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Sunday, April 20, 2008

Balancing your marketing priorities

This image is from illustrator Derek Mueller. "I specialize in Advertising, Americana, People, Product, Packaging, Food, Adults, Children, Humor, Editorial, Book Illustration, and Rockwell Style," he says on his website

If 69 per cent of new business originates from existing clients, referrals and word of mouth, how do you apply this focus in relationship to the other 31 per cent of new business -- resources such as advertising, RFP/Tenders and in-your-face (or ear) canvassing or telemarketing? Where do the minority marketing options assume special significance?

The answers to these questions of course depend on the nature and stage of your business. My recent poll is not a formal, scientifically valid survey (though I doubt the validity of virtually all formal marketing surveys -- I've reported before on the problems of survey fatigue, and the irritation many people (including myself) feel about intrusive inbound survey calls -- I now treat them with courteous avoidance, like telemarketers.) Yet, my sense through several years in the business is that the poll is accurate; reflecting the real world, and providing a useful reminder of what we need to do to succeed in construction industry marketing

To reiterate the essential points:
  • Most of your new business will come from existing clients and word of mouth -- so your marketing -- and brand development -- must focus on the actual interactions you have with existing and new clients equally; with 'every thing you do counts' energy.

  • Wherever possible, you will want to connect and enhance this word-of-mouth process and relationships; and you should use the other marketing options to facilitate these connections.

So, when and how should you use the other tools in your potential marketing arsenal?

When you are starting out, and don't have any clients, you need something fast-acting and inexpensive. Conventional paid advertising is likely to be relatively ineffective, with the exception of some web-based options such as paid keyword search, or free Craig's List ads. Your best results, if you can find a way to achieve this, is through powerful media publicity, harnessing your existing friendships and relationships, and the like, to make effective use of new business word of mouth publicity. Often, you can find opportunities through your network as a sub-trade or junior supplier (note there is a danger here of living in someone else's shadow; and your margins may be hammered).

Then, there is canvassing and telemarketing. I hate both and hope you never do either on me, but the fact is they force consciousness on you and, if you have very little business, bring you closer to your market, and in connection with potential clients. They are easily measurable and because you are reaching out -- rather than waiting for bargain hunters to call you -- may avoid the 'lowest price loses by winning the job' trap.

I'm less excited by RFPs and tenders, though possibly, especially in the ICI sector, public tenders may help you get started -- the problem is that the bidding is either structured to favour existing relationships with incumbent or 'wired' businesses (subjective qualification criteria are now built into most RFP processes) or the sheer volume of competition makes it unlikely you will win unlesss you are practically giving away your services.

These criteria also apply if your business is more established and especially if recession is blowing away your market, and you are worried, and want to find new business. First, if this is the case, I would redouble my marketing efforts with existing and previous clients; here some 'keep in touch' calls will probably pay real dividends (assuming you did your work excellently in good times). Certainly, chasing blind RFPs and tender calls is a recipe for disaster. You need to use your network to see if these are 'wired' to avoid wasting time -- unless, of course they are wired in your favour! The time you spend preparing for these opportunities could better be spent on the phone searching out new business where you don't have as much head-to-head competition.

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