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Host Scott Lollar is a 35-year veteran of the painting industry and founder of Consulting4Contractors. The 'Success Beyond The Brush' Podcast serves as a touchpoint to painting contractors who have hustled, sacrificed, and worked hard to get their business to where it is today. Now, you need the guidance, expertise, experience, and team to make it into the multi-million-dollar company of your dreams. You'll hear stories and interviews from "Brothers of the Brush" and "Sisters of the Sprayer" who have been where you are and are charting a new course for their company's success. Listen in and go beyond $1,000,000!
SBTB Ep. 21 | Warranties, Callbacks & Profit Leaks (What Most Contractors Get Wrong)
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No Questions Asked Mistake
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[00:00:00]
Mark: We used to term our warranty a no questions asked. That was our big thing, no questions asked, five year warranty. Meaning it's ironclad, we're not going to argue with you. If anything happens in five years, it's completely on us. That was a mistake. So here's kind of some, some negative things that you need to think about as a business owner to protect your company or have it in the verbiage of the contract. We had a no questions asked exterior warranty. We'd have a warranty on foundation block. We'd go out there. It's chipping and it's peeling.
Mark: Well, it's because they either rubbed their lawnmower up against it or the weed whackers gone over it week after week after week, and the paint's gone and they're saying, well, it chipped and peeled. No, you weed eat here. Right? That's such an obvious thing, but because I didn't protect myself, and just said it'll look perfect in five years.
Mark: You said no questions asked. Oh my goodness.
Scott: Yeah. You thought you were a genius.
Welcome to Success Beyond The Brush
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Welcome back to another episode of Success Beyond the Brush, the podcast where we help [00:01:00] contractors build more profitable and sustainable businesses. Well, spring is here, and for many painting companies, that means one thing, warranty calls. In this episode, Mark and Scott are going to dive into the real cost of callbacks.
How poor expectations lead to frustrated customers and why your warranty language might actually be hurting your business. They'll break down how to set clear expectations, protect your margins, and build systems that reduce rework. Let's dive into this episode with Mark and Scott.
Mark: Welcome everybody again to another great episode of Success Beyond the Brush. I'm your host, Mark Black. Here again with Scott Lollar from Consulting4Contractors. Hey Scott.
Scott: Hey Mark. I saw you were looking at your whiteboard, so you made sure you said the right title of our podcast. I appreciate that.
Mark: I did, I may have messed that up once or twice. And while we're talking about mess ups, can we just talk about how, two episodes ago I sounded like Daffy Duck, the entire podcast, and nobody told me
Scott: Yeah, that was [00:02:00] one of the best podcast lisps...
Mark: I had a lisp for the entire thing. I've, I sounded like I was just, sufferin' succotash.
Scott: I was wondering if you're having a stroke. Because I mean you have had some issues lately...
Mark: We got these great new podcast microphones, but it didn't like my iPad. And there's all kinds of techno junk behind the scenes and sorry about that everybody. I uh, my lisp is feeling much better now and hopefully we can get through this one without cracking up. That was actually a hard podcast to record because you were laughing the entire time
Mark: and I didn't know why. Yeah.
Scott: you didn't.
Spring Warranty Call Surge
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Mark: Hey, it's springtime. It's busy time. Our phones are ringing off the hook, and I'll tell you what I don't love about springtime. ~I don't know if this is just me and my company. I hope other painting companies can relate to it, but we get a~ Probably a dozen warranty phone calls in the spring. ~People have kind of been holding their horses all winter long.~
Mark: The first nice spring weekend, they're out doing chores and all of a sudden they start looking at the job you did last fall or maybe the fall before that. [00:03:00] We get at least a dozen warranty calls every spring, usually for exterior projects, sometimes for interior projects. And that got me thinking we ought to have a conversation surrounding the topic of callbacks and or warranties.
Mark: ~because I think there's a lot of meat in here. Um, but what's frustrating to me. Is that every once in a while we'll have something that, um, is absolutely acceptable. Uh, hey, I can't tell you why the paint did not adhere to that surface. Well, and I'm not proud of that. I would like to redo that at no cost and we will warranty the project.~
Mark: But what's scary to me, Scott, is that there are lots of customers who I feel like are taking advantage of our language or lack of language in our warranty policy, and it's like the doorframe on the front door. Oh, there's some paint shipping on the front door. And I go out there and I look at it as we always follow up with our warranties. It's obviously been beat with the wheelchair from the mother-in-law who lives in the house.
Mark: And like, that's not a warranty. Nothing's going to hold up. That's wear and tear. So I'd love to get your thoughts on this. How do you coach your clients to have ironclad warranties that are a benefit to our customers, but that they can't use them against us three and a half years later.
