Valuable Tool We offer a discount to clients who are having a hard time making up their minds on product selections. If they finalize the list of products before contract, they receive a 1% discount. If by the pre-construction meeting they have made most of the decisions, they receive a half-point rebate.
It is a valuable tool for two types of clients: those who we feel will be slow or difficult and those who are on the fast track and want the project completed quickly. We come up with a schedule we can maintain, but the only way we feel comfortable doing that is by having all the product selections done early. Otherwise, these decisions, because they require inquiry or confirmation, slow down the process.
We're always looking for better ways to manage our jobs. Our expertise is getting people to do things. We are the conductors of an orchestra full of crews, trade contractors, suppliers, and clients. We sit and point to the right person at the right time — that is how we are successful in keeping jobs on time and on budget.
I am a big believer in incentives and the psychology behind them. I like the idea of people thinking they are getting something based on their performance versus having something taken away based on their lack of performance. It allows them to control their own destiny.
Also, even if we pay out $1,000 on a $100,000 job, it does not really cost us anything. The incentive saves our staff time on tracking down the client to choose and sign off on selections and also on writing change orders pursuant to these decisions.
Bill Owens, CGR, CAPS
Owens Construction Contracting Co.
Taking a Gamble
In my 25 years in business, I have not heard of offering incentives for product selections, nor do I think there is a need for it in the industry. Our clients are mostly dual-income families that lead busy lives. They come to us for a full-service remodel. As much as we'd like to be a one-stop shop, we do have to rely on salespeople at showrooms to help them make selections. However, even if clients are feeling overwhelmed, they are still motivated to get the products selected so the project can be completed.
We give clients a selection schedule at or before the pre-construction conference. At this time, we discuss the allowances, and I encourage the clients to take one full day to make selections. Most are pretty good at staying on schedule. Occasionally, we have a client who has a hard time making selections. I sometimes will call the showroom salesperson and ask them to nudge the client. For more difficult cases, I put the clients in touch with an interior designer. They pay this person directly, or I bill them for these services.
I don't think offering money would make a difference in getting these types of clients to make selections faster. I have pulled off a project if clients were not ready. That seems to get their attention. If they know we will pull off the job, it strikes a chord of urgency. I would rather penalize them than give them a monetary incentive. In my opinion, money is a gamble. Instead of offering a discount, I'd rather keep the money for something else — like cost overruns.
Marc C. Ridenour
Natural Breeze Remodeling
Big 50 1990