A Lesson in Customer Complaints

Nobody enjoys a dispute with a customer. However, no matter how diligent and conscientious you are, disputes will occasionally occur. While these situations can be stressful, they can also represent an opportunity to improve your business.

Several years ago, I had a three-month dispute with a customer. I will spare you all of the gory details, but a brief summary of the dispute is necessary.

In early July we began an exterior repaint. A few interior rooms were also included in the job. During the job, the customer added a number of small items–another small room, some baseboards, and similar items. The supervisor provided a price for each item verbally, and the customer agreed to the prices. Because this was occurring several times a day, the supervisor did not write a change order for each additional item. Instead, he planned to write one change order later in the job. When he did write the change order the customer refused to sign it, saying that he wanted to review it.

We were also going to install a new door, which the customer would supply. However, once we were on the job, the customer informed us that the door would not be available immediately.We agreed that we would complete the other work and return to install the door once it arrived. The crew completed the work and asked the customer to inspect the work so that they could take care of any touch up items. He refused. That evening he called our office and left a message that he had a few questions.

Over the next several days I left him multiple messages, but he did not return my calls. I finally emailed him and he informed me that he was on vacation and would return the following week.

Upon his return, he provided a short punch list. We returned to install the door and take care of the punch list items. When the crew finished, he again refused to inspect the work or make final payment. Two weeks later, he submitted a new punch list, twice the length of the first one.

Up to this point I had tolerated his delays and lack of communication. But the new punch list was unreasonable. His refusal to inspect the work while the crew was there– despite the terms of our contract–was creating scheduling problems. His refusal to pay–despite the terms of our contract–was an indication that he might be trying to stiff us.

Over the next several weeks we exchanged emails and phone calls in an attempt to resolve the matter. He demanded that we complete the items on his punch list before he would pay any more. At one point he suggested that we deduct $1,300 from his balance of $3,000 to call the deal even. This was absurd, and I told him so. Our last phone call ended with no resolution. I promptly contacted the Better Business Bureau and requested arbitration to resolve the matter. The BBB contacted the customer and three days later I received a check in the mail for the balance due.

There are a number of lessons to be learned from this experience.

The first, and most significant, lesson is the importance of following procedures. Procedures are useless if they are not followed. In this instance, having the customer sign for additional work before completing that work would have avoided some problems. While the failure to do so was understandable under the circumstances and certainly not the primary cause of the dispute, the dynamics of the situation would have been considerably different.

The second lesson is the importance of a good contract. For example, our contract calls for the customer to inspect the work at the time of substantial completion, and provides the customer with an additional 5 days to inform us of any uncompleted items. The customer abused this policy, refusing to inspect the work at the time of substantial completion (even though he worked at home) and then taking 2 weeks to inform us of uncompleted items. Further, our contract calls for binding arbitration in the event of a dispute. Not only does this prevent expensive litigation, when the customer implied that he would sue if I did not cave to his demands, I knew that his threats were meaningless.

Finally, this experience shows that BBB membership does not benefits. For the price of a few emails with the BBB I was able to resolve this dispute quickly. Apparently, the realization that an independent, third-party would rule on this dispute provided motivation for the customer to quit playing games.

For us, this experience provided a reminder that we have specific procedures for a purpose. It also reminded us that when those procedures are not followed, the results can be much different from what we want or intend.

Growing Pains

If you are like most contractors, you dream of growing your business. You may want to get out of the bucket and turn production over to others. You may want to hire a salesman or office manager. You may want to add another crew. Regardless of your own particular goals, growth can be a painful experience if it isn’t managed properly. And the key to properly managing growth is having systems.

Growth necessarily entails delegating tasks and responsibilities to others. If we want to get consistent, desirable results, then we must have systems in place to ensure that our employees are taking the proper actions.

When I first began delegating responsibilities, I often lamented the fact that my employees didn’t do things the way I wanted. It took me a surprisingly long time to realize why—I hadn’t trained them to do things the way I wanted. I assumed that they would somehow know. That erroneous assumption led to a lot of growing pains. Systems won’t eliminate all of the pains associated with growth, but systems will minimize those pains.