Why Callbacks Kill Profit
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Scott: Go backs and warranties. Why do we even [00:04:00] care? Because they're profit busters. They are profit leaks. Some people would say, well, I just sent someone over there for an hour.
Scott: No, you didn't. Somebody called, there was a phone call from the, that the operations person took. Then they talked to you and you called them, and then a whole bunch of people's time was wasted and it, took several hours. Then we drove out there in the company truck and they weren't doing something.
Scott: You know, it's these are the things that matter. So number one, not having callbacks and warranty issues are helpful to elevate you as the premium white glove service that you're trying to pretend you are right. So if you are telling someone that you're great, act like you're great. So not only are you getting the benefit of the customer experience is amazing.
Scott: Second is we don't have the waste of time and all of this stuff of sending people back and monitoring that and making sure they're happy. And when the person starts thinking maybe they have to supervise and do quality control, they're going to start finding [00:05:00] more problems.
Scott: So really, we don't want them to do that. So you should do it. Tell them it's coming, go do it, and then move on. To your point about warranties, if there is no walkthrough or if there's a touchup, I would suggest you'd be militant about the next morning going and completing this and not letting it linger because it festers.
Scott: And so often we hear like, well, why doesn't so and so pay? Well, because we got a touch up. So it's just festers and it's a problem for us. And if you don't think it's costing your company money, it is. So that's why the conversation of both touch-ups, you know, callbacks and warranties are important.
Scott: Eliminate them as best you can. And it's really going to help you with your bottom line.
Mark: I agree a hundred percent. And the reason I agree with that is because I've been burned so many times and I think I'm great for this podcast, Scott, because I'm the antithesis of all of your [00:06:00] advice. A lot of times I don't take this advice, and that's why I know that we should listen and you would be wise to listen to this.
Scott: ~Yeah, well, I hear this sometimes from people, especially when they put out the newsletters and they haven't done that before, and the first five or 10 calls they get are, Hey, it was good to hear from you by the way. You never came back. And, uh, did that touch up? And they're like, oh, Scott, I hate, I hate newsletters.~
Scott: ~I'm like, yeah, well you got to try to, uh, go do your, uh, warranty work. But, um,~ I
Set Expectations In Sales
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Scott: do think this lends itself to the fact that we have not preconditioned our client with expectations. So, you know, a lot of people have an expectation that their drywall's going to be like a piece of glass when you're done, right?
Scott: Or you know that your, their alligator siding is going to be like brand new. And so I think that's a mistake in the sales process. So we haven't had a conversation with, Hey, what are your expectations? Tell me what you see that you'd like to see different. And if they say, well, I'd like this to look like a piece of glass, then I think you need to engage them in the expectation there. But I think talking about, in the sales process, what exactly we're going to do and what their expectation can be from that process. What I hear a lot is someone was vacuuming somewhere on their hands and knees at a certain dusk and the sun was just coming in just [00:07:00] so gently and shining up, and they looked up from their knees laying down and they saw the, you know, horrible little thing, whatever it was.
Scott: That really goes back to the sales process. Now, in contractual language, we're always referencing the PCA standards, one of which is a properly painted surface, how to inspect it visually, you have to be standing normal light, right? You can't put a halogen on it, get down on your hands and knees and get three, you know, inches from it.
Scott: That's not reasonable. So I'm talking about that in the sales process, as it's appropriate. You know, I don't just go up there and say, Hey, just so you know, you know, the work is going to look pretty good as long as you look at it from, you know, two states over. So I'm really talking about that and talking about the expectation because then that preconditions them to, when that happens, they'll be like, well, that is kind of being pickier.
Scott: He, they did talk about that. The same thing I would say is. Things like interior cracks. You know, When I was selling, I used to make a joke about stress cracks. I'm like, you know [00:08:00] what? We do guarantee those stress cracks um, to return. So I'm basically preconditioning to them that crack very likely, although we're going to do our best to repair it permanently, is it very likely it can come back.
Scott: So just preconditioning them to, to those realities, understanding that, there's limitations here. Would you like us to make this perfect? We can. It's going to cost a million dollars. Is that what you were hoping? So I think the start of it really is in the sales process to really talk through what their expectations are and address them then, because you're preconditioning, you're pre-solving, the issue that possibly will come up in the future. Then you can return to that conversation. Hey Mark, do you remember when we talked about the smoothness of the siding? Do you recall that conversation?
Put Standards In Contract
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Scott: It taking it a step further, and if anyone listens to anything I ever say you'll hear this over and over.
