TOM SWARTZ: When do you not take a project and why?
PAUL ELDRENKAMP: “To me, there are three main reasons not to take a job. One is if it’s clear there’s just going to be no way to reconcile the wish list and the budget. If the budget expectations are completely unrealistic, I can spend a little time helping them understand that; but I’m more than happy to let it go and let the fifth, or sixth, or seventh remodeler they talk to finally convince them the budget’s just off base. So the budget’s one reason. Another reason is if I just don’t think we’re the best company to do the job because of the type of work. But the most important reason for saying no to a job is if it’s clear that we’re not going to be able to be in charge—the client is just going to insist on being in charge, or if there’s an architect involved who’s going to want to be in charge. Most of our work is design-build, but we do some work with outside architects. I don’t want to sound like an arrogant dictator or anything, but my experience after 30 years is that the job stands the best chance of going really well if I’m the person in charge.”
BEN MOREY: “I’m on board, definitely, with Paul’s points. I think those are key. The thing I would add is if a client in the design-build portion of it is not willing to engage in the process that we have set up—we have been in business for about the same length of time, and we’ve come up with a way that works successfully for us, so we’re very process-oriented; and if I have a client who, as we walk through the steps of our process, is not interested in following or wants to jump out of the series of the things we do—and do it their way so to speak—that’s a very large red flag for me. The other thing that really comes into play is that as we educate people—because many times they’re not educated and you have to give them information on costing, timing, and how the process works—if they’ve already ‘found out everything they need to know,’ and really all they’re looking for is a cost from us, that’s not our client. The last thing that I would say is it’s really a trust basis of how we operate. There’s a relationship between us and the client. And if things pop up quickly that are integrity issues, whether the client stops trusting what we’re saying to them or, on the other side, they say things and then it turns out that’s not the way it is, that again is one of those real big red flags where we say, ‘We’re probably not the best company for you, and we’ll release you to fulfill your destiny with somebody else.’”
SWARTZ: What are the effective qualifying steps, questions, or processes you use to prevent taking a bad job?
ELDRENKAMP: “I think a fundamental one is being design-build because it means there are a lot of control freaks who won’t call us to begin with. So that helps. The ability at the first meeting to get dollars on the table I think is really important as well, if you do it in a way that doesn’t backfire down the road. When I have that initial meeting with the client, the approach I take is evaluating whether I should take the job or not. You’re not there to sell yourself as a company. You’re there to figure out if it’s a good fit and if you can be of service to that particular client. I think there’s a world of difference between those two attitudes.”
This month featuring:
Paul Eldrenkamp, Owner
Byggmeister, Inc., Newton, Mass.
Byggmeister, Inc., is a design/build remodeling firm founded in 1983. Eldrenkamp is also a principal of The DEAP Energy Group, an energy consulting firm that specializes Passive House, Zero-Net Energy, and Deep Energy Retrofits.
Ben Morey, Founder and President
Morey Construction, Signal Hill, Calif.
Morey Construction, Inc., is a design/build remodeling company founded in 1982. Morey is CGR, CAPS, and CGP certified. He is also an accredited instructor for the NAHB on Design/Build, and Business Management.
MOREY: “If you’re talking to a client, you’ve given them some third-party information when it comes to costing, and you have a feel for what this is as a typical project to you and what the cost should be, and they’re strictly having you at their doorstep to just get you to quote them a price, it’s important to know budget; but it’s also important to know the deeper questions of what’s the motivator and what’s the reason to do this now. And if they’re real standoffish to give you any kind of information in that area, then that again to me is one of those signs that says, ‘This is not our right kind of client.’”
SWARTZ: What’s the best way to identify a customer who simply does not look or feel like a fit for your company?
MOREY: “One of the questions that we ask when a potential client calls our office is, ‘Do you have a budget set aside for this particular project?’ The first time out, we’re going to talk about it. We basically say, ‘Do you have 30 minutes to talk to us at this time, or is it better for us to call you back and set up another appointment time to do that?’ Because we want to have that conversation before we actually ever stand on their front doorstep. The reason for that is it gives us a lot of insight into both project type and if there is any homework that they’ve already done to determine some type of budget number. With the online capabilities now, and enough information that’s out there, people can find that out pretty quickly if they’re willing to do the research. Again that kind of tells you a little bit about your client type. But you can also go out to the job and the description that’s given to you over the phone can be different than [reality]. Now you’re making some adjustments in your own thinking as well as trying to understand why the client would say, ‘Well it was just this part, now it’s the larger section,’ and believing that whatever they’ve told you budget-wise is now going to be the whole number for the large project. Then you have to do that kind of back-pedaling adjustment in your own mind first of all and say, ‘Wait a second, this project just grew substantially;’ and then if you can’t come to an understanding with the client of saying, ‘This is what you had told us on the phone, this is what you had talked about budget-wise, and now the project has grown and so this is a different ballpark than we were in before.’ From our experiences, if we don’t have those conversations—and we’ll send them some preliminary information before we hit their front door on the cost versus value charts that come out, so that at least there’s a little bit of understanding of what the costs are in the marketplace.”
