Jeff Petrucci was up on a roof with a homeowner and the homeowner wasn't happy. Shingles were blowing off. The homeowner said he'd been up there before and knew why that was happening. The shingles were nailed too high.
“He was right, and he wanted to know what we were going to do about it,” says the owner of Bloomfield Construction, a company in Bloomfield Hills, Mich., specializing in residential exteriors. “I said, ‘The only way to solve the problem is to take them all off and redo it.' I could see from his face what he was thinking: Which problem solver TV show am I going to have to call to get him to do this?”
Instead Petrucci said, “I'm going to replace it and it's not going to cost you a dime.”
Last year, Petrucci estimates, his company spent about $10,000 responding to customer service calls in some form. That $10,000 compares to the roughly $30,000 that the owner shelled out on Yellow Pages ads during the first years of his business. Today, after 12 years in operation, his reputation as a responsible roofer brings in far more jobs — profitable, high-end jobs — than any ad he could buy. In 2006, he'll spend a mere $500 on Yellow Pages advertising, simply to get listed.
Overall Marketing Strategy Servicing past customers, and providing the assurance of service to future customers, is a strategic business decision. It's based on a plan for business longevity and long-term growth, as well as new customer acquisition and enhanced profit margins. That's what executives at Bradford Roof Management in Billings, Mont., found out 10 years ago, when a commitment to service enabled the company to bypass ruthless competitive bidding on commercial jobs and instead focus on the commercial customers who wanted and needed service.
President Dane Bradford points out that analysis revealed the only jobs the company made money on were those that didn't involve an architect, a general contractor, a bid bond, or public money. The profitable jobs “were negotiated directly with the customer, primarily re-roofing jobs,” he recalls.
“It became clear to us that we needed to spend more time selling to our good customers. And it also became clear that these people needed more service than we were providing them,” he says.
Bradford established a separate service department focused on this class of business and changed pricing policy to concentrate on margins rather than volume. Almost overnight, the company's gross margins doubled, and today some 20% of Bradford Roof Management's volume is higher-margin service work.
Building Strong Relationships Today, many home improvement companies seek to reduce their marketing costs by building up previous customer and referral business. They'll find that difficult to accomplish without a strong service policy. The most important benefits of good service, many contractors say, are the strong customer relationships and referrals that come out of that. Good service for an existing customer reinforces his original decision to buy from you, notes Charles Gindele, owner of Dial One Windows in Santa Ana, Calif.
Perform service for a non-customer and you get a great start on a potentially profitable new relationship, Petrucci says. “For a $150 repair, I gain a customer and all their referrals, where the other guy lost them,” he says. In many cases, “we make more on the repair than [the original installer] did on the roof job, because in this economy, they're killing each other on price.”
