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Wednesday, October 31, 2007

The sales audit

Chicago area roofing contractor Thomas Kral (Reliableamerican.us), has his administrative employee conduct a follow-up "lead audit" call after his salespeople complete their appointments.
He says in the contractortalk.com forum: "The purpose of the lead audit is to meter the performance of the sales rep and to judge the overall satisfaction and professionalism of our company in the eye of our customer base. "
Elements in the audit call include:

Customer name:
Phone number:
Estimator name:
This is (caller's name) with (caller's company). I am with the Customer Service Dept. and I would like to ask you a few questions about our recent meeting with you. First of all please understand that I am not making this call to try and sell you anything. We are very interested in how our company performs with customers that have purchased a product from us and those that choose someone else. Do you have a few minutes to answer some questions?
1. Did our estimator respond to your call in a timely manner?
2. Was the estimator knowledgeable about the problems and how to fix them?
3. Did you receive a written estimate with all work and repairs described?

4. What can we do to make the estimate easier for individuals to understand?
5. If you had work performed by our company, were you satisfied with the quality and professionalism of the workers?
6. Would you recommend our company to your friends and neighbors?
Thank you for the time you spent answering these few questions and if we can be of any assistance to you in the future, please do not hesitate to call us.


Item six is the key question for the "Net Promoter Score" by Fred Reichheld -- who advocates that the key measure of your success is whether on average your clients are so enthusiastic they will recommend your business to others -- or at least, are not so dissatisfied that they will badmouth it!
This is a common-sense approach that makes a lot of sense for any contracting business. You'll receive valuable feedback, catch potentially unhappy clients before they become 'haters', obtain potentially useful testimonials, and most significantly, receive a quick early warning indication if your sales team are messing up their calls.

contractorheadlines.com


D. Brown Management offers an easy-to-read construction-related news updating service, "Contractor Headlines" at http://www.contractorheadlines.com , with interesting inbound information (including from this blog!) on construction marketing. I'm setting it up for a permalink.

Overselling? (2)


Thomas Kral of Reliable American Inc. Roofing-Siding (www.ReliableAmerican.us) installing a batten grid system on a roof and some solar shingles. He started the "overselling" thread on contractortalk.com under the name "Grumpy"

My original posting relating to this contractortalk.com forum topic found its way back to the thread there after one of the other thread posters posted a backlink to my blog. The theme of how much sales processes should be systematized is raised in the thread, and it is a valid issue. Should selling be 'dumbed down' so that reps must follow a process, guidelines, and systems to the "T"?

The issue here relates to quality -- really great salespeople internalize their own systems; they 'teach themselves' how to work best. Generally, the truly top performers resent excessive corporate intrusion into their work yet at the same time will conduct themselves with integrity and therefore their employer needs not worry about abuse or failure to follow corporate/business guidelines. So if you overly structure their process, you (a) risk losing them and (b) lose the potential they can bring to the process.

But, having said that, you clearly need business and sales systems or you will suffer the consequences of some really wild loose cannons. You need rules which build in flexibility but ensure control. And you obviously will have some standardized processes that must be followed by everyone (usually processes that are simple to administer or are so obviously rational that you would be a fool not to use them).

Of course this 'flexible' approach only works if you have really good salespeople! And that requires a really good recruitment system. I've found one that works for my business and variations may work for yours. It requires discipline, self-control, and an absolute confidence that you will not lower your standards. (If you are taking lower-calibre salespeople, then indeed you had better have their work clearly programmed and set out in an unbreakable system!) You also need to be ready to pay a salary guarantee to the representatives you hire. This is not as big a risk as you might think -- the screening process we use is so thorough the risk of paying salary to someone who won't contribute beyond the base quickly is low, indeed.

I am aware that my systems may be strained as the business grows -- the independent spirit and intellectual level of our sales team right now is really high -- and it may be challenged as the business grows, and management/operating systems suitable for larger organizations are implemented. Will we dumb down then? I hope not; but I want to grow. So I think I'll hold on to a really solid recruiting system, while creating support services and mechanisms that foster Independence but ensure fairness and mutual respect.

These principals also apply for consulting services. When you purchase a consultant's service, you are purchasing brainpower. The great consultant is something like a great brain surgeon. He (or she) can do the best work if supporting staff and resources are available to ensure productivity. But you can't just clone this type of talent. So you need to be wary if a big-name consultant tries to systematize, hire sales reps, and have some junior associate serve you. I would run for the hills! (Or use the consultant-author's really inexpensive books produced and mass-marketed to attract new clients. You can often purchase otherwise overpriced tapes and CDs as well on the used market -- try Ebay!)

I'm starting to build a (small) list of consultants I would recommend. I haven't used them personally, yet (but I am a publisher, not a contractor, so my needs are different) but I am satisfied they have the right combination of brains, personal integrity, and real life knowledge of the business to guide you correctly. They won't be free -- or even inexpensive -- but you'll certainly get your money's worth from them. As well, the networks in certain forums such as contractortalk.com are invaluable -- also relevant trade associations like the Society for Marketing Professional Services (SMPS) if you are in the professional services side, or work commercial/high end stuff.

The blog thrives

Yesterday, this blog reported a record 121 visits and 294 page views with a somewhat incredible average 4.25 minutes per visit on the site.
Most of this 'traffic' of course is from the Construction Marketing Ideas newsletter, which we sent to slightly more than 1,800 readers yesterday. But I also noticed 25 referrals from Google keyword searching, and eight visits from a contractors' forum I had never heard about before yesterday. (I checked out the forum and joined it -- appreciating the positive comments from one of the posters about this blog; but sensed it may be a private and closed group; so am awaiting clearance from the forum participants before posting the link here.)
What does all of this mean? Certainly not (directly and in the short term) any money! But business -- and an intriguing network of connections and opportunities -- is surely following.
For example, if you take seriously the suggestions about construction industry consultants in previous blog entries, you will most likely obtain high level insights and knowledge -- without wasting your money.
Of course, one person emailed me yesterday to say: "I thought your newsletter would provide me with leads." He seemed to think we were charging money for the service and he wasn't getting anything in return. I directed him to the reasonably priced leads services, but warned him that these won't provide him with a magic solution. Fortunately, his response to my email indicates he is 'getting it' now.
Until now, I have avoided drafting a formal Mission Statement -- but (tentatively) here is the objective of this blog: "To provide insights and connections to individuals and businesses concerned about marketing to the AEC industry." I'll refine this in the weeks ahead.

