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Tuesday, January 08, 2008

Four (different) routes

When searching for an image to go with this posting I came across this book, Construction Management Excellence, by Gene Fessenbecker.


When it comes to marketing construction and related professional and trade services, with experience, I can discern three basic business models. Each model has advantages -- in practice, we probably all use some parts of each model, to varying levels of intensity.

Low bid wins the job
We seek out public tender/bidding opportunities, review plans, and put in our bid. This is the pure "low price wins the work" model and until the last few years proved to be the way many businesses won publicly tendered jobs -- supposedly in a fair competitive structure with bid depositories and the like. In this model, you don't waste money on marketing (outside of using perhaps paid lead services), and focus on sharpening your pencil to find a way to come in lower than anyone else. It is a grind.

Selling your services
Old-fashioned selling techniques, including cold calls, canvassing, and telemarketing are sill widely used in certain retail sectors (such as vinyl siding, driveway pavement sealing and the like) but are of course truly uncommon in the professional services area. They 'work' for businesses which can stomach the hard-rock approach; and may prove to be surprisingly effective if you are in the professions and are willing to take the risk.

Value/relationship/informal branding
These are businesses which build and maintain trusted relationships; deliver exemplary service and value, and never need to 'advertise' simply because repeat and referral clients keep them busy. Pricing is competitive but they can beat the commodity pricing trap by having a solid reputation. They deliver the goods, and are known for it.

I generally prefer the third route but wouldn't discard the other two models. If your marketing is 100 per cent 'reactive' -- that is, you are serving your existing clients well and relying on repeat/referral business for everything, you may be pricing yourself lower than you need, and failing to replenish and revitalize your client base and opportunities. If you refuse to engage in "low bid wins the job" competitions, you may fail to see options for reducing costs and improving efficiencies which could truly help your bottom line.

And of course the opportunities within these three frameworks vary depending on your market segment/trade. Some businesses, perhaps because of low entry points or traditional business practices, work in one segment more than the others -- and deviation from the norm is risky.

This leads me to a fourth option, the one that I like the most:

Integrated/planned and creative marketing
We combine the elements of the other three models in a creative -- sometimes unconventional -- approach; drawing out and finding new high-value clients, attracting and retaining loyalty (generating referrals), within a cohesive, low-cost and highly effective business model; one that can both grow and weather the most challenging economic environment. And that, of course, is what this blog is all about.

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