Construction costs are rising. That is no surprise. We had a brief respite when lumber prices were softening, but the cost of soft lumber is going back up. As a point of fact, it looks like all the related construction costs are going up.
Worse yet, this is not a short-term issue. Due to demand and supply-chain delays, demand for construction materials will continue to be high. It’s an exciting time to be remodeling but also an incredibly challenging time to be remodeling.
I regularly read and collect articles in reference to issues like this. I always send these articles to the contractors I work with, so that they can share this information with their clients. These articles provide third party credibility to current market conditions.
In this challenging marketplace, it’s our job to manage our client expectations. As a comparison, I oftentimes compare custom remodeling to elective surgery:
- Elective surgery example:
- Big emotional investment
- The outcome is uncertain
- They hope they pick the right surgeon
- If a child or family member, cost is secondary
- Custom remodeling comparison:
- Big emotional investment (years in the making)
- The outcome is uncertain
- They hope they pick the right contractor
- Creating an experience that exceeds their expectations
Can you begin to see the parallels? I mentioned in a previous blog posting that I will undergo hip-replacement surgery in the not-too-distant future.
Earlier this week, I had to participate in an online program to review each step in the surgical process, beginning with preparation for the surgery, a review of what happens on the day of surgery, and then post-op follow-up and physical therapy. The entire focus of the program is to review and manage patient expectations prior to the actual surgery.
Due to this demanding remodeling market, we should be doing the same thing! Managing client expectations is our job. We can and should do all the things that we are already familiar with:
- The initial design agreement and cost (if you do design/build)
- Plans development and the selection process
- Contract completion and start date
- The preconstruction meeting
- The construction schedule
- Job close-out
Just like elective surgery, you need to guide your clients through their construction experience. With current market conditions, there are two additional elements that you should be adding to your client management experience:
- The changing and fluid project management schedule
- Regularly scheduled homeowner progress meetings to keep clients informed
The Project Management Schedule
The project schedule that you create will usually address your project timeline, payment due dates and expected completion date under normal conditions. In a traditional remodeling market, meeting these time frames (plus or minus two weeks) is expected. This is not a traditional remodeling market.
I would strongly recommend that you create a separate project acknowledgment form to let your clients know that due to the recent pandemic and the unforeseen demand in building materials, they might experience project delay issues. This could mean that your remodeling schedule may take longer than usual to address and complete.
You are familiar with this. There are several reasons for these potential delays:
- Shortages of materials
- Backordered parts and equipment
- Limited subcontractor availability to perform work
- Any previously placed government-imposed COVID-19 restrictions
Do your clients understand this? As their building contractor, you need to emphasize that you will manage their project with every intent of working with the production schedule that you provided. With that said, some project delays may take place that are beyond your control.
To manage potential delays, let your clients know that you will communicate potential project delays as soon as possible. Due to these delays, a revision of their project schedule may be required.
One important note to add for getting a project done on time is to make sure that special order items (such as cabinets, appliances, lights, etc.) are selected and ordered as soon as possible. Effective project management means addressing these variables!
Regularly Scheduled Homeowner Progress Meetings
In guiding your clients through the remodeling process, I have seen contractors have remarkable success with regularly scheduled homeowner progress meetings. These are not at random, informal meeting times. This is a regularly scheduled meeting at a set time with your clients, either weekly or bi-weekly.
With this meeting format, they meet with you at that set time, and any project-related questions or issues can be addressed. With these scheduled meetings, potential issues are addressed before they become problems. In my own past progress meetings, I followed a simple agenda:
- Start with the past week review
- Ask if they have any questions or concerns
- Review what is planned for the following week
- Address any supply or project-related delays
- Confirm they don’t have any questions or concerns to review
- Everyone initials the meeting notes, and everyone gets a copy of the notes
Regularly scheduled homeowner progress meetings are a pressure-relief valve! Potential issues do not grow into bigger issues because they are addressed before they become a problem. Your clients know that they will be meeting with you, and this personal attention manages much of their emotional uncertainty. They have your full attention!
As a building contractor, you have experience with your client’s emotional roller-coaster. Your clients, in most cases, do not have experience with the custom remodeling process. Prepare them for a successful project by managing and setting clear expectations.
I am fond of saying that good contractors don’t sell a project. They sell an experience, and it is your job as a professional contractor to manage your client experience. The outcome of successful project management is a satisfied client with a living space that they can enjoy for years to come.
Prepare them for their upcoming “home surgery.” Manage their experience. That is your job!