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The P Process
Slower times call for more intrusive and aggressive marketing
Last week another call came in. The story was the same; "Mike, I invested in a website and started showing some new bath remodeling products at a kiosk at the mall. Guess how many phone calls I've had from the kiosk at the mall? Exactly two in the last month. What am I doing wrong?"
The sad truth is that this discouraged contractor isn't doing anything wrong, he's just not doing enough right! While the web page and the kiosk at the mall surely would have gotten appreciable responses during yesterday's hypermarket -- in today's market we need more aggressive, more intrusive marketing. If we added another activity on top of these two that we’ve just put into place we might make the web page and mall display pay off. Let me explain;
There are several levels of marketing based on.
1. how active our involvement needs to be,
2. how intrusive we are in delivering our message, and finally
3. how aggressive we are in our search for prospects. The ultimate level of aggression is reached when we start to look outside our normal sphere of influence to find prospects at large—strangers.
The first level is “Basic,” so much so that most of us start here when we begin to think about marketing; letterhead, business cards, yellow pages ® ad, jobsite sign, vehicle signs (including jobsite trailers), telephone message, and bumper stickers. With today's computer tools and resources most all the necessary preparations for this level can be accomplished in a matter of hours. This level of activity and involvement is so basic that it is below the threshold we want to explore here.
Next comes “Passive/Non-intrusive” which includes; calendars, company brochures, Wikipedia, wearables (shirts, jackets, caps for employees/past customers), a sign or label that is permanently attached to our finished product, press releases, company brochures inserted in all outgoing mail, and more. This activity is pretty passive (doesn’t require a lot of energy on our part) and we’re not really intruding into the space of the prospect.
Further up the staircase comes “Active/Non-intrusive” including a website, past customer surveys which collect testimonials and referrals, keeping a ‘wish list’ for each customer, project cards (business cards specific to a project) showing before and after photos (including logo and contact info - delivered to the homeowner following completion), calendars with photos of past projects delivered to past customers, the website, the unmanned mall display, bus bench and/or bus signage, a YouTube movie linked to our website, social media postings of new jobs or special products/services, press releases, entering competitions (more content for press releases). Can you see the level of activity is higher here while and we are moving outside our comfortable circle of influence, but we’re still not intruding.
So far the marketing described has been targeted at what we commonly call repeat and referral business - people who might find us by their own search. The next step moves us beyond that relatively comfortable zone. We reach a level of aggression that is uncomfortable for many--we start looking for total strangers in addition to the more familiar repeat and referral customers.
Active/Intrusive activities include that periodic newsletter and/or blog to past customers and prospects, special events with a warm crowd (an office party for trade partners), arranging to take over the phone number of your failed competitors, mailing letters to past customers, following up on the ‘did not buy’ list, mailing seasonal cards to past customers, canvassing around existing jobs, refrigerator magnets mailed to past customers and new homebuyers, promoting the business through hobbies and/or social interests.
The Active/Intrusive/Aggressive level of marketing spreads to even more people with whom you may have no previous connection. Depending on our target this can be a real stretch of the comfort zone, it may be intimidating! For this reason you likely need a profile of the prospect to stay on track. Perhaps you might formulate this profile by looking back at past customers to see whom you have been selling to. For example; Dual income couple in their late 40’s jointly earning $200,000/yr who have lived in their home for 5 years and are located in zip codes beginning with ###.
Don’t discard the idea of coming up with a new target if the past customer profile doesn’t look promising in this market. For example; Retired but active empty-nesters who belong to the City Country Club and are living in zip codes beginning with ###.
Notice that both of these profiles address annual income and geographic location. At times we may equate higher income with a greater ability to buy. Armed with this information about your target, you can choose the correct delivery tool among a broad range; newspaper, magazine, radio advertising, radio show, direct mail, canvassing of target neighborhoods. The manned mall display or trade show booth, networking groups, chamber of commerce, association membership (for your specific product/service as well as property managers, realtors, home builders, etc) can come next. Consider special events for a more challenging crowd—an office or jobsite party for the general public, prospects (always include past customers in the crowd as your cheerleaders) / home tours / seminars. Add to this list; speaking as a white knight or industry expert, radiated telemarketing (calling homes that radiate around your job site), radiated mailing around existing jobs, door hangers, canvassing, magnetic business cards mailed to new homebuyers.