Tuesday, October 30, 2007

The right way to use the consultants!



Sonny Lykos has posted a useful and valid comment to an earlier posting on Michael Gerber's services. You can read the original blog entry and his comments here:

http://constructionmarketingideas.blogspot.com/2007/05/michael-gerber-are-marketing.html

I agree entirely with Sonny's respect for Gerber's essential point about the value of systematisation. But I equally agree with the amount Sonny paid for Gerber's material. Spending $80 is a whole lot better than $8,000 -- or more, which is how much you may pay Gerber for "coaching" and materials if you go all the way with his organization. (And you'll be getting the work of someone who is following Gerber's system for consulting, rather than his independent, creative thinking.)

My point with Gerber is the 80/20 rule clearly applies here -- you may get about 80 per cent of the value from his program with his books and perhaps tapes and CDs (maybe purchased inexpensively -- try Ebay!). If you wish to go the whole way -- spending more money -- you will gain additional value and insights, which may give you a true competitive edge. Then again, you could call Sonny, offer him some money for consulting services, and probably get a whole lot more value, especially if he matches his offerings specifically with what you need.


This image of the yacht "Change order" moored next to a tiny dinghy "Original Contract" has been making the rounds of viral email in architectural and contractors' offices for the past several weeks. Dozens of people are trying to find who owns the boats -- I can tell because of the number of daily 'hits' from Google searches to this blog using the relevant keywords.

When you put a cross-section of the construction industry in a room for a public forum on the topic, such as at a recent Ottawa Construction Association gathering, you'll hear the often-stated line: Change orders are inevitable, best avoided, and generally are ideally resolved early on in the process through good project co-ordination.

But the underlying issues here are not so simple.

One of example in my Seven Tips for Construction Marketing Success cites a (necessarily) unnamed Pennsylvania general contractor who constantly wins local hospital work, despite the hospital's requirement that all jobs be publicly tendered and awarded to the low bidder. In this case, the GC and hospital administration have an unwritten agreement that the scope of work would be loosely defined, with pre-planned Change Order opportunities. Knowing this, the GC always bid low, with the clients' understanding in advance about the impending Change Orders, which are accepted and paid without fuss.

You might not like the ethical optics here -- but this is a blog about construction marketing, and clearly the contractor has done something right, to virtually guarantee a win every time.

So, are change orders part of the marketing mix; and how do you handle them effectively and creatively? Within the next few days, I'll be communicating a survey on the topic, but these thoughts come to mind.
Do some contractors bid low, knowing that they can make up for lost ground with Change Orders? Absolutely -- and these contractors make sure that the right paperwork from owners is signed before they proceed (while perhaps conveniently forgetting to sign the paperwork for their subs and suppliers).
Do some owners and owners reps lay hardball with Change Orders? Certainly -- they refuse to accept them; or fight reasonable mark-ups, or dispute the details, knowing if they make enough noise and refuse to pay they can drag or force the General Contractor or sub trade into a "compromise" (capitulation?)

Are many change orders caused by sloppy documentation; perhaps caused by low-ball bidding by architects or consultants; or under-budgeting by owners, or simply because things are rushed because of a tight schedule? Certainly.

These questions explain why Change Orders are such a thorny issue within the construction industry. Each case is different, and in the end, the issue of whether Change Orders represent opportunities for profit; or challenges for conflict, often depend on the character and quality of working relationships.

From a marketing perspective, here are my tentative 'takes' on the situation. (I will revise my thinking here in the weeks ahead as I gather additional reader feedback.)
Your ideal circumstance is to achieve closeness with your client so your reasonable Change Orders will never be disputed -- you achieve this by your integrity and the quality of your working relationships (in extreme cases, such as the Pennsylvania hospital and contractor, Change Orders are worked into the process from the beginning to allow the 'right' low bid to win.)

Realistically, done right, and with thought, Change Order mark-ups can be highly profitable -- and if you are a general contractor or sub trade at the bidding stage and see that Change Orders will be likely, you can, and should, factor your knowledge into the bidding process (but be very careful about this -- if you know the 'higher ups' will fight Change Orders, or you don't know their attitude towards them, you are taking a big risk, and if you see the mistake before bidding to a trusted GC/Owner, isn't the right thing to do to tell them about the problem and likeliness of change orders in advance, even if that means an addendum is filed and someone else comes in low as a result.)

Change Orders should be resolved and documented early in the process, and pre or early-stage project meetings are helpful in discussing potential problems and possible solutions.

If you are a lawyer or forensic consultant, watch for marketing opportunities where you see lots of Change Order tension. A good dispute over Changes can produce many billable hours!

Note: See this posting from March 24, 2009, where the original photographer reports he took the image while in Vermillion, Ohio in late July 2007.

Monday, October 29, 2007

Effective (inexpensive) CRM


Daniel Smith has introduced me to Highrise, a CRM/contact management program that does things at a cost much lower than others on the market.

It has some intriguing features, including an ability to automatically convert your outgoing emails into contacts (or to file your the copy of your communications in the appropriate file). The system is set up with collaborative and management resources, image and file storage capacities, and other things that seem worth far more than the modest monthly fee (which is zero if you wish to use it on a limited scale).

A few years ago, I paid several thousands of dollars to attempt to achieve what Daniel has in a matter of weeks -- give us some effective collaborative and co-ordination resources so we can effectively track and observe leads, clients, and previous customers, and communicate effectively with them and within our own organization.

These resources are essential if you wish to build a top-notch marketing system for your business. It is important to remember, however, that they do not replace your direct relationships with clients and, most importantly, your commitment to deliver your service with value and integrity.

