Service calls to previous jobs are likely the most reviled aspect of the home improvement business. In addition to the potential damage to your reputation, they cost time, money, materials, and the profit opportunity lost while your installers are working on old business rather than new.

However, service calls are a part of this business. How do you budget for them? Is there a way to minimize their negative impact on your business?

Invest to Forestall Callbacks “If you do the minimum, you're going to have lots of service calls and angry customers,” says Frank Farmer, of American Metal Roofs in Flint, Mich. Farmer's approach is to budget for service calls on the front end, before and during the installation, rather than plan to make up for it after the fact. By investing more in recruiting, training, tools, and materials, he fields installers who are better prepared to do all work to approved specifications and thus minimize service calls.

“One of the pitfalls guys can fall into is the mentality of ‘It's good enough for this customer,' and that can get you in trouble real quick,” Farmer says. “The crew might get to know the customer and think, ‘They're easygoing, they won't mind if we do it this way.' But every aspect of installation is either done to a standard or it's not. We've torn off and redone areas we saw as potential problems before the customer ever said anything, rather than let it become a problem down the road.”

Service as Opportunity Contractors' natural aversion to service calls is understandable, because they cost money. But what about an approach that looks to use service calls as an opportunity to make money? “We look at it as a marketing expense and treat it that way,” says Scott Young, president of Advanced Home Technologies in Clintonville, Wis. “When we take care of that customer, we do it right away and we give them a bill for the service call and put ‘no charge' on it.”

Ed Bernhard, of BHI in Harrisburg, S.D., agrees. “We don't set a specific budget,” he says, “but we take care of them immediately.”

Homeowners universally fear that they'll choose the wrong contractor. If you can turn a bad situation around and delight customers in a way that exceeds their expectations, they'll be proud enough of their choice in contractors to brag about you and your handling of the situation. “I know it's effective,” Young says. “If you charge someone 50 dollars for a service call, that's perceived as a negative. But if they see it was worth something and they got it at no charge, they're going to tell their friends what happened and recommend us.” Bernhard sums it up this way: “We find that taking care of them immediately will get you more work.”