ELDRENKAMP: “For me, the most reliable criteria is how they got our name. We’ve been around long enough that the vast majority of our work comes from word of mouth referrals, and that’s true even in the Internet age. We’re definitely getting more and more leads from Internet searches, but we try to position our website to make it clear about how we approach a job, so it does a pretty good job of screening people who are going to call. The goal of our marketing is not to maximize the number of people who call us, but to maximize the quality of the lead that comes into the office. It’s a pretty serious time commitment to handle a lead professionally, even if it’s a lead that you’ll never be able to work with. So I try to focus the marketing on bringing leads into the office that are predisposed to hire us. I don’t talk money over the phone partly because we’re only getting about four times as many leads as we expect to have in sales.”
SWARTZ: Do bad jobs also come from repeat customers?
ELDRENKAMP: “They absolutely come from repeat customers. I’ve got to be honest, there are people for whom we have worked for whom we’d just as soon not do a second job. That can be pretty delicate. Also, we’ve changed our focus over the years. Over the course of the recession, we looked long and hard at what sort of jobs we were good at and that we wanted to do. There are some jobs that we’ve done in the past that we just don’t want to do anymore. It’s tough to tell a past client, ‘No, we don’t want to do that for you,’ but fortunately I’ve got three former employees out in the marketplace who are doing a range of types of projects. So that gives me sort of an easy out. I can say, ‘We’re not equipped to do that, but there’s someone who used to work for us who’s just rock solid who would be a really good choice to work with you on that.’ So it gives me an elegant way to refer it.”
MOREY: “I would agree with Paul. There are certain clients whom you work for and you learned through the course of the project that to have a continued relationship is probably not going to be the best thing to move forward with. More than 60 percent of our business is with small business owners, so we work both sides of the street, both commercial and residential. We can get ourselves in a situation where the client says, ‘You’ve done this for me, and I understand that you work in the commercial side; I’d like to have you come take a look at my building and do some work there.’ Sometimes the scope of the project is beyond what we would want to tie ourselves into, or it’s such a specialized type thing that we will try to refer them to people who we know can handle the project. I am a firm believer in relationships with clients, so once we create that relationship, even if our project didn’t necessarily end up where we were on the best of terms, if they call up and ask about a referral or something, we’ll still do that.”
SWARTZ: How and when do you tell a customer that you aren’t going to do their project?
ELDRENKAMP: “I make it my baggage. I say, ‘I’m sorry, I don’t think this is a good fit for us. I don’t think we can do as good of a job for you on this particular project as a couple people I can think of off the top of my head.’ I just say, ‘We’re really focused on a certain kind of job.’ I don’t get too specific about it. My goal is by the end of the first meeting to have a ‘yes’ or a ‘no.’ It might be my ‘no,’ it might be their ‘no.’ Going into that meeting, I don’t want to drag it on. Everybody knows by the end of the first meeting whether there’s promise or not. If it’s a likely ‘yes,’ I’ll do one more meeting. I’ll bring in one of our architects just to complete the courtship. My rule is that there’s no third meeting without a signature on something—a contract or a check. I don’t always follow that rule, but 95 percent of the time I make that happen. That 5 percent of the time I usually regret having broken my own rule.”
MOREY: “I approach mentally very similar to Paul. My upfront statement to them is, ‘Let’s have a meeting based on the information you’ve shared, and we’ll see if we’re a good fit for you.’ That’s actually the verbiage that I try to use and have my design folks use if they’re talking to them directly before we actually meet. That leaves the door open for either side, if you will, to say, ‘This is not the best fit for us.’ The idea is from a personality standpoint as you interact with people. You could have one partner or spouse that you talk to on the phone and things seem really upfront; you really get a good feel for what they’re doing. And you go out and you talk to the folks, and as you’re talking, you realize that there is a real conflict between the two individuals you’re working with. That’s another red flag for me to say, ‘It may not be the best fit for us because there seems to be some indecision or discussion that needs to take place before you [two] move ahead.’”
SWARTZ: What advice would you give to a remodeler on how to look for and how to handle the possibility of not taking a project?
ELDRENKAMP: “I think a good place to start is figuring out what you do best. Write down the names of the last 20 or 30 jobs you did and cross out all the ones you didn’t make any money on or the ones where—I refer to it as the supermarket test—if you notice a particular client at the end of an aisle in the supermarket, would you run up to greet them or would you run over to the next aisle as quickly as you could? Cross out those people too. What you’re left with is a list of projects that you made money on and you did well on, on a number of fronts. Figure out what the commonalities are—what are the characteristics of those projects—and think long and hard about what it is about those jobs that made them successful for you. Say ‘yes’ to all those jobs. Say ‘yes’ only very cautiously or not at all to jobs that don’t match those characteristics.”
MOREY: “Paul’s checklist is exactly the same advice that I would give. Know what you do well. The thing I would add—and this has been a personal problem so I can speak from experience--be careful what you commit to. You are setting yourself up. This is a business that’s based upon trust. If you commit to something, and you don’t end up delivering—even in the very start—it’s only going to go south from there on out. Learn to check your tongue if you are a people pleaser so that you can say, ‘Let’s collect information before we commit to doing anything.’ That, for me, has been one of the best things that I’ve learned to do. At times you can get caught up in somebody whom you’re communicating things with, you really feel great, you go through the process, and all of the sudden you come back in and go, ‘I think we’ve committed to something we can’t perform.’ I’ve had to make those phone calls back to say, ‘We blew it. We said some things’—be very specific about what it is—‘that we can’t do.’ Know yourself and learn not to over-commit. Gather information, particularly in the first appointment. Share as little as you can but enough to show your expertise, and at least be able to intrigue the client that you can be the right company to solve their issues. You will have success and the bottom line will show that because you held in check your commitments.” PR