Relight the Stove

            Note: the following customers were never a problem before or after the incident described. They were model home buyers. The following story is absolutely true. The story also has very little education value except it is a great story.   

            Over the years, we had done a very good job of training our buyers to submit all service requests in writing. Having requests in writing reduced misunderstandings and we were able to establish a procedure to make sure the request was routed to the correct trade contractor or material supplier for correction.

            When our receptionist told me one of our home buyers, who had been in her home about six months, was on the phone I picked up the call with some concern. Mrs. Buyer said her stove used to work but was not working and could I please tell her how to relight the pilot light. I was almost certain all the stoves we installed were electronic ignitions but I took her number and told I would call her right back.

             I called our purchasing manager, Darlene, who assured me that none of our stoves had pilot lights. I called Mrs. Buyer back and told her there was no pilot light. I then asked her if they had checked the circuit breakers. She immediately assured me that her husband had checked the circuit breakers as they had been instructed during the new home orientation.

            I then asked her if her heat was working. It was near Thanksgiving so if the gas had been shut off for some reason, she would likely have noticed. She again assured me that the heat was working and the gas service was on.

            I called Darlene back on her cell phone. She, by chance, was in Mrs. Buyer’s neighborhood so I asked her to stop in and see if she could see anything obvious before I had Mrs. Buyer call the appliance company for a warranty claim.

            Darlene went to the Buyer's home and knocked on the door. Mr. Buyer answered and took Darlene to the kitchen where there was no stove. There was a burn mark on the wall where the stove had been. It seems they had had a minor stove fire but had needed to call the fire department. The fire department had disconnected the gas and electric from the stove and placed the stove in the garage to get the smoke smell out of the house. Mrs. Buyer was out trying to relight the stove in the garage. 

Original Content copyright 2011 Thomas Robinson

Verbal Agreement

Have you ever heard, "but the sales person told me __________." I have had customers sit in my office and tell me that my salesperson promised things that not only do we not do but that we never did. I also have had customers tell me that I promised them things that I was confident that I never promised.

I believed the customers were sincere as it was unlikely both partners could lie so convincingly. I was also pretty sure I was not yet going senile nor were my salespeople over promising. I began to believe that the customers were shopping a number of builders and they had been promised something someplace else and mis-remembered who told them what. Either that or when discussing their new homes one would say to the other, "what did they say?" They would discuss the issue and become convinced that we said something we did not.

The issue was not common but happened often enough that we felt we wanted to proactively deal with the issue. We discover the following clause which we added to the end of our contract.  We Left about ten lines of space to write in verbal promises. We rarely had a customer add anything and if they did we could deal with it before we started.

Record in the space below any and all verbal commitments that any representative of Robinson Development has made to you.  If no additional commitments were made, please write none.

____________________________________________________________________________________
____________________________________________________________________________________

Original Content copyright 2011 Thomas Robinson

When to Say No to the Customer

One of the most difficult customers to deal with are the Negotiators.  The Negotiators are on a mission. Sometimes to get a specific item they want but just as often to get as much as they can.

There are a number of books on negotiating that all tell the reader how to get whatever they want by negotiating. In reality they are not negotiating as much as trying to manipulate someone to get a desired result.  One example given in one of these books is if you are looking to buy a car always tell the car salesperson that you like the car you are looking at but hate the color, even if the car is your favorite color.  The strategy is to make the salesperson think you do not like the car so he will lower the price to induce you to buy the car you wanted all along. The trouble with this particular tactic is every car salesperson has heard it a hundred times and all the good ones have read the same book.

In our housing business we had customers who had read these books and when they wanted something they were not entitled to by contract would express displeasure over some item then try to turn the expressed displeasure for what they really wanted.  We had a customer call us about a scratched cabinet after they moved into the home. The "scratch" had not shown up on our list of incomplete or damaged items on the walkthrough and upon inspection the "scratch" was on the side of a cabinet and nearly invisible.  We could repair the item with a dab of touch up wax but the customer wanted the entire cabinet replaced which would have been costly and disruptive to the family.

After a few minutes of discussion he said "You know what, we really do not want to put up with the hassle and put you through the expense. How about you give us a wine rack for under our counter as compensation?"  I discussed the issue with my superintendent and discovered there had been a number of similar "trade offs" during the construction and the customer was talking bad about us to other home buyers in the community but was telling all the neighbors how he got us to give him free stuff.

I called the customer and told him that because the item was not on the walkthrough list we would not be doing any work on the cabinet. We told him we would give him the touch up wax if he wanted to make the repair himself.

He asked me if I was sure that I did not to make him a happy customer by giving him the wine rack. I told him that it was unlikely we would ever make him happy. I told him I knew what he had been say about us to his neighbors. I also told him that giving in to a made up warranty claim was unlikely to make him happy.

