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Saturday, May 31, 2008

A sales success formula?

This image is from Construction Business Development in the U.K. which proposes a systematized sales program for its British clients. Perhaps a similar business model would work well in North America.


A British company, Construction Business Development, has started a blog to promote its sales and business development services for U.K. contractors. In a recent entry, 4 Keys to a Successful Sales Strategy, the author explains some fundamentals and a business development system for companies in the mid-range, £1m to £20m in annual volume.

In their model, they put one of the contractor's office for the equivalent of one day per week.
"The results speak for themselves with one day typically producing 1-2 high
appointments between your directors and potential work providers. On top of that, this strategy tends to secure 3-5 tenders a month, mostly through utilization of telecommunications and subsequent relationship development. Finally, this strategy uses planning leads as a key source of market and project intelligence."
The blog entry says there are four keys to success: 1. Market intelligence; 2. Regular time to develop leads; 3. Executive support and 4. Encouragement of sales input across the company.

The writer notes these prerequisites:

There are some basic elements that firms should ensure are in place before pursuing any marketing strategy. Several of the most important of these are outlined below and for the vast majority of readers they will serve only as a reminder of the basics. These are:
• Commitment from the directors and managers for the a long term sales program is really important because it ensures that your bosses are behind you in your sales endeavors and will provide support when it is required.
• A strong, attractive and effective corporate identity is something that all firms aspire to have but it is essential to stress that if one’s corporate image is tainted, it will become much harder to build a client base.
• Clear thinking and clear prioritization of market focus areas will help streamline your corporate process generally, but it will also help any marketing strategy because a clear focus will make the best use of a marketers time.
• Effective marketing resources are essential for promoting a corporate image and for advertising to potential clients. Most firms will already be involved in some activities related to this field, however it is worth reiterating how important it is to be strong in this area by having a wide range of resources available – i.e., brochures, websites, pdf's and email material, case studies and letters.
I've italicized and bolded "it is essential to stress that if one's corporate image is tainted, it will become much harder to build a client base." All the selling in the world won't do you much good if you don't conduct your business with fundamental integrity and business sense.

I'll permalink this blog, hoping that it is updated with some frequency.

Connecting the dots

This image is from the California Subcontractor Listing Law page from the Carlin Law Group in San Diego. The law, about 50 years old, is intended to prevent bid shopping and peddling. But is it truly effective? In researching my story on bid shopping and peddling, people said legislative measures often result in greater corruption and manipulation as owners, contractors and suppliers manipulate the rules to protect favored relationships (good marketing) or reduce prices.


Yesterday, a group of seemingly unrelated calls and emails brightened my day. In one, a source elaborated on observations in a pre-publication draft of my story about bid shopping/peddling. In the second, we worked on implementing a good deed to a previous client (and a group of strangers) that correlates with the apparent demise of a once-formidable competitor. And I had intriguing conversations and invitations from people I hadn't known previously, who have read this Construction Marketing Ideas blog.

The experiences in the final sentence of the previous paragraph can (and later will) be turned into public blog postings. The other events need to remain confidential. The reason for the confidentiality is not the events themselves, but the circumstances that lead to the events. They result from connecting dots and being in the right places at the right times -- and disclosure of part of the story would lead to unintended consequences and possibly the violation of real, meaningful confidences.

So, as I write this posting, I am tangling with my desire to communicate a vital marketing message -- with some wonderful real-life examples that I cannot share. Frustrating, I suppose (but I know well that under the contradictions are an increasing number of respectful, warm relationships with individuals and businesses in a diversity of circumstances and trades).

If you would like an advance draft of my stories about bid shopping and peddling, please email me at buckshon@cnrgp.com. There's no cost -- and I've made sure that confidences shared in researching the story have been observed in the final written words.

Friday, May 30, 2008

Rote and creativity -- a real challenge

I keyed the words "rote and creativity" and found Peter De Jager's page "Creativity by Rote and Mechanism" where he writes: "Here’s a rote behaviour which is guaranteed (or your money back) to increase creativity in your organization is: Give all new ideas respect… even when at first glance, they don’t seem to deserve it."


