Have customers ever told you they don’t intend to pay you for your work? Maybe they never intended to pay or their expectations were beyond what you could achieve, or higher than even the best contractor could deliver. Or maybe your work was partly to blame—no one wants to pay for a disappointing experience. What do you do when faced with this situation? What should you do?
Here’s how two decorative concrete contractors, a small residential contractor and a much larger commercial contractor, work with their customers to ensure the best outcome.
element7concrete
Cory Hanneman, director of operations for element7concrete, Marble Falls, Texas, says though it’s a small company, it has installed more than 1000 projects to date, its focus being almost entirely residential. He remembers two situations when customers refused to pay. One was a high-end residential job and their contract was with a general contractor they had known for years. “The owner raised illegitimate complaints about our work and it became clear to everyone they never intended to pay. Our contractor thought the owner was trying to cheat us and being a righteous person, paid us out of his own pocket.” On another project the owner ordered a heavy broom finish on his work, despite warnings about aesthetic issues, and then decided he didn’t like what he ordered. “He finally gave me a check for $500 and we ate the rest of our $2300 contract.”
Hanneman thinks his company is in a risky position because most of its work involves chemical staining and diamond polishing—products associated with a wide range of variability. Using computer tablets and apps, element7concrete focuses on preparing its customers ahead of time, helping them understand what the outcomes could be.
The company directs customers to its website, asking them to go to the “What you need to know as an owner” page, where they are informed about variability issues. When the sales staff signs a contract with owners, they use an app called Sign-N-Send to review a list of items. The app allows people to use their finger to sign their name on a tablet, verifying they have read and understand the contract. The goal is to curb unachievable expectations and prepare customers for possible outcomes.
Hanneman says they try to identify and reject the few prospective clients who don’t intend to honor the contract. They look for erratic behavior, such as those who are obsessive about details or those who want their work to look like another material.
Element7concrete wants customers to feel from the start they are working with trusted professionals. Staff must look and act professional on the jobsite and its trucks must be well organized. Everyone in the company uses electronic checklist apps so that everything needed will appear on a jobsite. It helps their bottom line but also shows owners they are on top of all the details. High expectations go both ways.
Trademark Concrete Systems
Serving the Los Angeles area, Trademark Concrete Systems, with offices in Anaheim and Ventura, Calif., focuses on commercial decorative concrete. Only about 1% of its business comes from residential work, says company president Lance Boyer.
“It’s more difficult to collect money right now due to the times; collections often end in the 100-day age bracket,” Boyer says. “So it’s important there are no issues when a job is complete.” Trademark does a lot of repeat work with contractors it knows and trusts. That helps them manage expectations. Trademark is proactive with customers; preventing problems rather than encountering them. They don’t want customers to say, “Why didn’t you tell me this?” Boyer says managing customer expectations regarding crack control, though infrequent, can be one of those conflict areas, complicated because plans often specify improper joint spacing or layouts. So Trademark started a program to get CAD drawings for all its projects and superimpose shop-drawing layouts of properly laid out isolation and control joints, submitting them for approval. This solves many issues before a job starts.
Boyer says they construct mock-up panels for every project and initiate prejob meetings with all parties concerned to discuss details related to their part of the work. “We try to shine a light on everything that could go wrong, to improve the project and avoid conflicts at the end,” he says.
If an owner calls and says, “There is a problem with my job,” Boyer responds quickly by going to see them. The goal is to be proactive and not wait for angry customer calls. If any of the installed work is in question, it’s a lot less expensive to remove a section and replace it while the job is in progress and before a punch list is created. Owners feel better when they see a contractor imposing their own high standards. Trademark also addresses punch-list items quickly. It prefers a strong finish and doesn’t want to irritate owners at the end of a project.
Managing risk
Managing customer expectations is really about managing risk. In this economic downturn contractor profit margins are lower than they should be, increasing the risk of losing money on a job. There is less room for error on the jobsite and if customers decide to pay slowly or not at all, contractors can find themselves struggling to stay alive. There are high-tech and traditional ways to face this issue. However you manage your customer expectations, it’s best to be proactive.
