By Collin Corso
The end of the snow season presents an excellent opportunity for a snow professional to sit down and review the portfolio of properties serviced over the winter and evaluate both the practical logistics and the actual profitability of each property. Doing this in the early summer months is particularly beneficial because the problems faced with customers are still relevant and fresh in our minds. Sometimes the real numbers can be surprising. By taking the time to do this now, snow professionals can save a lot of time, money and headaches in the long run.
I have found that this is another of many situations where the age-old 80/20 rule often applies. Most every snow contractor will have particular customers, properties or even a general property type that will require about 80% of the time and effort and only give 20% of the value that needs to be obtained. Learning time or effort and only give 20% of the value that needs to be obtained. Learning to respectfully remove these customers or properties from my service list was one of the hardest things to do, but it was one of the best things I ever did. More often than not, the time spent reviewing data and identifying and dropping bad customers or properties was well worth it in the long run. The question then becomes, what else can be done with that 80% of time or effort?
Following are examples that may help identify undesirable customers or lead you to re-evaluate your relationship:
Logistics. One example from my own operation came last season after reviewing GPS data. I found that I was losing a good portion of an account’s bottom line to traffic-related drive time for every service visit. When only considering the on-site service time it was profitable, but its unique location posed enough of a problem that I chose to drop that customer during the early summer months, prior to the following season. It had nothing to do with the customer, simply the location of the property. Doing this freed up significant route time to better serve existing customers or to add a location that made more logistical sense while reducing waste.
Unrealistic expectations. Another common scenario that most every snow professional has faced at one time or another is a customer who will never be happy. These are the people who have expectations that are unachievable, or they are simply not willing to pay for the work required to achieve those expectations. These customers generally call frequently to make demands outside the scope of work (and oftentimes outside of reality). In my earlier days I found myself carrying a lot of stress when faced with one of these customers. I found that we would begin to focus too much time on these customers in an effort to satisfy their unrealistic expectations. Eventually it started cutting into the profitability of that account.
Brand reputation. When dealing with a customer who presents a routine and unsolvable issue, we have to assume they will voice their views and opinions to friends and neighbors - in other words the potential market. Whether or not their complaints are legitimate, this can damage a snow professional’s brand. As I realized this, I became bolder about dropping customers who had unrealistic or erratic expectations. This gave us time to better serve our other customers and elevate their overall experience, while releasing the stressful burden of a “bad” customer.
Drilling into data. When reviewing your portfolio, it’s useful to use real data that has been collected on customers over the course of a season whenever possible. This can include number of callback visits and/or complaints, the nature and resolution of the complaints, total hours spent on property vs. revenue from the property, drive time, payment history, and the profitability of each account. Using real numbers and data can uncover the parts of the overall picture that we sometimes miss.
Knowing when to drop customers or properties that take up more time, resources or effort than their value can justify is just as important as knowing how to respectfully and properly cancel their service. When possible, it’s always beneficial to finish the season and inform the customer in the spring or early summer months. This will lead to a smoother transition, a better reputation, and allow the customer time to find a new service provider. However, this may not be possible due to misaligned expectations or payment issues.
Knowing when it’s time to part ways with a customer and handling it properly can prove beneficial for a snow professional.
- Unhappy customers like to spread discontent. If despite your best efforts you can’t make them happy, it’s best to let them find someone else who will try.
- Review your portfolio of work early, while your winter experiences are fresh in your mind. If you decide to cut a customer loose, doing so early gives them time to find another service provider.
- Review your documentation to get a clear picture of every client’s profitability. Only relying on the “emotion” of the winter is shortsighted and might not offer an accurate representation of the relationship.
Collin Corso is CEO of of Driveway Snow Blowing, Inc.