7. Managing Client Expectations With Sky, Russ and Andy

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To industry experts and your fellow professional builders on everything you need to know to generate more leads, more sales and higher margins while improving the building experience for your clients. Hello and welcome to the Professional Builder Secrets Podcast, a podcast by the association of Professional Builders for building company owners, general managers, VPs and emerging leaders. Here we discuss all things running a professional building company from sales, processes, financials, operations and marketing. Hello and welcome. I'm really excited today to have co founders sky and Russ Stevens as well as head coach Andy Scarda for the association of Professional Builders. Welcome everyone. Excited to speaking to all of you today as well.

Hey, how you doing?

Pretty good, pretty good. Thank you for being here. So we've all heard of experiences that have gone south because of mismanaged client expectations, and I'm sure you've heard stories with all the clients that you work with. Can any of you share some stories from the industry of some mismanaged client expectations?

I got one that springs to mind years ago when I went to visit a Brisbane based builder and I was just waiting to see him as I arrived at his house because that kind of doubled up as his office. And he was on the phone and I was in deep conversation on the phone when he answered the door and he waved me through into the kitchen and then he left the room and I could just hear him shouting in the background doing his nut. And this went on for about 15 minutes. He was getting into a right state and then he entered the kitchen 15 minutes later and the first thing he said to me, that's another $15,000 down the Dr. I kind of looked at him and he went on to explain that this particular client had constantly been going on site and instructing his subcontractors and it had happened again and they had actually instructed them to do work that they'd gone ahead and done, but there was no way he already knew, there was no way this client was going to pay for it because it was a variation. And as I kind of looked at him, he said, yeah, I know, I know, I know, I'm not liable to pay the subcontractors either, but I need these guys on site the next job, so you know, I'm just going to have to suck it up and pay it. And he was fuming. I kind of got the impression maybe he was a little bit angry with himself for letting this situation occur, but it really is all about mismanaging the client as to how that come about. Because, yeah, the. The client wasn't particularly being malicious, but that's the way they'd come to kind of feel this is how the job runs. If I want to get anything done, I've got to organize these subcontractors myself and them exactly what I want.

I think that's a really good point. A lot of clients, yeah, managing client expectations is mainly about setting their expectations, because when a lot of clients come in and it's their home that you're building, so this is all this. This is their project. Why can't they talk to anyone? And it's. Yeah, that sort of starts right at the beginning, setting the expectations so that you know what. This is actually your project, your construction site.

Yeah. I mean, it brings about that question. Is the client always right? I guess is the bigger part here is, you know, at what point do you come to a fair compromise? Is it. Is it a conversation that needs to be had prior to. Or do you have the conversation during the client relationship? Andy, I'm just curious to know your thoughts.

Without a doubt. And I think this is. Sky and Russ have both alluded to it. It must happen ahead of the problem becoming a problem. So right up front, in fact, our recommendation is that it happens as part of the sales process, is that we're actually educating clients on how the process is going to run from the time that the job actually gets out of the ground. I couldn't help thinking over a wonderful quote that I saw on the wall of the Dallas Cowboys head coach on his office wall that said, you encourage what you tolerate. And the reality here is that if you don't set the expectation correctly and put a system in place from minute one, your clients are going to be pushing the boundaries on an ongoing basis, and that doesn't work for either of you. So really it needs to be set up in those initial conversations.

To answer your question, Bosco, I don't believe the client is always right, but they are always the client.

It's a juicy debate, isn't it, Russ? I mean, really, if you think about it, and I've been trying to think about this from a character perspective, from a service perspective as well. I guess there's different factors that really create this, what we call client escalations when it comes to mismanaged expectations. But I'm just curious, what are your thoughts as to what fuels mismanaged expectations and what causes these problems once the transaction has already occurred?

I Think you've got to get off to a strong start in the client relationship. You've got to be the leader in the relationship and take control. I think that's really important and it's just like really managing your team members in that respect. But secondly, it's then communication. That's where all the problems come from, is communication. You've got to have a flow of communication to the client, but also a flow back from them as well, because they need to be heard and valued and understood. So, yeah, you've got to really take control from the start, but then you got to have that communication channel in place.

I think that's a really good point. The communication, while it's so important, there are two kinds of communication, right? You've got proactive communication, then you've got reactive communication. And the reactive communication is exactly what we were just talking about. That's when you are on the back foot, you're reacting to the problems that are happening. That's that miscommunication that's happening. If you make a decision to be proactive with your communication, you're always on the front foot. You're preventing problems and future problems happening. And it's a much, much stronger form of communication. And like I said, it's not just to clients. This is managing everyone's expectations. If you can be proactively communicating to your clients, your subcontractors, your suppliers, man, can you eliminate so many issues?