Scott: ~I would put those kind of comments in my contract language. You know exactly how are we going to feather the edges of this peeling paint. Exactly. You know, how much preparation are we put, you know,~ I put that right in the contract because, ~you know,~ a lot of us have selective hearings. So when they say, Mark, do you remember when we had that conversation?
Scott: You might [00:09:00] say, uh, as a matter of fact, Scott, I don't, well lucky Mark, I put it in your contract. Would you like to read it together? So you know you have, it doesn't necessarily mean they're going to like it, right? I'm not saying they're going to be like, oh, well cool. Thanks, Scott. I'm, I'm glad we had this conversation.
Scott: My, my siding still looks, like terrible, but it gives us a place to go with the conversation instead of just you being on the hook to run over there and do touchups the rest of your life.
Mark: I agree. And for my company I think we do a pretty good job. We actually go overboard. Usually in the contract. We have a whole section on prep. What does prep mean? What are the levels? What are we going to do? What tools are used? And then at the end walkthrough with a customer, we're always ask.
Mark: Asking if we met their expectation. And generally the answer is yes.
What Warranties Cover
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Mark: What's difficult in this conversation, though, is setting an expectation of what that surface is going to look like two years from now. And for us, we have an exterior warranty of five years. I'd love to get your opinion on that for length of time as well.
Mark: But [00:10:00] the hard part is, you know, we painted that surface in 2023. They're calling us in 2026. It is within their warranty period, but sometimes they just... it's not as shiny as it was three years ago. Like I don't know how to manage people's expectations for years in the future of what that surface was going to look like, even if we prepped it correctly.
Scott: It's been pretty popular for people to offer some pretty extravagant warranties. Now what their warranting, I'm not sure, but I think five years is very reasonable for a two coat system. And I, I would have no issue with that. What I think you should be educating and documenting is we're not guaranteeing sheen or color fastness, right? So if it's in a exposure where there's a sun exposure that's really strong, you know, that coating, depending on the color is going to have some fading. That's normal. Quite frankly, paint is a sacrificial coating and you're going to have different things happen to it.
Scott: So if it [00:11:00] gets dirty, do they say, well, your warranty, you know, need to come, you know, no, it's going to get dirty, it's going to fade. The sheen level could adjust. ~And~ I don't think those are warranty issues. I think what you're talking about is, ~um,~ the product we applied, ~um,~ will last and be sound and not peel for a time of five years. I think also addressing at times when you have a peeling substrate. We've all been there, right? Where there's, they say, Hey, you need to come out here, Mark. and you go out there and they have big amounts of peeling, but it's not necessarily just what you applied, it's actually going all down to the wood.
Scott: And there's different reasons. Is that your problem? Well, it's your problem because the customer kind of hired you to, you know, take care of this. So you know you're going to have to handle that. And I think we've all. Eaten some warranty when it was in the interest of good customer service, even though it wasn't our fault.
Scott: But I think some goodwill, within reason, ~can,~ can make a difference. But yeah, I think, you know, being clear about what we're warranting [00:12:00] is really important and like I said before, now the other thing is what about in an exterior situation is what about water infiltration or when you have that, you know, gutter that's dripping drip you know, we can't, and expansion contraction.
Scott: Are you going to warranty the expansion contraction, which I'm talking about now, caulk lines, right? So expansion contraction be because you have done a test of the vapor barrier of this house and you know how much insulation's in the attic and you know exactly how this house is going to breathe.
Scott: No.
Mark: Nope.
Scott: You're not, you know, so, helping them understand, there are some parameters to what you can guarantee, and I don't think I would over address it, but I think I would be clear about it.
Midpoint Break - Connect With Scott Today!
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We're going to take a quick break here at the halfway point, and if you're listening and realizing that your warranties, callbacks, or processes might be costing you money, you're not alone. This is one of the most common areas where service businesses of all kinds really leak profit without even knowing it.
So at Consulting4Contractors, [00:13:00] Scott and his team help contractors not just fix these issues, but build systems that prevent them in the first place. From contract language or project management workflows, they help you run a tighter, more profitable operation. So if you want help dialing in your systems, head over to www.consulting4contractors.com and book a free discovery call with Scott there.
As always, you can check out the show notes or video description for additional resources and links related to our episode today. Let's hop back into the conversation with Mark and Scott.
Schedule Warranty Work Fast
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Mark: You mentioned it earlier and I'll comment it as well. For the most part, we have a lot of goodwill when it comes to callbacks or warranties. If it's not completely ridiculous, if it's within a five year time period, we're likely going to touch up whatever. Whether it's a legitimate complaint, whether we have anything to learn from it or not, we're probably going to do it as a matter of goodwill in our community.
