAY YET?
Clifton, Great Falls, McLean, Fairfax Station, Manassas, Virginia Renovation Contractor

duckdown

Yes, if we were to educate our customers as to what great work looks like, then it would eliminate the bottom half of contractors out there which would cause those who actually are quality to get much higher rates even in a down market...

VMFehr

I can honestly say I go into every job with client satisfaction as my key goal. It seems a lot of contractors don't understand that bad news travels further and faster then good, how many times have you had a conversation with someone and they've focused on the bad experiences they've had over the good. I think the number one mistake most people make when they put a reno out for bid is taking the cheapest bidder, I recently followed up a bathroom reno where the guy who got the bid was 4000$ dollars under the nearest bidder. The home owner jumped all over it and the experience was awful, the biggest sign that this "professional" had no clue what he was doing was that the room was boarded, mudded and taped yet he'd never had a plumbing or electrical rough in done. In my expierence lowest bid doesn't have a real idea of the full scope of work and highest bidder doesn't really want the job.