Most remodelers know intuitively that they'll have greater long-term success if they deliver outstanding service to their clients. New research based on 224 projects performed by 15 top remodeling companies confirms a direct correlation between client satisfaction and profitability. "Your reputation drives your margins," says Geoff Graham, president of Guild Quality, which surveys the clients of remodelers and homebuilders.

The survey, summarized on Graham's blog, analyzed financial information for 225 projects completed after January 1, 2006. The survey also asked the owners of these homes about their satisfaction in 13 areas, including whether they would recommend their remodeler. The remodelers surveyed, members of Guild Quality, have annual revenues ranging from $500,000 to more than $6 million, and are located in California, Connecticut, Delaware, Georgia, Illinois, Idaho, Massachusetts, Michigan, Minnesota, Missouri, and Virginia.

Using average job costs of $100,000, the gross profit variance was a whopping $13,000 between the study's "top performers" --those whose clients were most satisfied--and those with the least-satisfied clients. Explains Graham: "So if a top performer and a bottom performer both had total job costs of $100,000, the top performer was likely to have charged $167,000, while the bottom performer was likely to have charged $140,000. Gross profit margin on the former was 40%, and on the latter was 29%."

In other words, the more exceptional the client experience, the more you can charge.

Graham notes that Guild Quality members "are not typical remodelers. Nationally, the recommendation rate among remodelers is around 65%," he says. "Our remodelers had an average recommendation rate of 95%," and even his company's "lowest"-ranking performers had recommendation rates in the upper 80s.

There's a lot more to this survey. Visit Graham's blog and Web site for details. But take heart that all that good work you do -- the extra lengths to which you go to meet and exceed your clients' expectations -- does pay off. -- Leah Thayer