A Simple Way To Make More Money and Have Happier Customers

Oct 24 , 2013

A Simple Way To Make More Money and Have Happier Customers

Customer Satisfaction chart

Yes, you read that right. I’m going to show you a simple and effective action that you can take to increase your hourly rate by $5, $10, or even $20 while actually increasing your customer’s satisfaction. (Hint: It doesn’t cost any money or extra time)

The secret is in managing the expectations of your customers.

Whenever a customer hires a handyman or other service provider, the customer has certain baseline expectations. These expectations are derived from that customer’s previous interactions with other service providers.

Now, I’m going to go out on a limb and guess that your service isn’t exactly like everybody else’s. That means it’s your job to align customer expectations with what you are actually going to deliver.

You may be thinking this is pretty obvious, and it is. Yet, I’ve screwed this up countless times and see it happen everyday with people I hire or products I buy.  New handymen are especially prone to making mistakes regarding communication with customers.

Ever had an unhappy customer? Ever received a bad review online? Ever had a customer say “Oh, that’s more than I thought it would be?” That’s because you didn’t communicate well enough.  Those customers were expecting A, and you gave them B.

Think back to the last time you were pissed off or even just mildly unhappy from a service or product you bought.  Was it because you were expecting something else?  Hopefully, otherwise you bought something you knew you wouldn’t be happy with, and that’s flat out dumb.

So, what can you do as a service provider to properly manage expectations, charge more, and get only excellent online reviews?

How To Manage Expectations in 3 Easy Steps

Step #1:  Talk price immediately

The first interaction with the customer is critical to properly setting expectations.  I’ve found that if I don’t mention price immediately, it becomes more difficult and awkward to bring it up as time goes on.  Not only does this cause me to lower my prices on many occasions, but it also sets the customer up for potential disappointment.

The key to doing this in a confident manner is to know your shit before the customer calls.  This means setting a minimum service charge, knowing your hourly rate, or setting a policy on free quotes.

If you fail to figure these things out, you’re going to be forced to make a game time decision under pressure.  This almost always leads to bad decisions.  I can’t even count the number of times I screwed this up before finally developing decision models that I stick by when dealing with customers on the phone.

Here’s the deal.  The sooner you put pricing on the table, the better off you will be.  If it’s too expensive for that particular customer, then you can part ways on the spot, no harm done.  You didn’t want that customer anyway.

If a customer is still interested in moving forward, then you know it’s worth your time and their expectations of how much it will be are set properly.

Step #2:  How long will it take and when can you do it?

The next step is to set their expectations on when you can get it done, and approximately how long the project will take.

If you don’t know yet, then you can say something like “Based on what you’ve described, I’d expect it to take about 3 hours, however, I’ll be able to give you a much better idea once I see the project.”  (This gives them a general idea, but still leaves it open if things go wrong and it ends up taking longer.)

Often times, If I think something is going to take me 2 hours, I’ll overestimate and say something like 3 hours.  That way when I finish early, the customer is happy because they saved an hour of labor.  If it ends up taking 3.5 hours, I was still pretty close with my estimate and the customer will likely understand.

Step #3:  What can they expect when you’re done?

The next thing is to let them know what they can expect from the finished product.  Are you going to do a quick and cheap repair that will get them through the winter or are you going to make it like new again?

Not only is this important as far as managing expectations goes, but it’s also helpful for selling your services.  When  customers know exactly what they are going to get for $300, it’ll make it easier to fork out the cash.  Conversely, if a customer is quoted $250 for that same job but are unsure of the results, they are going to be less likely to buy.

So as you can see, being clear and setting expectations is very beneficial to both you and the potential client.

Let’s back this up with a story

Way back during month 3 of running my handyman business, I came across a customer looking for a handyman. Let’s call her Jan.

Jan was looking to simply add a mirror to one of her sliding closet doors. She had a three panel door and wanted the middle panel to be a mirror, but did not want the side panels to be mirrored.

Me, being an eager new business owner, wanted to help her do just that. So, I told her I’d come over and take a look. I didn’t mention anything about how much it would cost because I had no idea myself. (first mistake)

After looking into solution for her request, I discovered that most manufacturers don’t make sliding closet doors with this configuration. They only made all mirrored or all wood. The ones that did offer this variety where super expensive, pushing $3,000.

I also knew that there was no way I was going to attempt to attach a mirror to the side of an existing door. So, the next best option was to piece together a solution and only replace the middle door. Since all sliding closet doors have different rails and rollers, I was going to have to order a custom panel and find some rollers that would work with her existing track. This way I could just integrate the new door into the existing system.

I found everything I needed, let the customer know what it would cost, ordered the parts, and installed the door.

Right when I thought I was finished, I realized that the mirrored door was a little flimsy. This was a serious issue because the middle panel needed to be rigid enough to pass through the 2 guides at the bottom of the door. It wasn’t, and caused the door to run directly in to the side of the guides every time it was moved.

Long story short, I ended up spending a lot more time re-inforcing the door and making it work. The job ended up taking 3 times as long as I expected, causing my estimate to be way lower than it should have been.  I lost a lot of money on that job.

Sure, I could have raised my price, but I wanted to keep the customer and avoid getting a bad review online.

I knew that it was my fault for not communicated properly. If I would have raised my prices, I would have been going against what I had set the customer up to expect.

How could I have avoided this?

First, I should have immediately recognized this job as something I had never done before and therefore charged hourly.  I could have let her know right away that I’d come up with a solution for her, but wasn’t sure how much it would cost.

Secondly, once I found a door and came up with a solution, I should have clearly let her know that this was a custom solution and therefore may not work perfectly right away.  This way I’d take the risk off of me and let her make the decision whether she wanted to risk potential additional expenses.

I ended up charging only $400 for the whole job, but should have charged more like $800.  Not only that, but she has never hired me again!

By simply communicating better, I could have made an additional $400 and had a happier customer in the end.

Since then, I’ve gotten much better at communicating with my customers and make this type of mistake much less often.  And one thing is for sure, the sooner I talk price, the better off I am.

Next time you speak with a customer about a job, keep this in mind and actually implement it.  You’ll likely make more money, have less awkward interactions, and have happier customers.  Everybody wins.

What do you think?

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