With systems in place, we have a process for handling the myriad issues that accompany growth.

For example, if we add another crew, we need to sell more jobs. And to sell more jobs, we need to generate more leads. When we sell more jobs, we have more customers to keep informed. We have more paperwork to keep organized. Without systems, we could easily find ourselves dealing with an endless stream of emergencies, jumping from issue to issue in an effort to put our the latest fire.

But with systems in place, we have a process for generating leads, for selling jobs, for communicating with customers. Fewer things fall between the cracks. We can be proactive and manage the company’s growth, rather than be reactive to the crisis du jour. And that is a lot less painful.

That Won’t Work

When I was younger, I was frequently dismayed when someone expressed extreme negativity towards some plan or idea I had advanced. “Nobody does it that way,” they would say. Or, “I’ve heard that nobody makes money doing that.”

A few years ago, I experienced this same type of negativity when I expressed an interest in rental real estate. I was quickly barraged with a litany of reasons why doing so is a bad idea. What was particularly interesting was that none of the people who provided this advice had ever invested in real estate. And the people who had invested in real estate gave me very different advice.

It is certainly possible to have accurate information about some activity without actually engaging in it. For example, I have never stuck a sharp stick in my eye, but I am certain that it would hurt. My conclusion is drawn from the knowledge that sticking myself with a sharp object always hurts.

I responded to this negativity by mentioning that, with the proper systems in place, real estate can be far less of a hassle than these individuals believe. They responded with another chorus of negativity–specifically, they attacked my belief that systems can overcome virtually any problem. And that brings me to my point.

In simple terms, a system is a specific way of acting. It is a recognition of cause and effect. If you act a certain way, you get certain results. If we identify the actions that will get us the desired results, then success is largely a matter of taking those actions. (I say “largely” because there are factors outside of our control that we must consider.) Systems are the means by which we identify and document the actions we should take.

In the context of real estate, this means following the steps of successful real estate investors. More broadly, this means following the steps of those who have experienced success in any realm, including paint contracting.

I certainly don’t mean to suggest that success is merely a matter of mindlessly following the dictates of someone else. We must always exercise our own independent judgment, and adapt our actions to our particular situation. But if we want to achieve success, we can save ourselves a lot of time, money, and grief by listening to those who have achieved it.

Keep it Simple

Many painting contractors express great resistance to developing systems for their business. One of the most common reasons I hear is that painting is too complex. There are too many variables involved and a painter must assess those variables to determine the proper course of action.

It is certainly true that there are many variables involved in painting a house. But this is not an argument against systems; it actually demonstrates the value of systems.

To illustrate, let us consider a typical exterior painting job performed by my company. The job consists of preparing and painting fascia, soffit, siding, doors, and windows. There is some minimal peeling on a few fascia boards, and several pieces of rotting siding that need to be replaced.

I strongly suspect that you could identify the steps required to prepare and paint this house, even with my minimal description. And I also strongly suspect that the order of your steps would be very similar to mine: Clean; scrape and sand the loose paint; replace the damaged wood; spot prime; caulk; paint. Further, I suspect that the steps for completing each of these tasks would also be similar. Why is this?

Even with all of the complexity involved in painting a house, there are certain tasks that must be performed in a certain order. (There may be some options, such as replacing damaged wood before scraping and sanding.) If we don’t complete these tasks, or do them in an improper order, we will not get the desired results.

You might think, “But every job is different. It isn’t as easy as A, B, C. Often, once we start the job we have to re-evaluate and modify our approach.” While this last is true, it doesn’t refute my point.

The process of re-evaluating requires certain steps. The process of identifying the specific conditions of the job requires certain steps. The process of deciding the best course of action requires certain steps. Indeed, everything associated with the job requires certain steps.

To a young child, learning to tie his shoes is a very complicated endeavor. He must learn specific steps and then master the physical skills involved. When he does this, what was once a complex process becomes quite easy. The same is true of painting a house.

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