Mark: [00:14:00] But, we've found, again, springtime, much, much more warranties than any other time of the year. I'm not sure why people wait all winter long before they make the call, but we have found that we often have to spread out our warranty. If we did all of our warranties in March and April, it would really affect our cash flow.
Mark: So we usually spread that out through the first half of the year, ~up, up until July,~ doing two or three ~a~ month. ~Depending on the severity or or nature of the, of the complaint. Keeping in mind, we're servicing hundreds and hundreds, usually three to 500 customers a year. So to have a dozen complaints proportionally is not that, that large.~
Mark: ~Um, and, and we feel like it's a good loss leader for Goodwill, um, but we like to spread it out a little bit too.~
Scott: ~Yeah, I, you know,~ You know, I would really rather you ~uh, a company~ tackle that pretty ~pretty~ aggressively and get it done. Because to drag it out, it's basically saying, Hey, I promise you I'm going to stand behind this work, but I'm going to do it when it's convenient for me. So I'm not thrilled with that process. I understand what you're doing there.
Scott: I, but I, in addition to, I don't think I put my whole company on warranty. I think I would take a person, a service person, you know, we all have that person in our company, or if you're a subcontractor, we, you know, when we have, you know, clients with subcontractors, this is can be really problematic because if the sub that did [00:15:00] the work is not still around, you know, it's going to cost you some money, but I think that should be part of your sub agreement, that, hey, we're going to expect you to stand behind your work, or even if you have to pay a little bit, but to get through that work as quickly as possible, just designate a crew to it and get through it.
Scott: I'd rather see that. We have seen many people, I'm thinking about a client right now that's a hundred percent submodel that they just, you know, of course the sub didn't want to go do the, the touchups and it just kind of became a hassle. And the customers were aggravated and the company was aggravated.
Scott: And so, you know, we said, Hey, just schedule that stuff. And that's another thing I'll make a comment about is that we always want to wait until it's convenient for us. Just put it on this schedule. Mrs. Smith, we'll be there on Monday at eight o'clock. Okay? Get it. Make it a priority to get it done so that it appears that you actually are a company that stands behind your work.
Scott: If you wait and drag it out and I have to pester you, it's not very that great of a warranty, in my opinion. [00:16:00] So...
Mark: Yeah I hear what you're saying. What I've found is there is so much goodwill and almost every time we leave with another project.
Mark: While you're here, can you take a look at this bedroom? It always spurs on more work and I think that is a good thing. So maybe we ought to prioritize that.
Scott: Most people don't have something that is so glaring and inconvenient that it's a big crisis. It's usually just, Hey, when you have a chance, could you come take care of this? There was a little something. Okay, so I'm okay with that,
Mark: If it was an actual failure, we would be there tomorrow for sure, you know?
Scott: Yeah,
Mark: ~No, that makes perfect sense. So let me get your thoughts on ~
Walkthroughs And Punch Lists
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Mark: So obviously every company has incentive to, to reduce their number of callbacks. Do you have some tips and tricks that you advise your customers to avoid callbacks altogether?
Scott: Yeah. So. You hear people call these touchups, right? And I tell, I remind people that in the English dictionary touchups in English the definition is stuff that we sucked at the first time. Like we didn't do it. Okay. We didn't do a good job. And so, if you go back and listen [00:17:00] to any of our podcasts that I've talked about org chart, or project management. This is the project management piece, and so the bookends of the jobs are the most critical. ~If you'd had nothing else in between, I would say for day, day one, ~Day one walkthrough and final walkthrough are the bookends that are, are critical. So I think that the issue, and this is subs, employees, I don't care who works for you, this is universal.
Scott: ~I'm going to sneeze.~
Scott: ~I was right.~
Mark: ~Bless you.~
Scott: ~Um, this is universal for some reason. No matter what time of day it is, ~Everybody is in a hurry to get out and go home. I don't know if it's bowling night or meatloaf night. There's something that everyone's got to get out of there. And in fact, if they simply would've taken an extra four minutes and done a walkthrough, they would've seen there was a piece of tape or there was a drip on the floor.
Scott: And those are the moments. That, that one extra minute of just the walkthrough is the critical part. So there's a couple of, tips I would give the people is to ensure the walkthrough is done by management, if that's the way you guys roll. If you don't have high functioning crew leaders in a employee modeled company, [00:18:00] if they're not high functioning, I do have some clients that are very high functioning.
Scott: I would not hesitate not to walk through because they would do it. But if, I would say management project manager has to do it. Okay? It's a non-negotiable for me. If you have subs, there's no question you have to do this, and so end of job. Now, here's all the excuses. I have three jobs finishing on the same day.
