Customers, Rewards And Image

The past two columns have covered issues related to your most important asset (and the most difficult one to measure): your employees. The methods you choose to express appreciation, the compensation you offer and the value you place on their contributions to your business, and the risks you impose on them through your management choices are impossible to measure. In this final column of the series, we examine how customer relationships are affected by similar “unmeasurable” factors.

Developing a new customer relationship is a balancing act. Your potential customer wants to deal with a stable, successful company, so you carefully present a professional image, from your paperwork to the logos on your employees’ shirts and the organized appearance of your building, tools and vehicles. Over the past several decades, construction industry leaders have realized that the image of the construction worker was in need of a makeover, and today, great strides have been made in that effort. As a contractor, you now have a different problem—walking that fine line between creating a capable image and appearing too successful. That balance affects how potential customers perceive your price.

The first time I connected through Denver International Airport after the “circus tent” terminal was completed, the luxurious finish materials throughout the building and the high-end merchandise in the shops overwhelmed me. It seemed overdone, and I wondered if that level of expense had been necessary. Denver is a hub city, after all, and it is unlikely that travelers would choose other routes if less expensive flooring had been installed. Were the taxpayers likely to appreciate these details, or would they have preferred to subsidize a less costly project that still served its intended purpose?

When you price a job, your customer measures anticipated value against the impact on budgets, payback period and return on investment. Image and comfort are more important to residential and commercial customers, while institutional project owners place a higher value on efficiency and functionality. The most coveted project owners will allow their contractors a fair profit, but even the most understanding are loath to overpay, especially if they perceive that they are helping you become the next Donald Trump. You can arrive for your next presentation in a Lexus wearing your bespoke suit and handmade Italian shoes or driving a Dodge Ram wearing chinos and a golf shirt, as long as you consider the impact each choice will make on your potential customer’s perception of price versus value.

A few years ago, I was careful to drive an American-made car when I visited downtown job sites, as the union workers sometimes expressed their support of their brethren in the United Auto Workers by defacing foreign-made vehicles. Since my company regularly performed small residential remodeling jobs, I selected moderately priced company cars, knowing that the retired couple on a fixed income was likely to be peering through the window, evaluating the likelihood that my price would be too high. On the other hand, I wore my best suit when I met with corporate owners and lawyers because it gave me a competitive advantage when other subcontractors were dressed casually.

Image matters, and it is a form of respect for your potential and existing clients. When service and maintenance contractors first used shoe covers, residential customers appreciated the respect for their property conveyed by that simple, inexpensive detail. Field employees who communicate clearly enhance your company’s image. These behaviors convey appreciation and respect that customers don’t always expect from contractors and their employees, and they help to soften the impact of price and build long-term relationships.

Balancing image, perception of value versus price and appreciation for your customers includes a reward system. No matter how many testimonials you place on your website or Facebook page, it is the discount or referral coupon, the token gift, or the educational seminar that creates additional value for your customers. Indirectly, supporting your customer’s preferred charity, participating in fundraisers and community beautification projects, and coaching the local sports team are the visible reflections of your company’s commitment to its market area.

How your customers measure the unmeasurables—your image, appreciation for them, and willingness to reward them for choosing you and continuing to support your enterprise—becomes an essential part of your ability to sustain your operation, maintain your lifestyle and attract employees who support your vision. The unmeasurables tip the balance in your favor when the numbers alone don’t give you the edge.

About the Author

Denise Norberg-Johnson

Financial Columnist
Denise Norberg-Johnson is a former subcontractor and past president of two national construction associations. She may be reached at .

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