When Do You Cut a Customer Loose?
According to the contractor, the elderly man had "already replaced both his thermostats and power heads because he had no heat and couldn't understand why his circulator wouldn't come on. I took my pocket screwdriver tester and sure enough no power to C1. I tripped the relay a few times and the 007 started but stopped after 10 seconds. I said the control was no good and needed to be replaced."
The homeowner did not like the price to replace the part (he was only quoted the price of the part and not the labor to replace the bad one). He said he could get the part cheaper on the Internet and that he'd do it himself. He thanked the contractor for coming - and the contractor left. He left without charging anything. I guess the customer could survive the frigid weather while waiting for the replacement part to arrive.
The contractor later explained that although he was "sick of being taken advantage of by these people," he thought that ticking off the elderly do-it-yourselfer would create bad word-of-mouth among other referrals that would come down the road. Huh?
When should contractors draw the line and stop working for free? When should contractors cut these customers loose? Will the next referral expect the same free treatment? And the next and the next?
Others Speak Out
I knew this guy might get a few sympathetic ears, but I was not surprised that most other contractors hearing the story were critical of the guy's generosity.One said, "You should have never walked out of that house without being paid. I have dealt with enough people like this in my day to say you do not need a customer like this and a service charge is owed to you for just walking in the door... period."
Another contractor was more succinct, "Working for nothing is what's gonna put you in the poor house. So the homeowner is gonna do it himself. Big deal. Charge him a $125 diagnostic fee and be on your way. He called you –– you determined the problem –– he owes you a professional fee, unless of course you don't consider yourself a professional."
One responder even blamed the supplier who sold the parts to the homeowner. "When will the suppliers get it? They sell to stupid people; take it back, which now makes it used, and have to discount it to sell it again, if in fact they can sell it again. Gee, what a brilliant business concept."
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The Decision Can Be Painful
I know that all customers like the one in this example can't be shunned or made an example of. Each service call is different and there are exceptions to every rule. But having a policy, especially explaining the terms of the service call, e.g., C.O.D., estimated charges with customer sign-off, can save a lot of trouble down the road. If the customer wants none of that and prefers you perform service out of the goodness of your heart, be prepared for a lot of charity cases.These are tough times. Prospective customers are worried about rising health care costs, shrinking retirement nest eggs, higher energy costs, and higher equipment costs. They have every right to be worried.
But look in the mirror - aren't you worried about the same things for yourself and your employees? Cut the nonmoneymakers loose and stay in the black. You deserve it.
John R. Hall is business management editor. He can be reached at 734-464-1970, 248-786-1390 (fax), or johnhall@achrnews.com.
Publication date: 11/28/2005