The Non-Customer (November 2006)

  You know the type. They’ll either try to:
  • Bluff you to give away secrets and then do the job themselves;
  • Hire a cheaper person and coach them; or
  • Have you do the work at an agreed-upon price, and try to re-negotiate afterwards.
  My Uncle Howie always told me that the job isn’t over until the money is in the bank. Now my good Unc was a smart businessman, and he never considered money as in the bank until a check cleared. He started in business back in the 1940s and since retired quite comfortably.
  Have modern ways caused us to be lax when it comes to viewing our customers? Has the “customer is always right” theory put us at a disadvantage? And most importantly, is a customer that hasn’t paid really a customer?
  To bluntly answer the last question first, no. If someone was to walk into a store, pick up an item, argue about the price, and then leave with the item without paying, that’s not the description of a customer. It’s the definition of a thief.
  A few years ago here in Ontario, when the price of gasoline skyrocketed, a man filled his truck with gas, walked into the kiosk and paid for his fuel at the “old” price of 65¢ (Canadian) a liter instead of the new price of 85¢ (3.89 liters equals one U.S. gallon, BTW.) This was his form of protest at the recent rise in oil prices.
  Did the gas-station owners just take the money and say, “You win some and you lose some?” No; they pressed charges.
  The gas-station owners never had a written and signed contract with the man, so how could they win? The courts easily decided that there is an agreed-upon price at the station that’s posted on a sign in full view, and it wasn’t this man’s first time buying gas. He’d stolen part of his fill-up, and now he owns a criminal record.
  If a customer gets what they want (either a new counter or restored floor) and yet doesn’t pay the full agreed-upon price, are they really a customer? No, because they haven’t paid for your goods and/or services. And as the little fuel rebellion in Canada shows us, if you do not pay in full for goods received, it’s as good as theft.
  Yes, it’s good practice that the customer is always right, but a customer is not a customer unless they’ve paid. If they receive the goods/services and there’s no payment, they may possibly be a thief.
  Sometimes there are reasonable problems that customers want fixed before they pay in full, and those are different situations. Non-customers start out with the intent (or mens rea, to sound all official) to cheat the tradesperson or to get something for nothing.
  The one sure-fire way to avoid a situation like this is to have an agreement in writing. Even if you don’t like contracts (or if you are trying to evade paperwork for governmental reasons) have something on paper. Even the gas station had their prices clearly marked to protect them from the Petroleum Pirate.
  A contract keeps honest people honest. No paperwork is an excuse for the dishonest to wave the carrot of getting paid in front of you until you meet all of their demands, whether reasonable or not. Remember, they’re not customers if they don’t pay or have no intention of paying.
  Now, I’m asked all the time, “What kind of fairy-tale paradise do you live in, anyway, that you can get away with what you do?” Well, we all create our own paradise or hell; if you condition the customer to take advantage of you, they will. If you condition them to respect you and your company, products and services, they will as well (and they’ll pay up, too).
  Customers (and non-customers) talk among themselves. If non-customers hear you do good work without a contract, the line to your door will get very, very long. Is that the type of word-of-mouth advertising you want?
  If non-customers hear that the contractor will cave on a complaint and slash 50-percent from the bill to save headaches, then the dishonest will freely hand out head-pounders just to get something for nothing. They steal from us and our families, and they essentially steal from our honest, hardworking real customers – because to cover our losses, we need to charge more. Now how is that fair?
  I’ve been taken advantage of in the past, and mainly it was because I was either in a rush myself or was rushed by my non-customer, and that right there should tell us all something. In all my years of business, it is always the customers in a rush to get the job done that seem to be the ones that always want to renegotiate or look at the job afterwards through a microscope to “save” money.
  Here’s a case study. A large construction company called me up (after a friend referred them to us) on a Tuesday and said they needed us to have this big commercial job done for a grand opening on Saturday. Seeing as we had a delayed job that week and another we could move to the next week, I told him our hourly rate. He said fine, I said no problem in getting started tomorrow.
