Five Ways to Stop Clients and Prospects from Stealing Your Time and Sucking Away Your Profits
By Jeffrey Scott
There are 5 main times in a possible new clients life, where they can steal away your time, and suck away your profits. This article touches on some of places this happens, and how to avoid it.
Visiting a bad lead.
The most important place where your time gets stolen away–or more rightly said, where you give it away–is going out to visit an unqualified prospect. Many contractors don’t realize just how much time they lose this way. The way to see this clearly is to measure how many sales appointments you end up closing. Old, established, slow growing firms, that work only on referrals, and don’t care how fast they grow: will have very high closing ratios. Younger new firms, that aggressively market, will have lower closing rates. If you sell big-ticket items, it is ok to have a lower closing ratio, but it is always (ALWAYS) better to have a higher ratio….because of the actual costs and opportunity cost. Actual costs show up in overhead, administration, gas, and windshield time. But “opportunity costs” are even larger; everything you could have been doing with your time…which includes visiting an existing customer and planting seeds for more certain add-on sales. There are many ways to qualify leads. How you use your website is the best way; but also, how you position yourself with prospects, what you speak about (and how you speak) over the phone, and what you send them in the mail as a follow up.
Following up on a mediocre lead.
Ah…..the proverbial “good lead”. Salespeople get mixed up in their signals, when they visit with a lead that has a “need” for their services, but isn’t’ sending strong buying signals. Salespeople also get sucked into following up with a prospect, and perhaps chasing a prospect, that isn’t ready to buy. Worse, salespeople will meet with a prospect, and gain a gut feeling that they aren’t qualified, but still promise to follow up anyhow. What does this follow up look like? Taking measurements, going back to office and working up an estimate, and creating a proposal, and sending it off or setting up an appointment to visit the client. That is lot of work, just to hear a definitive “no”. You would be better off qualifying your prospect during the first visit, before committing to spending more time creating a proposal. There are multiple ways to feel out a prospect face to face, including getting them to talk about price, or you talking about price if they don’t. One friend of mine uses a sure fire technique (I feel disinclined to spread his time-tested technique on the internet in this article, for all his competitors to read, but you can call me and I will be happy to share: 203 943-3991). As the old expression goes, fool me once, shame on you; fool me twice shame on me. Don’t get fooled by a bad lead after you have met them in person–make sure you ask them enough questions, to uncover their needs, to discover if you are truly the right fit for them.
During the job.
Clients can make you jump through hoops during a job, unless you have a structured process for you and them to follow. Lets pick a design-build example. When you have a meeting with a client, often expectations are created at the meeting, on things you will do, and on things the client will do. A quick email outlining your promises, and their promises, goes a long way to keeping a project on track. This is something I would advise doing weekly for a multi week project. Clients can also steal your time by coming out on a job while the work is being done, and distracting your workers–even a short job. As more people work from home this is increasingly a problem. You can address this upfront in terms of how homeowners should (and should not) communicate with you and your workforce.
At the end of the job.
I have seen many jobs go south at the end of the job. Either the contractor doesn’t wrap up the job strong and quick enough, or the client finds reasons to extend the punch list. If you don’t move quickly to close out a job, they will run on and on and take on a life of their own. Getting things in writing, and focusing on getting them done, is important. As one contractor once told me — we put 100% of our energies into the last 5% of the job. Why do so many contractors do a poor job at the end of the job? Why do they end up hurting their own time management? and perhaps their chances of referrals? and perhaps ruin their ability to upsell the client? I think it is because they haven’t measured or quantified the loss. What gets measured, gets managed. What gets discussed, gets managed. What gets written down, gets managed. Have a process in place for doing one of these three things, and you will go a long way to solving this problem.
Not paying on time.
The final time bandit that steals time and profits is collections. Like Steven Covey said (in his book: The 7 Habits of Highly Effective People) “Start with the end in mind”. This applies to collections perfectly; because this problem is solved way up front at the beginning of the relationships. It starts by how you set expectations with your client, how disciplined you are to collecting your first bill, and how much slack you give your clients. If you are disciplined upfront and have a good payment history from your client, then you can use slow payment as an indicator of dissatisfaction. I.e. when a good paying customer slows down his payments, he is saying: I am not happy with something. The key is to be very disciplined, so that you can uncover their unhappiness as soon as it happens, so you can solve it and get your final payment quickly and keep them happy. If you find that your clients are still not paying…don’t waste your time by reacting to them.
Instead, have a process in place that ‘raises the bar’ on the client. One that slowly but steadily increases the pressure on them to pay. Many things in business can be systematized, and this is one of them. But, before you focus on all of this, evaluate how you set expectations regarding payments, and how you enforce them.
Jeffrey Scott is a business coach, consultant and author, and is known as the “marketing guru to the green industry.” He is co-owner of Glen Gate Pool & Property, where he grew the company to $10millon, increased client retention up to 98% and increased referral sales by 2000%!! For a FREE REPORT on “The 10 secrets to developing relationships that will propel your sales and referrals” e-mail him at Jeff@JeffreyScott.biz.