The Law Of Thirds

January 15th, 2017

the Law of Thirds | Great Customers and Bad Customers | LPSolutions

I will never forget a business professional telling me about the law of thirds. And really, this can apply to anything. Great, good and bad.

 

The law of Thirds. As a contractor the hardest thing I had to deal with was walking away from jobs that I didn’t get that were bid by multiple contractors. The frustration that goes into getting prices, calling the supply house, waiting for the return fax or email, writing up the proposal, pricing it all out, putting a card in the letter with my bid and sending it off hoping that I was the first bid that they opened. I wanted to show due diligence and the fact that I took this bid seriously. What I found depending on the job, that there are 3 types of people I was dealing with. One third really do care about who you are and what your company stands for and will pay the higher price for better quality, service and care. One third doesn’t really care, they just want the job done, they need a bid because they may work for a management company and the last third want it done as cheap as possible….preferably yesterday.

 

Who is in the top one third of your customers? They are most likely the affluent, well to do customers. The customers who want you to put a 5 x 7 mat on the floor, wear booties, smell good, very polite and are professional in all that they do. They may be high end restaurants that know you’ll put them first when they call and will pay the extra to be first on that list. These are the customers who may own multiple businesses and can’t afford the down time and will pay the extra price it takes to get it done. Don’t you think that these customers should pay a premium for showing up next on the service call list? You buy the extras booties, rubber gloves, floor mats and you will drop everything to take care of that one special customer. This is the customer who is going to pay you for the extra effort and not complain about the price. They expect to pay it! Their business is more important than a stopped up sewer line that will stink up the entire restaurant. Their thank you is “just send me a bill” and they will pay it! These customers want the warranties, guarantees and service agreements because that is what got them the quality service in the first place.  

 

Who are the middle third of your customers? These are the people who are way to busy and is beyond what they can do. They are either frustrated or upset because it has inconvenienced them. It could be the contractor who just fired a sub contractor and now they just need it done. JUST DO IT! This is the secretary to a property manager who may not be in charge of finances but was told to get the job done. Or they have had three other contractors out that couldn’t fix the problem and now they just want it fixed. They won’t care about warranties, guarantees or service agreements. With all the frustrations the customer has already been through, a service agreement is the last thing they want to have to pay extra for. If you’re good and can fix the problem and explain as you go, it may convince the customer to purchase a service agreement. At that point you are building a business relationship, strengthening your bond with the customer and giving them peace of mind. At that point you will have to test the waters when offering a service agreement.

 

Who is the last third of your customers?  These customers are the real stinkers. They will get multiple bids, ask a ton of questions as if they are trying to figure out how they are going to fix it themselves based on what you are telling them. It will take up to 3 times as long to price it out. They are the ones who want to put a kitchen faucet where a roman tub faucet will go and then tell you, “can you do it for $50” or “I can only afford $50 and I need it done on a saturday or sunday”. They may be the property management companies. Some are good, some are bad. The ones that are good will pay your bill because your prices are cheap, but they have little work for you and will pay immediately. That is their little way of saying “we will continue to use you because we pay immediately, just don’t raise your price”. Other property management companies will want to bargain your monthly $5k bill down to $4,250 because they give you lots of work.

Avoid those at all costs! Let them get the service companies that are hungry and starving. They could absolutely care less about service agreements. BUT, will hold you to their warranties, “Fix it again or we call someone else” and then you’ve now been replaced by a company that charges more than you do. They can be vultures…  



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