Construction is a competitive business. A client can “jump ship” at any point, and losing customers can mean a huge dent in your company’s revenue. If you wish to protect and grow your revenue, you must therefore focus on strengthening your relationships with your customers.
Building good and long-term relations with your clients may seem straightforward. Caring for your clients and being a reliable contractor, subcontractor, or material supplier seem easy to do, but it takes diligent work to develop effective strategies that will ensure your customers are happy and your business revenue is protected.
- Effective strategies for construction revenue protection
- Building customer relationships through communication
- Importance of building customer relationships
- Strategies for building customer relationships in construction
- How to build customer relationships in construction
- How to maintain customer loyalty
- How to improve customer retention
- How to expand your client base
- Construction credit management and client retention
Effective strategies for construction revenue protection
Nothing beats a good plan. Whether it’s for managing a project or expanding your construction client base, you need to come up with airtight plans that consider all possible aspects that will help you achieve your goal.
Part of being prepared is also coming up with contingency measures in case Plan A does not pan out. It becomes even more important when major economic downturns happen. If anything unexpected comes up, you need to be able to re-calibrate your strategies to keep the business running.
Understanding your payment rights
The construction industry is known for delayed payments, among other payment issues. To protect your revenue, you also need to know your payment rights and to protect them proactively.
You are strongly advised to come up with a mechanics lien policy. Make sure that you serve preliminary notices, even if the state in which you are working does not require you to do so. Serving preliminary notices opens communication lines with your clients. Not only does it remind them to honor their payment responsibilities, but it also encourages them to serve preliminary notices on their respective customers.
Building strong customer relationships
A big part of construction revenue protection is ensuring that you maintain good relationships with your clients. When you have loyal customers who are satisfied with your services, you are more likely to keep your customers, even when major disruptions.
There are many ways to establish a solid relationship with your clients, but the key is always to make them your priority. Make sure that you provide good services to your clients, and always be willing to adjust and go above and beyond to ensure supreme client satisfaction.
Building customer relationships through communication
As in other industries, communication is one of the most important aspects of building good customer relationships. In all stages of a project, you must know how to reach your clients, and your clients must know how to reach you.
If, for example, changes must be made to the original scope of work stipulated in a contract, all the relevant stakeholders must be kept in the loop. You must know what is going on the ground, and your clients must be aware of the costs associated with the change order.
If communication lines are clearly established, issues and concerns will be addressed promptly. Consequently, your clients will know that you run your services efficiently, and they will most likely want to keep on doing business with you.
When communicating with your clients, you would want to leverage the available technologies that will keep all stakeholders in the loop. Other than emails, text messages, and phone calls, there are also project management tools and software that can keep everyone updated about all the necessary updates and developments in a project.
Importance of building customer relationships
Construction is a client-based industry, and so ensuring that you have a good working relationship with your clients must be a top priority. Other than having a constant stream of revenue, there are other numerous benefits that you can reap for ensuring that your clients are happy.
Increase in sales and revenue
Satisfied clients will want to keep on working with you, and they will be more willing to take on the other services that you offer. This will potentially increase your business’s profitability. Your goal should, therefore, not only about delivering top-notch services but also introducing your clients to the other ways your company can help them.
Always watch out for opportunities to address your client’s problems. You can do this by constantly communicating with them and by being proactive in identifying ways in which you can make their lives easier.
Word of mouth recommendation
One of the best ways to promote your business is through word-of-mouth marketing. If you want to expand your business and to grow your client base, you want your best and most loyal customers to put in a good word for you and recommend you to other companies.
Potential clients also often ask for references before they work with you. If your existing clients are fully satisfied with your services, and if you are on good terms with them, they are more likely to give you positive references to boost your business.
If you only have short-term goals and you are looking to keep clients for short periods of time, focusing on building good customer relationships may not be as important. However, fostering good relationships with your clients will definitely help you if you have long-term objectives in mind.
In the construction business, long-term success lies in having a loyal and reliable client base. Having a loyal and reliable set of clients puts you in a prime spot to grow your business.
Strategies for building customer relationships in construction
There are many strategies that you can employ to build a mutually beneficial relationship with your clients. It is important to understand that these strategies must not only focus on a single aspect of the business.
Instead, your clients must be your top priority in every aspect and every stage of a project. Right from the get-go, you should have the clients’ interests in mind, even before you officially take them in as your clients. You would want to work with clients who need certain services that you can provide and whose needs align with your long-term goals.
For example, if you are a material supplier who supplies goods that are worth mid to high-end prices, you may reconsider taking on clients who consistently look for low-cost materials. They may sign you on if you happen to have the cheapest offer, but you may end up having to lower your prices in the future just to retain them in your client base.
You also wouldn’t want to take on a new client if you think you are not able to deliver on their demands. Some companies are tempted to take on large accounts without proper planning, solely for the prospect of earning a huge sum of revenue. You do not want to fail a client, so always make sure that you have the means necessary to provide them the services that you agree to do.
How to build customer relationships in construction
The table below shows a few examples of how you can build good business relationships with your clients.
Choose the right clients
To develop a good working relationship with your clients, you must first choose the right clients to work with. Some clients may not be a good fit for your business model and long-term goals, and this is something that you should consider before you sign a contract with them.