And Andy, you know, being on the front lines of coaching and leading a coaching team as well, I'm sure you get a lot of stories from builders as well. Are they natural born communicators on the front lines when you coach them or you work with them, or is it something that you have to instill in them as well and educ them?

Well, I think the concept of communicating with their clients is where they need the education. The problem for a lot of builders is that they, they don't consciously acknowledge that the guy they building for is a heart surgeon. And he's a really, really clever man, but he's never built a house. And in the same way as you wouldn't go to your local kind of corner store, 711 owner to get your heart transplant done. You'd go to a specialist who knows how to do it and the sequence it needs to run in and all of those kind of things, I think for most builders, they need to understand that they are the professional in this situation and therefore they need to be the ones, as Russ has said, that take that control and then they explain to the client the best way to do it.

Yeah. I can't tell you how many times I've spoken to people, friends and acquaintances. And when they find out they're in the, in the construction industry, they talk about, about their build and how that went. And they proudly tell me how they were the ones managing the build. You know, they were organizing all the subcontractors, they were turning up site. They were, yeah. They're quite proud of the fact that they, they project manage. And I always wondered, like, you think, I wonder how the builder felt about that. You know, this person coming in, taking, taking over, because. Yeah, like Andy said, yeah, these are typically. They're successful people, aren't they, that are building big homes, spectacular homes. So they're used to organizing and being in. So when they see something running not as they would expect it to, they just feel this need to kind of jump in and organize it themselves, which isn't always a great idea.

I think when you step back though, like, it makes sense. Like you say, the most successful people, they got there for a reason. So they, you know, they like being in control. It's a certain personality type. But it also makes sense. What you said before, the client, they're not always right, but they are always the client. So it comes back to, like you say, communication. But it's almost like the power of influencing people. This is your construction site, this is your process. But you need to bring them on your side and take them on the journey with you. I think when Andy was talking about just before, you know, is it a communication problem, a build is built with this or not? It's like we've got the curse of knowledge, so we know what needs to be done. We just want to get in there and do it. This is our site, leave us to it. We know what we're doing, but the client is the client. You've got to bring them with you. You've got to keep them in the loop. And that's where that proactive communication comes in. But it's very much influencing their thoughts and behaviors. So you're bringing them with you and they are on board with every call you are making.

And I think just to add to that, it's a great point that most builders build, they that good at it, that they do it without thinking about it. And therefore, I think for most of us, when something comes easily, we assume it's easy for everybody. So kind of a lot of builders, I think, go into the process. Here comes that terrible word. Assuming that the client will understand why they are doing things the way they are doing. And what are we back to? We're back to exactly what Scar said. We're back to communication. We're back to what Russ said. We're back to leadership. Don't assume step into the leadership role. Come up with a process that's going to work for everybody, including the client, and then communicate that process effectively.

Let's talk a little bit about the builders. Let's put the microscope on them a bit here. It sounds like time is a valuable currency as well from everything that you guys are talking about. The more time you put in, the less time you have to then manage those expectations as well. But a builder has got so many different responsibilities, got so many moving pieces running a business, being a leader. What are some of those common blind spots that really cause the problems when it comes to managing client expectations?

Well, Rory touched on communication with subcontractors. Yeah, that leads to a loss of profits and an absolute nightmare. But another one which really does leave builders vulnerable is site access. This is a big red flag because clients believe that it's their site and it isn't. The moment they sign that contract, they hand it over control to the builder. The builder now controls that site and not only determines who goes on that site and who can't go on that site, but they are responsible for every person on that site. And that's their responsibility they have to take extremely seriously because the consequences are dire. So site access for me is one of the biggest blind spots because I often hear about builders not only allowing clients onto their sites unsupervised and even their children, which is a big no no, but they're allowing subcontractors engaged by the client to come onto their sites as well. And that's another big no no because you are responsible for the health and safety of all those people. It's something you cannot take lightly at all. But clients don't understand this. You've got to give them the why. So you've got to explain to them why you are being so rigid on this. You do not take one step on site until I arrive to meet you at that site. And no, you cannot do the electrical through your brother in law and have him turn up on site when it suits him. Because apart from the workplace health and safety liability that is going to impact the whole timeline of the job anyway. So all of a sudden your timeline is out of your control. But yeah, that all comes from explaining the why really to the client in the first place.

