We spoke to Daniel Green, CEO and Co-founder of GreenPointe Design & Construction, about how networking and developing relationships is the key to successfully growing a business. The entrepreneur began his career before high school, running his own baseball card store for 3 years. Today, he operates a flourishing company which has grown over 500% from when they first began two and a half years ago.
1. Building Great Client Relationships Is the Key to Acquiring Great Clients
- Why have you found that developing great relationships is the most important thing in acquiring the most profitable clients?
“If you have a property manager who manages 14 properties and you have a great relationship with that person, you can leverage it to get in front of their contacts. If you don’t have a good relationship with your property manager, since they’re the gatekeepers, you’re never going to get a chance to look at any work. Furthermore, we have some companies that operate differently, for example, there will be a VP of construction for a particular firm that could be managing anywhere from six to eight hundred projects in the next six to eight months; having one point of contact there to generate those leads for that particular company can be crucial.
The most important part of any business relationship is that your customer service is great; our industry is very fragmented in terms of professionalism. A lot of general contractors don’t have business sense, they end up going into business for themselves and then they find that the professionalism is wacky. Perhaps their work is decent but they have a hard time hiring good people, retaining the employees they do have, and being professional with clients because they didn’t grow up in that atmosphere.”
- How are clients you get from key relationships different than clients that you acquire through prospecting?
“Much more qualified. Your chance of landing work with someone you have a great relationship with is much higher than marketing to property management firms; that’s how you get yourself in the door at first but once you get in the door, they’re much more qualified. Homeowners associations are required to get three bids, by law, for any project that’s over a certain size; therefore, a lot of times when you’re first prospecting, you might be a comp bid for someone, meaning, you're one of the two bids the company is not planning on going with. But once you develop a relationship or you’ve done a project for a particular association or manager, the discussions are a lot different. You get more information or they disclose a lot more things in terms of how the board will make a decision and who they’re going to go with.”
- What are some best practices to developing key relationships within your community that lead to client acquisition?
“Networking, a lot of times you may not have a relationship with a particular contact but you might have a relationship with another vendor. For example, a general contractor who has a good relationship with a landscaper that a growing corporation routinely uses, could lead to an introduction. I’m a big fan of networking, it’s more of a warm lead at that point and getting your foot in the door is a lot easier when someone knows you or you can leverage your business off of their relationship.”
- How do you develop relationships in a systematic way that feels organic?
“We’re members of two or three different trade organizations, in Portland, that support and educate the HOA and apartment industry. We frequently attend those events, I sit on a couple committees, volunteer, and attend trade shows in those organizations, as well as sponsoring different events they have whether it’s a luncheon or boat cruise. My project manager and I are really in the social scene of those organizations, we tend to get a lot of business that way, and that’s where relationships start. Once I get someone’s information, I’ll generally take them to lunch or happy hour and have more of a one on one conversation where they get a feeling of who they’re using right now, how it’s going, and, perhaps, how we can fit in and help them.”
- Any other tips that you can share about developing great client relationships?
“The other thing is really understanding your clients and what they’re drivers are. Some clients don’t want to be wined and dined; that’s not the way you’re going to get more business from them. It’s just a matter of providing good customer service, ensuring the quality of the work, and making sure there are hardly any complaints from their owners; that’s one way. The other way is that, plus, wining and dining them; every couple weeks inviting them to basketball games, dinner, happy hour, lunch, etc; figuring out what their hobbies are and taking them to play golf or whatever it might be. You just have to know each of your clients individually; you can apply a system to developing relationships but a lot of it just has to be just getting to know that person better.
2. Developing Great Employee Relationships Is the Key to Less Headaches and Increased Revenues
- How does developing great employee relationships lead to higher revenues and less stress for you as the CEO?
