Back in January 2000, REMODELING set the benchmark for customer referrals at 95%. That number is reasonably easy for most honest, hard-working company owners to attain. Still, I'd like to be a fly on the wall when those referrals are made. Most would go something like this: "His company does beautiful work, but ..." I'll wager that the litany of qualifying statements that typically follows are almost all related not to the final product but to the management of its construction.
Most remodelers will take a referral any way they can get it. And it's the nature of the business that no matter how topsy-turvy the remodeling experience may have been, if everything looks good and works the way it's supposed to, homeowners will give you the benefit of the doubt. Unfortunately, that's what most of us measure (if we measure customer satisfaction at all). We look at lead sources, count the number that come from referrals, and leave it at that. Even follow-up surveys that ask homeowners to rank performance too often ask the wrong question or draw the wrong conclusions from the answers. If on a scale of 1 to 10 a customer ranks your company as a "9" to a question like "Overall satisfaction with our company," you're likely to take that as a resounding endorsement. As a fly on the wall, I think I'd get to hear about that missing one point.
Good craftsmanship still goes an awfully long way toward keeping customers happy, particularly as the process of remodeling fades from memory and day-to-day use of the product of remodeling becomes routine. But good craftsmanship is a given these days. The referrals every remodeler should strive for are those that come from clients who were surprised by how their project was managed. That means getting high marks for the following:
* How well you anticipated their needs
* How respectful you were of both their property and their daily routines
* How often you communicated with them about progress (and not just when there was an emergency)
* How quickly you fixed problems after the job was done
The complete list is a lot longer, and it's often different for different customers. Until you measure customer management, you can't really know what a referral means.
"The work is beautiful ..."
"... but it was way behind schedule." Sticking to the schedule is not something remodelers do well. With our superhero mindset, we tend toward the optimistic when it comes to deadlines. Be realistic when setting schedules, and when delays are inevitable, call the customer in advance to explain.
"... but it took forever to get done." Even when you stick to the schedule, any job longer than a week will seem longer. Tell them not only in days or weeks but also in "emotional time."
"... but there's dust everywhere." Customers learn to live with dust, but don't let that fool you into thinking they're OK with it. It's good marketing to keep your company in front of your customers, but not because two months after the job they're still finding grit on every horizontal surface.
"... but they still have to come back for a few things." Punch lists are to-do lists for tomorrow -- not next week. When you delay the last few details, you lose goodwill faster than at any other time during the project.
"... but we'll do things differently next time." If the customer who heard this referral calls your company, better hope your line is busy. Unless you have answers for whatever the "things" were, you could be in for a rough ride.
"... but it cost more than we thought it would." Most jobs increase in cost by 10% with change orders. Unless you prepare your clients for how and why this happens, you'll earn a high-price reputation you don't deserve.