Part of choosing the right clients is also scouting for the best companies in the industry. Working with the best companies will be a huge boost for your business, but be sure that you have the resources to be able to provide them the services they need.
Be ready to adapt to client’s preferences
Being flexible is a sought-after quality in business. This is because not all clients have the same practices and preferences, and so you must exhibit flexibility to ensure that each of your customers is satisfied.
For instance, you must be able to communicate with your clients through different methods, be it through email or phone calls, or video conferences. If you limit your business communication to just a single method, you will alienate some of your clients, and you will most likely lose them. Every client prefers different ways to reach out, and you should be able to adapt depending on a client’s preferences.
Communicate with your clients regularly
It is important to connect with your clients regularly, not only during a course of a project but also during down seasons when they are in between projects. You can communicate with them by sending automated email messages, or you may touch base with them through phone calls or in-person lunches.
By keeping in touch with your clients, you remain updated with how their businesses are doing, and you can also identify potential opportunities to step in and help out. You are also able to stay within their radar, and they will think of you if they ever needed your services in their next ventures.
How to maintain customer loyalty
- Prioritize your clients’ needs
Every step of the way, you must have your customers as your number one priority. You can do this easily by being available to your clients whenever they need anything from you. Keep in mind that your clients can tell if they are being ignored or if their needs are not prioritized.
If, for instance, it takes you a long time to respond to a client’s questions, they will fairly assume that you have other priorities before them. Your client is less likely to keep on working with your if they feel that they are only the second priority.
- Offer rewards and incentives to your loyal clients
Giving rewards and incentives is one way of thanking your most clients for their loyalty. You can incentivize them through reduced prices, and you can also offer other gifts in kind, such as free lunches.
Sending thank-you notes is also a good gesture to show your clients that you appreciate them. However, be sure that your services are top-notch and that your clients are truly satisfied with your work. Rewards and incentives are not enough to retain your clients, and these tokens must always be substantiated with high-quality services.
- Always deliver what you have promised and more
Going above and beyond is becoming a tired phrase in business, but it is still what most clients look for. Clients want to work with companies who deliver what is asked and who do more than what was initially promised.
If you want to keep a loyal client base, you should be able to fulfill the most basic expectations and go beyond them if necessary. At the very least, your invoices must be served on time, and your clients must be notified in advance of any potential delays.
How to improve customer retention
Respond to queries right away
Replying to messages and phone calls right away is very important. You do not want to keep your clients waiting for an answer, and so you want to get in touch with them as soon as you receive a question.
It should be part of your standard operating procedures to reply to inquiries after a certain number of days. It will also help if you have a standard set of replies to basic questions. Being able to respond to their requests and queries right away demonstrates your reliability as a company, so you should never leave your clients hanging.
Provide top-notch services
To increase client retention, you must ensure that the services you provide are worth staying for. All customer retention strategies do not mean anything if the core of your business – the services that you offer – are not of stellar quality.
If clients are not happy with your work, be willing to make concessions as long as the demands are reasonable. Be diligent and always make sure that the services you provide to a project are enough to speak for themselves.
Ensure your clients can access you when they need to
Being accessible is another important trait that will help you retain your clients. Your clients should be able to speak with you when they need to, especially when they have questions or when they have concerns that they want you to address.
Your clients should also be able to contact you using the method that is most convenient for them. Some clients prefer phone calls, while some clients prefer email exchanges. If you want your clients to keep on working with you, then you should be willing to adapt to their preferred communication methods.
How to expand your client base
There are many ways to broaden your client base and keep your business growing. Below are just a few actionable steps that you can do if you want to expand your client base:
- Be present in industry events
There are many conventions, conferences, mixers, and other events related to the construction industry that you can attend. These events are a good opportunity to learn about potential clients, touch base with existing clients, and expand your network.
- Utilize social media to your advantage
These days, you must have an online presence for other people to find out about your business. Utilize social media such as Twitter and LinkedIn to connect to potential contacts. You should also have a working website that potential clients can look at when they are doing their research.
- Research potential clients and opportunities
Being informed is key if you want to grow your business. You should know who your potential clients are, and you should identify the opportunities that will allow you to help them. You should also know the best players in the market and find your edge over them. Use it as leverage to gain and retain more clients.
Construction credit management and client retention
Proper credit management in construction can also help you retain your clients and expand your business. For instance, efficiently managing your customers’ credit accounts puts you in good financial shape, which consequently affords you more resources to improve the quality of your services.
Below is a list of some approaches that you can use to improve your credit management practices:
Have a solid trade credit policy
When you have a sound trade credit policy, you can vet potential customers by assessing the credit risks associated with them. You are then able to make data-driven decisions on whether you should approve or reject their trade credit applications, which in turn allows you to only work with reliable, long-term customers.
Set appropriate trade credit limits
Sometimes the question isn’t about whether you should approve or reject a customer’s credit application. Sometimes the issue is how much you should let them borrow. Part of building a good trade credit policy is determining how to set the right credit limit to ensure that both you and your clients are not pushed against a tough financial situation.
Protect your lien rights
If a client fails to pay up, you can recover your payment by filing a mechanics lien. To ensure that your right to filing a lien is protected, you should always serve a preliminary notice on your clients. Doing so also establishes communication lines with them, which paves the way for building a stronger customer relationship.