One challenge (that is an euphemism for 'problem') I have yet to truly resolve is my tendency to fall into a rote/script when handling a repetitive task. This correlates with my own need for routine -- I have enough adventure in my life, with the challenges of self-employment , family and the like -- so I like some things to the same way, every day, every time. This certainly is apparent in my eating patterns (for breakfast and lunch) and my favorite sofa seat. These behaviors are normal enough, I suppose, but what is less normal -- and therefore much more of a marketing challenge -- is how to express good deeds and courtesies to clients and potential customers in a systematic, but natural, manner.

Take, for example, the idea of the "thank you call". I thought this would be a great idea a year ago. We have a lot of one-time advertisers, who purchase their advertising largely because they wish to support or maintain healthy business relationships with their current clients. I wanted to connect with these customers in a somewhat stronger and more personal manner than a bland invoice, once they do business with us. So I set out to call and thank them.

First time around, the new initiative worked like a charm. I learned interesting things, found ways to improve our service, and gained a real appreciation of the interests and needs of our clients. So I decided to make it part of my routine. I continued for a few months until I saw something not quite right.

First, I began dreading making the calls. Then I realized why. I had descended to using a call script -- a repetitive phrase that became almost drone-like. I had become, in trying to improve our client service, a "telemarketer". And I sensed that the people at the other end of the line were feeling the same.

My initial reaction proved to be less than effective. Whenever I find I'm doing something I need to do that I don't like, I think like an entrepreneur -- get someone else to do it. So I dumped the work on my sales team. Fortunately, they are astute enough to give it right back to me. They said most people weren't returning their calls, and they, too, said it felt funny to make the calls this way. So we reverted to sending hand written thank you notes. These may be somewhat rote-like, I agree, but they certainly don't have the horrible flaw of the phone calls -- the intrusive, voice mail or time hogging nature of artificial interaction, requiring you (the client) to engage, whether or not you are prepared at the moment.

This challenge of rote-like "relationship" behavior is common in other circumstances. I don't go to too many 'networking' events, but I'm sure one reason I don't is because the plastic goodness at these things drives me nuts. (I am getting better at it of course -- now I really put the 'selling' side away and focus exclusively on sharing, listening, and connecting -- that is when I'm not running away to the bathroom, or a corner table, or somewhere I don't need to be 'there' with the others in the room.)

And of course, we've all experienced and I sense find discomforting the plastic 'friendly client service' with all the scripted niceness at certain retail establishments and other businesses. If the warmth is coming from the heart of the employee, good, if it is coming from the "corporate training program" we can see it a mile away.

As I said at the beginning of this posting, I don't have really good solution to this problem. Maybe you can share one in a comment. The best answer I have is when you find you are travelling down the path of rote and it doesn't feel right, stop and do something else. And maybe that 'something else' is something you like doing. I'm a writer/journalist, so naturally, I enjoy blogging. Here, I combine some routine (right now I'm at my favorite family room sofa) with the absolute pleasure in finding something new and sharing it, instantly, wherever we may be.

Thursday, May 29, 2008

Living for a fortune

Keith Walsh sent me a news release announcing his appointment as National Sales Manager of Starlight Skylights. What I liked most was the tag line to the signature on the email he presumably sent to countless media outlets.

"If you make a sale you make a living. If you make an investment of time and good service in a customer, you can make a fortune." - Jim Rohn
True, indeed.

Rules for salespeople

This contractortalk.com thread, The rules our sales guys live by, is fascinating on several levels. Different businesses have different models, it seems, on guiding and compensating their sales team. Should salespeople set their appointments, or go to them on pre-set calls (by company management). When/how should they meet internally, and with potential clients? And how should they be compensated.

One of the most intriguing insights from the thread is the way some contractors use "average dollar per lead" as a guide to sales performance.

If I give a salesguy 30 leads a month... and he sells $90K in gross.. his average dollar per lead would be $3000. That means that no matter what the circumstances... the good, the bad, the whatevers... I know the company will bring in $3000 for every lead we give the salesperson.

