Who is your most important customer?

Your most important design/build customer is the one sitting in front of you right now—the one with whom you are currently working. When a client hires you for design/build, they book your valuable and limited resources. Time spent with one customer is time not spent with another. That is why it is so important for design/build firms that the clients that are working with you during the design stage stay with you into the production stage. During the recession, many of you probably noticed an increase in drop out from design to production.

Our drop-out rate remains higher than before the recession, so we set out to analyze the reasons for the drop-outs to see if there were lessons to be learned and variables we could control. Here are some things we learned that might be helpful to you:

Sales stage

  • Make it clear to clients through all stages of design that your company is set up to build what you draw. Explain the benefits of this model to the clients early in the sales process and remind them of this several times during the design process.
  • Clients that do not have real need are less likely to move from design to construction. Ask your salespersons how they can identify these clients early on in the sales process.
  • Check the home’s sale price and compare it to home values in the neighborhood. We find that new home buyers that pay a premium for their house are less likely to move forward from design to construction.
  • Listen closely so you can get a feel for clients that do not want to be upsold and do not push them to do more work than they want.
  • All design proposals should be reviewed by the estimator or the sales or design manager for both budget and scope of work accuracy. Also, accurate estimating for construction during the design process is imperative to keep clients through production.
  • In some cases, feasibility studies do not result in a full design and construction sale, but they do allow us to provide clients with more accurate pricing without investing too much of our designers’ time.

Design stage

  • The designer and salesperson should agree with what will be presented at each meeting with the client. Presentations and communication with a single cohesive voice will avoid misunderstandings. The more team members and consultants on a project the greater the need for leadership and time spent on agenda planning.
  • Thoroughly research zoning issues so you know all the facts and present the best solution from the beginning. Having to redesign a project due to zoning issues does not instill confidence in your client.
  • When design is near completion sell value by bringing in the project manager or other members of the production team. Surround the client with value. Enable the client to visualize and bond with the production team.
  • Design is additive. When your client adds scope during design, be sure to make it clear that more scope equate to more cost and actively track those additional costs with the client.
  • If the estimate is higher at any stage, have a pre-sales meeting or conversation with the client to gauge how sensitive they are to price before you present the higher price. When you do schedule the meeting to present the higher estimate, come prepared with a strategy to lower price in that same meeting.  This includes itemizing areas where the client added to the project.

At the end of the day, the customers you have in front of you are important because they help create an even work flow for your firm. Every loss from design to construction can result in a hole in the production schedule. Measuring your losses and understanding the reasons for each loss will help you with retention, smoother work flow, and higher profitability--the holy grail of any business.