Sixty Four Percent Gross Profit, Not Bad for Crap Service.

Wolfgang is a service company and we work hard to deliver. We make mistakes but for the most part we provide solid service. It takes big time commitment, hard work, patience and a thick skin to consistently please customers. Delivering great customer service is rewarding and tiring at the same time. But, if you don’t enjoy helping your customers, if you don’t want to make a difference with your business, get out of business.

So, when I experience poor customer service from another company, it bugs me.

I had my snow tires installed the other day. I usually go to Kal Tire (great company, amazing service) but this time, unfortunately, I was pressed for time so I ended up at their main competitors.

I walked through the door and I was greeted with a gruff “You need to move your car”. Not, “Hello” or “Welcome” or “How can I help you?” just “You need to move your car”. I moved my car, re-entered the office and said, “Hi, I need my snow tires installed” to which the attendant, who happens to be the owner, stated “Can’t help you until Friday”. OK?

I explained that I was leaving town so I wanted to leave the car to pick up at a later date. The attendant responded, “You need to park the car down the street and bring the keys back to me”. What the hell? “You have five guys in the bays can’t they move the car for me?” I said, “Too busy” was his reply.

I had a plane to catch and didn’t have time to argue, so I moved the car again and brought the keys back.

I was charged $110 for the job. It probably took one hour. Peg labor at forty per hour. With no other variable costs, the shop made seventy dollars gross profit. Sixty four percent gross profit margin, not bad for crap service.

Two weeks later my wife and I travelled to Whistler to celebrate our ten-year anniversary. We stayed at the Four Seasons. The staff was all smiles all the time, our room was cleaned three times a day, they shuttled us back and forth from the village, provided complimentary champagne and chocolates for our anniversary, the staff greeted us by name every time we walked by reception. In short, the service was over the top! What a pleasure.

We paid less than two hundred per night! Do you think the four seasons made a sixty four percent margin? Not a chance. I doubt that they broke-even on the room. Of course, the hotel made money on the dining and additional activities that we took part in. The overall experience was so exceptional that we were happy to pay “rack rate” for the add ons.

So, one company makes a large margin and alienates a potential long term client in the process. The other company uses a loss leader, delivers unbelievable service and works hard to close additional high margin sales.

Guess who wins in the end? Guess who gets a repeat client?

Wish Upon A "Star"

Two months ago I began a recruiting campaign looking for two Sales Reps and a Project Manager. The positions have been posted online, marketed through Twitter, facebook, LinkedIn and worked hard through my network. To date fifteen people have been interviewed with no offers on the table or in the funnel.

With a sluggish economy and jobless rates in the news everyday, I expected a boatload of strong candidates? Not the case. I’ve been down this road before and I guess I shouldn’t be surprised. Regardless of external factors, good people are very hard to find.

The challenge is finding the right balance of fit and talent. Loyal workers are tempting, great people with exceptional work ethics but lacking the raw talent that drives growth. Mavericks got talent but they don’t fit with a transparent and team oriented culture. Like everyone I am looking for the Star, the “A” player, the person who outperforms and takes the company to the next level. Easier said than done.

The longer the recruiting cycle drags on the more tempting it is pull the trigger and hire. I’ve made that mistake before. Ouch! Nothing is more costly than a poor hire. Time for the company and the employee is wasted, money is burned and team morale takes a major hit.

It easy to externalize while recruiting; there are no good candidates, on line job site are expensive and overrated. But, more than anything this recruiting challenge suggest that I need to focus more on growing people. But, that’s for another post.

In the meantime we keep looking. Know anyone?

A Job Well Done

Over the last few weeks we took the time to say thank you to our customers. We delivered Halloween treats, hosted a movie premier, made a lot of phone calls to say thanks and continued our Christmas tradition of handing out “Wolfgang” short bread cookies.

Our “Thank you” theme continues in December with a focus on our contractors. The contractors are the guys and gals who get the work done. The people, who work from forty-foot ladders, spray epoxy on metal roofs in the blistering heat, work graveyard shifts while painting parkades and sacrifice weekends to hit deadlines.

Wolfgang switched from employee painters to sub-contractors in 2008 and it was an excellent move. Like any business model change, it had its challenges. But now, through teamwork and a commitment to win/win from our contractors, the model is producing great results.

The paint industry has and always will be built around sub-contractors. Painters are hard working, self-taught and independent people. The best painters want to leverage their skills and maximize their earning potential, so they become sole proprietors. Some choose to work solely for themselves and others, wanting to avoid the headaches of marketing and sales, choose to contract their work from larger paint companies.

