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TRADE TIPS - FROM DAVID LUPBERGER
Tuesday May 13 2008
Managing the Emotional Homeowner: Part 6

My life philosophy is to take the pain early, not just in my construction business, but in all things. Putting things off never really makes bad things go away, and putting the bad news out front usually ends up with much less total pain.

How does this situation relate to construction? Experience is a hard teacher, and in this regard, it's taught me a lot of hard and expensive lessons. Here is what I've learned:

• Be very clear with prospective clients early on how you do what you do. If they don't like the way you work or the procedures you want them to follow, you'll be money ahead in the long run to just walk away and go get another client.

You need to explain your construction procedures in advance. Your clients need to understand them, and agree to your procedures at the outset. If your clients don't want to follow your job procedures, you want to know it earlier, not later. You need to ask yourself, if they don't like your job procedures, do you want them as a client?

There Are Problem Homeowners

I understand that there are some bad service professionals in the home improvement industry. I have discovered, through personal experience, that there are also some bad clients. If your prospects are not thrilled by your job procedures, you need to make a decision. If they still want control, even after you've reviewed your job procedures, then they may be the problem clients that you don't need. By thoroughly reviewing how you manage a project before a job ever starts, you are taking them through a qualification process. If they agree to follow your procedures, you have a good chance of making money— if you estimate and manage the project correctly. If they resist your procedures and argue for control, they are letting you know right up front that they intend to "help you" manage their project.

Indentifying Problematic Homeowners

In seminars I host, I ask, "Who has worked with problem homeowners?" Literally the entire audience raises their hands. The next question I ask is, "For everyone who has worked with a problem homeowner, when did you know that they were going to be a problem?" More than 90 percent of the home service pros knew during the first meeting. How did they know? Sometimes they couldn't be any more specific than "something didn't feel right." They had some subtle signals, but they didn't pay attention to the mixed feelings they were having about the potential clients.

Trusting Your Gut

Think about it. Don't these difficult homeowners let us know they will be difficult early on? They may not be saying it, but in the course of our first meeting with them, they send certain signals. At first you may not know it, but after the bad and expensive experiences pile up, eventually you learn to identify those uneasy feelings. And the problems will pile up. At first, you get a gut feeling, but you ignore it. I used to take jobs with problem homeowners because (a) I either needed the money; (b) I was trying to keep someone on my staff busy; or (c) I was feeling particularly good about myself and thought I could handle anything. "I can handle this; I've dealt with worse people than this."

It's when I was lying in bed six months later, reflecting back on the job that was supposed to be done three months earlier, that I understood how bad a decision I made. At times like this (have you shared this experience?), you realize that you don't make money with problem homeowners. But worse than that, you destroy the morale of your company. When you have problem homeowners, carpenters and other trade contractors do not like going to the job, people who answer the phones do not like speaking to these homeowners, and worse yet, you don't like going to work.

Fair Compensation

I'm not saying it's impossible to work with demanding people. But you need to identify the source of the problem, and put a price on dealing with that problem. If someone needs additional hand-holding during the renovation process, have them express that they want more than you have reviewed in your standard job procedures. They can have more, but let them know the price of this additional service because all we have to sell is our time. If they want more, they need to compensate you for your time. I only resent working with demanding homeowners when I'm not fairly compensated for my time.

Choosing Who to Work With

Think about the clients that you have enjoyed working with, who have enjoyed the work you've done, and paid you accordingly. Homeowners will pay you what you are worth when you provide these badly needed services, and they will treat you with the same respect that they afford their doctors or lawyers.

Enough homeowners are out there right now who want you to do a good job, and you will enjoy working for them. These are the people I want you to concentrate on working with.

How to Avoid Problem Homeowners

When you get a bad feeling, and you will get it soon after meeting these people, pay attention to that feeling. Look for the subtle signals there. If you're wondering about whether you should work with someone, ask a project manager or carpenter to join you at a meeting with these prospective customers. After that meeting is over, ask for their impressions.