Sunday, October 28, 2007

The Lykos Group serves Collier County, Florida. It may be a model for you to emulate in your own area
Sonny Lykos has smarts. The semi-retired contractor sold his business to his sons, but he didn't leave the scene -- he started a 'modest' business serving condo owners for simple jobs in the Naples, Florida area.
He believes in branding. Not branding in the stereotypical big-advertising-budget image; but in the rather simple concept that if your potential consumers in the market perceive your brand has value, they will pay more.
See this posting in a contractortalk.com thread from last spring (he also recently posted a comment in response to my posting on Friday, "So you are looking for that magical, quick answer." In his contractortalk.com posting he rebuts another poster who suggests branding relates to advertising and expensive marketing:

I didn't know that. I'll have to tell my son, Tom. I sold my remodeling business to him and his brother in 1999. About a year or so later he bought out his brother, and his brother started his own remodeling company. I started it shortly after moving to Naples, FL in 1991. My advertising in our newspaper started in Feb, 1991 and I stopped it in May, 1991 and never again had any more ads. In 1999 when I sold the business we did just under $1M in sales. Last year The Lykos Group, Inc. http://lykosgroup.com/ Did about $6M in sales - all from "Branding." Among other awards Tom received the Remodeler of the Year Award for the state of FL.

I guess it's true what they say: Some people succeed at doing something because they didn't know it couldn't be done. And since I'm now semiretired specializing in only very small remodels and a lot of repairs, while most of my so called competitors base their prices on labor rates of
between $35 to $65/hr, mine are between $85 to $125/hr and I and my part-timer still can't handle all of the work. When I started my small new business in 2000, I never advertised. Still don't. What son Tom and I do is the result of "branding", not luck, advertising, or marketing. And by the way, Tom's "net profit" is consistently double to triple the national average. Mine is about 40 per cent. But maybe you're right, and we really can't do what we're doing. So I'll not comment about it again.

I requested (and he graciously provided) some copies of his simple newsletter he uses to promote his condo service business. You can view a copy at this link. In his email to me with the newsletter copies, Sonny notes:

My pleasure, Mark, and if it can help others, go ahead and reference it on your blog. About half of my sales are for condo associations, so the front page is for them and the back page for condo and home owners. They were tremendously effective. Created on my word processor - nothing fancy, just very informative.
Attached in pdf format. I keep hard copy files with articles from various trade magazines. Keep the files by trade. I do the same on my computer with articles from various trade association newsletters and also mfg. web sites. I just hang on to them for future newsletters I would send. I also used what I had up here in my head from my expertise and experience. And by using the same newsletter format, all I had to do was pull up a previous newsletter, erase the text in the particular block and type in the new info. Maybe the most it ever took was one hour, so for that minimum amount of investment, where the heck could we get such positive feed back?
Good luck with your own. Incidentally, one guy I know used to get verbal approval from a past customer to use their name and photos in a newsletter, and show the before and after photos with the owner's name (no address or #) and brief description of what the remodel entailed. People like to see their names in print. Makes them feel like a celebrity.
Anyway, quick, cheap, and very effective. Just remember to keep a couple dozen copies in your truck to give away to any customer's neighbor you meet. I bought a HP color copier and printed them on both sides of the sheet. I think it was cheaper than using the computer printer. And you can use a heavier paper, glossy or other wise. I used a heavier flat paper - no gloss at all. Sonny.

Aha, note some wonderfully simple yet effective things here.
  • Sonny has a niche. A defined market segment, which clearly needs his services (and which you may well be able to replicate in your own market area. I would recommend offering to pay Sonny for some consulting advice in this regard -- he is doing it successfully in Naples; why not in virtually any other community in North America.)
  • He doesn't waste money; he uses a newsletter to provide simple, valuable information, relevant to his readers, and information which you likely will have on hand in your own format with your own resources.
  • This high perceived value -- the nature of a 'brand' is only possible if he actually delivers the service to the level clients expect. A good brand, he notes, allows you to get away with occasional errors (provided you rectify them quickly) and command a price significantly higher than the commodity level. You make more money, with less stress.
Finally, note the wonderful long-range implications of giving without worrying too much about 'return' on your knowledge. You don't need to call or pay Sonny to emulate many things here -- and if you do, you will likely succeed. But if his business matches something you think you can do, offer to pay him for his services. I think your return on investment will be staggering.
Note: Sonny sent me a couple of additional copies of his newsletter, which you can request by email from me at buckshon@constructionnrgroup.com.

Adobe AEC Blog


This blog, Jonathan Bowman's AEC and EPC Blog, qualifies for inclusion as a marketing blog -- it focuses on how Adobe is used within the AEC Industry.

JLC Online


I'm permalinking the "Business Strategies" forum at JLConline.com (Journal of Light Construction -- a Hanley Wood publication). While another forum, contractortalk.com, provides a truly vibrant community with highly relevant insights and remains my favourite, I sense there are useful insights and resources in this forum as well.

Saturday, October 27, 2007

The world tomorrow

So this heading sounds like an old religious television program ... this Youtube video says something for the future of your marketing and the way the world will look in the years ahead.

Friday, October 26, 2007

So you are looking for that magic, quick answer . . .

You want some business; profitable good clients who will use your services, pay their bills promptly, and tell their friends about you. And, in between jobs or with a disturbing indication that your client base is drying up, you sense that you will soon have more time in the day (with more bills to pay) than you wish.
And so you surf the net, perhaps Googling "construction marketing" or something similar, and come across this site, and see the offer "Seven Tips for Construction Marketing Success" and you hope, maybe you dream, that this free information is going to give you the answer you've always been seeking, the quick fix, the brilliant insight, that will solve all your problems.
Sorry to disappoint you, but this stuff (mostly) only exists in the real world of Internet fraud. Successful marketing is rarely easy or quick; I suppose theoretically you could hit the home run on your first visit to bat, but the odds are against you. And anyone who offers quick, simple, easy, and "free" or (worse) expensive solutions that will "act fast" is probably selling you a pile of BS.
Yes, you can achieve apparently instantaneous and effective results -- with a cost per good lead of $2.00 or less -- yes, you can have a seemingly unlimited resevoir of potential clients; and a system that allows you to turn on the marketing tap when you need business; and slow it down when you don't, and yes, done right, you don't need to be a marketing guru, or spend a fortune on consulting services to get the results you are seeking.
But you will get these results by spending some time and careful thought on developing a practical strategy right for you -- it won't be obvious to others; but it will work for you.