And the Thought of having a child on worksite Russ is a bit scary. Makes me feel a bit uncomfortable. When you think about it, or for that matter, having someone unsupervised, that just opens up a whole can of liability.

Issues for sure, Big liabilities. And it never goes wrong until it goes wrong. And when it goes wrong in that area, it goes wrong big time.

But I think this is the other reason that we very strongly recommend an online project management portal as part of the client expectation management process. Because the reality is that for a lot of people, and we've said this already, they are the client and in most cases they're spending a lot of money, which kind of puts them in a place where they feel they have a right to, to know what's going on. And they do. But the beauty of running an online project management system allows you to show them progress, if you like, on a daily basis. We recommend at least on a weekly basis so that there is constant update for them to see that the job is moving ahead. And that then takes away the need for them to physically be on site other than prearranged and obviously supervised and led site meetings. So that's another part of, let's call it the APB mix that I think helps them solve this kind of problem.

I like that. And I think to add to that, because, you know, we're talking about blind spots at the moment, I think the biggest blind spot for builders is how many methods, channels and avenues of communication there are for clients. And they're going to hit them all up unless you are proactive and put something in place. So exactly what Andy was saying, having some form of a dedicated portal that your clients can log into and know, that is how you communicate. And everything is logged in there from all the, you know, photos from site to update them on. Exactly what Andy was saying, you can do that on a daily or weekly basis to all of the decisions they need to make to how they ask questions, is actually channeling it all through the one spot. Because, yeah, the blind spot is going to be, you know, the one phone line you didn't check that day and you know, the client kicks off because you're not getting back to them. You want to be able to deliver such an amazing experience, but, you know, we need to be able to channel it through one spot. And I think to add to that, you know, something else we recommend is in ensuring and making sure that your clients each have a dedicated point of contact because you don't want your clients channeling communication through multiple people. Just like Russ said, you know, instructing the subcontractors on site and then telling one thing to your site supervisor and then someone else in the office hears something else and suddenly like this is telephone game, you're all hearing different versions. It gets into a massive mess. You just want to ensure all of your clients, all of your staff and all your suppliers and subcontractors are aware how things get channeled through, what the correct protocol is.

Yeah.

And if you don't have a client facing portal in place, you will experience a lot of problems with client variations. That has to be one of the biggest areas of, of miscommunication and dispute, I'd say, when it comes to builders and clients. And yeah, a lot of the time what's going on in the client's mind is, well, it's only just a little adjustment. They have no idea of how much work is involved in that change and the consequences, the cost of delay etc from changing a tile that's going to put a one week delay on the project. They got no idea of the consequences of that. And the reason they don't have any ideas because the builder doesn't communicate to them exactly what those consequences are, which again comes down to communication. But a lot of that, like sky and Andy have said, can be resolved through a client facing portal where everything is documented and that's when expectations get managed.

I tell you what else it solves. How many times have we heard from builders, you know, and they're talking about, you know, maybe their most difficult clients, they're getting calls on their mobile late at night, the weekends, like it's actual harassment. There's no boundaries because no boundary was put in place. If, if you get something like a portal, train them on how to use it, make sure everything's directed through there. You get that boundary and you get that respect of how things are supposed to work because that would be an absolute nightmare.

There's so many channels now, isn't there? You know, years ago it was quite straightforward. Yeah, pick up the phone, maybe send a fax, who knows it was the phone. But now, you know, some people prefer the phone, other people will not speak on the phone, you know, some live by text, mess in other messenger on Facebook. Yeah, people tell me, yeah, don't send me an email, I don't live on my email. They can be very anti email. But as a builder controlling multiple projects, you've got to be all across all the channels because you don't know what's going to be their favorite tool. So yeah, You've got to be ready to interact.

I think I was alive during the pager era too. I'm starting to date myself. But yeah, I remember the time when you.

What's that we're talking about?

Yeah, I was going to say I remember the pages, but okay, so we talk about having this need for the client facing software. Andy, I'm just curious, how did you first hear about this problem? Was this through the coaching side of things? When it sounds like this is a common problem that most builders face. Let's go back to the roots of this. Is this a problem that you identify through the coaching? Is this a problem that they come to you with on the offset? Where did this problem start?

Well, I mean, it manifested in builder frustration. I mean, literally, I'm not exaggerating when I tell you that I have been in coaching sessions where builders, both male and female, are in tears, like literally beside themselves emotionally on. I don't know what to do anymore. I just cannot wrangle this client into a place where, I mean, the reality here is it goes back to the fundamental reason that we exist. We believe that clients deserve a better experience. Well, then we need to make sure that we set that experience up correctly at the beginning. So, I mean, I'm tempted to say to you, no, Russ told me about the problem, which he probably did. But certainly in terms of it manifesting, we see it on an ongoing basis from builders directly.