If your customer has a legitimate complaint deal with the complaint even if it is more expensive and time consuming than the proposed alternative. Giving in will only open you up to future similar claims. If your customer does not have a legitimate complaint tell them so politely but firmly. If the customer threatens to withhold their satisfaction or happiness it is more often time to call their bluff.

Original Content copyright 2011 Thomas Robinson

Harassment Clause

While we always tried to identify bad customers before the contract was signed it was not always possible.  As we grew and I was less involved in the contract process we had a few that went to contract that should have been weeded out in the contract process.

We had one customer who was a retired engineer. He would come to the construction site every morning with a lawn chair and sit and watch the construction. Often he would go up to the trades people and ask questions about what they were doing and question why they were using a particular tool or material. In the evening he would go to the library and do research. Often he would bring a do-it-yourself book to the home and ask why the tradesperson was not using a certain technique. It not only slowed down the construction but was upsetting all our trades' people.

We used pre-fabricated wood I-beams on our floors because they were more uniform, shrunk less and provided quieter floors. Our customer had envisioned traditional lumber. He questioned the carpenter who explained that that the product was superior to the traditional lumber. The next morning the engineer customer came to the job site with a bucket full of water with an I-beam cut off he had taken from the jobsite the night before floating in it. It had, of course, swollen on the cut edges.  He believed because the truss absorbed water it was inferior. Our Carpenter contractor was ready to walk off the job.

To deal with situations such as this we had the following clause in our contract;

32 .ADDITIONAL REMEDIES:  :  If Purchaser in any way harasses Seller or any of its employees or subcontractors, or interferes with construction of the residence or conducts unauthorized visits to the site, or makes repeated complaints to third parties, or indicates a fundamental unhappiness with the residence or the project, or otherwise indicates any material lack of creditability in Seller or Seller’s ability and willingness to perform its obligations under this Agreement, then Seller may, in its sole discretion, terminate this Agreement by notice to Purchaser and refund to Purchaser any earnest money payments made by Purchaser.  Seller shall not be obligated to return or pay to Purchaser any deposits or payments for upgrades, extras or non-standard items which have been installed or made or cut to order.  Upon such termination of this Agreement and return of earnest money payments, Purchaser shall have no further remedies against Seller.

I took a check in the full amount of his deposit and went to his current home and knocked on his door. When he answered I explained that we were canceling the contract under the clause above and handed him a letter to that effect. He took the letter but refused to accept the check. Within an hour I received a call from his attorney. After a short conversation his attorney – who was also Mayor of the village where we were building the home - sent me a letter saying that if we completed the house the home buyer would cease all harassment and in fact would not visit the house until completion. We did complete the home.  As the final walk through approached we were concerned about an explosion of pent up frustration but the process went smoothly and we never received a single warranty call from this home owner.

A harassment clause such as the one suggested in this article will not only help you once you get into this situation but it may also help you in the weeding out process. The more a customer objects to the clause the more likely they are to be a problem. 

Original Content copyright 2011 Thomas Robinson

Fire the Customer

In our housing business we worked hard to identify, locate and bring leads to the table. Often as we were negotiating the contract and sometimes even after we went to contract things would not feel right or even begin to go wrong and we would recognize that a customer would be more problems than the contract was worth. Firing a customer is hard emotionally and can be difficult legally.

The saying goes eighty percent of your problems come from twenty percent of your customers. I always thought the ratio was more like 90/10. The sooner you identify problem customers the easier it is to disassociate. As good as it might feel to "fire" them that process can have legal and public relations consequences that you may not want.

A real bad sign of problems was when one of or the other of a couple took complete control of the process particularly if the lead partner was condescending to the other partner. If they argue openly in front of you it is also a bad sign but in my experience not as bad as only one controlling the process because it often means the disagreements are going on outside of your presence and you can be caught in the crossfire.  You cannot be a marriage counselor so do not try. If you get bad feelings that the customers are not on the same page it is often better not to even go to contract.

There are other signs of problems. The "researcher" was one of my favorites. He would often start out a conversation by saying "I know you are the expert but," and then would launch into a monologue on what he had found n the internet or at the library. As we were moving through the process he informed me that he had purchased a CD that had contract forms he intended to use for his new home purchase which included a penalty clause if we were late on completion which he had needed to use on a previous new home purchase.

I told this customer that we had a standard purchase agreement prepared by our attorney and that we did not use third party contracts particularly ones purchase off the internet. His response was "We'll see."

The process of selecting a lot and completing final drawings was usually a two to three month process for us but with this customer it took us nearly six months to finally get to the contract signing.  We completed the contract and sent it to his attorney for approval. The Contract came back with his penalty clause written into the pre-printed form. When I told him we would not accept this clause he told me he had done his "Due Diligence" on us and although we had an excellent record of on time completion so had his last builder and he had need to enforce that clause on that builder. In the process he told me the name of the other builder who I happened to know through the builders association.