  • Consider successful peers in other, non-competitive markets. Take a trip, invite the colleague out for lunch, share insights and observations, and learn what works for them. You'll get two benefits. First, some good ideas you can take home with you; and secondly, possibly some opportunity for cross referrals. A good wayto f ind these successful contractors is through your trade association; if you are a member, you will presumably have a directory and can contact other chapters. A better way is to assume a leadership role in your association; first at the chapter level, than at regional or even national levels. You'll obtain many insights and 'best practices' while working for your industry as a whole.
  • Learn how to produce an electronic newsletter and the basics of Google adwords. If you don't know how to do these things, talk with a student or someone in your community with a bit of technical knowledge. You need a good website (a blog can serve as an interim and easy-to-set-up website), and you need to attract 'traffic'. You'll make mistakes; you'll at times find the whole thing frustrating, but ultimately your Internet leads will likely prove less expensive than any others you are seeking (though other channels may be more effective if, for example, your demographics are largely senior citizens.)
  • Consider hiring or contracting a good consultant. Be careful, there are scammy ones out there or ones that are preaching methodologies that worked 20 years ago and may still work for hard rock salespeople, but not today's more cautious consumers. I like Michael Stone (residential) and Bernie Siben (ICI/Commercial). Alternatively, use a local general consultant who you know is good -- we use Bill Caswell of Caswell Corporate Coaching. (Caswell will work with you if you are not in Ottawa; but if you are willing to travel and pay the costs for consulting, I would argue that specialist construction industry consultants may be a better fit for you.)
  • Have a plan, be patient, and work to find systems right for you. This blog is part of my marketing plan. I don't expect revenue from it, but (outside of some achievements noted earlier), expect its main 'payoff' will be in 12 to 18 months.
Most importantly, remember that while marketing is a vital part of your business; your greatest strength is in the work you do -- conduct yourself with integrity, treat your customers properly, deliver value, and things will progress -- your marketing will succeed. But don't expect a 'free offer' or quick fix to an 800 number will solve your crisis -- you'll have to work at it, be patient, and learn the best way to go.

Change orders, prime consultants and relationships

The Ottawa Construction Association tackled three of the thorniest and most important issues at its annual Construction Forum yesterday evening. And in it, the dynamics, controversy and underlying issues affecting the industry overall were clear to see both in the panelists' direct remarks, and (more importantly) the indirect interplay between the people speaking at the event.

There is lots of food for thought here -- too much for a blog entry and, frankly, for our November print issue, which was past deadline and virtually ready for the printers. So I'll write a news story to post on the OCN website tomorrow (Saturday) and prepare much more thorough reports on two of the topics -- the value of prime consultants and change orders -- in the next couple of months.

"Relationships that work" however is a topic that should never be delayed -- it is the foundation of this blog. I've always advocated that what you do when you are currently working with your suppliers, colleagues and clients sets the stage for your marketing future, especially within the ICI sector. Sure, some residential contractors can maintain viability by an organized marketing and sales strategy; constantly finding new clients through various forms of advertising. But when it comes down to building schools, hospitals, commercial fit-ups and the like, you aren't going to win the really good jobs unless you have satisfied your current clients; referrals and recommendations are vital here, so do positive references, unless, of course you simply want to spin your wheels on low -price open bids, only to find you can't win these jobs for one reason or another (and those that you win, you can't earn a decent profit.)

So I listened with interest the observations of the various speakers about how to develop and maintain good relationships, and will share these observations over the next few blog entries.

Doug Brooks, senior associate with Barry Hobin and Associates Architects, made these points:

Most successful projects and relationships have four or five key factors

Most successful projects and relationships have four or five key factors.The first one starts with the client, on every job, total success starts with good client. It has to be a client who understands that you as a professional are tyring to offer service to them to the best of your ability. There are no hidden agendas -- we’re all tyring to be as efficient and effective to give client what he wants. (Good) clients are open to that understanding,
Secondly, is respect. They (clients) respect what you are trying to do for them; that respect goes through the whole project team. You have to respect what each team member brings to the table-- you have bring out those strengths.
Third is communication, identifying early on what everybody’s objectives are, and ensuring those roles and responsibilities are clearly defined.
Fourth is building a team, (you need a) familiarity with the work you are doing but also people you are dealing with, you build understanding of what their expectations are, what you are starting with and to where you are going.

Brooks is right that the client certainly sets the project's stage and tone. It certainly can be difficult if you are lower on the pecking order in setting the stage since you don't control the show. But in some respects you can. If you apply the principals he outlines here to the areas within your scope of responsibility, you'll achieve much the same results as if you are fortunate enough to be working for the ideal client. (And there is an argument, not always easy to observe in practice especially in tough markets, that you should only elect to work with clients who respect you.) So, yes, communicate well, build a team, and respect the point of view of others. And, if at all possible, find a way to bring everyone together early in the process to establish effective communications and responses to the situations that will arise on the job site.

Wednesday, October 24, 2007

Overselling?

Thomas Kral installing a batten grid system on a roof and some solar shingles.


This contractortalk.com thread is fascinating. Original poster "Grumpy" explains that his sales reps are sometimes losing jobs because when they visit homeowners they quote work that may well be necessary, but is more than what the homeowner wants.

Solutions offered by others include a systematized "good", "better", "best" approach -- something that Grumpy (whose profile tracks to roofing contractor Reliable American Inc. -- Thomas Kral, President -- in Glenview, Illinois) is not sure is right for him.

I can see several sides to this story.

First, is the issue where someone really needs more than they are asking -- to do the job requested would truly be unethical (and in some cases unsafe). Second, is the tendency in some cases for sales reps to pad jobs to build out their commissions. Third, of course, is the simple fact that few jobs are truly simple -- and there are very real choices for quality and comprehensiveness.

Then there is the issue of whether to present more than one option, or to provide the "good", "better", "best" choice. I will dig out later today a previous blog post that shows that when you give too much choice, you often lose the sale -- people freeze up and won't make any decision when they are presented with alternatives. On the other hand, a systematized approach presenting three choices gives the potential client the option of voluntarily up selling themselves. (Another poster heads in the direction of doing the basic job, but presenting up selling opportunities on site -- this is frankly to me a scary option unless you are running a one-man band; it also smacks of deliberate underbidding with change orders in mind, something alluded in the dinghy/boat picture floating around many AEC offices these days!)