“The way I look at our employees is that they’re really my clients; I’m not overly involved with the field and I’m not project managing. They’re having a lot of direct contact with the owners and it’s their job to make sure that we deliver on the scope of work and quality that they’re expecting. Therefore, my feeling is that if my employees are happy, they’re likely making our clients happy. A disgruntled employee can really cause a lot of issues; you can tell when an organization has a lot of energy, excitement and low turnover, which we do. This is because the relationship between my project manager and I is great; that trickles down between him and the carpenters, painters, and laborers we have onsite. The quality of work is better and the speed of the work ends up being faster because the guys are motivated to hit their bonuses.
I also tend to hire a people who want a lot of responsibility and I also pay very well. I actually pay a little bit more than I probably should just because I don’t want pay to be an issue. I don’t want to play this game where they’re going back and forth between me and my competitors, searching for another dollar. Overpay them a little bit now, they’ll find out that other employers are offering less, and then they will feel comfortable staying with you.
Furthermore, it’s critical to empower employees; give them responsibility, train the heck out of them, make sure they know exactly what their expectations are, and follow up. Help them facilitate a process, that way, they will feel like they’re making most of the decisions in the field regarding their employees. My project manager actually feels like my partner because he has so much say of what happens in the field and the guys that are working for him, although we write their checks, feel like they’re working for him. ”
- What things do you do to develop great employee relationships?
“Lots of recognition, we celebrate small wins a lot; I really believe it’s the little things that make big things happen. Look for wins that your employees are having, some people need recognition to justify their role, you really have to know what pushes the buttons of each one of your guys and deliver that kind of recognition; sometimes it’s different depending on the person. The other thing we try do is every three to six months have a company get together to bring everybody together. We’re going to be a 20 million dollar company in 10 years and even as we grow, it’s still important for my wife and I to visit the job sites, meet people we’ve never met who work for us, and let them know how much their work matters to the business. Another thing is to have an open door about topics such as personal issues or other challenges with an employee, really just being someone they can vent to, while withholding judgement.”
- For business owners who struggle in this area, what tips can you share that would help them excel?
“Everybody wins and loses together; you don’t want employees to feel like the only person benefiting from a home run is the owner. We have 95% retention in our company and part of the reason is because everybody benefits. Our bonus system is structured in a way that allows many of our employees to receive bonuses on particular projects. They know exactly what they need to do in order to bonus their paychecks; we have a very transparent system that shows them where jobs are coming in. They’ll know they bonused before I would if I didn’t have time to look at the report.”
- Where do you think most CEOs fail in this area and why do you think they fail?
“It’s important to create a three and five year plan for your company and to also make sure your key employees know where you’re going, whether it’s your executive or middle management teams. Furthermore, describe what opportunities will become available as you grow and how that applies to them. You get a lot more committed people when they’re not worried about where they’re going to be in one, two, or three years. We’re also very loyal to the individuals who started with us; if we don’t have full time work for everybody, the people who get laid off are ones who have been with us the shortest amount of time. There really is a hierarchy in our business; we don’t start a new guy on a higher salary or give them more work than someone who’s been here for two years, it just doesn’t work that way.”
3. People Buy From People They Trust. Employees Stick Around Because They Know You Care.
- How does developing trust and relationships with clients play a factor in getting the sale, in comparison to focusing on the technical parts of the service or product?
“Trust is everything, if someone doesn’t think you’re going to do a good job, they could care less what your price is or who you’ve worked for in the past; it’s the main driver in almost all of the decisions that people make. Relationships are very important to the success of your business and the first thing that can break them down or build them up is trust. Relationships with your clients are no different than the relationship with your best friend or your parents, there has to be mutual respect.”
- How does showing an employee that you care play a factor in retention and productivity?
“Trust. There’s only a small percentage of job satisfaction that actually occurs while you’re on the job. You also have to enjoy who you work with and you have to be happy with your pay; maybe you’re not thrilled with it but it’s enough that it doesn’t stress you out to pay your bills. There’s a comfort zone you fall into, not a complacent one however, more of a feeling that if you don’t have to worry about bills, you can focus on getting better at your job and staying motivated at work. As a leader, showing you care is more than just going through the motions; some business owners say they care but do you really care?”