  Here’s my big mistake, I asked him to fax over a work order authorizing us to do the work, and the response is, “We do not require one. Just make sure that you get our supervisor to sign for your hours.”
  I should’ve stopped there, counted to ten, and said, “Well, we require a signature of some sort.” But hey, I trusted the guy; after all, he ran a big construction company, a friend of mine was doing a load of work for him, and I was in too much of a hurry to argue.
  On Wednesday night, my lead hand is talking to a mutual friend who used to be a bricklayer. The friend said, “Oh, those guys; be careful, because they stung me for $10,000.”
  When I found out, my stomach felt sick. “We never got a contract,” I thought. “What should I do? Should I stop work and lose the one day’s wage? Continue in good faith?”  
  On Thursday morning, my lead hand made sure he got a signature on the previous day’s hours, and for every hour after that until we were done on Friday afternoon. We finished the job, sent in the invoice, and prayed.
  We even offered a 2-percent discount if paid within two weeks to encourage quick payment.
  After two weeks, my secretary calls to see if payment is ready. The controller says that the boss wants to talk to Tom.
  The contractor tells me that he only agreed to pay so much per hour, but didn’t agree to pay per man; he thought it was per crew. I then asked him that if I had sent out twice as many men to get the job done quicker that I could have made a quarter instead of a dollar (four men doing the same area as two men could do it in half the time, but paying out the same man-hours and billing half the time equals 25 percent.
  He claimed that he did not claim to know the semantics of our business and that, if we agreed, he would have a check ready for tomorrow. On the spot, what was I to say?
  Fortunately, I was already one step ahead of this guy. I knew how he operated because, since hearing about stiffing the mason, I’d asked around. His big company took advantage of smaller ones; I found out that the friend who referred me had been run over the coals by this company for more than $100,000. (Some friend.). The company knew from experience that most contractors roll over and take the abuse.
  I agreed to nothing. I acted like a dog with the tail between the legs and told him that I would pick up the check tomorrow. I never verbally agreed to accept his counteroffer; I only said that, “If you have the check ready tomorrow, we’ll pick it up.”
  OK, it’s a bit dodgy, but I turned the tables on him; I never gave him a contract. I sent someone who had no signing authority for the company to pick up the check, just in case they wanted a release form signed. So at this point, I have 50-percent of my money, since he paid only the hourly rate for the whole crew, and not each man individually.
  As far as I was concerned, he was stealing the rest. If I had told him I wanted it all and got indignant, I would be waiting for months for payment; I’d send it to collections and end up with maybe half. This way, I already had half, but I was going for 75 percent or better.
  We applied the check as a payment on account, and charged a late payment fee of $ 75 a month and 40-percent per annum. We had to do this for two months before we could send them to collections; our agency will base the claim on that supervisor’s signature for our hours every day, and that they already paid us half. I also learned that when the judgement is filled, the agency can garnishee the contractor’s bank account (the banking info is recorded from the original check).
  I’m not sure what upset me more: the fact the contractor tried to take advantage of me, or that he took advantage of my friends. For the life of me, I don’t understand why others allowed this company to roll over them; it just gave them more fuel and confidence to continue to do so in the future. I decided to put my foot down.
  The lessons here for everyone:
  1) If you mess with the bull, you get the horn. (Some readers who know me may remember I have bull horns on my truck)
  2) Have a contract!
  3) Just because someone offers you a job, they are not a customer until the money is in the bank.
  4) Have a contract!
  Based on my experience, our bricklaying friend is now pursuing his collective options from the same company. As, as well, none of our trucks roll out of the driveway without some form of agreement in writing.
  So, until next time:
  5) Keep your stick on the ice and no one will slide the puck through your legs.
  Tom McNall is founder and owner of Great Northern Stone Care, a Huron Park, Ontario-based stone-cleaning and -restoration company servicing all of southern Ontario. He also serves as the director of training, technical assistance, and operational support for Stone Restoration Services, a division of Stone Shop International. Tom also offers corporate and private consultation, serves as a trainer for the MIA, and is also on the organization’s board of directors. He can be reached at tom@greatnorthernstone.com