I called up the other builder and when I asked him about this customer he said "RUN." Turns out the project was delayed because the customer kept changing his color selections while the home was being built. When it was finished the builder had paid him the "penalty" just to get rid of him.  We told this customer we would not be building him a home.

Most of our customers were great.  Living through the bad ones is a nightmare. Identifying a bad one before you get involved is financially rewarding and great for your mental health.

Original Content copyright 2011 Thomas Robinson

Simple Residential Construction Schedule – Tips on Using

Following the instructions in my three previous articles on scheduling you have now prepared a simple and workable schedule for a typical home. This schedule is a starting point. In this article you will learn a few tips on using the schedule.

The first step is it to get it out of your computer and put it somewhere where you look at it every day. I had one manager who kept all the schedules in a notebook.  His projects never seemed to run as smoothly as our other projects. It was hard for me to review his schedules to see where he was on any given day. Keeping the schedules in a notebook was his way of hiding his problems.

Once you add the starting date for your project and have the spread sheet calculate the schedule save it in a separate file then print the schedule. You want to save it because as you will see you want to be able to tweak the master as you work the schedules to continually improve it. Tape the sheets together. I liked to trim the top or bottom of the pages and tape them together so it looked like one long spread sheet.  Tape the reassembled schedule to a large wall or pin it to a bulletin board in an area where it is easily viewed.

As you complete each item on the schedule highlight the item. I liked to do it with an orange highlighter so I could see the marking from a distance but still read the words. Crossing the items off will make it harder to backtrack if you make and error.  Look at it frequently if not daily and update as necessary. As you work the schedule you will discover problems with times it takes to complete items, sequencing and even some items you have forgotten. Make sure you make corrections to your master so you do not repeat the problems.  

Be careful about adding time.  It the roofing is taking five days when you programmed in three why is it taking five when you though it should take three?  Was you assumption wrong or is there something wrong with the planning or even the trade contractor that can be corrected instead of just adding days to you schedule. Remember each day costs you money in overhead and interest.  

Often it is easier to add time than fix a problem. You should also test assumptions occasionally. If you have programmed in three days for the roof can it be done in three. It is harder to spot under scheduled times than over.

If you line up all the schedules of multiple houses on the wall the highlighted portions should create a smooth slope from the oldest project to the newest. This is not a perfect indicator but it is a great way to quickly spot possible problems that need be looked into in more detail.

The more you work the schedule the better it will become. Do not be afraid to add items. One of the fireplaces we offered as an option required a sheet metal cap installed after the siding was complete.  It was difficult to spot from the ground and so on one house we missed it and forgot to install the cap.  During the next rain water showed up on the interior wall. Once we diagnosed the problem we add a zero day work item to our schedule. We also added a zero day item just before our drywall that reminded us to check for the cap.  You can add whatever items you like from inspections to reminders. You can even add an item such as "remind the office to schedule closing." Whatever makes your process better.  

Original Content copyright 2011 Thomas Robinson

Managing Customer Expectations – Homeowners Manual

Did you ever receive a customer complaint and take it to your staff only to get the response from your employee, "Well what did they expect?"  

Managing your customer's expectations will lead to happy customers and more referrals. The key here is manage not manipulate.  It starts with your advertising. Are you promising something you cannot deliver? You have likely heard the adage "under promise and over perform." The problem with this theory is that continued over performance will raise expectations even if you promise less.  Promise what you can do then do it.

Our housing business created a Homeowners Manual that told the customer what to expect from signing the contract to warranty.  To develop our Homeowners Manuals we used a template written by Carol Smith and distributed through the National Association of Home Builders. The template is extremely helpful but needs to be reviewed thoroughly and adjusted to your geographic area and construction methods. You also need to prepare the instructions on the various procedures such as closing to your area. We found that more information we included the better. We even prepared a page with names and phone numbers for the homeowner to contact for establishing utilities, garbage pickup, cable TV and water service. We also included information on the municipality, Park District, school districts and emergency numbers.

The maintenance portion of the manual includes maintenance instruction on everything from vacuuming the floor to instructions on changing the furnace filter. At the end of each section the standards for the work item and warranty for the item is listed. The standards were practical and achievable. All our employees and trade contractors were required to have copies of the Manual available so they knew the standards we had contracted to meet.

Also included was a detailed description of closing procedures. We included a page of contacts the new home owner would need such as phone numbers and address of municipality, utilities, cable TV, garbage removal, emergency numbers and recreational facilities.

We would give the full Homeowners Manual to the home buyers when they signed a contract. We had them sign a receipt. The receipt included a clause that if they found anything in the manual with which they disagreed they could cancel the contract within forty eight hours.  If they did not cancel they were tied into the standards and policies in the manual. We never had anyone cancel their contract. We had happier customers and therefore happier employees and trade contractors.

The template for the Home Owner's Manual can be purchased HERE. You can also email me and I will send you a copy of the table of contents from our Manual.

Original Content copyright 2011 Thomas Robinson