Our Customers Speak and We Listen

In the past, Wolfgang has blanketed Vancouver’s Property Management industry with paper marketing. Flyers, post cards, faxes, direct mail, proposal folders, display ads, invoices, you name it we did it. If we needed leads we dropped a bunch of flyers. If we needed “Brand” awareness we send out postcards. You get the picture. We never felt good about the paper waste but the marketing worked so we did it.

However, as the company grew and gained market share our traditional marketing tactics devolved from effective to unproductive to damaging. Our customers became bored and irritated with our marketing efforts. Eventually, one our customers, emailed, “stop with the paper or we’ll stop buying!” Right, time to change.

Today, we have eliminated paper marketing in favor of social media and PR. And, our paper billing has been converted to a digital format. The change in our billing process was a no brainer but the marketing has been challenging.

PR and social media take lots of legwork and time and the results are difficult to quantify. There tends to be long periods of “unknown” or “is this going to work?” and in business the unknown is scary. But, our customers let us know that a change was needed and we are committed to “greener” not to mention more effective marketing.

Check back in a few weeks to see how our campaigns are rolling out.

Painting the Town "Green"

The paint industry and its negative impact on the environment has been a popular news story lately. Let’s face it; paint is not a green product. The industry is improving though. Recycled paint is more common, proper disposal programs are in place and low or zero VOC (Volatile Organic Compound) paints are becoming the norm.

Now, a major step has been taken to clean up the industry. By the end of 2012 oil paints will be regulated out of production and not allowed for residential or commercial use. Low VOC, water based paints will be become the standard. The phasing out of oil paints as a method of “greening” the industry is a step in the right direction but it is controversial.

Low VOC paints require more energy to produce than oil based paints. Water borne paints under perform oil paints on high traffic areas like doors, frames or handrails. Moreover, when transitioning a surface from oil-based to water-based paint, harsh primers are required. Even with the proper primer, the water-based system breaks down faster and the surface requires more frequent re-paints.

So let’s summarize: more energy, harsh primers, less durable paints, more frequent re-paints.  Doesn’t sound very green? Short term, it is not. However, paint technology is rapidly improving and the manufacturers are developing more durable water borne products all the time.

Despite our concerns, Wolfgang is on board with the new paint regulations. Long term, the changes make sense. For now, our job is to adopt the new regulations and educate our customers along the way. 

Hang onto to your bottom line like your life depends on it, because it does!

I remember leaving my first meeting with the bank, the year that I founded Wolfgang and thinking “OK, he’s not quite as enthusiastic about my business as I am?” The bank was not interested in loaning me money. I was on my own and I needed to be profitable or the business would fail.

During my start-up I had no choice but to compete on price. Margins were tight, they still are. A thousand dollars loosely spent in the second quarter didn’t seem like much, but at the end of year, that thousand hurt. Two, three or four line items over budget, as was my case, and your profit is seriously compromised.

So, I learned to watch my overhead closely. Overhead is fixed. I had direct control over my overhead. If I overspent I had no one to blame but myself. Accountability, I love it!

Next, I learned to budget from the bottom up. In other words, I set profit goals not revenue goals and built my budget around the profit goal. This was a hard concept to grasp because revenue is sexy.  Of course, there is value in a revenue goal, it helps you to think big. But, revenue is useless without profit.

After a rough first year, I realized that I needed to track expenses properly. So, I bought some accounting software and soon after hired a bookkeeper. The particular software was not important, excel could have done the job. The lesson learned was that the budgets needed to be to be tracked weekly.

Once I had a smart profit goal and a proper tracking system, it all came down to discipline.

Ikea’s “as is” section furnished my office. I cold called and networked non-stop to generate leads. I bought used equipment and vehicles. Shopped my uniform, insurance, and marketing suppliers relentlessly. Grind, grind, grind . . . And, I utilized co-op programs (free labor) when I needed administrative help.

I am not saying that I haven’t spent money through the years. I have, you can’t grow without investing in your business. I just learned to spend on the right lines, track properly and to hold on to that bottom line.

Humble Pie

My mentor says, “Meeting with your managers to solve business issues is bull s . . t! If you want to learn about your business, if you want to solve a problem, talk to your customers”.

We survey our customers a lot. Once a year we ask our customers to rank ”what’s important” when it comes to hiring a service company (the survey concept was taken from the Frances Frei EO Event). At the end of each job we send out the classic survey question “On a scale from one to ten how likely would you recommend us to a friend?” Occasionally we ask our customers how they perceive our brand? Specifically we ask them “How would you describe us to a friend? Heck, we even asked our customers, through our facebook page, to vote on a “Wolfgang” Bouncy Castle that we are going to donate to community events (another borrowed idea from an EO colleague).

The feedback we receive from our surveys is invaluable and sometimes painful. The results are invaluable because our customers hold the answers to most of our strategic questions. And, painful, because our customers have a keen sense of where and how Wolfgang needs to improve.  Sometimes, you need to eat a piece of humble pie.

I hold my breath every time the results of a survey come back. The strokes are great, the pokes hurt. I am a passionate guy, I have poured my heart and soul into the business. Any time I hear something negative about Wolfgang I get defensive.  It’s something I ‘m working on and I still got a ways to go. So, reviewing the surveys is not my favorite task.

This year our surveys 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.

One customer stated,  “It doesn’t matter how easy or friendly your staff is to work with, if the you take too long, if they don’t deliver on a deadline, I am not happy with your service.” Ouch! We heard similar feedback from enough customers that we needed to take action. After all, any construction project is a pain in the rear and no one wants it to drag on.

We listened and learned. When we sat down to talk strategy for 2011 we let our customers feed back guide us. In fact, consistency is our organizational theme for 2011. And, we are putting our money where our mouth is.

For 2011 we will be offering a “Start and Finish” guarantee.  In short, we guarantee to start and finish our projects when promised or our customers get five percent back.

We have aligned the staff and built a bonus package for the entire organization based on our “start and finish” guarantee.  This guarantee is risky for us. 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 we hope that this guarantee gives our customers another compelling reason to buy from us.

So, Wolfgang is stronger for 2011 because of our customer’s feedback. We will keep on asking them for help in 2011 and I will try not to cringe every time a survey with a “poke” hits my desk.

Happy Holidays!

So, Santa visited my son’s pre-school the other day. It took two minutes for my boy to notice that he was wearing running shoes, not black boots. “Santa, why are you wearing runners?” The room went silent waiting for Santa’s response, “I have been jogging, trying to loose a little weight”. Rocco replied, “Yah, you are kinda fat!” That’s my boy.

Happy Holidays everyone!

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?