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Set Expectations for Your Customers Early — And Often
 I have been told recently that 90% of home owners choose a contractor based on price. If that truly is the case, I want to work with the 10% of customers who DO NOT decide by bottom line.
Of course, one of the most important aspects of working with this segment of the customer base is to set proper expectations for the individual customer.
I recently met with a customer and failed to set proper expectations. Luckily the customer was fairly understanding, and we ended up signing a contract anyway. This does not always happen.
In this particular situation, I gave my customer a ballpark estimate without first speaking to my suppliers or tradespeople. I was merely trying to get the customer to understand approximately how much the project was going to cost.
The customer was fine with the initial ballpark. However, as we completed the design, the project became more elaborate. I did not go back and review the initial estimate to see how much some of these changes were going to affect the price.
When all the changes were incorporated and the design was completed, I priced the project very accurately ― about twice the initial ballpark estimate. Talk about an uncomfortable meeting.
As you go through life, you can learn from one of two things — mistakes and embarrassing situations. In this particular project, I learned from both.
I think we are all very similar — we want so desperately to maintain a positive relationship with potential customers that we will put off the bad news for as long as possible. I certainly did.
What I have to realize is that the customer is going to hear the bad news sooner or later. So the best thing to do is set their expectations from the very beginning.
What you have to say may not be what they want to hear, but it is what they need to hear. I have to make a conscious effort to provide information, good or bad, to our customers as soon as possible. I need to modify the ballparks as we go through the design process. I need to set the customers' expectations at all times.
We were able to salvage our project, but it could have cost me a very nice customer and a very nice project. I will try not to make that mistake again and I hope you all will avoid it, too.
Erik Anderson, CGB, GMB, CAPS, is vice president of Anderson-Moore Builders, Inc. in Winston-Salem, N.C. He also currently serves as vice president of the Home Builders Association of Winston-Salem. For more information, contact Anderson via e-mail.
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