And it's not light either. This goes so deep. This isn't just we had a coaching session there in tears. This runs so deep. This is a topic we've gone into a lot of depth lately and it's the mental health and wellbeing of, you know, the owners of building company because this industry is tough. I remember being at an industry event not long ago, just a few months ago now, getting to meet not just clients, but, you know, other builders that we've been in touch with over the years, you know, either subscribers or whatnot. And I remember having conversations and it's been a particularly tough 12 to 18 months and more than one, literally a good handful that I was talking to that evening were just in a completely different, completely different place. It really, really took a toll on their mental well being. And this is what makes builders want to pack it all in. Like the worst kinds of clients, the worst kinds of experience. This is what makes them think, you know, it's not worth it. I'm done. I will leave this industry. And that's really sad.

Yeah.

And just to back sky up 100% on that. I mean, in the last six months, just in the clients that I look after, I've had two builders leave the industry. One was at the age that he was approaching retirement age and he just said, it's too hard. And if I think back to what really was the straw that broke the camel's back, it was the fact that he was dealing with a series of difficult clients. The other builder is probably the most recent one. And he literally, fortunately for him, his wife runs a separate business and he just said, when I look at the way her life runs compared to mine, I'm going to go and help her run her business rather than do this. It's just too hard.

So, yeah, it sounds like every. It sounds like the builders, a lot of the builders are sharing the same experiences with you as well. As Guy pointed out, is it during. Because of the times right now where builders feel like you have to be that nice person to accommodate everyone. Are you going to lose the business to your competitor? I'm just trying to understand a little bit about the characteristics of builders. You know, as business owners, we all wear our nice, nice guy or nice lady hats on, as they call it. But it sounds like that also causes the problems.

It's always going to be hard. I don't think you can blame any point in time. It's always hard.

It's always been that way, hasn't it? And I think it's probably got gradually worse over the years. Clients expectations have. Have increased, which, yeah, is a good thing, really, because, yeah, we want them to increase because we want this to be a more professional industry for sure. But yeah, it's nothing to do with recent times. It's always been there. Yeah. I think we've got plenty of examples of guys that have gone through this three, four, five years ago.

Yeah. And I think just to maybe add to that comment, we've got to understand we're not selling a commodity here. When somebody walks into a retail store to buy a new mobile phone, you only need to be nice to them for 11 minutes and they either buy or they leave. I often say to my clients, they need to understand that they're not only building houses, they're also building relationships. And often to build a house, the time that you're involved with that client, from the time you first meet them until the time you hand over that finished home, is longer than some Kardashian marriages. So it's important that we understand that, that that adds another layer to this, is there has to be consistency in that. Relationship across a much longer period of time than what would happen in, let's call it a kind of commodity based customer relationship scenario.

Yeah, you got to qualify them well, it's twofold. You've got to make sure your marketing and sales process are down pat so you're attracting the right kinds of clients and you are qualifying hard. If you see the red flags in the beginning, you're going to spend at least another 12, 18 months with them. So you do not want to take them on. So you want to make sure they're good. But we all know people can change as soon as they sign on a dotted line. There's a lot of money at stake. So then it's about making sure you can actually proactively manage these kinds of people. Because it's exactly right. I said expectations are high and it's worth pointing out expectations are only going to get higher. So it's actually only going to get harder. So you don't want to rely on the fact that you, or maybe you have someone on your team that's actually very good with people and it's not been an issue to this point. You want to make sure that you've got systems, very robust systems and protocols in place. So as a company, you are managing and setting their expectations well, not just relying on one people person.

We always hear, don't we? It's. Yeah, when you're talking to a builder that's got a particularly tough client, it always comes out. I saw the warning signs. I knew I should never have signed this one up. So they always kind of know, they just, they weren't religious enough with their disqualification and for whatever reason they decided to press on. But rarely do you hear from a builder saying, complete, complete surprise. Yeah, they were wonderful to begin with.

It's the other way around. I think we've heard those stories. You know, when they're a bit of a nightmare in the beginning, you can do a very good smackdown and set the law and say exactly like how things are going to run and then they can turn into the perfect client. But that's a result of having the right systems.

And yeah, we've seen that happen a few times. And I think you've assisted a few guys with that, Andy, haven't you? Coaching them on how to take a firm grip. And I think they've been amazed at how it's transformed the relationship and respect has come in.

