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Four Agreements for Improving Client Relationships

Management Four Agreements for Improving Client Relationships By Rick Schuett In his book The Four Agreements, shamanic teacher and healer Don Miguel Ruiz captures the essence of the human spirit and presents a wonderfully simple, yet effective, code of personal conduct learned from his ancestors.

In his book The Four Agreements, shamanic teacher and healer Don Miguel Ruiz captures the essence of the human spirit and presents a wonderfully simple, yet effective, code of personal conduct learned from his ancestors. The four agreements one should make with one’s self are the following:

1) Be impeccable with your word
2) Don’t take anything personally
3) Don’t make assumptions
4) Always do your best

While Don Miquel Ruiz’s book is one of a spiritual journey (if you are up for a challenge read it; be forewarned it will probably bring you more than one reading to understand the book), his principles and his advice can be used more literally in our business as a guide to interacting with one’s customers.

As I (and others before me) have so profoundly stated before, running a profitable business in this industry requires that you spend less than you take in. A lot of what you end up spending has to do with properly managing the relationship with all of your clients, at all times. Every company/client relationship goes through various phases from start to finish of a project. Sometimes the client is in control, sometimes the actual process of what needs to happen is in control, sometimes other consultants and/or the builder is in control and once in a while the custom installation company is in control. The more times the ball swings into your court, where you and your company are choreographing and scripting what happens, the greater the chance that you will end up with a happy client and more money in your pocket. Here are, in my opinion, the Four Agreements of Client Relationships:

1) Deliver more than what you promise
2) Make everything personal
3) Assume your clients don’t know what they want and act accordingly, and
4) Have everyone do better than what they think their “best” really is

“Deliver more than you promise” is one of those beautiful phrases that just rolls off one’s tongue and sounds incredibly simplistic. I can already hear many readers sarcastically saying to themselves, “No kidding, just do more than what we promise, huh?” Deep down, we’ve heard it a thousand times before, the famous, “Under promise and over deliver” spiel from a countless number of CEDIA EXPO business classes. Of the four agreements above, it is by far the most important one by a large factor. Yet, in reality, while we all know deep down that if we actually did do more for our clients than what we said we were going to do, they would be happier, and happier clients generally make better referrers than unhappy clients. But here’s the other reality: few companies manage to actually do this in practice, at least on a repeatable level.

My belief is that the core reason as to why delivering more than what one promises is so difficult to do has less to do with the “delivery” side of the equation and more to do with the “promise” part. Many “good” custom installation companies have technically qualified installers, sell products manufactured by reputable companies, hire professional and conscientious people who want to do a great job, etc. Ignoring for a moment the random chaos that tends to invade every project, a significant number of companies in our industry are poised at any time to “deliver.” Consider, however, the other piece of the puzzle: the “promise?” Here is where the wheels fall off the cart.

Let’s go back to the title and look at the word “Agreement.” Many of you use the word “contract” in dealing with your clients. I’d recommend that you immediately change all your documents to become “agreements.” The real estate industry figured out a long time ago that the word “contract” had a lot of negative connotations and brought to mind images of a potentially confrontational relationship, which is why we see the phrase “Sales Agreement” in most real estate transactions. If you think that having a “contract” is safer for your business, I would suggest that you think again. Most of your clients could, if properly motivated and angry enough, dedicate huge amounts of both money and personal time toward grinding you and your company into the ground, piece by piece. Having a contract behind you protects (in my opinion only) absolutely nothing.

On the other hand, agreements are more personal and friendly. The first and most important rule of agreements is that there are no such things as “verbal agreements.” Anything that could have even a remote chance of financially impacting either you, your company or your client might initially start out as verbal communication, but must eventually be transferred into some form of a written document. What about discussions regarding simple things like the location of a volume control or lighting control keypad? If your client wants the keypad moved and you cannot document that he was the one who said he wanted it moved, then someone will have to move it and in that process will cost your company additional money. These types of extra costs can, over the course of a long project, substantially alter the net profit of the project once it finally has been completed. Once you train yourself and everyone else in your company to recognize that almost every discussion with a client or client representative has a potential financial impact on someone, you will be one step ahead of most others in the custom installation industry.

Write it down, communicate it back to the client, builder, etc., and remind everyone when it is appropriate of the decisions that they have made. Finally, remind your client that he/she should never accept any verbal promises from anyone within your organization that are not backed up in writing. This simple small step will nearly eliminate the infamous, “But I was told…” that you have heard hundreds of times before. If they were told, then they should have insisted on a written confirmation. If they don’t have it, then they weren’t told.

