CoatingsPro Magazine

JAN 2017

CoatingsPro offers an in-depth look at coatings based on case studies, successful business operation, new products, industry news, and the safe and profitable use of coatings and equipment.

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Page 26 of 116

26 JANUARY 2017 COATINGSPROMAG.COM Contractor's Corner I s there really such a thing as a bad profit? With business getting larger and more power- ful, and investors feeling and expecting ever greater return on invest- ment (ROI), wouldn't that imply that all profits are good? It is an important question to ask, including for small coatings contracting businesses. e short answer is yes. Bad profits are those profits that are earned at the expense of customer relationships. W henever customers feel misled, mistreated, ignored, or coerced, then the result is a bad profit. is could be something like promising to show up to coat a concrete warehouse floor first thing Friday morning, and then getting there late, or worse, not showing up at all. Bad profits arise when a company saves money by delivering a lousy customer experience. Consider a roof coating contractor who leaves the job with a roof that's not really water- proofed. Essentially, it means that the leadership or the company extracts value from their customers instead of adding overall value to the industry, community, etc. ose of you in leadership positions and those of you who run companies and manage people under- stand that the culture you present to your crew may lay the foundation for success not just in the short term but hopefully in the long term. e leaders who have exceptional core values and focus on good profits — and eliminate bad profits — will not only create companies with long-term success, they will provide products and services that customers will crave, want, and need. W hen leadership and compa- nies don't understand the difference between good and bad profits, the result is that growth suffers in the long term, reputations are hurt, custom- ers become alienated, and employees become demoralized. You and your business become vulnerable to competi- tion. is kind of business may achieve short-term success, but it will always fail in the long term. Steps to Eliminate Bad Profits Bad profits create detractors. ese are people who hurt your company and team members. ey hurt your compa- ny's reputation; they strangle growth and demoralize an organization. ese detractors can be leaders, managers, employees, and customers. e first step in avoiding bad profits is to recognize that this type of person exists, and the second step is to recognize who the detractors are in your world. e third step involves deciding if you can convert your company's detrac- tors into enthusiastic advocates for your company. is is accomplished with top-shelf internal communication and sterling customer service. Create Customers That Promote Your goal is to focus on good profits from good products and/or ser vices. Good profits are earned w ith the customer's enthusiastic coopera- tion. T hey occur when the customers come back time and time again for your products and ser vices. T hey want to tell their friends, family, and acquaintances about their exceptional experience w ith your contracting business. Your crew showed up on time, was respectful, did what they said they'd do, etc. W hen this exceptional experience occurs, your customers become the best promo- tional arm for your business. As promoters, these individuals provide positive marketing for your company; they are loyal and provide the most cost-effective growth for you and your company. It has been estimated that out of all customers, most companies have about 42‒82 percent promoters receiving products and/or ser vices. Your focus should be to improve that percentage as much as possible to boost your good profits. T his is done by training your team — and more training. Some of the most important and least expensive training starts w ith the point of ser vice and the phones. You should ensure that your employees speak clearly and profes- sionally, that they're knowledgeable about your company and products and ser vices, and that they have a solid sales and customer ser vice background. One training technique is to aud io and or v ideo tape these ind iv id- ua ls on the phone and v isit them on jobsites in person for eva luation and mentor ing. A lthough simplis- tic, tr y ask ing the employee about specif ic products or ser v ices that your company of fers. You may be By Dr. Kevin Coughlin, DMD, MBA, MAGD The True Cost of Only Focusing on the Bottom Line

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