Yeah. And they're often quite sort of tentative and nervous to do it in the beginning. And it goes back, Bosco to What you said earlier, you know, we have this drummed into us. The client is always right. The client is always right. You know, the comment that Russ made earlier, I think is 100% valid. The client is often not right when it comes to their building site, but they remain the client. So it is. It's managing that tension really, I think.

We'Ve seen as well, is being nice and giving things to the client does not work. That is counterproductive, isn't it? I mean, if you try to look after a client by giving them a variation for free or being overly helpful, that just compounds and works, works against you constantly.

I was literally just about to say that that's like exactly where you were going, Bosco. Like, we all want to be Mr. Nice Guy. And the second you do that, it just. That's when it really starts going downhill. Because people don't value things for free. You know what I mean? People value what they pay for. So if you start doing all of this extra work, you bend over backwards. You start replying at night and on weekends. Well, that's the expectation. It's exactly what Andy said you're teaching them. You know, we teach people how to treat us, us, you know, as humans. And so, yeah, we encourage what we tolerate. The more we lean into it and do you know what they're wanting when it's not necessarily our process? Oh, it can just go downhill.

And a builder gives a variation worth a thousand dollars for free, thinking he's going to get a nice referral at the end of it. What's happening in the mind of the client is, crikey, how much extra margin did he put in that job? What else should I be getting? They just want their money's worth, and they're now. And. And they want more and more. And the builders thinking, I just can't do enough for this person. They're never happy.

Yeah, and that's just Bosco, just to balance this, because I think this is important to anybody listening. We're not suggesting that a builder becomes a tyrant with their client at all. What we're actually saying here is there are absolutely wonderful ways to run this relationship, but you have to decide to do it. It's not going to happen on its own. You're not going to end up in that beautiful, everybody's happy world by thinking it'll get there. You literally have to lead it from the word. Go and find the things that work, capture those, turn them into a process, and then rinse and repeat, rinse and repeat, rinse and Repeat, totally.

I think that's a really good point. The most successful builders we have, the second that contract is signed and that construction slot is scheduled and we know it's starting, they will have a very formalized, structured client onboarding meeting where they get to lay down this law and everyone forgets, everyone. So it needs to be documented. And what they can do is they can give out what can be like a new client handbook. And it's a beautiful little handbook for their new clients of everything that was covered in that onboarding meeting and everything. They need to know how to communicate what is and isn't acceptable, what's their responsibility, what is our responsibility, how things are going to work. And yeah, it's exactly what Andy said. You're not a tyrant. You are being professional. And that's the name of the game, is trying to make the industry better because we are professional building companies.

Yeah, I mean, as you're talking, I'm thinking about Haven Builders in Canada who turned that into a coffee table hard covered book that literally every single client that signed a contract with them in that meeting was given a beautiful glossy expose of how the relationship was going to work over the next, whatever it was. 6, 8, 10, 12 months. And I mean, that is the, in my mind, that's the epitome of taking it to that kind of level of professionalism that it reminds me of that saying that, you know, some people are sufficiently diplomatic that they can tell you to go to hell in a way, way that makes you look forward to the process. This is not quite that, but, but it's, it's, it's building that excitement in people saying if we stick to these rules, we are going to have a fantastic experience throughout this process.

I mean, how exciting would that be? Like you have a meeting, like you've spent all this time designing your dream home. Like that's exciting. And it sort of gets to the point, it feels like it's dragging on now, but you get to sign the contract. It's finally going to start. You get given a glossy book of what's going to happen. You, you get details on every upcoming milestone, what it means, what you can expect, what you get to do, and you know, the schedule for all of your site meetings. That's, that would be so exciting for clients and that's how you can just keep it light and happy. But again, set those expectations.

I had a question for you. You talked about qualifying clients and picking the right clients so that you can teach people how to treat you as well. You know, for Builders out there who are starting out, how do they collect this intelligence? How do they get that milestone clients so that they, they are marketing to the right clients? Because I sometimes we let our guard down and say we'll take anything that comes through because we want to fill our pipeline, but sometimes that can cause a lot of problems. And you brought up a really good point that I thought we really want to hone in on here. Where does a builder go to qualify the right client and what type of intelligence are they looking for?

