Trust Is the Answer—But What Is the Question?
Ulf Wolf and Steven Ferry
February 2008It is a well known marketing fact that it takes three to five times the money, time and effort to find and develop a new client, than it takes to service and hold on to one you already have.
It is equally well known that long-term relationships make for good and profitable business.
In light of these two truths, the question is: How do you get there? How do you build that long-term relationship with your general? Can you make yourself indispensable to him?
We recently took to the phone waves to find out.
It is a well known marketing fact that it takes three to five times the money, time, and effort to find and develop a new client, than it takes to service and hold on to one you already have. It is equally well known that long-term relationships make for good and profitable business.
The Big Four
The factors subs have found that make them indispensable to a general turn out to be amazingly consistent:
Quality of work.
Meeting schedules includes both showing up on time and completing the work on, or ahead of, schedule.
"One of the things that makes a sub indispensable,” offers an Oregon consultant, "is showing up on time, every time. If a sub says he’ll be there on Wednesday at nine, he shows up on Wednesday at nine—every time.”
"Meeting schedules is a must,” agrees one Washington contractor. Another feels the same. "Commitment to the schedule is job one.”
Several contractors suggest that without quality of work, one shouldn’t even bother showing up for the job.
As a Rhode Island contractor puts it, "The bottom line is that you get the job done satisfactorily. You can work all day, but if it isn’t done right, and it’s a problem, they won’t call you back.”
A Minnesota contractor adds, "Over time, from my company’s perspective, it’s been quality and meeting schedules. I would say those two items have been one and two. Price has been number three.” A Washington contractor concurs, "We look for a no-punch-list project. We aim to show up nowhere on the punch list. We achieve this by doing a pre-punch list of our own.”
A Florida contractor sums it up, "You want the minimum amount of punch work, the best quality. The craftsmanship must be what they expect and pay for, every time. Consistency of workmanship is very, very important.”
Price brought differing views. It was agreed, of course, that price was a key factor, but its importance varied by market and time frame.
"Today, everything is price driven,” says a Minnesota contractor. "We’re in a down market and everything is price driven.” He goes on to say, "Now if you ask the general, he’s going to say that quality is number one, but the reality of it is, things are price driven right now.
"I think in a better market, when things aren’t so ugly, competition-wise, quality becomes more important, and generals will be willing to spend a little extra for that quality.”
Another Minnesota contractor concurs, "I would say that 70 percent of the GCs now look at price and could care less about quality. It is sad. You’d think that they would have more pride.” A Rhode Island contractor: "Lately, it seems to be all about price. But in the long term, quality comes first, and price is second or third.”
From Vermont, "It comes down to meeting schedules, quality of work, and price.” And from a Hawaiian contractor: "If you’re not the low bidder, they give it to somebody else." A Washington contractor agrees: "Price is always a big consideration.” An Illinois view: "It used to be a lot different. Now price is number one with the GC.”
Another Illinois contractor said, "As sales started to tighten, and everybody looked to cut costs, price became more of a key than service. But I think people will come running back to service and quality as soon as things pick up a little bit.”
By now it is clear that Meeting Schedules, providing Quality of Work, and bidding the lowest Price are the three things the GC will always look for, but which, on their own, will not make the sub indispensable.
Expertise, however, is what begins to set one sub apart from another. A New Hampshire contractor puts it this way: "We, as subcontractors, give the GC someone that brings expertise to the table about the project, expertise that could improve it. We give him someone who is looking out for the overall project and not just their own interests.”
A Rhode Islander: "If you don’t have the expertise, you’re not around very long.”
When asked to rank Schedule, Quality, Price and Expertise, a Washington contractor puts it this way: "There is no simple answer, because a general has to take into account what kind of a project it is and what kind of owner he’s working for. One project might be expertise driven, another schedule driven and a third price driven. That’s why those four always come to the top. Ideally, you’re a contractor who can provide all four, and who knows the GC well enough to figure out what focus the GC requires for that specific project. ... If you don’t have a good relationship with this GC, you probably can’t discover whether schedule, quality, price or expertise drives it. But if your relationship with the general is good, you probably know these things even before you know the name of the job.”
