Satisfaction is Worth the Effort

This is the sixth time we have presented data from remodeling clients reflecting back on their level of satisfaction with their remodelers. The genesis for this research, which we conduct with RenovationExperts.com, was to examine the root causes as to why remodelers are viewed somewhat suspiciously by homeowners. This is borne out by data from the Better Business Bureau that shows a high level of consumer concern when hiring remodelers. Remodelers are routinely among the top 10 nationally in number of BBB inquiries.

Theories abound as to why this is the case, but the single most critical issue seems to be the industry’s low barriers to entry. For every upstanding remodeling organization, there are many others that fly by night. This leaves a trail of unhappy customers who, in the aggregate, are willing to give the industry a black eye at every possible juncture.

But there are other reasons why the industry is viewed suspiciously; namely, it is a surprisingly complicated business. When one steps back and looks at the processes and stages involved in moving a project from its initial stages to completion and the various places where customer relationships can go wrong, the challenge of being a remodeler is apparent.

The power of satisfying customers and creating positive outcomes is often lost in the hurly-burly of getting the job done. But in an industry where referrals, repeat business and positive word-of-mouth advertising can mean the difference between success and failure, satisfaction and loyalty should be as important as accurate estimates and competitive pricing. You don’t have to believe me. Here are some stats from data-mining firm SPSS Inc. that add credence to the importance of customer satisfaction as an important business discipline.

  1. Only 4 percent of all customers with problems complain.
  2. The average person with a problem eventually tells nine other people about their bad experience.
  3. Conversely, satisfied customers tell five other people about their experience.
  4. The cost of acquiring a new customer is five to seven times greater than retaining current ones.
  5. The cost of hiring and training a new employee is up to 10 times greater than retaining current ones.

These five points offer an opportunity. For your good customers ­— those who pay on time, those who are more rational than emotional, those who make decisions in a timely fashion — do what it takes to keep them happy. They represent a stream of repeat and referral business that is money in the bank. In turn, when your company is continually working with happy customers, there is a motivational benefit to your employees who will tend to work harder and focus on making other customers happy.

In business school, it is called a virtuous circle. High customer satisfaction results in greater customer loyalty. Customer loyalty allows you to retain customers at higher prices and better margins. Some of these funds can be set aside for training and empowerment of employees. Empowered, well-trained employees mean greater competency among employees and higher employee satisfaction — all of which feeds back into higher levels of customer satisfaction.

The first step is to survey your customers after each job is done. The best way to do this is through a third-party company like GuildQuality based in Atlanta. There are many others. It is an investment of time and energy worth making if you hope to truly grow your business over the long haul.

Loading