Who's going to go? Because we can all jump into this one. I mean, the process we work with every one of our members, and particularly in the mentoring program is. This is the front end of what we do. It's literally the cascade has got to go from getting all of your marketing correct so that you're attracting the right people with the right mentality, the right amount of money, et cetera, et cetera. And in terms of you saying, where do they start? Russ mentioned it. They can reverse engineer this from the guys that they think back on as their nightmare clients. Those guys that in their gut they knew they shouldn't have built and work out everything that went wrong and make sure that's not in the clients that they start working with. You've raised a valid point that I think most builders when they start out will literally take anything that comes across their desk because they want to get going. But the truth is, most of the guys that we work with always wanted to be builders and became business owners almost by mistake because those first couple of jobs are referrals and they are referrals from people that enjoyed the experience. So actually there's already a wealth of information available. If the builder takes the time just to sit down and say what made those people right, and then that's the starting point for them to develop, you can go down this rabbit hole for a week. I mean, literally we can take people through an 85 data point tool breakdown of what that ideal client looks like, but that's unnecessary at the beginning stages. It's literally having it clear in your mind those people for whom it's worked, what were their characteristics? And then making sure that none of those nightmare characteristics are part of the.

Process, I think as well. I mean, qualifying in itself is a whole other conversation that's going to take at least an hour for us to break down and chat about. But to add a little bit of salt and pepper for five minutes, that law of demand and supply or supply and demand again, because if you're just Trying to take anyone that comes across your desk, that's the biggest mistake. You want to be marketing so well your building company and have such a robust sales process so that you can actually manufacture such a large amount of demand for your services so that you can be super picky and qualify each and every one of them so that who you do send through because you've got such a limited supply, you know, you only want to build, you know, 12 or 20 or even four homes a year, that all that demand that's coming through, you need way more demand than you're actually going to supply. So if you can manufacture that, you will get more picky. You will be able to choose your clients. That's something we're really big on.

And. And if a builder was to look back over the last 24 months, maybe at all the projects they've done and rank them in order of net margin and then just look at the revenue of the jobs and the net margin on those jobs, they'll probably find that the biggest earning jobs that they've been doing are the most enjoyable and that will typically help them to identify their niche as well. It's when you start mixing up builds that it becomes very hard to make a decent net profit across the board. Big new home, custom homes and small renovations, for instance, is you got to set your building company up in a completely different way to do those operations, which does affect the profitability. So, yeah, looking at what you've done. Yeah. Big profits normally mean they're the biggest fun.

And I think if you. I mean, the truth is, if you're going to have to take pain, make it worth your while, you know. In other words, the absolute worst place to be in is a terrible client and no margin. I mean, if I'm going to have to have pain, then make it worth my while is part of that process.

Yeah, that's always when we take jobs on for cash flow, isn't it? We'd rather have not have had the cash.

And that's the problem. That's the demand and supply. If only you had way more people lining up.

Exactly.

Don't make those desperate decisions. It always traces back to that in every client's case.

Yeah.

Right. So we talked about profitability here and a lot of this really leads to a profit or loss. What are some of those pitfalls and traps that cause a lot of problems for builders and they end up either losing out or having a lot of problems that impact their business? Let's get into a little bit of those things that we should be looking out for as builders.

I think builders typically start out with a best case scenario when they're communicating with clients. They're always erring on the best side. And that, that kind of starts right at the beginning when they're talking about budget. Well, it's going to be 750 to a million. The builder's thinking a million, the client's thinking 750. So they put themselves on the back foot there. If they're. They're talking about a timeline. Yeah, yeah. We should be in the week before Christmas. In his mind, he's thinking, well, as long as it doesn't rain in the next three months, we'll be okay. They're always there erring on the best side, and that really does get them into a lot of trouble. Much better taking the pain early on, really. And that is how you manage expectations, isn't it? By being realistic and being honest?

Yeah. It's interesting you say that too, Russ. I think builders go in with a lot of optimism, but sometimes that optimistic response can also get you into a lot of trouble as well.

I think they're maybe trying to avoid the difficult conversation early on, aren't they? In a lot of cases, I think I can get through this conversation with. Without too much lack if I just err on what they want to hear and I'll take the pain a bit later on.

I think that's a really interesting point. Everyone's trying to avoid confrontation early and all they're doing is just prolonging it. It's actually going to become a worse confrontation. You're actually building a worse situation for yourself. So if you have that confrontation, just like we talked about before, by setting those expectations, doing, you know, the smackdown, if you need to do a smackdown, or at least laying down the law, that initial confrontation can set you up for a much better project, whereas you don't want the opposite. You delay it for so long, it just gets worse and worse and worse and a bigger and bigger problem.

