On-Time Project Completion – Guaranteed

National Association of the Remodeling Industry article:

Tuffin’ It Out: Watching the time impresses clients

by Morgan Zenner, marketing and communications coordinator

To Neil Parsons, of Mark of Excellence Remodeling in West Long Branch, N.J., respecting your client’s time is important. After careful research from a select group of clients, friends and family, Parsons developed his top five complaint list.

“We wanted to develop a complaint list to recognize certain things that were of biggest concern and figure out how to overcome them in order to set ourselves apart from our competitors,” Parsons says.

The list consisted of cleanliness of the job site, pricing, surprise extras or changes, payment scheduling and finally, the No. 1 client complaint of time. More specifically, the complaint included being on time for the work day and having the project finished on or before the estimated completion date.

Parsons understands why scheduling and timing is the main client concern. A remodel is typically considered a major inconvenience and requires a major change in one’s lifestyle.

“When you tell your client that the project will be completed by a certain date, they mentally prepare themselves for that time frame,” he says, “almost to the point where people ask themselves, ‘Could I live without a kitchen for five weeks?’”

If the answer is yes, then the client prepares themselves for the struggle. When projects run late, it can be very hard to take.

“If you get half-way through the project and it is not on schedule, clients get upset because they were not expecting it,” he says.

An offer they can’t refuse

Parsons started to think about ways to address this issue that would make the most sense for the company and the client. He is a homeowner, just like his clients, and could understand this concern just as well as anyone else.

“I sat on the other side of the table and began to think about my wife, who happens to be a very tough client, and what she would want to hear from a contractor,” Parsons says.

The end result is the On-Time Completion Policy, where Mark of Excellence Remodeling promises to pay clients $500 per day for every day the project is not finished by the estimated date. In addition, the company pays $1 for every minute an employee is late to a meeting.

So far, the policy is working, and the client reaction has been great, in part because money talks.

“This not only sets the tone in regards to the client’s time but to the entire process that we are going to take the project seriously until the end,” Parsons says.

Here is how it works: After clients and the sales department agree on the job and the design, Parsons asks everyone who is contributing to the project how long their portion of the project will take to complete. Once the estimations are confirmed, the project leader works out the scheduling.

“I do factor in a few typical bad weather and sick days, but for the most part, we know how long something is going to take,” Parsons says. “Where it starts to get sticky is when clients start to change orders.’

To avoid the conflict, Parsons requires clients to make 90 percent of the project decisions before work starts. If some decisions can’t be made at that time, there is an agreed upon deadline for when decisions are made. If a client’s decision changes during the project, Parson’s makes a note of it in the project records, and it is pushes back the completion date.

“We don’t pay clients $500 per day if the are responsible for the delay, but we do pay clients $500 a day for delays that are in our control,” Parsons says.

In the event that the project is delayed, the money is extracted from employee bonuses, which are based on a percentage of the project’s profits. These bonuses are only granted if the job is done on time and on budget. Otherwise, the bonus money goes to the client.

An argument against a system like this is that it could decrease the quality of work because employees are rushing to complete the project. Parsons has found ways to prevent this.

“We have weekly progress updates with the clients where we discuss the work and the scheduling,” he says. He also established a 13-period payment plan to allow customers to give feedback throughout the project.

“Essentially, if our customers have an issue with the work quality, they will probably hold their payment. That forces us to address issues right away,” Parsons says.

Although most clients are mindful of the $500 bonus, they don’t use it as a way to get a free remodel, they leverage it as a way to control the work that is being done because they know that the project manager will be held accountable for time, budget and quality.

Parsons notices that clients appreciate the ability to exercise their control during the process by holding back a payment. They also appreciate Parson’s concern for their home, families and their quality of life during the project and after.

You better pay up!

So, how much money has Mark of Excellence Remodeling had to pay? “The most money we’ve had to pay was $1,500 for a three-day extension, but it was a $120,000 job.”

Of course, with a project that size, Parsons has a greater risk of running into problems so in retrospect, three days is not too bad. For employees, it is enough money to motivate them to get their work done on time.