REPLACEMENT CONTRACTOR: How does customer service make a difference in a home improvement job such as installing new windows?
Charles Gindele: The way I look at it, if I went out to dinner with my wife and we had a great experience, I would certainly be inclined to tell you about that experience if you asked me â€” maybe even if you didn't ask me. So I am applying that to home improvement, specifically to window and door replacement.
RC: Did this happen in one year or over time?
CG: It became obvious to me a dozen years ago, as I got my arms around the financial structure of my business, that I wasn't selling jobs for enough money. I had to raise my prices to get the gross margin I needed to operate profitably. I also realized that we had to compete on things other than price. It's not just the products, it's how we do business.
RC: How did the Red Carpet Program come into play?
CG: Well, turn the clock back to December 2010. We'd just gotten notification that we'd won the Renewal By Andersen excellence award for the third quarter. That same day we got the Super Service Award from Angie's List. I thought: What can we do to make this real and tangible and to market it to our customer? And also make it real and tangible to the employees?
Getting Employees Onboard
RC: How did you introduce the program to employees?
CG: We normally have our company meeting on a Friday morning at 7:30. We announced that the January meeting would be held on Saturday morning. When the employees showed up there was a yellow school bus in front of the office. Our office manager, Kathy, directed everyone onto the bus and gave the driver directions. We ended up at the Ritz Carlton at Laguna. Red carpets were rolled to the door of the bus when it pulled up in the hotel portico. We had a breakfast meeting in a private dining room. Everyone was there: admin, salespeople, installers.
RC: What was your message?
CG: I told staff: The reason I brought you to a five-star hotel is that I wanted to make an impression. I could have taken you to the Holiday Inn. Instead of the least expensive place I could find, I took you to the most expensive â€” because I wanted you to experience the ambience of a $700-a-night hotel where no need goes unanswered and someone is always at the beck-and-call of guests. And we want to do the same thing for our customers.
We showed our staff a brochure we'd created to distribute to customers, called the Red Carpet Experience.
RC: How do you use the brochure in your selling?
CG: The salesperson opens the sales call by talking about the experience. We know that buying windows and doors is a daunting task and that there's a tendency to focus on the tangible things, which is what most companies focus on. But you can have a great product and deliver a bad experience. It's like being a great doctor with a lousy bedside manner. And homeowners sense this, but they don't know what kind of questions to ask the contractor.
We give homeowners 15 criteria to use in evaluating contractor selection and overall job satisfaction. Do you finish on time? Stand behind the work? Pull required permits?
We build our case. We explain our culture and our way of doing things.
Red Carpet Boost
RC: Did the Red Carpet Experience affect your sales?
CG: Our sales were up 26% in 2011. Most of that I attribute to the Red Carpet Experience. We won the Angie's List Super Service Award again for the second year. And at the Renewal by Andersen Summit we were recognized for achieving three Best of the Best: homeowner satisfaction, sales growth, and community involvement.
The most important thing is you have to like what you did for them and feel good about what you did for them. And they have to like the people who did it for them. It doesn't happen overnight.
RC: What makes your customer experience different?
CG: It's communication. It's clear, concise paperwork. No pricing games. Being up-front about any issues and what we're going to do. Then doing what we say we're going to do when we said we were going to do it.
RC: Is it difficult to get employees to put this in practice?
CG: I think most people are well-intentioned and want to satisfy the people they're doing work for. For new people who are just coming to work for us, they quickly learn that that's the way we do it. We've been able to tap into the collective intelligence of employees to create a culture where they feel empowered to speak up and fix things.
Documenting the Experience
RC: How do you know it's actually happening?
CG: We documented it through homeowner satisfaction surveys. And seven years ago we partnered with Renewal By Andersen and they do their own customer satisfaction surveys. The key question RBA asks is: â€œBased on your experience, would you recommend us â€¦â€? The goal is to get 80% of customers rating you a 9 or 10, the top-notch scores. Some people will never give you a 10. They might give you a 6, 7, or 8. But you would really have to have offended them if they give you a 1 or 2. We were in the top 5% of 110 RBA locations.
RC: How much of your business is repeat and referral?
CG: About half. For instance, we did about $650,000 in April and I will bet that $300,000 of that was past customers or referrals. To give you a better idea, in 2008 we did $7.5 million. About $5 million of that cost me $125,000 [to generate], most of it networking stuff or Internet-related. We did another $2.7 million that cost me $950,000 to generate. That marketing cost was unsustainable.
It was the first year of the recession and even the best message was falling on deaf ears. In 2009 I didn't have a lot of marketing dollars. A lot of the customer acquisition part of the business plan was repeat, referral, and Internet stuff. But by reaching out to past customers with promotions, I was able to make money in 2009, 2010, and 2011.
RC: What do you think is the most important thing a company owner can do to be successful?
CG: You have to get a team that believes in you. I'm the sole owner. It's kind of a lonely world at times. And when you're having a bad day you've got to fake it sometimes. You can't sugarcoat bad situations. I tell it like it is. When sales dropped I said: We have to change things here.
We took a lot of bitter medicine. We asked for pay cuts. But we have a client base of more than 30,000 people. And we do a lot of multiple jobs and repeat jobs.
RC: Is it possible for employees to see their relationship with the customer the same way the owner does?
CG: My first year in business I sold half the jobs and installed all of them. At the end of the year I had 40-plus poinsettias delivered to the customers to say thanks. As an owner, you're not out there touching every customer, you're managing a company. But I still want that feeling to exist. I still see a lot of my customers. And I go out on re-measures from time to time. I use that as a marketing opportunity to check in on the customer experience; to find out what it was like buying a job from us. If you get too far away from the customer you get a skewed perspective.