> Being open, honest, and helpful increases an A/E firm’s chances of securing future projects from clients even after they turn down work from them initially.
While every A/E firm wants to secure as much business as possible, this goal is difficult to achieve. At the same time, firm leaders realize that every time they turn down a prospective client, they risk losing out on future, repeat business. That’s why, when turning down business, it’s necessary to maintain that delicate relationship with the client so that a firm doesn’t lose out on future business.
At 38-person MEP engineering firm JJA, Inc. (Dallas), Executive Vice President and COO John Johnston said work does have to be turned down occasionally but "it rarely occurs with our regular clients. When we turn work down, it is usually a request from a non-repeat client with a short timeframe for a deadline, and we cannot staff the project properly."
Mike Hermesmeyer, president of 200-person civil engineering firm LBFH, Inc. (Palm City, Fla.), said, "We have recently turned down business due to capacity and the ability to serve existing customers. We first got rid of customers that were slow payers and/or staff abusers. Next, we raised prices to new customers. Finally, we had to quit accepting new work to meet our existing client needs."
Weighing a project
Before work is turned down, Johnston says, JJA tries to get a full grasp of the scope, schedule, and deliverables required for the project. This information is reviewed along with the firm’s current project schedules and staffing "to make sure we are able to staff the project with appropriate personnel for project management and lead design roles."
At 200-person interdisciplinary design firm Mithun (Seattle), President and CEO Bert Gregory said the firm "has always been judicious as to the selection of the work that we undertake; evaluating the client’s goals, the business case, the project’s environmental context, and the potential for the project to positively contribute to the community in which it rests, as the governing factor, rather than quantity. Staff availability is always paramount in these decisions, with priority given to serving our existing client base."
Politely saying ‘no thanks’
Turning down business while maintaining a relationship with the client can develop into a tricky situation for any organization. However, firm leaders agree that being open, honest, and helpful toward the client goes a long way in ensuring that the relationship continues.
"The customers we turn down are given the names and contact numbers of firms we feel can meet their needs," Hermesmeyer said. "Further, we meet with the customer and the firm they selected. We talk to the customer as to why we cannot accept their work, what we are doing to resolve the problem, and the fact we would like to work for them in the future, but know they would not be happy with our service now.
"We know when we reject work we will lose some customers permanently," he says. "However, customers do return with future projects and let us know they appreciate our honesty."
Mithun also suggests other firms in some cases, Gregory says. If staff availability is the issue, then the firm will explain "that, in order to deliver the project at the excellent level we expect of ourselves, we will have to decline, and hope to be able to work together on another project soon.
"A wonderful Squamish Tribal story here in the Northwest is about two fishermen who caught so many fish, their boat sank," Gregory said. "Making sure we are successful is more important than ‘overloading the boat.’"
At JJA, Johnston said, the firm tries to explain that it would be unable to meet the needs of the schedule and properly staff the team.
"We believe that the best long-term solution is to turn the work down rather than jeopardize the relationship with a mistake or missed deadline," Johnston says. "In order to maintain a long-term relationship, a firm must be able to produce its deliverables without compromising its processes during the design, production, and quality-control stages of a project."
Making a choice
While firm leaders are eager to attract new business, they are not hesitant in refusing to accept a job from a "bad" client.
"My predecessor believed that, to stay healthy, you had to lose the aggressive deadbeats. We practice that today," LBFH’s Hermesmeyer said. "We are not afraid to dismiss a bad customer or to not accept new work to keep our good, long-term clients happy."
Gregory said that Mithun has fired clients or declined to work with them because of the treatment of staff, client values, and business issues.
"We all have clients we respect and clients we do not," JJA’s Johnston says. "When a firm has a backlog of work and is not in a cash-flow crunch, it is a better business decision to turn down the ‘bad’ clients. When additional cash flow is required, sometimes those decisions are not quite as easy to make. We have some clients we refuse to work with again, and those clients know why. It is an easier decision of who you work for when times are good."-Franceen Shaughnessy (email@example.com)
This article first appeared in The Zweig Letter, issue #662, originally published May 15, 2006.