Right now, I think for contractors without systems requiring high quality standard screening for potential salespeople, the "good", "better", "best" approach is wisest. You can teach even the most junior person how to calculate and present the three options. For organizations with higher screening standards -- like ours, maybe! -- I would argue in favour of a more customized approach. You need to listen to the client in the presentation, and determine whether to offer a multiple choice or simple option. This requires a depth of understanding and finesse that not everyone has.

Editor's note: Thomas Kral of Reliable American graciously provided this photo for blog entry. The posting regarding the reasons for limiting choice is here: http://constructionmarketingideas.blogspot.com/2007/08/image-from-eyesore-too-many-choices.html.

Try before you hire

Our hiring system has a key and crucial component -- the working test. No one is offered an employment contract with us until they spend a few days with us, either handling a freelance assignment or a task for some hourly pay. This working test replaces the formal (and stilted) interview. Job interviews are artificial exercises, after all.
The working test really tells us if the candidate can do the work, and belong comfortably within the organization.

Tuesday, October 23, 2007


Who is right? Jeffrey Gitomer or Paul Cherry?

In his latest newsletter, sales guru Jeffrey Gitomer takes direct aim at the advice offered in the article "When sales call stall" by Paul Cherry. It is rare to see one guru take a shot at another. Gitomer doesn't name Cherry in his newsletter article, "I'd rather have no advice than bad advice", but the direct context similarity between his reference and this article suggests indeed it is one and the same. (Google is an amazing resource to check out things like this.)

In his newsletter, Gitomer writes:
Sales techniques are increasingly becoming passé.
So are the people that stress using them, rather than emphasizing the softer side.
I grew up selling, and I grew out of it.
If you have lost a connection, or if a hot prospect evaporates, or refuses to call you back or respond to you, the WORST thing you can do is try a sales technique. Why don't you try something new? Try being honest. No, not with the customer -- with yourself.
Gitomer of course is correct in saying that arbitrary and forceful application of 'sales techniques' is a recipe for disaster, but equally, I think you need to know the techniques to get beyond them. You will be effective at selling if you understand "Stalls", "Closes", and "Overcoming Objections" -- and then appreciate that humility and honesty go further than slickness and manipulation. But I don't think it hurts to understand the 'techniques' -- if only to appreciate their limitations.

Awards programs -- the great uplift

Corvanelli Home's "Pearl" model wins OCHBA People's Choice award

Third-party awards programs can be a powerful boost to your business, especially if your business is small, new, or dominates a niche. They will probably be a disaster to your ego if your business is large, mediocre, and wishes 'control' in your marketing plan (unless you elect to pay to participate in what are essentially 'pay for your award' marketing gimmicks.) Finally, if you are an association or publisher, operating an awards program can be truly rewarding for your group or business; creating good-will and often significant streams of additional revenue.

We will need to wait a few months to confirm whether John Corvanelli's Corvinelli Homes reaps significant benefits as the Ottawa Citizen People's Choice winner in the Ottawa-Carleton Home Builders Association Housing Design Awards. My bet is his business will surge. He is a modest-sized builder, perhaps constructing 10 homes a year, in a rural area outside of Ottawa. I'd never heard about his business before he received the award.

He tells me he felt some shock at the price of the association members dues when he joined a couple of years ago. His goal, to obtain some recognition from his peers and a housing design award. He entered one home in the competition.

Ottawa's major daily newspaper sponsors a People's Choice award in conjunction with the Capital Fall Home Show where visitors can select from all the various candidates for specialized awards their favorite. Corvanelli's "Coral" model won the prize. For his business, it is the top end home, and at a price of more than $300,000 is certainly not inexpensive in the rural area he serves -- but in the more urban areas nearby, this price would seem incredibly low (and Ottawa is certainly not the most expensive housing market in Canada or the U.S.)

How many people will call him when his home is written up in the homes page of the daily newspaper; how many others will feel comfortable committing to purchase knowing that hundreds of others voted in favour of his model as their favourite? How much would he have to pay for this attention if he tried to purchase conventional advertising?

Yes, indeed, awards programs can be absolutely incredible if you are smaller or getting started.

But what if your business is larger, and you are the marketing specialist there? Then you have more difficult choices. There may be few things more demoralizing than when your team spends hours preparing an entry of its best work, then your company spends hundreds of dollars to pay for tickets to the awards dinner, only to find you don't win. And this happens with disturbing frequency. Simply put, many businesses achieve success and efficiency as they grow but lose some of the magic edge that makes them the truly best at what they do. And their employees' ego, reinforced internally by business scope and size, grows beyond the marketplace (and award judges) perceptions. Wham. Here, the awards program proves to be a powerful reality check.

The solution is either to specialize and truly lead in a niche (bathrooms or kitchens, for example) or buy your award. Yes, these types of awards programs exist. They'll take your money, set up a rigged survey, and then give you permission to market your business touting your award 'win'. I'm really cynical about these things -- sadly, I see some really good businesses apparently buying into these fake awards. I suppose they work but they don't seem right to me.

No, I prefer an honest award won by a business that is catapulted to fame and recognition because it does great work -- like Corvanelli Homes.

Monday, October 22, 2007

The pace of change


Today the issue of the SMPS Marketer with my article about blogging arrived in the mail. It took about a half year from writing the story to seeing it in print. Certainly, much has happened in that time but I'm satisfied the observations in my article about why blogging makes sense have stood the test of time.

This blog has helped our business in two rather important areas -- recruitment and sales. The sales are arriving from an increasing volume of leads and inquiries -- I count about 10 so far today -- largely because the blog and our websites are now achieving high Google keyword rankings.

Should you blog? Yes, if you are passionate about your subject matter, have the ability and authority to speak freely and you are willing to be patient. Blogging is, of course, instant publishing -- but it certainly does not lead to instant results. Nevertheless, with time and commitment, you will discover the truly satisfying rewards.
P.S. If you start and publish a blog relevant to marketing construction and related professional services, please let me know -- this blog will permalink (one way to your advantage) all relevant blogs we know about.

