Not Chump Change Capizzi began to see an increase in sales and profits from change orders or additional work authorizations when he authorized field staff to sell, cultivated their awareness of such opportunities, and supported the effort with operational changes put in place about four years ago. Change orders at the company — its work is 40% remodeling, 60% home improvement — have grown ever since.
From original sale, through the job, and into the ongoing post-sale marketing follow-up, the procedure is intended to generate add-on sales and make customers happy.
Shortly after a sale is made, a “re-measure” meeting is held between the salesman, the customer, and the production manager responsible for overall job supervision. A few weeks later, they meet again in a pre-production meeting. “The production manager and the salesman are equally responsible for how a job goes,” Capizzi says. “We don’t just pass the baton, end of story.”
These meetings are the first opportunities to make add-on sales and build customer satisfaction through communication and performance.
“The re-measure process builds a great bond and rapport between the customer and the production manager right off the bat,” Capizzi says. “The production manager is not only remeasuring the building, he’s re-measuring the client, getting to know his temperament, special needs, anything that’s necessary to understand how to handle him.”
With each meeting, and as a job progresses, the anxiety that many customers feel begins to diminish and sales opportunities increase. Customers start to lose their concerns about whether they’ve hired the right contractor and about how the job is going to be done, “so now they’re open and willing to have us do more work,” Capizzi says.
Company sales and production people report that after some 90% of “re-measure” meetings the production manager writes a proposal for additional work, with customers agreeing to probably 80% of those proposals.
There’s no high-pressure selling involved, production and project managers agree. It’s more a matter of service and responsibility to the customer. “It’s the right thing to do, and that’s why we’re there,” says project manager Jack Strumski. “We try to be proactive, to see the need and bring it up with the customer. If we see something that’s worn out or wrong with the house, it’s our duty to mention it.” For example, he says, “every house on the Cape has rot. It’s a matter of identifying, for the customer’s benefit, the need to replace it.”
Split Commissions Production and sales personnel benefit because Capizzi pays standard commission on additional work, half to the production manager or project manager who sold it, half to the original salesperson on the job. There’s also profit sharing based on various profitability thresholds, so it’s not just a matter of top-line sales, but job efficiency as well. The company’s top and bottom line benefit from additional sales that have no additional marketing expense attached. And customers benefit because the work they really want done gets accomplished.
Although Capizzi rates people as far more important than business systems, (“It’s probably 80-20,” he says), the company has comprehensive systems to help ensure the quality and service it strives to deliver. Good people develop good systems, he says. “We don’t do anything here verbally or by memory. And when we find a hole, we plug it.”
For instance, every job passes through a series of checks and re-checks. The salesman is responsible for assembling a sales package of the usual paperwork, notes, photos, etc. He turns it in to the office where administrative personnel check it. Then the production manager checks it again during the remeasure meeting with the customer.
Capizzi and his employees use a similarly thorough system to monitor performance. On completion, customers are asked to rate almost everything about the job on a scale of 1 to 10: the employees they interacted with; various aspects of the job such as workmanship, site cleanliness, production time, and their overall satisfaction with the company; how likely they are to do business with Capizzi again; how likely they are to refer business; etc.
Every individual and job gets a score. The scores are available to and discussed by everyone in the company, as are reports on gross sales and gross profits. And everyone’s profiles are freely available. There are few, if any, secrets in the company. “We are constantly having dialog and meetings. These guys are included in my running of the business,” Capizzi says.
Change Order School There is more or less constant training as well. That training can be informal, such as on the job and between individuals, but it also takes place through formal programs. There is a regular “change order school” that covers topics such as how to calculate and price change orders, as well as how to suggest them to homeowners. All sales personnel have been through the Certified Contractors Network sales boot camp, Capizzi says, and most project managers and production managers have gone through CCN’s blue-collar management training as well.
But Capizzi stresses that, first and last, the success of the company is largely a matter of the people.
“My job is to create an environment that serves these people,” he says. “It has to serve them financially and they have to feel they’re part of the organization, that they can be heard and that they have a stake. It’s not the boss’s way or the highway.”
—Jay Holtzman is a freelance writer based in Jamestown, R.I.