Your referrals leave an impression

Recently, I received an email from someone who described a rather unpleasant home improvement job, which involved the purchase of materials and a subsequent installation of them. We like these things to be boring – meaning everything went smoothly with no drama.

This one doesn’t appear to be turning out that way.

When I say rather unpleasant, the job describing to me included the theft of building materials by a contractor who was referred by the company where the materials were purchased. They also described bill padding on two occasions by the contractor, once for materials, and once for the labor. I’m told the referring supplier reimbursed the customer for the stolen materials, and that the contractor first offered to reimburse for the padded bills and then disappeared.

A few things about this merit discussion: First, there’s probably more to the story. Second, these situations almost always leave clues before bad things happen. Finally, this is really about how much care are you (the business owner) take when you refer someone to help your clients.

Do no legal ties mean no responsibility?

Referrals made in these situations are typically made to businesses with no legal ties to the referring business. You can understand why a referring business would make a point of distancing themselves legally from the folks they refer, but *does the lack of a legal connection matter to the consumer*?

Only legally, if that. And only until you establish a pattern of referring people to your clients regardless of how the referred vendor performs. The corporate line will almost certainly be one of maintaining that legal separation and that the consumer must be responsible for selecting a contractor.

The thing is, if you are going to go to the trouble of referring someone, why do it poorly and without conviction?

Taking the wimpy, “no legal connection” angle is not how you make business personal. I understand that there’s a desire to avoid burdening the corporate parent with the possibly sketchy behavior of a local contractor. What I don’t get is why you would recruit and refer contractors with so little care that it’s simply a matter of time before you run into trouble.

Even if there’s no business relationship and no legal responsibility accepted by the referring company, only a fool would believe that a referral doesn’t reflect on the one who makes it. So why do it poorly?

Why not refer well?

The smart business who makes these referrals will recruit, select and refer contractors that are so good that they leave the kind of impression that you can’t wait to refer them to your clients. Help your customers choose by giving them the tools they need to choose the best contractor from your vetted list of referrals.

The smart business who makes these referrals won’t stop there. They’ll follow up with every referral after the job, perhaps during each job until they’ve developed a level of confidence in the contractors they refer. It isn’t enough to recruit and select well – you have to keep it up. These people represent you whether you like it or not. Make sure they do it well and make sure they understand the importance of the work you’re sending to them.

The consumer bears the burden too

Part of the story that I left out up to now is that the referred contractor asked the customer if they could pay in cash because of some irrelevant reason.

If you (the consumer) don’t immediately disqualify a contractor who asks this question, you shouldn’t be surprised if (when) you have problems with them. In this case, that’s what happened. I told the consumer that this should have been a red flag to expect trouble.

When I get this question, I ask myself what else they want to skip.

Will they skip work that would result in dangerous construction? Will they skip town with my money? Will they skip town with materials? What else might they do while having access to my home or business? Did they skip buying insurance? What else did they shortcut?

The smart business will remind their clients that while working this might save you a few bucks, it might also cost them a lot.

The quality of your referrals matters. Make sure they’re worth giving.

When the smoke clears, will your reputation?

No one in the Pacific Northwest has to be reminded that this is the worst fire season since 2003.

Depending on what you do a bad fire season could be a boon, a bust or a non-issue to your business. Over the last couple of weeks, we had communications and marketing oriented conversations focused on the folks whose businesses are placed at risk by a bad fire season.

There’s a different kind of business impacted by fires, natural disasters and similar events: those who provide things like tanker trucks, field rations and related convenience items, construction supplies (lumber, drywall, tools etc) and so on.

If a scene like this summer means that you will be extra busy for the next year or so, perhaps more, good for you – particularly if you are a trusted member of your community (business and otherwise).

However obvious this may seem, it needs to be said…

A reputation setting recovery

The way you and your staff serve your clients from now until the recovery is over – regardless of what’s being recovered from – will set the tone for your business’ future.

Some will eventually give you a second chance, but for most, this is the one chance your business will get to show its colors. It will seal the reputation of the business, its owner(s), managers and staff.

Captain Obvious, you say? Perhaps, yet we continue to see examples where businesses have behaved so badly that governments feel obligated to put “no gouging” laws into place.

The thing is, pricing is the least of your problems. People understand that pricing gets a little crazy when resources are constrained. Supplies are often harder to get, and they’re often competing for scarce transportation facilities including berth time at port, dock time at warehouses, much less truck drivers or semi-trailers to haul those supplies. Qualified people are in demand, which tends to create overtime hours.

Do your clients want to wait or pay overtime-related costs? Ask them.

Communicating the challenge

When these situations occur and drive up your costs, communicate the situation as frequently, quickly and clearly as possible. Communicate what you’ve done to try and work around the situation. Ask your clients for ideas and connections in their network that could help you serve them a bit better.

You never know when a client might have access to resources or connections that could solve a problem that’s simply “killing” you – and those things may be out of reach without a little insider help. Even worse, if these clients know what’s blocking your progress and they know their resources / connections could help but you keep telling them you have things under control – how could that damage your relationship / reputation?

It’s OK to ask for help.

Resource problems aside, be sure that any abnormal delivery timeframes, costs, staffing challenges or other potentially damaging issues are communicated well. Transparency works. Small businesses use it as a competitive advantage vs. larger, better funded competitors during good times, why not use it during challenging, resource-constrained times for the same reason?

Call volumes are unexpectedly high, but your call is important to us…” – something you’d never say to a client before putting them on hold. Yet you only get this greeting when reputation damage is most likely to happen.

We don’t remember that the cable internet met their 99.9% uptime goal last year, but we remember each of the 43.8 minutes of downtime per month that this uptime goal allows for – and that the downtimes happened at inopportune times.

We remember when we consistently get a transparent answer or explanation.

The mindset that risks it all

The “they have no choice, I will get (and keep) the business no matter how I act” mindset can infect everything from sales and service to receivables and delivery. Once observed in one part of the business, it’s a matter of time until it crawls elsewhere.

I won’t belabor this, because the kind of business owner or manager who would let this behavior happen wouldn’t likely read my work. Despite that, check out the short 30 seconds it takes Vince Lombardi to describe the obligation that team members have to do their best on every play of every game.

Print readers, see https://www.youtube.com/watch?v=HKN3rvrWyvg&feature=youtu.be&t=0m50s