Ask them what they experienced at that meeting so you can see what your mixed feelings are about. If something is unsettling during these initial project meetings, do something about it. You are the expert. You are the "pro". You establish the boundaries. You have set job procedures, and if everyone involved follows these, the jobs run smoothly, the jobs get finished, and you make money. But while you establish these boundaries and these priorities, your clients have to agree to them. If these homeowners are not agreeing to your priorities, you may have to stop. These may be the problem clients you don't need.

Brass Tacks

In doing any home improvement project, you are the expert. Use your experience to guide prospective clients through their project. Good physicians and dentists guide their patients through medical and dental procedures. A successful service professional does the same thing. If someone doesn't want to follow your procedures, address it quickly and decisively. Sometimes the best jobs are the ones you don't get.

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Expert Q & A
How about the problem home owners who dont want to pay for any extras and think they can get all the extras included at original price? Or they get the subs to do extras & then the homeowner tells you they didnt know it was extra & they expect you to pay for it. While your articles are adequate, they are not specific enough for the tradespeople on this site.
          
Luigi C. - 05/14/08 at 04:13:49 MST
How about the problem home owners who dont want to pay for any extras and think they can get all the extras included at original price? Or they get the subs to do extras & then the homeowner tells you they didnt know it was extra & they expect you to pay for it. While your articles are adequate, they are not specific enough for the tradespeople on this site.
          
Luigi C. - 05/14/08 at 04:14:27 MST
Luigi, I have felt this pain mayself. I know you have heard this one before and is extreemly difficult when things get busy, very detailed specifications and absolutly no changes unless YOU MAKE CHANGE ORDERS with extentions of time,money and scope. This goes for subs as well. If they don't like the terms they have the power to say no. Even when its a bargaining chip ( they purchace the materials ) "all you got to do is" are the famouse last words. Now if you swallow the labor on it who has to warranty the work? Or at the end the client complains how long you took?
          
Richard H. - 05/29/08 at 04:27:40 MST
Luigi--as stated in the article, you need to explain your process.  A part of that process is a contract with the homeowner AND make it clear verbally and part of the contract, that any changes to the original order require a CHANGE WORK ORDER to be signed.
          
Derek J. - 05/29/08 at 11:36:35 MST
I think it's smart to add 10% to 15% to your detailed quote numbers so you have already built in additional money to do a few extras at no charge. I would still have the customer sign a change order but make it a "no charge" change. At some point however you need to hold the line with the client by simply saying, "Mr. Jones, I've already included X amount of additional work at no charge", and reference the signed "no charge" change orders. "This additional work is outside of the agreed to or contracted scope of work and I would need a change order and an additional sum of X prior to beginning this additional work."
          
Giles C. - 05/30/08 at 10:51:23 MST
Ethinicity, if you always have problems with one group or type, just swear them off. Their not bad people, they just want more than they are willing to pay. Its in their blood and you won't get the better of them.
          
Martin S. - 06/01/08 at 05:53:33 MST
Years ago I remember my wife reminding me after one of these real bad jobs that I had mentioned a bad feeling at the start and also on previous jobs.  I learned to say no from that comment, however, I also learned that many problems can be eliminated by tellling them up front what to expect.  Then there can be discussion, tell them the real facts now and your are a professional, explain it after the fact and you are a flake making excuses.  Communication has helped me to resolve serious issure and I do not have anywhere as many problem people.  That being said, I realize I am planning to work with another contractor that I should never do. This discussion helped me to listen to my past experiences.  I think I should stay away from this job.
Ray K 
          
Ray K. - 06/01/08 at 18:42:03 MST
A change work order is a great concept, although a little wording change can correctly portray the additional cost correctly. Always have on hand an "AWA" form -- Additional Work Authorization !  It should be mentioned up front, before any work is started. The AWA CORRECTLY portrays the extra work as just that -- extra. The standard "order change" generally conveys the thought that "this is just a little change (like changing a retail purchase of a BLUE shirt to an ORANGE shirt-"it shouldn't cost any more since it's the same size"!) The additional work is WAY more than that ! ! !  It requires re-routing pipes, additional materials, additional delivery costs and(most likely)the total reworking of your schedule as well as theirs. 
          
Wayne Z. - 06/10/08 at 09:14:55 MST
 
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