With care and attention the sub-contractor model delivers price certainty for the customers, capacity for the larger paint contractors and a simpler more consistent business for the subs.

Our contractors are operationally excellent; they know how to produce paint jobs efficiently with great quality. They are great people to work with.

So, for December we are saying thank you to our contractors. We will have a little party, share a few laughs and celebrate a job well done.

Beware the slippery slope

Your competitor has talent on his roster. Talent, which you think would look good on your side. So, you decide to make a pitch. You invite the coveted “talent” for coffee and suggest that the grass is greener.

Surprise, the “talent” says he is very satisfied with his current position and that he has no intention of leaving.

Now what?

Guaranteed that the “talent “ is going to report the recruitment and any proprietary information that you divulged back to his Boss. By attempting to lure the “talent” you are suggesting to the market that you current roster needs improvements (not good for staff morale) Moreover, the door is now wide open for the competitor to come after your staff.

Whoops, you’ve just clamored up a very slippery slope!

If you are thinking about stealing “talent” you had better be sure your target is unhappy with his current lot. Underestimating your competitors corporate culture and staff loyalty, can lead to trouble.

If “talent” approaches you by all means recruit and improve your team. Attracting talent is paramount for any entrepreneurs’ success. But don’t get obsessed with the players on the other team. In the end you are probably best served to support and nurture you own talent and avoid the slippery slope.

Builder of the Decade?

I attended the Builder of the Decade event mostly out of curiosity. Having seen Premier Campbell speak a few times, I wanted to see if he had been humbled. Nope, the man is as defiant as ever.

Considering the botched roll out of the HST, the “now you see it now you don’t” fifteen percent tax cut and his resignation, you would have thought it was time to crawl under a rock! But, there he was proudly recounting his accomplishments for a packed house.

Look at it objectively and the Liberals achievements are impressive: the Sea to Sky Highway, Golden Ears Bridge, Abbotsford Hospital, the Gateway Project, Canada Line and the 2010 Olympics! Together these projects created thousands of jobs and helped to make the province a better place for everyone. Campbell and his liberals don’t deserve all the credit for these projects but they did their part.

Under Campbell the residents of BC pay lower income taxes, dodged a real estate crash and the subsequent economic meltdown. Not bad.

Campbell’s speech last night captured his time as Premier nicely. Solid performance with snippets of unfortunate clumsiness (his Schwarzenegger impression was brutal)

Say what you will about Premier Campbell you can’t deny that under his leadership the province got infrastructure, jobs and lower taxes.

Err on the side of Fun

My business partner likes to say “Err on the side of fun”. Kevin likes to have a good time. In both business and personal, it’s good advice. Looking to feel more connected to your family, goof around in the basement, play Wii together or go jump around in the local swimming pool. Want to feel more connected to your clients, take them out for some fun.

Last weekend the Wolfgang Team and one hundred and fifty clients went out for some fun. We hosted a private screening of the new DreamWorks movie Megamind. We picked up the tab for movie and the treats. It was a great family event. Parents and kids loved the movie and had fun.

The Megamind event was our way of saying thank you to our valued clients. The event was very casual; no hard sell, just a great time. For me, the best part was having a laugh with our guests as they entered the theatre. It was great to touch base outside of work and meet the families.

Will the event generate some immediate business? Probably not, our business is seasonal not much painting goes on in the winter. Generating business was not the point, saying thank you was. But, I believe that people want to do business with good people. So, come spring, when our clients look to tender their paint jobs, they will probably remember that they had some fun with the Wolfgang.

Learning from our Customers

Every year we survey our customers in an effort to improve our service. We enquire about the quality of our work, service and our people. Thankfully our wonderful clients take the time to answer our questions. The feedback is invaluable and we use it as the foundation for our business strategy.

This year our survey respondents told us that we are easy to work with, our workmanship is solid and our customer service is great. At the same time, our customers suggested that Wolfgang should work to become more consistent. Specifically, we need to start and finish projects in a more timely fashion. After all, any construction project is pain in the rear and no one wants it to drag on.

We’ve listened and learned. In fact, consistency is our organizational theme for 2011. And, we are putting our money where our mouth is.

For 2011 Wolfgang Commercial Painter will be offering a “Start and Finish” guarantee. In short, we guarantee to start and finish your project when promised or you get five percent back.

The “start and finish” guarantee is risky for Wolfgang. Commercial Painting is competitive and we don’t want to give away five percent of our hard earned profits. But, improving our service is important and this guarantee gives our customers another compelling reason to buy from us.

So, we thank our customers very much for the feedback and helping us to make Wolfgang a better company.