Are Loyal Customers a Top Priority?

by marika_gabriel | 12 September 2023 4:00 pm

[1]When asked or surveyed, more than 85 percent of construction business owners say their top priority and primary role should be to focus on generating, developing, and nurturing great customers. However, looking at their calendars, most never do what they say they should be or want to be doing. This poses the question: What is your top priority and are you focusing enough effort on accomplishing it?

When I was building our $50-million commercial general contracting business, we self-performed the concrete work and subcontracted the other trades to 30 different subcontractors on almost every project. We averaged building more than 50 projects of varying sizes per year. This workload required us to request and obtain more than 10,000 sub-contractor bids annually, which resulted in awarding around 1,500 subcontracts every year.

As I reflect back, I cannot recall a time when I received a thank-you note for the opportunity to submit a proposal or be awarded a contract. The only mail or email I seemed to get were invoices or request for change orders. I also remember only getting a handful of golfing or ball game invites in 35 years.

There is no business without customers. It still amazes me how many contractors treat their customers poorly and continuously complain about doing business with them. Customers are your only and biggest opportunity to grow, make money, win work, be awarded contracts, and build a better future.

Building strong customer relationships is not really prioritized by most contractors. As I work as a business coach and consultant with contractors, I often see their income statements. Generally, less or if any money is spent on maintaining customer relationships, marketing, or sales efforts. Most contractors also do not invest time or money cultivating and spending time with targeted customers. These efforts could improve their bid-hit win ratio, and help negotiate contracts, or get the last look. They also do not make forming favorable relationships with customers a priority and therefore have to bid many jobs to win low-priced work. Further, to generate new bid opportunities, new customers, and referrals, they hope and wait for their customers to call, requesting them to bid on projects.

The ultimate goal for contractors is to find customers who will only get proposals and bids from their company, will not shop their price, award them negotiated contracts, and give them work based on their trusted relationship. Loyal customers are those who trust you and want to give you contract after contract at your price. Making this happen takes a step-by-step action plan, process, and system. With so much competition, there are lots of general contractors and subcontractors for customers to choose from. Most of these choices include excellent contractors who offer great service, quality workmanship, professional supervision, safe worksites, on-time completion, and competitive prices. So why should customers only hire your company instead of getting lots of bids?

More customer time means more bottom-line. On the positive side, I have seen several successful contractors, who make developing and maintaining loyal customers a top priority. They implement proactive customer service programs, which are designed to create long-time loyal customers who hire and negotiate on a regular basis.

Get started on building trusted customer relationships. In the construction business, the biggest marketing strategy is creating trusted close relationships with loyal customers, highly desired potential customers, and referring parties. The action plan starts by selecting the customer targets you want to go after, and then converting them from one-time or past, to repeat, to loyal customers.

To get started, make a list of your top 20 best customers and/or targets you want to attack. Rank them in order of annual revenue and profit potential. Also, consider the ease of doing business with them, and the degree to which you want to work with them. Remember, your focus is developing and expanding your list of loyal customers, compared to repeat customers.

“Date” your loyal customers. Customer loyalty requires time and commitment. Think of when a person first starts dating; they get to know the other person and spend time talking and doing fun activities together. After the date, they call and talk for hours, send a note or flowers, and stay in touch on a regular basis. Treat your customer relationships similarly, because even building customer relationships take commitment, time, and constant contact.

Maintain a relationship calendar. How often should you see customers to build and maintain strong relationships? Think about your best friends. To maintain a close, loyal, trusting relationship with them, you spend quality time together at least once every month or two. Similarly, it takes strategy, dedication, time, and a plan to win targeted customers. You may have to win work from first-time customers via low prices or bids to start the relationship, or you may have already done work for them. As you get to know customers better, they will start to see the value in working with you. Just like dating, it will take frequent time together and staying in touch to build deeper trust, comradery, and friendship. If you commit to meeting and seeing two customers every week, you will see all your
top 20 targets every 10 weeks. If you do not have any relationship building activities with customers, all you can hope for is for them to remember you and put your company on their bid list for the next project.

Schedule your calendar for activities, appointments, meetings, meals, or events to spend time with your target customers on a regular basis.

The key is commitment. Draft an annual customer target activity calendar. Be sure to contact all customer contacts monthly to stay in touch and build stronger relationships. Face-to-face contacts can include meetings, events, meals, or fun activities. Other forms of contacts include phone calls, photos, postcards, birthday gifts, books, article reprints, or thank-you notes.

---

George Hedley, CPBC, is a certified professional construction BIZCOACH and top industry speaker. He helps contractors achieve their goals, increase profits, grow, get organized, develop accountable talent, improve field production, and get their companies to work. Hedley is the author of “Get Your Construction Business To Always Make A Profit!”—which is available on Amazon. He can be reached at GH@HardhatBizcoach.com.

Source URL: https://www.metalconstructionnews.com/articles/columns/are-loyal-customers-top-priority/

---