Speed matters


I think public relations consultant Ronn Torossian makes a really good point in his brief blog entry:


I wish I could say I have always practiced what Torossian is preaching here -- but there is a good argument for returning all your calls promptly, including so-called 'nuisance' calls from salespeople. (If they take enough time to leave you a voice message, they deserve a prompt and courteous response, even if it is a 'no'.) And of course clients and potential clients undoubtedly will form a much more positive impression about your work -- which will move quickly -- if you respond without delay to their calls.

Sunday, October 21, 2007

The renovators' website


Further to my last posting, here is another suggestion from Michael Stone's newsletter on how to promote your business. He quotes a note from Mark Ashton of Ashton Renovations in Toronto and Richmond Hill, Ontario. At $2.00 per lead, he clearly is doing something right.

Regarding our leads, we obtain 100 percent of them by way of the Internet. http://www.ashtonrenovations.com/ reaches our prospects through Google and by us advertising on a construction portal www.gopro.ca. We do not advertise in Yellow Pages, telemarketing, door-to-door, print in magazines, or newspapers. They are much too expensive per lead. And by the way, when prospects see a nice ad regarding services they need, what do our prospects look for: a web address for more information. Our advertising budget is $100 per month plus cost of site. We pay on average $2 per lead, some for jobs $100,000 to $150,000.
Our site, which is a year old, is now being updated to reflect newer technologies. Our project gallery page will have over 1,000 photos. It will also have video testimonials and a blog.
Advice regarding site:
1. Copy-writing is important and done ONLY by someone who can write;
2. Fill site with valuable info i.e products used, detail of services, process, extremely detailed info regarding your management and crew;
3. Photos during and after, with info about products and installation methods;
4. Crisp clean design. If your site looks bad, what does that say about your work?
5. Logo should have .com beside it;
6. Form page to fill out leads short and sweet;
7. Site may post Free Estimate depending on your market, which gets the lead. But never give free estimates! Explain only for simple small jobs, and given over phone.

Saturday, October 20, 2007

Donuts for GCs


Michael Stone's excellent Markup and Profit newsletter is one reason I put him on the higher level of recommended construction industry consultants. (He is also smart -- he saves his 'best' free advice for people who actually sign up for the newsletter, no charge, you generally won't receive the information unless you at least provide your identity to him.)

His latest newsletter contains some of the best and most practical advice I've seen in a long time on how to get "advertising" right, both in the definition I use of paid media promotion, and in the broader lead generating marketing approach he explained in his email to me yesterday.

Since I am not selling consulting services and this site now is generating enough traffic to produce several outbound links to his site each week, I expect he won't mind me sharing with you some of his newsletter content. So here is one gem:

If you are a specialty contractor looking for referrals from either general contractors or suppliers, take doughnuts or cookies to your supplier or GC's sales or production meetings. Let them know who you are, what you do and that you want their business. Don't be bashful or shy. Get out there and let these folks know you want the jobs. Schmooze!
A friend of mine who does HVAC duct cleaning gets three to five new leads each week by simply dropping off a dozen doughnuts every Friday between 7 and 8 am. He normally works for between 16 and 18 different HVAC contractors, and he visits two each week. He buys Krispy Kreme doughnuts using a discount card that provides a buy one dozen, get one dozen free. Use your imagination and deliver the goods.
I should note that I advocate your linking your marketing/selling approach both to your clients' needs and orientation, and your own personality and temperament. Many of us (certainly myself!) hate schmoozing! If you are to be really successful you will need to work around this limitation, possibly by taking public speaking courses, participating in appropriate networking activities or the like. Or you can find other approaches such as properly planned paid advertising, or a really good website/Internet strategy, that will work for you. Also, as Stone suggests,you can set realistic targets that you can simply force yourself to do. Even the poorest 'schmoozers' can do it once a week or so, if the reward for effort is high enough.

Friday, October 19, 2007

Referrals and advertising

A few weeks ago, I questioned construction business consultant Michael Stone's assertion that contractors should only rely on referrals for 25 per cent of their business; while 75 per cent should come from advertising.
This seemed wildly out of balance to me. Our business earns most of its income from selling advertising, but I would never counsel potential clients to rely on advertising for more than a much smaller portion of their business; perhaps the inverse of what Stone seemed to be advocating. So I sent him an email seeking further clarification.
It turns out that Stone has a rather broad definition of "advertising" -- he also counts:

  • Repeat customers
  • Schmoozing
  • Suppliers and subs
  • Other contractors
  • Association leads
  • And so on.
"I consider referrals to be when a customer, friend or relative suggests your name to someone else to have work done," Stone writes. "Referrals are passive -- depending on referral's means you are hoping that other people are talking about you. that's fine when the market is good and business is plentiful, but it's no way to build a long-term business."
Stone says a referral means you have no control over:
  • Who is calling
  • Where they live or where their building is located
  • Their income bracket
  • The type of job they are calling about or want done
  • The time of year they call.
"Most important, you will never know how much business you missed because you did not advertise. Referrals are easy, but easy doesn't cut it in business. Business owners need to take active steps to promote their business."
Ok, I understand things now. Stone is saying essentially you must engage in activities to market your business. I suppose this could be seen as advertising, but since we are in the advertising business, I have a more closely defined perspective. Keeping repeat long term customers happy really is the best way to go, especially if it results in relevant referrals (such as the DesignGold story just posted.)
Advertising, not planned right, can be by far the worst use of your money. The reason is that it is so easy to buy. The ad reps will gladly take your order, prepare the ad, ad make it 'easy'. Of course that doesn't mean the advertising will be effective.
Effective marketing requires work, effort, measuring, and careful planning. Advertising of course can be part of the mix; but I still think if advertising is narrowly defined as paying money for promotion with the hope that your phone will ring, you (unless you have tested the advertising for effectiveness, or see it as part of a strategy to maintain and develop relationships with current clients) should be a minority part of your marketing; and the number and quality of referrals should be a key indicator of your success.

Thursday, October 18, 2007

Non-marketing brilliance

Inside the Pro Hockey Life store in Vaughan, Ontario, the world's largest hockey store.

