There should be a law against ‘time and materials’ contracts.

I can’t believe it happened to me again. I know better, unfortunately my wife does not. I never ever allow a contractor to work on my projects for time and materials. Not to say they are screwing me, or purposely over billing me. In fact it is entirely possible I am getting value for my money but it is not the way to do business. In this instance she was having two porches rebuilt, the verbal estimate was for $6000. The conclusion was over $15,000 for time and materials. Yes a good job was done, but I had no intention of spending that much but I got the bill after the fact…. too late.

The only way is with written estimates with time and price with defined objectives and specific deliverables. Additionally, there should be an agreement about the markup of materials. Further, it always helps to get at least one other bid, not necessarily looking for the lowest but at least keeping the bids in the right ballpark.

With time and materials, there is no incentive to work efficiently, quickly or at all. The pace is best held to slow as the more you work the more you get paid.

It is open ended, in search of perfection…on it goes, never ending, the continuous bill, an annuity.

Besides, the customer never has an opportunity to decide what he wants to pay and what he wants to get for it. He only gets ongoing bills and wonders when it will end and when he will get what he wants.

A professional can bid effectively, accurately and fairly, for both the customer and the professional. The professional is entitled to a fair profit and the customer is entitled to know what it will cost and how long it will take and what will be accomplished. How can time and materials billing possibly satisfy that goal?

If the consumer market will not accept time and materials, the professionals will not continue to bill this way. Insist on a well specified bid offer well-documented with time, cost and results. This works.

Conclusion, forget the time and materials deal…it never works out for the customer.

Customer experience, the newest focus.

I was recently confronted by a huge demonstration by a retail chain to deliver an exceptional customer experience. I asked a few questions and got the whole picture.

The chain called Trader Joe’s has a significant commitment to high quality, reasonably priced, prepared foods. An upscale market place with competitive pricing, offering many interesting and unique offerings.

They employ three graphic artists to draw; paint and hand write the signage for 2000 product signs, each one illustrated and hundreds of specials, larger signs featuring specials and sales and are changed each week. Each sign features graphics, art work, and special calligraphy.

Here is the point, this one store invests in the production of hand crafted signs to produce a customer experience that depicts a feeling they want, a Caribbean vacation, homey, folksy, cute, friendly, inviting, comforting. Instead of utilizing standard, almost zero cost computer generated signage, the store invests $200,000 in an art department employing three graphic artists full time to help deliver a positive customer experience through these custom hand painted signs. Multiply times 334 stores for a total cost of about $60 million. Wow, that is some investment for custom drawn friendly, inviting, folksy signs. $60 million and it could be delivered for almost nothing if they did not respect the value of the customer experience.

People enjoy shopping at Trader Joe’s and trust their prepared foods frozen entrees and assorted unique offerings to be high quality, very good and reasonably priced, and the signage supports this conclusion, thus the investment is deemed worthy. It works to deliver the customer experience they are looking to generate which results in exceptional bottom line performance.

Does it work? Absolutely.

There are unlimited ways to deliver a positive customer experience. Furniture stores that have 3D movies, candle companies that have large puppet shows, low pressure sales people that are informative and help but do not sell, extensive sampling, three piece string trio, piano, whatever it takes to deliver a positive customer experience. This supports a buying decision and a desire to return for more.

Try it, see how it can improve your customers experience, like hotels putting a piece of chocolate on the pillow and turning down the blanket…customer experience, it makes sense.

Lessons learned from small business hand to hand combat figuring out what works and what doesn’t work.

Thirty years of experience in the trenches of small business combat.We know what works and what does not work. It makes no sense to experiment or learn what we already know. You need this type of experience and expertise to survive and grow.

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Our debt forgiveness strategy, the only Small Business Bailout program available, and it works!

Bankruptcy does not work, it will cost you your business and your personal guaranty will require the payoff anyways, so what’s the point? There are no other options. Debt reduction is the only solution.

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Revenues are down, overhead is up and your debt is killing you. There are no bail out programs for you….no second chance, other then our debt reduction strategy. Reducing your debt is equivilent to incresing yiour revenue. It works.

So go ahead and contact us.

• Phone: 413.584.2581
• Fax: 413.549.2968
• Email: info@secondwindconsultants.com
• web site: Secondwindconsultants.com
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