Three additional factors surfaced, though not in the same league as The Big Four. They are Safety, Cleanup and Quality Assurance.
A Texas safety director says, "I [laughs] would put safety right at the top. But generally, I think, it’s quality and scheduling.”
A Washingtonian: "The smaller GCs aren’t geared up on safety, but the larger contractors are, and they want to see that you have a good safety record.”
An Oregon consultant adds, "I’d look for a contractor who maintains a high safety level, who has his own rulebook on safety.” Another Washington contractor has some words on Cleanup: "One of the biggest things is cleanup. If you clean up after yourself, they love it. They don’t want to be pestered by cleaning up after you.”
A Massachusetts consultant adds, "They have to have internal quality assurance.”
The Long Term
The Big Four will get your foot in the door with most general contractors, but when we take a long-term view, other factors take over.
We asked contractors with long-term general contractor relationships what they had done to attain—and protect—those relationships. A Vermont contractor offers us one key, "We say what we’re going to do. If we run into a problem, we still find a way to get it done. If we say we’re going to do it, we will do it.”
A New Hampshire contractor adds, "You attain it by servicing the client, by performing over a series of projects, over time. So they see what you’re bringing to the table.”
A Rhode Island contractor points out that "It’s almost impossible not to have some kind of problem on a job. A job can go bad in a hundred ways. It’s all in how you resolve those issues, whether or not you make it a long-term relationship. You must step up to the plate and work with the GC, as a team, to handle them.”
A Washington contractor adds another wrinkle: "I’ve now been at it long enough to where I know your relationships are more like friendships, and with that comes trust. I hope that is what they value the most in our company.
"It’s a commitment to their efforts. Every job takes a turn at some point, and they have to know that you’re going to be there for them. It’s a give-and-take. We may not make the margin we need on one job, but if you have a good relationship, down the road they’ll find a way to make that up to you.
"I instill in my guys that when there is an issue on a job, the first thing to ask is: ‘Is this an owner issue or is this a contractor issue?’ If it’s a contractor issue, we need to take care of those guys. We want to do more work for them, so we have to make sure that they turn a profit.”
Another Washingtonian agrees, "The guy can depend on you to get it done, and that’s where trust comes in. I think dependability and trust go hand in hand. And there is always the human aspect. You call Tom, and he knows that he can depend on you to get the job done.”
So does a third Washingtonian: "General contractors want to see legitimate change order requests. It’s all about honesty.”
An Oregon contractor sees it this way: "Honesty and integrity are the key factors. You gain reputation through good common practices, fair play and business understanding. We have a lot of repeat business because we’ve built up good customer relations over the years. They know that when they hire us to do the job, we’ll do it as fast, and as economically as possible; and that our bills will be accurate. "It boils down to trust, dependability and honesty. What else have we got to offer? Everybody can come up with a low price and most have the talent to get the job done in some form or another.”
An Illinois contractor sums it up nicely, "We have a couple of GCs that we’ve worked with for 30 years. My father developed those relationships, and we still foster them today by ‘servicing them to death.’ Service is the key for us.”
The Long-Term Four
Long-term relationships boil down to these factors:
Given that you deliver on the The Big Four above, in order to develop repeat business and a long-term relationship, you must take these additional factors to heart.
People. To a man, the contractors interviewed agree that when it comes to the long term, the relationship is always between people, never between companies.
Dependability. You do what you say you will do—no matter what!
Honesty. Honesty is the foundation for trust.
Trust. When the relationship between you and the GC is based on trust, you gain not only a friend, but also a customer for life. And that’s the answer successful contractors give.
About the Authors
Clearwater, Fla.–based Steven Ferry and Los Angeles-based Ulf Wolf write for the construction industry as Words & Images.