We live in culture of service that is driven by top-performing companies such as FedEx, Disney and Mercedes-Benz. These industry-standard companies have created an expectation among our customers that the quality of service should be exceptional and our ability to deliver unsurpassed.
Those are hard models to live up to, especially in a construction world where we are increasingly competing on price. The well-known rubric is that the customer has three choices: quality, speed or price. The customer can chose two, because no company can deliver all three. But customers seem to be asking for all three even so. If you’re dealing with homeowners, this is even truer.
Because business is tight, though, we tend to talk ourselves into the ability to deliver the best quality at the lowest price in the quickest manner. We want to close the sale so we tend to agree to any and all demands no matter whether they’re reasonable or not. And then, to get the customer to sign, we offer a greater discount if they’ll make the decision immediately.
This is the classic blunder of over promising and under delivering. We set ourselves up for failure from the beginning and the pressure to do it is even greater now. No company-no contracting company, design company, manufacturer, supplier or media company-can deliver quality, speed and price for their products or services.
The essential element of making sure you don’t over promise is to know your business so intimately that you understand the compromises you make. Too often, new contractors are uncertain about the actual costs of construction and, in order to land the job, undercut their price so much that they lose money on the project. I worked with a consultant once who advised contracting clients that if didn’t understand the burdened costs of their work and they offered deep discounts, they might as well stay home and watch soaps during the day because they would make a better living.
But I think there is a worse alternative for contractors than discounting below cost and that is taking the job and assuring the client you can deliver on requests you know you can’t. These tend to fall into two categories. First is the promise to deliver a project in a time frame that’s impossible. After all, certain stages of building just require a certain amount of time. You can make drywall mud dry faster, but you can’t make it dry instantly.
The second promise is to deliver a project with tolerances that are so tight they could only be achieved in a controlled environment using expensive technical equipment. Wall panels cannot be installed to the micron of tolerance. There are just too many variables.
That said, there are some companies who are better at the highest quality construction than others. They have all the elements in place to deliver, including highly trained crews, efficient supply chains, and clear specs and processes. They also differentiate themselves on those abilities so the promise at the front of the sale is a promise they can deliver.
Interestingly, there is still demand for this kind of ability, and the companies that are sophisticated enough to meet that demand tend to get better margins and better service from their suppliers. If you’re interested in pursuing this path, it begins with not over promising.