Special to The Daily Reporter
In an industry in which technical competence is everywhere, contractors who do more to secure repeat business can find themselves with a life raft in tough economic times.
“Having those repeat customers has been a lifeline,” said Dean Dequaine, a project manager with Howard Immel Inc., Green Bay. “And it’s been us maintaining those relationships that has gotten us through tough times.
“Having that repeat business means survival. It means being financially stable. Without that, it would be a struggle.”
About 80 percent of business at Immel comes from repeat customers, including insurance offices and big-box and department stores. Some companies have worked with Immel for more than 40 years.
But if contractors rely on that life raft to carry them too far, they could sink.
“You have to make sure you don’t get complacent,” said Jim Voelz, chairman of the board and owner of The Redmond Co. The Waukesha contractor recently finished its 125th Walgreens store.
Diversity in building type and customer base can keep work quality high, Voelz said. It also can prevent financial collapse in case a major client pulls back.
Growing new relationships
Cultivating relationships means companies such as Immel and Redmond get invited to bid on projects, an honor – not to mention an advantage in this tight market – because the invitation means the client trusts a contractor has the qualifications, expertise and stability to do the work.
A bid invitation also implies a client wants a contractor to design and build a project.
The opportunity to design and build lets contractors show off not only their technical skill but also their creativity, said Pete Szotkowski, director of business development for Vogel Bros. Building Co., Madison.
But getting to the invitation phase of a client-contractor relationship takes work. And that starts with the first job.
Szotkowski recommends building security by fostering relationships with several individuals within an organization.
“You can’t anymore expect to build a relationship with one person,” he said.
Szotkowski, who estimates 80 percent of Vogel’s business comes from repeat customers, takes care to interact with developers and retailers in social, educational and business settings.
Contractors also can build repeat business by being available for service work after a project.
And, Dequaine said, contractors should never underestimate the value of reaching out to a client, even when they’re not looking for work. He recommends simply stopping by to say “hello.”
“(Then) nine chances out of 10, when they do have the big project coming up, they’ll call you first,” Dequaine said. “They know you’re reliable. They’ve seen your work. They know you.”
Breaking into new territory
Since the economy soured, repeat business has been a key for survival. Such long-term relationships also help contractors break into new areas of business, as Redmond did through its relationship with Walgreens.
When Walgreens decided to shift from shopping center-anchored outlets to stand-alone stores, Voelz said, his company helped with the transition and quickly became a go-to player.
The relationship took Redmond to six states as the company built between four and eight Walgreens each year for the last five years. That repeat business also gave the company the capital it needed to pursue other projects.
“We use the foundation of the store to allow us to parley that into other related retail development work,” Voelz said. “That might be a grocery store. That might be a shopping center. That foundation really allows you to expand.”