603: The Real Cost Of Bad Construction Client Service

Contractor Success Map with Randal DeHart | Contractor Bookkeeping And Accounting Services

This Podcast Is Episode 603, And It's About The Real Cost Of Bad Construction Client Service Have you ever paused to consider the real impact of your business's customer experience? Is it lifting your brand or dragging it down, along with your team's morale? Today's consumers expect nothing short of excellence, so understanding the consequences of poor customer service is vital. So, what does poor customer service cost you? Let's delve into the details—they might change your perspective. The ripple effect of dissatisfied customers Every business faces it sooner or later—a client who leaves less than satisfied. But don't be fooled into thinking that the story ends there. Unhappy customers, in your case, homeowners, rarely stay silent. They're more likely to share their experiences with friends, family, and the vast world of social media. What's worse, a scathing online review can echo for years, impacting your brand's reputation far beyond the initial complaint.

The National Customer Rage Survey highlights a worrying trend: many consumers are airing their grievances publicly, and the numbers are rising. This digital age makes it far too easy for a bad experience to snowball into a PR nightmare, causing potential sales to slip through your fingers.

Damaged Reputation: More than just a bad review

When your reputation takes a hit, it's more than losing one customer. It's about a domino effect that can push potential clients away before they even give you a chance. With social proof playing a crucial role in purchase decisions, even a handful of negative reviews can deter future business. In a competitive market, a damaged reputation can be a slow poison, eroding consumer trust and loyalty over time.

Decreased customer lifetime value

Businesses often strive to augment a customer's lifetime value. However, poor customer service can drastically reduce this value. When customers feel undervalued or mistreated, they are less likely to return, cutting short the potential revenue they could have generated. This not only impacts immediate sales but also affects the long-term relationship that could have been nurtured through consistent, positive interactions.

The cost of increased churn

High customer churn is a silent killer for any business. When customers don't feel heard or appreciated, they're more likely to jump ship to a competitor who promises better service. This constant turnover is not just costly in terms of lost revenue but also in the effort and expense required to attract new customers to replace those who have left. A revolving door of clientele can undermine your service business and drain resources that could be better spent on growth and improvement.

Employee morale and productivity

Believe it or not, poor customer service affects your customers and employees. Handling disgruntled customers is draining, and over time, it can significantly impact employee morale and productivity. When your team constantly deals with unhappy clients, it can lead to burnout and decreased performance, affecting your business's overall efficiency. Investing in proper training and support for your team not only helps improve customer interactions but also boosts worker satisfaction and output.

Missed opportunities for growth

Every negative customer interaction is a missed opportunity for improvement and growth. Poor service can blind you to valuable feedback that could lead you toward better practices and innovation. By focusing on delivering exceptional service, you open the door to learning from each customer interaction, paving the way for a more robust and dynamic business model.

Three steps to mitigate the costs of poor customer service:

Understanding the costs of poor customer service is the first step, but addressing them requires actionable strategies. Here are three practical steps you can take right now to turn things around:

1. Enhance employee training and support

Equip your team with the skills and resources they need to deliver exceptional service. Regular training sessions and workshops can help employees stay sharp and motivated. Consider role-playing customer scenarios to prepare them for real-life interactions. By fostering a supportive environment where employees feel valued and empowered, you not only improve service quality but also boost morale and productivity.

2. Leverage Customer Feedback

Don't shy away from feedback—it's a goldmine for improvement. Implement systems to gather customer opinions through surveys, reviews, and direct communications. Use this feedback to identify pain points and areas for enhancement. Actively listening to customers and responding to their needs can transform negative experiences into opportunities for growth, demonstrating your commitment to their satisfaction.

3. Improve Communication Channels

Make it easy for customers to reach you. Efficient communication platforms like live chat, social media, and customer portals can enhance the customer experience by providing quick and practical support. Ensure your team is responsive and transparent in their communications, keeping customers informed and engaged. A streamlined communication process resolves issues faster and builds trust and loyalty.

So, how do you rebuild trust after a client vents frustrations online? Breathe. Don't think the damage has been done - at least not yet.

1. Leave the negative review up.

A negative review doesn't have to be the end of the world. Although customers like to see five-star reviews, they understand that perfection is almost impossible—and probably a sign that something is "too good to be true." In that sense, having a client or two provide negative feedback gives more credibility to the positive reviews. Customers expect to see a couple of negative reviews. If they're among the positive feedback, the negatives won't hurt you much and may even increase your legitimacy if handled well.

2. Respond to the review honestly.

Customer complaints are a way to build trust with your potential clients by allowing you to respond honestly and professionally. Did something go wrong that was out of your hands? Offer an apology and explain what happened. Was there a misunderstanding? Look for the best opportunity to clear it up. Has the reviewer requested additional information or a solution? Respond online to show what you've done to address the situation. Did the reviewer misunderstand a policy? Explain your policy and invite them to contact you with further questions.

Doing so shows readers that you take their concerns seriously and are willing to take responsibility when things go wrong.

3. Learn from negative reviews.

If you see the same concerns repeatedly in the online feedback, it may be time to review your services. Negative reviews give you insight into areas where your customers feel your business could make changes, so take the time to consider what you're being told. You can improve your offerings or communicate better with clients to manage their expectations.

Thank them for their feedback, let them know you're taking their concerns seriously, and explain your next steps.

Final thoughts

Implementing these steps can significantly reduce the negative impacts of poor customer service, leading to happier customers, more engaged employees, and a more substantial brand reputation.

Don't panic. A bad review or two isn't likely to ruin your reputation. A few negative reviews can help you build trust with potential clients. You can use the situation to build confidence in your construction business by being responsive, transparent, and honest.

Finally, remember that a proactive approach to customer service can be the key to unlocking long-term success. You take good care of your clients, so let us take good care of your construction bookkeeping and accounting. Reach out anytime.

About The Author:

Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [e-mail]