High Road to Where? Why is ethics even a concern to home improvement companies? “It pays off,” Jones says. “But that’s not the only reason why we do it. You don’t see ‘Business Ethics’ as a line item on a financial statement. But you do see the results, or the lack of them, on a financial statement. So you simply have to do the right thing. And not everybody is capable of that. Any decision you make short term can have a negative impact on your earnings.”
Whatever approach owners take, however, must be consistent. “What is ethical in terms of pricing?” Yoho asks. “What is ethical in terms of stealing your competitors’ salespeople? A guy hires a salesperson from another company, who brings along that company’s presentation book. Is that ethical?”
What is or isn’t, he maintains, is not as important as the idea that there be a standard. “A business,” he says, “has to have commandments.”
Weinstein points out that it’s up to company owners to establish rules and an environment in which decisions are made based on ethical principles that all subscribe to. If an owner fails to live up to the principles he espouses — if for instance he pockets an overcharge, ignores a request for service, or encourages reps to bad-mouth the competition — he gives de facto permission to discard ethics.
What can you do to stay ahead of the ethics curve?
Have a written policy formulated by yourself or borrowed, from NARI for instance, setting forth what you consider to be acceptable ethical principles or practices as they pertain to marketing, selling, and installing your products. Make these part of your employee manual and include them in your presentation book. Set limits on the ability of salespeople to determine the price of a project. Then monitor those limits. If customers are inadvertently overcharged — say for work not performed or materials not used or needed — call their attention to the error and refund the money. Be willing to fire salespeople who abuse the goodwill or otherwise take advantage of customers, and let everyone in the company know you did and why. Bob Dillon once had a rep who forged a company contract to collect a $1,500 deposit, which he kept. Dillon not only fired the rep, but had him prosecuted, and refunded the $1,500 himself. Become a member of a trade association, such as NARI, and promote that membership in your marketing. Involve your company in community or charitable activities. These put out a positive message about your company’s ethics, culture, and stability. They make you look like the good guy. Join the Better Business Bureau, or better still, become active in it. The BBB is an organization that consumers know and trust. In Cincinnati, alone, more than 200 people a month inquire about Champion Windows through the BBB. “Ninety percent of the public knows what the BBB is,” says Rick Edwards, of Custom Patio Rooms. Belonging, he says, immediately gives the company’s salespeople something to talk about in the sales presentation. His company gets as many BBB inquiries as it has jobs. Respond swiftly, that is, within 48 hours, to service calls or calls for repairs under warranty. Last year Hanke Brothers spent $384,000 on its service department. The goodwill generated by cheerfully provided service comes back in repeat and referral business. “How many more sales did that bring in?” Kim Hanke asks. “A million? A million five?” Most companies, he says, see service calls as expenditure. “We see it as an investment.” Inform customers. If your warranties are pro-rated or if warranty work comes with a service charge, let customers know that when they sign the contract, not when they call for service three years later. Give employees the authority to spend whatever time it takes to resolve situations involving customer dissatisfaction, and make it their job to do that. At NewPro, for instance, employees are assured that they have the power to resolve whatever complaints are received, regardless of expenditure in time and money. “They don’t have to come to me or a vice president,” President Nick Cognliani says. “They’re empowered to make the decisions that are right for the customer, and nobody will get in trouble for doing that.” Use customer satisfaction surveys to ensure that the people you do business with are happy with what your company did for them, and if they aren’t happy, to find out why. As an increasing number of home improvement companies struggles to leverage marketing costs by building an ongoing base of pre-customer and referral business, the issue of ethics comes repeatedly to the fore.
“Taking the high road is not just the right thing to do,” Weinstein says, “it’s the smart thing.”
