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Thursday, February 21, 2008

The construction association meeting

The reception at the Ottawa Construction Association's AGM.

Daniel Smith and I attened the annual meeting of the Ottawa Construction Association tonight. For me, this event combines business development and news gathering -- I won't forget the time I attended one of the association's AGMs when, in reviewing some small print in the annual report, I uncovered a scandal involving the then-association president and the local labourers union that ultimately resulted in a major shake-up within the organization and the president's resignation.

At tonight's meeting, we gained some insights into the current scandal involving the local general contactor who decamped to Lebanon, after arranging to wire close to $2 million in cash to the Mideast; shortly after this, his company's payroll and subtrade checks started bouncing. The question, raised at our table, is why the bonding company granted surety to the GC, whose reputation, at least among the people around me at the table, was well known (and not positively) within the industry. I explained to my table mates that we are slow on this story because we will be covering its impact with care and depth long after the daily and general business press move on to other topics.

But the topic of this blog is marketing, and the question is, do these kinds of meetings and events help in the process. Certainly some businesses think so; and spent significant money sponsoring the event. The effectiveness of this type of sponsorship is debatable. In an article in the latest issue of the SMPS Marketer, Lisa Rhatigan, a shareholder ansd senior vice-president at the Whetstone Group, reports that virtually every architectural business her practice surveyed uses sponsorship, but this certainly not the most effective marketing tactic.

(Top of the effectiveness list on her company's survey is "referral sources" and "client referrals", with speaking, articles, industry groups, social events and seminars significantly less effective, but still much more powerful than a final grooup of options including direct mail, newsletters, telephone leads, and advertising.)

Equally, I'm not sure how much marketing value you are going to get when you -- as several companies did -- purchase a 'company table' at these events. Sitting with your peers at one table may help bonding and internal communication, but you sure aren't going to meet anyone new that way. But sitting at a 'general' table with a diversity of people from the industry produces interesting chemistry and results; but sales . . . I'm not so sure.

Networking value here is highest if we forget the sales pitch and focus on the community and relationships; I am happy to see Daniel has met some people and connected with them through the steering committee he joined; this is the beginning of relationship-building which, as noted in Rhatigan's article, is the most effective way to find new business.

Probably the highest marketing value is achieved when you can reach a level of active recognition and involvement in the community. At the meeting, the Ottawa Hospital's CEO thanked the association membership for supporting its fund-raising campaign, pulling in more than $9 million. This is good, but credit went to the fund-raising committee leader Robert Merkley of Merkley Supply Ltd. whose business has built a reputation for community involvement and service through active invovlemment and leadership. This is far more than the relatively ineffective 'sponsorship' described in Rhatigan's article -- it is the intense, time-consuming and highly visible leadership only a few achieve.

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