Scott: What do I do? Or the customer wasn't home? What do I do? The customer wasn't home because you did not condition them to be home. You did not tell them yesterday. I need to do a walkthrough.
Mark: We are guilty of that.
Scott: And so here's a couple of tips in that moment. You don't have to be there at the actual final minute.
Scott: This is a concept called punch as you go, which is get the customer to approve surfaces, areas, sections, as you, is everything looking good? Take a look at this. We finished this and get them to kind of walk through components of the job as you're going [00:19:00] through, because there's a couple reasons for this.
Scott: Have you ever had a moment where you worked at a house for like two weeks and then at the final walkthrough, they, say, Hey, I was wondering when you're going to caulk the baseboards, and you're like, well, we've been here for two weeks, like we're going to have to go back to the start and address that situation that you, you, I mean, we've had that happen.
Scott: We're like, well, are you going to do like, wait a minute, if we had talked about this two weeks ago, I could have easily done that. Now this customer's going to make me go do this again. So this punch as you go concept can be really powerful because you're engaging the customer often, every three days or so, two to three days and just saying, Hey, we, let's take a look at this. This area's done. This section's done. You do this too in commercial work for sure, without question. If you're not getting sign-offs in commercial work, that's where people, you have horror stories of them saying, Hey, I need you to go paint that area,
Scott: it's all damaged. Well, no, no, no. We, we finished it two weeks [00:20:00] ago and I walked you through it and you signed off on it. So it's not repaint work that's damaged by others. And again, PCA standards, we're going to have to write a change order for that. And so the only thing that you really need to do a walkthrough is the final day or half a day of work.
Scott: So if a client wasn't there, I would say, Hey, we're going to walk through at two, not four, because you're not there at four. I would do that, make that provision. But you have to get that done so that they don't, keep looking for issues. You can kind of sign off on it and then they move on.
Mark: ~Understood. ~
Final Takeaways
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Mark: We all know that the nature of warranties is to pacify or satisfy a customer to make them feel better about a large purchase, to let them know. We are partners in this, I am telling you that in five years I will make sure that your house still looks good. And in that we, we are building a, a trust bond together.
Mark: That's kind of the whole purpose of warranties. And we also understand that there really isn't an ironclad contract that's going to have perfect verbiage. Protects you from every possible [00:21:00] scenario from five years from now. There's certainly some verbiage and, and a well-written warranty policy is something you should talk to a consultant about.
Mark: But, I think at the end of the day, this is about trust and, and do you trust me as your contractor? That's the reason you chose me. We're going to bend over backwards in my company to, to go a little bit above and beyond. Maybe even if I wanted to argue that point a little bit, I'm probably going to give it just for goodwill, but that, I guess that's why my blood boils when somebody violates that, trust contract that we had, and I feel like they're trying to get something for free.
Mark: My door doesn't look as good as it did five years ago. I just want you to paint it again for free because you said no questions asked.
Scott: You know, making sure that you're not over promising and that you're, you're realistic with your client. It, it'll go a long ways. So, so out of this episode, just a couple things. Make sure your contract language is clean and accurate. What are you warranting?
Scott: What aren't you warranting? Go ahead and put it in writing. Talk to people in your sales process. What's your expectation? And then we [00:22:00] talked a little bit about today, about, making sure there's a final walkthrough, making sure there's approval and, and don't go onto the next job until this one's done.
Scott: You know, you have to make that an absolute or else you're going to continue waste time with callbacks and, and warranty issues.
Mark: think that was a key takeaway from me as well. I love your idea of punch as you go. A lot of our clients are not home, both of them or they get home late and it's after my guys have already left for the day. And so I love this idea of when we do catch you in the morning or in the afternoon or leaving a note simply to say, Hey, we squared up the master bedroom today. Love to see if we met your expectations in there. We finished the hallway, bathroom, that type of language just to make sure that we met your expectations, that it looks the way you thought it was going to look. Great, ~great~ discussion today. I appreciate your insights, Scott.
Mark: Thanks so much. I hope you found the information useful today and that you can use this in your company in the future. Scott, here's to building better businesses. Thank you, sir.
Scott: Talk to you next time, Mark.
Wrap Up And Subscribe
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[00:23:00] That wraps up another episode of Success Beyond the Brush. If you found this episode helpful, make sure to subscribe, leave a review, and share it with another contractor who might benefit from tightening up their systems. And if you're ready to take your business to the next level, don't forget to visit us at www.consulting4contractors.com to book your free discovery call with Scott. You can also check out the show notes or video description for more resources and links from our episode today. Thanks so much for listening. We'll see you in the next one.