Years ago, one of my best clients told me on the day we signed our first contract, “today is likely going to be the best day of our relationship, so let’s enjoy it”. It took a minute for that to sink in.
And it took me years to truly understand that building and maintaining good client relationships is a prerequisite to any successful project. This applies as much, if not more, to construction projects given that many decisions are - quite literally - set in stone once they are made and implemented.
In any client service business, conflicts and issues are bound to arise throughout the course of a project or relationship. How you handle these conflicts can have a material impact on your business. Investing time and energy in building healthy relationships, built on trust and transparency, with your clients can help you navigate nearly any problem with integrity and fairness.
Here are 4 tactics I’ve learned the hard way about building and maintaining great client relationships:
It is so simple in concept, but surprisingly difficult in practice. We are all busy - running multiple projects, hiring new talent, winning new business, paying the bills. It is a lot - and with all of the things going on day to day, it is easy to neglect one of the easiest things you can do to keep your clients happy: stay in touch! In our research on residential construction projects, we have found that over 80% of clients expect to talk to their builder or contractor multiple times per week with a majority expecting to have multiple interactions per day. This doesn’t mean that clients expect you to spend your entire day making phone calls. Rather, getting into the habit of simple, more frequent touch points go a long way to keeping everyone feeling positive about progress and that the lines of communication are open. Regular communication is essential - even when there aren’t major updates to share. It also makes having those tougher conversations a lot easier when they arise.
One of the most powerful lessons I learned in my career was that I didn’t have to do it all - that my clients had a major role to play in every project’s success. The issue is that in many cases, clients don’t actually know the role they are supposed to play and what is expected of them! This is especially true in construction, where it is common for clients to be engaging in their very first construction project. Let’s face it, most of us don’t tackle new home builds and renovations more than a few times in our lives. Don’t take for granted the amount of knowledge you have about how construction projects run. You’ve probably seen it all - and learned countless lessons over the years. But, your clients haven’t. Teach them. Educate them. Make it clear what you need from them, when you need it, and why you need it. Do this at the beginning of the project - ideally in writing - and continue to follow up and remind them along the way. Helping your clients make timely decisions about their materials and selections will go a long way toward ensuring a successful project - and a happy client.
Find ways to ensure that your incentive structure is in sync with your clients best interests. One of the most overlooked tools to create alignment with your client is in how they pay you. There are multiple structures that can be considered - each of which has their merits based on your industry, company size, and goals. Regardless of which you choose, work hard to find ways to align your interests (profit and referrals!) with your customers (quality workmanship, projects that remain on schedule and fair pricing). One way to do this is to consider using a fixed management fee contract structure. In short, this means you are getting paid a fixed amount (typically based on a percentage of the original contract price) - which is fully transparent to your customer from the start. In this structure, you aren’t incentivized to have your customer go over budget. You are getting paid the same amount, regardless of the cost of materials and subcontracted labor. This allows you to guide customers throughout the project and build trust with them around your recommendations (product selections and labor techniques).
Word of mouth referrals are the lifeblood of any client service business - regardless of the industry. It is a given in every construction project - regardless of your contract structure, that there will be multiple opportunities to choose profit over quality. This isn’t about finding ways to cut corners in a vindictive way, it is about the inevitable disputes that arise during the course of a construction project and how those disputes get resolved. Like it or not, miscommunication happens far too often in construction. Erring on the side of quality - doing the right thing for the project, even if it means losing a few dollars of profit on the job - is almost always worth it in the end. If you have open lines of communication with your client, have set clear expectations for them along the way, and have your incentives aligned with theirs, it makes it a lot easier to compromise on disputes with both parties feeling like they got a fair deal.
In summary, good client management boils down to a pretty basic set of relationship principles. In a complicated industry like custom home construction, conflict is inevitable. So, laying the groundwork to manage it when it arises is well worth the effort. This is also why we are building the BuildBook platform - to help builders, their teams, and their clients communicate better together.
What other lessons do you think are essential to building and maintaining great client relationships?
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