The goal is to get a response. Monitor and measure your results in terms phone calls, emails or other inquiries. Also track sales results—don’t throw money away on activities that don’t work. If an activity doesn’t work, try something else or add a complementary activity. Study the outcome and compare each marketing activity to the others in terms of;
1. how many leads you generate for each dollar spent (cost/lead),
2. how much each lead sold produces in revenue (production/lead),
3. how many leads it takes to make a sale (leads/sale).
You will create name recognition among those people who don’t or can’t buy today. This is almost impossible to measure so consider name recognition to be a gift, not an objective. It may increase sales at some later date.
Remember four things;
1. If done correctly, marketing is an investment that provides predictable, measurable results.
2. Marketing should continue non-stop even though the specific activities in the marketing mix may vary depending on the market conditions.
3. Have realistic expectations. For example; understand that getting two or three return calls from every 100 postcards mailed is good. For this reason mail should usually be sent by the thousands, not the hundreds.
4. What works today may not work tomorrow. What worked last year may not be enough today.
Lets take the activities we started with at the top of the page (website and mall display) and add direct mail (a complimentary activity) to our target market. Be sure include a call to action; "call now." Perhaps we could build in some urgency by including a special offer (not a lower price, but an additional feature, choice, or upgrade with an expiration date), for example; “Replace 8 windows before the end of June and we’ll include low-e glazing at no charge.” Or, "Free replacement garbage disposal with kitchen remodel."
Think of the down market like this; in years gone by, there may have been three people on every city block who had the need and the ability to buy our product/service. Today, while there may be as many who need the product/service there may be only three people every square mile who have the ability to buy. The job of finding these few people gets more difficult when there are fewer around.
The Best Estimating and Pricing System
While there may be as many systems of estimating and determining pricing as there are contractors, if I wanted to identify two major groups of estimating systems I could divide all systems into; ‘sticks and bricks’ systems and ‘unit cost’ systems.
Pricing systems are more difficult to lump into such classifications, however. Each of the two estimating systems have good and bad points, none are perfect. My purpose here is not to promote any one system for estimating and determining pricing, but to promote another view of estimating and pricing that might be better for all contractors. I base my findings on the assumption that we are all need to make a profit in order to keep doing what we know and love.
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How the Sale Happens
Ever wonder why some salespeople are more effective than others? In his book Emotional Intelligence: Why It Can Matter More Than IQ, (Bantam Books), Daniel Goleman tells a story illustrating how simply and subtly emotions and feelings pass from one person to another. I’ll put his story in my own words: Two people, one highly expressive and the other somewhat deadpan, were placed in a room together at separate desks. Each was given a mood checklist and asked to complete the questionnaire about their moods at the moment. They were left alone for a period of time, several minutes longer than needed to complete the test, but were observed to be silent during and after the test. The tests were retrieved and then each was immediately given the same test again. The results of the second test showed that the mood of the person most highly expressive of emotion had been adapted to some degree by the other, more passive participant.
Using a capture form composed of carefully crafted questions during this first call helps stimulate a conversation, gathers information about whether or not the caller is qualified to do business with us, while at the same time exhibits the kind of knowledge that begins to win the prospect’s confidence. Later, professionalism is further enhanced by physical appearance such as dress, the kind of vehicle we drive, punctuality, and more.
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Winning a Profitable Job
Marketing (position), sales (propose) and estimating (pricing) are the three most important components of our business for generating cash flow, but they are often the components most ignored by contractors. The words marketing and sales are not synonymous, marketing is what gets the phone to ring, sales happen next. An estimating system for determining price and generating specifications either streamlines the path to the sale or creates a bottleneck. When these three systems perform well, we are often faced with the challenge of managing a steady flow of profitable business. When these systems don't perform well, we may get stuck with jobs that suck all of our energy away and leave us with no time and no money.
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