Many years ago I attended a seminar about characteristics of the remodeling client. The speaker said something that really caught my attention: “Approximately 18% of all homeowners will not allow you to make a profit.” I questioned this at first, so I started taking inventory of which of my jobs had been profitable and which had not. Although my percentages were slightly different, the general theory proved to be true.
There are many reasons why projects are unprofitable that have little to do with the construction process and everything to do with the client. Some clients are indecisive; others have unrealistic expectations; still others are not fair-minded. Working with these “wrong” clients not only hurts the bottom line, it also robs you of time, increases stress, and, ultimately, harms your overall reputation.
Finding this kind of proof with my own company's historical data inspired me to find reliable methods for flushing out the “right” client and for avoiding the “wrong” client. In many ways, learning when to say “no” is easy; the hard part is doing so gracefully.
Easing Out It's important to decline the project without making the homeowners feel abandoned. I find that it helps to respond to one of the three factors — cost, time, or quality — that drive most remodeling decisions. All three factors are usually present, but one typically dominates, and that's the one to address. For example, if a prospective client is driven by time, explain that your lead time exceeds their time frame, then refer them to a company that can quickly jump on their project. If the driver is cost, explain that your price exceeds their budget, then suggest a company that might allow them to supply some materials or provide some labor. Turning down a quality-driven client is hardest and the response often involves both cost and time. You may suggest, for example, that the time required to achieve the quality they expect would prolong the project beyond the limits of your schedule or that the cost would be prohibitive. Be sure to offer a reasonable alternative — a local artisan who works hourly, for example.
As you can see, there are several consistent themes:
Suggest alternatives. Abandoned clients will be angered.
Make sure the alternatives do not fit your process. Otherwise, you haven't closed the door on your company doing the work.
Focus on the project not on the homeowners. Raising personality issues will just complicate the situation.
Making The Point Analogies often help homeowners see the logic of the alternatives you suggest. To get your message across without offending anyone, you may have to rehearse more than one version. For example, to support alternatives related to scheduling, you might explain that there is no reason to reserve a table at a restaurant if the primary goal is to grab a quick meal on the run. Make the same point by explaining that not all restaurants have “theatre” menus to accommodate time-strapped diners. To support a cost- or a quality-based alternative, you might explain that it isn't necessary to use a Wall Street accounting firm to do a simple tax return. If that seems too belittling, you could explain that some people file a full 1040 tax return when a “short form” is all that's needed.
Obviously, the language and tone you use when declining a project are important. For example, instead of saying that your company “doesn't fit” their project, you could explain that they would be “better served by working with ABC Remodelers.” Or: “The scope of this project doesn't warrant a full-time project manager; unfortunately, we are not structured to work without one.”
If all else fails, get personal, but do so carefully. Say something like: “Successful remodeling projects are largely based on ‘chemistry.' I don't feel there's a good fit here, and we respectfully decline to provide a proposal. We'd be happy to assist you in the future.”
Many homeowners mistakenly believe it's their right to do business with anyone they choose, and most remodelers believe they “owe” any prospective client their services. But this business is a numbers game. Reduce the number of “wrong” clients you work with, and your profits will soar. Have the courage to say “no” to the wrong client. — Mark Richardson is president of Case Design/ Remodeling and Case Handyman Services, Bethesda, Md. 301.229.4600; email@example.com.