Jeff Goldberg doesn't have a website nor carry business cards for his tenant fit-up and retail design/contracting service. He doesn't have any employees, working from his home. Yet his business does more than $8 million in contract volume a year, from some of the smartest and most market-savvy Canadian retailers.

In fact, he told me today in the presence of one of his most enthusiastic clients that the upcoming feature about his business in Ontario Construction Report will be virtually his first marketing activity since he started his business about a decade ago. (And this initiative is because our GTA-area co-ordinator Chase's work in encouraging him to have the feature written.)

Goldberg, who started doing work for Chapters, still has Chapters/Indigo as a major account. Keith Hunt, senior vice-president at Pro Hockey Life, knew Goldberg from when he worked at Chapters, and invited Goldberg to handle the interior fit up of the new, and rapidly expanding, group of hockey super-stores. Hunt offered one of the most enthusiastic testimonials for a supplier I've ever heard.

"I have no idea of how he (Goldberg) does it," Hunt said. "He is incredibly detailed and organized . . has tab in his binder for everything, he is just the most organized guy I’ve ever met."

Pro Hockey Life is expanding from its Montreal base; the Vaughan Mills store is its first in Ontario and is the largest hockey-only store in the world.

This is a 34,000 sq. ft. store where you can find virtually anything and everything associated with hockey. My eyes lit up as I walked past rows of skates, sticks, goalie pads -- even a sizable area dedicated exclusively to referee gear.

We also had some fun in the store when I mentioned that my 10-year-old son Eric is a serious hockey fan -- I found a hockey shirt for him, and Hunt introduced me to an employee who is a dead-on lookalike for Ottawa Senators captain Daniel Alfredsson. So we set up a posed shot with the employee dressed in a Senators' uniform.


When I returned home this afternoon, I said: "Eric, do you recognize who is in this picture" and showed him the image of the look-alike employee. Eric let out a whelp, before I came clean, and gave him the hockey shirt I had purchased at the store. (Hunt graciously sold the shirt at the employee discount rate.)

OK, really talented retailers with rapidly growing businesses who need to market effectively to attract and retain clients use a designer/contractor who doesn't advertise, doesn't have a website, doesn't have any employees, and doesn't even have a business card. I had a 'wow' reaction in the hockey store, and an even greater 'wow' reaction when I heard this story.

Of course there is a reason why Goldberg is successful and doesn't need to market assertively. He is super-talented at his craft; he provides undeniable value to his clients, and (in part because his clients are also successful in business) he has no shortage of repeat business.

Wednesday, October 17, 2007

Philanthropy and marketing


Last night, you could find a virtual who's who of key decision-makers in Ottawa's construction, architecture, engineering and development sectors; approximately 100 people all enjoying dinner at the Rideau Club. Certainly, this elegant event provided a truly high power networking environment.

Of course, like most really good networking events, if your objective in attending is to network, you are missing the point. The 100 or so people in the room had either made truly substantial contributions to The Ottawa Hospital, were key employees and representatives of the hospital, or were like me -- supporters and facilitators of the generous donors.
Robert Merkley of Merkley Supply served as Master of Ceremonies. Merkley, like two other key organizers, Roger Greenberg of Minto Developments and Architect Barry Hobin, have poured countless hours into the process of gently arm-twisting industry leaders into supporting the hospital goal to raise $100 million in community contributions. The hospital has almost reached its goal, and the construction and development industries have contributed about 10 per cent of the total; not an insignificant amount.

Some contributions came from contractors involved in the multi-million hospital development and expansion work -- these contracts are indeed lucrative. The largest contributions, however, were from my company's landlord, Peter Foustanellas of Argos Carpets and Olympia Homes (his companies also own several industrial and commercial buildings), who gave $350,000 at the dinner and over the past four years has contributed about $2 million. (The hospital's Heart Institute saved his life.)

As I sat at the table with representatives of an architecture firm actively involved in hospital work, a major general contractor, and one of the key people in the hospital responsible for construction projects, I mused about the quality of contacts and relationships here -- and in fact, did some gentle selling (as did other guests at the table). You can see the difference the quality of relationships in this environment from the brutal coldness of lead services, cattle call RFPs and insincere and artificial 'networking' functions. This room reflected power and authority -- and confidence and connections. If you are 'in' here, you are really in.

(This is one thing I enjoy about my work. We don't presently have the resources to make big financial contributions to the hospital , but we can still do useful things. After profiling a hospital project earlier in the year, I arranged a free large "Thank you" ad for the hospital's development team to commemorate the industry; then went a step further -- I granted the hospital a free ad in every issue. This contribution had special value -- it served to reinforce the good-will between the hospital and its generous donors. Of course that good-will provokes more donations, and more support.)

If you try to use this type of community service cynically as a marketing ploy you will fail. But if you really want to rise to the top, think of where you can share and give without really expecting any return, and put your best efforts forward. The contractors, professional services, architects, engineers, developers and sub-trades at the Ottawa Hospital dinner last night showed they have the stuff to be community leaders. You can, too.

Change order boat (more)

The number of inquiries regarding the mysterious Change Order/Original Contract boat/dinghy photo is increasing day by day. Today, for example, so far, this site has received another 10 Google keyword visits related to this image. And the day isn't finished. (I can also track 26 page views).

I wish I had more information on this site, but you can help me in the tracking exercise by sending an email or comment to me telling me where you discovered the picture. I won't post names or contact information without consent (for example, if you give me permission to publish your identity I will, but I won't publish your source's identity without permission from the other party.) This blog allows anonymous comments though of course they are reviewed before publication. You can email me at buckshon@constructionnrgroup.com.

Hopefully, I'll be able to trace this back to source -- it certainly is an interesting detective challenge.

Note: See this posting from March 24, 2009, where the original photographer reports he took the image while in Vermillion, Ohio in late July 2007. Also you may wish to refer to this posting from April 1, 2009, where I resolve the issue as much as possible (including my discovery of a second "Change Order" boat).

