Spoiler alert: You shouldn’t be offering change orders for free, at least not as a standard practice. We’re professionals, and we need to get compensated for our expertise. It’s the foundation of business.
But, and there always has to be a ‘but’, sometimes you need to make a change or deviation from the plans or specs you signed at the contract. Over the course of a typical custom home, I’d venture to say it’s common that there may be dozens of these deviations after contract, ranging from the minuscule to the major.
Usually you’re going to issue a change order that has a dollar amount attached to it, but sometimes you find yourself in that place where you need to make a change or deviation, and it doesn’t make sense to charge the client. Maybe it was a small error on your part, or maybe it’s a fairly easy change that isn’t even worth pricing because it’s so easy to accomplish. The easiest route is just to do the change and be done with it…move on down the road. It’s what most builders do.
It’s also a mistake. This is a business about not just communication, but DOCUMENTED communication. For this reason, any and all deviations from the plans or specs should be documented via a change order. Even the small stuff.
Why? Well, many times it won’t matter, but in those few times it will matter, you will be glad you have the documentation and it will more than make up for all the effort you invest in always following this process. Knock on wood that a disagreement between you and your client would ever end up in a courtroom, but if it did, documentation is one of your few allies. After all, judges and juries are usually more sympathetic to the customer.
And if you need more reason, this is also a business where the companies with real systems in place win. This is nothing more than a habit, a process, to keep you and your company accountable.
Yeah, it’s a little annoying, but the project managers can even keep paper change order forms in their trucks and write up a one-sentence description with their signature and that of the client right there on the job site. There are a lot of similarly easy paperless options as well. The point is, it doesn’t have to be hard.
For the clients, several things happen with these zero cost change orders. One, they become aware of the things you are doing behind the scenes at your own expense, which can generate goodwill down the road. Two, you are reminding them that everything follows a process, which keeps them from beginning to take advantage of you with endless requests on the job site. “Hey, can you just move this plug over here? Can you add one or two or fifty plugs over there? I don’t like it. Can you just tear the house down and start over?”
The tired adage that “no good deed goes unpunished” rings true. If you allow clients to move that plug just a few times, when you go back to following a process in the future, this may actually cause friction. The “oh yeah, no problem, I’ll have the electrician just move it,” answer, may generate unintended consequences in the future. When you say no to a future request, or follow a formal change order process, they may respond with, “Well, you all were able to just take care of it in the field last time.” That’s what we want to avoid, the “complacency creep,” because it will undermine your system. Ultimately, clients will respect you more if you consistently follow a process, even for the small stuff.
Give this happy client hack a shot. You’ll be glad you did.
BTW, if you are looking to improve some of your company’s systems, head on over to the Building Optimal Shop to check out some of our swag to build a better business. Proceeds go to benefit, Exponencialistas, my non-profit investing in entrepreneurs transforming their communities in Latin America.