Credit: Illustration: Dough Boehm

Your company has signed a contract for a job. A day later, the office fax machine begins to hum. Out comes the customer's copy of the contract with cancelled scrawled across it. When cancels happen, it's because the home-owner felt bullied or pressured into signing, or because the salesperson left questions unanswered, says Carlo Pinto, president of Pinnacle Energy, a window, roofing, and siding company in Maryland and Delaware.

Solutions? Be completely up-front in explaining the three-day Right of Rescission period to home-owners, and ask the customer if they think they might have any reason to cancel. If a cancellation does happen, have someone from the company immediately phone the customer. "We don't bicker, we try to find out why," Pinto says. "There will be cancels, and you need to have a system in place to prevent them from happening and another system to address them when they do."

At Regal Home Improvement Co., in Richmond, Va., owner Arthur Mullian figures that "there's nothing to do but call them back and tiptoe through it." He says that back in the days when his company generated most leads from telemarketing, it sometimes experienced a 30% cancellation rate. Today, he says, "we get 10 or 12 [cancels] a year. The source of the lead is always going to reflect back on the rescission rate." So is the sales methodology.

Make That Call

Preventing cancellations, says Gvido Bars, vice president of Sound Glass, in Tacoma, Wash., is a matter of making sure that home­owners are qualified, understand the product, and have no other questions. He says that cancels at Sound Glass typically result from "something unexpected," such as job loss, a dispute between spouses, or a death in the family.

A year and a half ago Carolina Home Remodeling, in Charlotte, N.C., implemented a new practice that has substantially cut rescission. The morning after a deal comes in, co-owner Bob Anderson gets on the phone and calls the homeowner to thank them, spell out the company's installation procedures, and to ask if there are any questions. That call gives the company a chance to address any issues that might lead to cancellation. "People are fairly forthright," co-owner Beth Anderson says. "If they're going to cancel, they will do it right there."

This year, Beth says, the company took it a step further and created a certificate that reps will have customers initial in two places. The certificate explains that the company will begin organizing the project tomorrow, "that we invest time and energy in the job," she says, and it thus encourages homeowners to bring up any concerns with the salesperson right then and there. "It's a soft way to make sure there are no reservations," she adds.