Andy has a great saying, doesn't he? We've heard him talking about this a lot lately. Words become things. And when we're in that conversation with a client and the client might be giving their expectations out, which don't quite align with reality if we don't address it. Words become things and we're on the back foot. So even though we may never have agreed to what they're verbalizing, we have to bring it out and address it.

Yeah. And I mean, I had a conversation this morning with a client actually, where in the mentoring program, we will go as deeply as helping them script the manner in which they explained that scenario. So we've literally reverse engineered this to the point that we can help them develop the way to tell a client something that makes sure there's no misunderstanding and make sure that that expectation is properly set up.

It actually reminds me of a training we recently did with all of our members and it was all on negotiation. And a book that every member ended up reading was by Chris Foss. Never split the difference. And it's all about negotiation. He's like an ex FBI hostage negotiator, but we're essentially relaying it and interpreting it for builders, not only in, like sales conversations, you're negotiating all day long in every situation. And something that crispos teaches is something called, I think it's like bending their reality or just sort of being able to shape their reality, because everyone has their own version of events. And I think that's the most dangerous thing. So if we can understand everyone has their own reality, then words become worlds. Exactly what Andy says all the time. The client has their perception of what's happening. They've got their expectations, they've got their perception, they've got their own reality, but we also have ours or the builder has theirs. And you need to be able to fuse the two together but ensure that it works how it works in your building contract. You need to constantly understand their version of reality. It's that seek first to understand, then to be understood. Stephen Covey. You need to thoroughly understand. It's that whole discovery process again, even on onboarding, what is it they're actually expecting? What are their expectations? What do they think that's going to happen? Then let's us address it. Let's tell them what's going to happen so we can actually shape their reality ourselves. This is a negotiation. We're trying to influence the outcome.

And if we go back to what we said earlier about this starts with your marketing, we quite openly teach that a marketing process or a marketing system needs to do two things simultaneously if you're in the southern hemisphere and simultaneously if you're in the northern hemisphere. It needs to not only be attracting the right people, but it needs to be repelling the wrong people. So ideally, if we bring all of this back together again, part of what we're wanting to do is to make sure that our marketing is that clear, our messaging is that clear that the Richard Craniums of the world aren't even going to phone us. They literally going to see in the way that we present what we're going to offer, this is not for me. I can't work with this guy. That's a far better situation to be in.

Andy, what you're talking about is that old saying, prevention is always better than a cure. I'm just curious with all the coaching and the different types of builders that you deal with on a day to day basis, if there's any techniques on how builders can avoid the problem before it even begins other than the ones that you've talked about? We've talked about that client facing software and communicating expectations as well. But what are some of the techniques that you give out to builders that they can apply in their day to day business?

Well, it's really developing a process that is repeatable. I mean, we talk about systemizing the building business to the point that it becomes rinse and repeat. When we find something that works, we optimize that process until it absolutely works for both sides of the equation. And then we do it over and over and over. And sky has touched on it already. We want to make sure that across our team and our subcontractors and the clients that we're all singing from the same hymn sheet that everybody understands exactly the role they play in then delivering that final outcome. So it's, I'm not going to say to you, we've got the, I think Russ has mentioned it in a couple of others. We don't have the red pill or the blue pill because obviously everybody's business and everybody's situation is slightly different. But the fundamental protocol is find what works, capture that, systemize it, train it, because that's the reality. We've got to train ourselves, our team, our subcontractors and our clients and then make sure that that is constantly and consistently being implemented.

And you can also, I mean, there's a few tactics you can use when you're, you're talking to prospects and clients as well that can really make a huge difference in getting you to the outcome that you want. And one of the techniques is anchoring, and that is by bending your client's reality by simply anchoring their starting point. And what I mean by that is before you talk about anything, you emotionally anchor them by just saying how bad it's going to be. So in the case of numbers, you might be talking about a variation. You don't, you don't touch on the, on the lighter side, you might go extremely worse. And then when you talk about what this variation like could, you could get it down to that, then Sounds a lot more reasonable when you're talking to a prospect, maybe in terms of what the budget might be. By using ranges, it sounds more reasonable and less aggressive than going in with. With a big number. Because the real value of anything, it just depends on the vantage point that you're looking at it from. It's all about perspective. And I know a lot of people might think, well, that's really simple. I wouldn't fall for that. That is way too obvious. But we all do. It's the way we're built and it's why we see this technique being used in plain sight all around us. And we just have a look. When you're looking at any adverts or going shopping, we're seeing anchoring being used on us all the time.