Effective public relations marketing in action

Today, I returned a call from Angie Gurley of Ketchum, a PR/marketing agency representing Georgia-Pacific. Angie and her colleagues have made several calls to me over the past few weeks; their messages reside in 'voice mail jail' because (1), I was exceptionally busy, (2), I failed to observe the courtesies I am supposed to apply regarding returning phone calls and (3), because I sensed this was a public relations ploy for free publicity in our newspapers.
Angie didn't give up; reaching our office administrator, signing up for a subscription to the newspaper, and leaving a real live message with a real live person. With that kind of persistence, I knew it would be wrong not to return her call.
I suppose I was right about point 3. And so I explained our policies. We don't publish self-serving articles or stories generated by public relations specialists for the interests of commercial businesses, unless these businesses are our advertisers.
Our policy is probably more stringent than most publishers; it relates to my background -- I own the publications, and have a purely editorial background. I know that editorial publicity is much more effective than advertising. Therefore we have a paradox. Is it right for us to give stuff away for free to commercial businesses who don't support us?
Of course there are exceptions to every rule, and I could see that Angie was looking to find them. For example, she asked if we are publishing themes or stories on relevant topics -- where Georgia-Pacific could provide an expert for commentary. I said that wouldn't work -- if someone from Georgia-Pacific for example served as a volunteer on a community association or non-profit construction group, we would certainly work with that individual in the non-profit capacity; equally, if our editors found interesting stories about local people and businesses, commercial, advertisers or not, they could find mention in Community News, but we wouldn't likely publish a news release from an out-of-town commercial organization in these routes.
We of course would be happy to work with any business on advertising-supported editorial features and project reports; these are our bread and butter, the core of our revenue, and provide the correct trade-off (for us) between editorial publicity and advertising revenue.
However, despite her 'failure' to place stories with us, Angie still succeeded. You see, I recommend to our advertising clients that they focus a large percentage of their marketing budget on public relations and communications rather than conventional paid advertising. The cost/benefit analysis for the business owner is immense. So if you want an effective, hard-working communications specialist, consider visiting ketchum.com or calling Angie at 416-355-7415.

Tuesday, October 16, 2007

Deciding on a new design


Here is a preview of what will likely be the new design/style of our publications and websites. The process behind the change may provide you with insights into effective strategies to incorporate changes in your corporate identity, branding, and client relationships.
First, some background. We've been using our 'old' design for more than a decade, since 1996 when I met designer Ray Levielle and he offered prices and service levels far better than the competition. Through thick and thin, the good times and hard times, he has worked with us at times producing hundreds of pages a month even while serving many other clients.
With month-to-month business demands and responsibilities, and the challenge of not knowing whether a redesign would help or hurt the publications, we never changed it.
But we now have a business planning and management system, and we decided at our late spring planning meeting earlier this year to rethink the design to adapt it more effectively to the combined Internet/Print model. The project still sat on a back-burner -- but now we had an 'action item' regarding the need to redesign the publications.
Two weeks ago, Ray got to work, and presented several design choices. Now I had a different kind of problem. Which design should we use? I polled our staff and contractors. Some of the original design options looked good but would not be feasible with advertising and postal requirements. One logo design looked too close to a competitor's title. Still, I had four apparently good design options.
"Why not ask our readers?" I thought. Previously this choice would have involved much delay, expense and uncertainty. But the online survey simplifies things immensely.
Frankly, the survey-set up of our email provider Constant Contact isn't perfect, especially for a survey requiring readers to select from graphic options. But I patched something together, offering a modest inducement of a free $25.00 subscription or advertising credit to readers who respond; then sent the survey to about 2,000 names on our Ontario database.
Within eight hours, we received 46 responses; and a solid majority (59 per cent) chose the design you see here. Several readers also offered insightful comments.
The impressive thing to me about this process is that I was able to take a challenging business decision and, with reader/client feedback, obtain virtually instant response to something that is highly subjective. While the survey certainly is not scientific, the results here are clear enough to allow us to make an informed decision.
The survey is still live. You can get to it at this URL:

My favorites

General marketing and sales gurus

Jefferey Gitomer and Seth Godin. Jefferey's Sales Caffine e-letter is the best marketing/sales newsletter I've seen, and Seth's blog almost inevitably offers something useful. Sure they are promoting their books and speaking services, but you can read these resources and gain value without feeling any obligation or need to do further business with them (but of course you do)

Internet forum

Contractortalk.com is great especially if you doing renovations, retail trade work, and the like. Lots of down-to-earth advice and insights from peers.

Construction and AEC marketing gurus

I like Michael Stone (for smaller residential contractors) and Bernie Siben (for architectural/engineering large contractor practices).

Social networking sites

Linkedin.com -- combines effective networking with a truly businesslike attitude. And it is free.

Associations

Look into the Society for Marketing Professional Services (SMPS) and see if they have a local chapter in your area.

If you have your own favourites or recommendations, please feel free to share them with a comment or by email to buckshon@constructionnrgroup.com

Monday, October 15, 2007

Need financing click here


The homepage for Hasser Construction in Indianapolis is the first time I've seen financing services prominently offered by a commercial contractor. So I called to find if, by helping clients obtain the money for the project, this helps the contractor get more business.

The answer is still uncertain. Roger Upchurch, vice-president of business development, says the financing offer has only been on the website a month and with the exception possibly of a church project, he can't track business directly to the offer. Hassar's annual volume is about $10 million, he says, including tenant retrofits, churches, and other projects.

Upchurch says he is a retired builder who went into the mortgage business about eight years ago. When he joined Hasser to help the contractor secure new clients, he says he decided to bring his financing background and expertise to the job.

Like most general contractors, he networks, seeks referrals, and uses the conventional commercial leads services. Virtually all of Hasser's business is within the Indianapolis area.

The intriguing thing about Upchurch's financing concept is that similar models certainly work in in the retail sector and especially in homeowner renovation projects. If you can help the clients find the money, you find the job. At a higher level, especially in Canada, so-called Public Private Partnerships are building major infrastructure projects including highways and hospitals. In this model, a consortium including financial institutions joins with a general contractor and design and operating specialists to bid on construction and long-term operating contracts; financed by the partnership.

So, maybe it makes sense for the general contractor to have a loan facility for the pizza restaurant, retailer, or medical practice wishing to build a new clinic. I'll check in later to see if Upchurch's concept is succeeding in practice.