The Most Profitable Job We Lost Money On
Losing $2500 dollars taught me a valuable lesson.
One of our customers was turning their three car garage into a workshop for their jewelry business. In the cold Idaho winter she needed some sort of heater to keep her tools and work area warm.
She had tried to enclose the work area with tarps and use a space heater inside, but the heater kept tripping the breaker. Our electrician went out and installed a fan powered heater that set her back about $2500. The problem was it still didn’t keep her workshop warm.
I ended up with an upset customer who felt like she was promised a warm garage, but got a drafty tarp workshop that was not at all comfortable to work in.
I was at a crossroads. We had already installed the heater so there was no way to return it, and the technician had already been paid so we were well over $1500 into cost of goods sold(COGS). Any profit in this job was already gone.
The way I saw it, we had 2 options:
Walk away with normal margin and an upset customer.
Make things right and install a heater that could take care of the whole job, and hopefully walk away with a happy customer.
I swallowed my pride and chose option 2.
The deal was a no brainer. She was getting an $8000 install for $5500.
We ran the gas line and installed the heater. The customer was happy and she didn’t even need the tarps for her workshop anymore.
Almost a year later I was reviewing invoices on New Year’s Eve. I came across a ticket from one of our plumbers that had a new water heater, water softener, whole home water filter, and a booster valve. Easily $8,000 of high margin productive work. The name rang a bell for me. It didn’t take any special discounts, no extra marketing, just a return customer coming back to a company that she trusted to do the right thing every time.
Doing the right thing often looks like a loss on paper, but can pay large dividends when customer trust is built.
Customers don’t just grow on trees. Each one should be treasured and taken care of so that the relationship grows and trust builds.
Solid decision to eat the loss upfront instead of chasing short-term margin. The real insight here isn't that she came back for more work, but that she trusted enugh to bring other big jobs without needing discounts or convincing. I've seen contractors who always try to win the negotiation but end up spending more on marketing than they would have fixing first mistakes. Building trust like this turns customers into salespeople for you.