Once you get better at documenting “what” will be done, the next big part of the “promise” is documenting “when” things will be completed and what specific circumstances control whether or not your company will be able to meet your time-based commitments. Your pricing to the client was based on a set of assumptions that you made. These assumptions relate to how much notice you need to schedule your pre-wire crews, how much notice you need if another subcontractor’s schedule either is radically moved up or pushed back, whether or not your technicians can gain access to a completed project if they have to physically get inside to troubleshoot, etc.

Take a hard look at the top three or four things that have happened over the past year that made it difficult for your company to meet your time promises. Choose those examples that were beyond your control. Next, consider adding these items to the client agreement. You may even want to consider creating a separate scope document that the client can give to his builder. This document will outline the assumptions that you have made in pricing your client’s system that could potentially be affected by the actions or inactions of the builder. Consider that the mantra of your company needs to shift toward “over-communicating” vs. “under-communicating” information as well as expectations.

“How” and “by whom” are other elements of the “promise,” but they tend to be less contentious than the “what” and “when.” Save working on these two areas until you and your company have become masters at communicating in writing the other areas discussed above. Do not forget that while it is important to communicate to your client what you believe their expectations are of you and your company, it is also equally important that you convey to your client what your expectations are as well. Payment terms, definitions of what constitutes “significant completion,” insistence that all promises be made only in writing, how you want change orders to be handled, the cost for change orders at different phases of the project, etc., should all be spelled out clearly and concisely.

The second agreement is to “make everything personal.” This is fairly basic and easy to understand, yet is rarely ever practiced in most small, service-oriented companies. Ideally, you should get every employee to ask themselves a simple yet equally profound question: “If I were the client right now, how would I feel and what would I want to have happen that is within reason and within the scope (implied or otherwise) of our agreement?” Once each and every employee starts to put themselves in the shoes of your clients, you will see a subtle but nonetheless perceivable change in how people within your company handle themselves every time they interact with your clients.

When an employee makes a mistake that affects a client, don’t tell them how you feel about their mistake. Instead, ask them how they think Mr. Jones feels about what happened. You may want to consider having each salesperson, project manger and installer write their impression of how the client feels about their portion of the work once a project is near completion. This will do two things: provide a truthful snapshot of the client’s “happiness level” and set up how your company might best position yourself to collect the final retainer (the profit portion of the job).

“Assume your clients don’t know what they want and act accordingly” goes back to documenting everything that is communicated in writing. It also gets to the heart of what the “C” and “D” stands for in CEDIA (“custom” and “design”). While it certainly makes sense to ask each prospective client what things they might want or like that they have either seen elsewhere or read about, once you have gathered that information, move into consultant mode and begin guiding your client. If they really don’t want guidance, your expertise, your experience or your knowledge, then fire them immediately and let them go buy what they want to buy from another “dealer” or retailer.

The last agreement is “have everyone do better than what they think their ‘best’ really is.” On the surface, this seems ludicrous, but time after time we have seen examples of human beings doing the impossible, stretching and breaking limits once thought impossible to break. How do your employees know what their “best” really is? How do you know what your own personal best efforts really look like?

The key to outdoing “best” starts with a simple effort, called measurement. How would we know if the 4-minute mile had been broken if we had measured neither the distance nor the speed of the runner? Yet each and every day, few things that could make a big difference in most custom installation firms ever get measured. One of my favorite things to talk about is measuring “first fixes,” or the percentage of time a crew is sent to fix a problem once and for all. “But wait,” I hear some of you say, “it isn’t fair to the crews that have to work on products that are harder to fix, or get bad information from the clients as to what is actually wrong.” My response would be, “That’s great!” Maybe the crews will complain to upper management more about problem products and the company will stop selling them, and maybe the crews will spend an extra five minutes on the phone getting better information.

In the end, the best and most telling measurement of success as to whether your client is truly happy is when you ask them for a written letter of recommendation. Get in the habit of doing this every time, and let them know early on when the project starts that it is your intention to ask them for a letter of recommendation when the project is completed. Sometimes you won’t want to hear what they have to say, but better they tell it to you than to your friends.

As time goes on, you will get better and better at not only meeting but also exceeding their expectations. Use the “Four Agreements of Client Relationships” as a guide to assist you in setting your company up to be successful in each and every client engagement. Soon you will be well on your way to solidifying that all-important stream of client referrals that continues to feed our industry.

Rick Schuett ([email protected]) is vice president of sales and marketing for Acoustic Innovations.