This is a question that I'm always curious to ask because you have builders from different parts of the world. Do they all have some of the same problems when it comes to client expectations? But also what are some of those key teachings and learnings that you have attained working with builders from all over the world? I'm just curious if it's the same answer, if it's different perspectives in different parts of the world.

It's a great question. And the fundamentals would be the same. There's certainly nuance depending on the cultural implications of where the builder is and where the client is. So, I mean, even in North America, for example, where we work with people across the entire country, the way you do things in the south is different to the way that you do things in California just because your client. But again, we. Back to what we said earlier. It's understanding that this is largely an exercise of communication. And if we are clear in what our ideal client looks like, we go into the psychographic side of their world as much as the demographic side of the world. So what are their interests? What are their hobbies? What sort of education do they have? Those kind of things will then inform the way in which we communicate with them and the kind of nuance that comes into that.

And one thing I've seen work particularly well when dealing with clients as they progress through a project is a technique of getting them to know. And what this involves again, is maybe an extreme anchor, or you could even call it. It a label by. By saying you're. I mean, especially what we've seen recently, haven't we, with COVID pushing the prices of supply up and those allowances have gone up tremendously. And of course, it's the. The finger gets pointed at the builder. He's the one to blame. You know, it's not the suppliers, it's the builder's fault. But he has to deliver that very difficult message and conversation to the client. So by, by getting them to know can help him move the conversation forward. And an example of that might be, well, you're going to think that I'm just out here ripping you off and I'm making an absolute fortune out of this build. And the more extreme you go, the more likely the client is to come to your aid and say, no, no, I don't think that at all. Well, yeah, that's ridiculous, because when we do verbalize these things, they do sound crazy as well. So once we've got the client to know, what we've actually done there is put them in a position of power, or maybe not so much power, but they feel comfortable, they feel like they're being heard. And once you've gotten to know, now, you can move the conversation forward. So that's a. I think it's a very important technique that's worked well for a lot of builders that we work with.

And it's interesting because a lot of these techniques can be applied in different parts of the world and you can sort of get that same narrative as well, which. Which I think is. Is really a blessing in disguise as well. So I think. I think, Russ, you bring up a really good point that, you know, these are little things that. That, you know, it is about taking on the conversation and having it ahead of time before it gets even further escalated. So I think it's a really good insight.

I was tempted to jump in and say, yes, it is different in every country, and that's why we have a different portal for every country around the world, because it's all different. But, yeah, that's simply not the case. We like to think we're different in our particular city or state or country. But fundamental, the problems that builders are faced with are the same across. And the way we deal with those problems is very, very similar as well.

So how does looking forward, how does this get better for builders, and what is the vision for builders and what do they need to do to become even more accountable and responsible for managing client expectations?

Well, I think the first word that you've just used there that is important is accountability. The builder needs to understand that he is the authority in the process. And as the authority, he needs to step into that leadership role and determine the process that's going to work best for everybody. So it's being on that front foot, sky mentioned earlier. We can either be reactive or we can be proactive. We need to be proactive. We need to literally do what Russ said. Look back over the last 24 months, look at the jobs that worked, analyze what made them work, convert that into a process and then step into that process as the authority, as the leader in the relationship.

So we're at that time where I'm going to ask you guys for some final words of wisdom and I'm just curious. We'll start off with Sky. Any final thoughts and words of wisdom for the builders out there listening in?

I think just to summarize, the whole conversation is client expectations are high. They're only going to get higher. If it's hard now, it's only going to get harder. If you're great at it now, it is only going to get harder. So the bottom line of it is, is 100% our responsibility. We made the decision to take on those clients. So whether that was the right or wrong decision at the start, but now we need to keep going with the decision. Yeah, keep going with the decision we have made. And it's 100% our responsibilities. We need to take responsibility, be accountable to it. Exactly like Andy said and ensure that we're not relying on a couple of good people in the team. This is a completely systemized approach for how we, we don't just meet our clients expectations, we exceed them. We deliver such an amazing building experience or an amazing experience with our building company. So I think step number one is just taking that responsibility, owning it and then making that process and going forward.

Russ, any final words on your answer?

Yeah. Act as a professional. We never want to hear builders say to us, I'm just a builder. No, you're not just a builder. You are a professional service provider. So act as a professional, be a leader and dictate the path.

Andy, what day, Sid?

Well, it sounds like we all have a learning experience for managing expectations and we'd love to, we'd love to hear our listeners learning expectations as well. So I want to thank everyone for your time. Really, really appreciative of your insights. I feel like this is a very insightful interview and thank you so much for your thoughts.

Thanks, Bosco. Bye.

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