The other nice thing about this is it eliminates false numbers. If I close 80%... but every job I sell is undercut with little profit - would you be happy? If I sell super-fat jobs with lots of profit - but am sporadic in my closing - would you be happy? This number tends to be a much better indicator of true performance in your sales staff.

This is a good system, of course, if the company provides/counts the leads, and flows naturally into a cost per lead measuring system for initial marketing (and would I think provide great Key Performance Indicators if your business has this marketing capacity).

But what about the other end of the equation -- larger projects, with long lead time, and the implied value of relationships, connections, client service and the like. As readers of this blog know, this is the type of selling/marketing that works the best -- just look at our poll statistics on the sidebar (or take the poll yourself, and you'll soon find the answer).

Here, concretemasonry writes:

We operated in a different world than you. There is a difference between peddlers and professional salesmen. The thought of no salary was ridiculous and could not worked in any way in our situation.My salesmen sold materials and called on established contractors and not on the public using referrals. They had a reputation to build and maintain, so the time frames were different. Because of this, pride, success, friendship and accomplishment became very important.

They were also a part of a team, so the two of them were not the only reason for $12,000,000 in annual sales.When we were sold out, one was told to use his golf membership every day (avoid problems), but he still ended up on jobs we were supplying and on jobs supplied (poorly) by competitors in order to be ready for the next year or two. The other did not want to entertain customers, so he went fishing on the customers boat. Both sold by making money for the contractors after they got the jobs and by getting them new jobs.

They had a more difficult (time)separating business from pleasure on their expense accounts than I did when it came time to approve them.

When I used the term 'professional salesman', I was not being critical, but defining the position. On one $400,000 project that we were not the low bidder on, one salesman and my self did some work and justified getting another 15% from the GC due to labor savings. After the agreement and five minutes of talk, the salesmen tore up the revised agreement and got another 5% from the G.C. that felt it was worth it. - That is a salesman!

I'm sure the selling cycle and guidelines for selling vinyl siding or household window replacements is truly different from promoting your competence to design and build a $50 million commercial complex. You need to develop your own models and approaches, depending on the circumstances.

Where do we stand in our own business? The answer, to me, is less than perfect, but "somewhere in the middle" is where I'm at now. The reason this answer is less than perfect is that when you are neither black nor white, sometimes you don't know where you are -- and your standards and guidelines can get fuzzy, and people don't know/how to relate to them. But our challenge is we are selling an intangible; with a mixture of one-time business and long-term relationships, with a modest entry point cost, but a truly high total potential client value. I would like to find a more consistent answer here.

Tracking value for your client

Frank Gamez
Extended Stay Coordinator, Howard Johnson Toronto East
receives a Tree Canada certificate from Chase. The Ontario Construction Report plants a tree for every advertiser in every issue -- meaning the Construction News and Report Group of Companies plants 70 trees for every 11 trees it consumes.


Chase makes a wonderful point in this posting Tracking Value for your client - Part 3 The Final Frontier? about how to generate value for the client -- it comes down to the quality of the relationship you provide. And if that relationship is healthy, you'll develop client-sensitive services to deliver real value.

You'll want to read his post about how he worked with the Howard Johnson Toronto East to give them resources to expand and enhance their contractor-related business.

Wednesday, May 28, 2008

Construction Informer

Duane Craig's Construction Informer blog is worthy of a permalink. The header describes "Construction News Views Interviews Commentaries Downloads and More" and the blog is well written -- in part because Duane is using it to market/promote writing and communication services (and sell a construction-related blog directory).

Also see this article: Constructing the Construction Blog, with some solid ideas on the whys and hows of blogging for the construction industry, and a gentle pitch for his writing services.

Collaboration vs. spam



Today, I woke up with the inspiration to write about the power of collaboration in marketing. I turned on the computer, and discovered 347 emails in the in-box. Most were bounces from spam, apparently using my (forged) email address on the 'from' line. As I went through the tedious process of clearing the junk email and worrying about my damaged reputation, I am reminded how the Internet brings out more than ever the extremes in marketing -- something you should consider and appreciate in planning your own strategies.

On one end, the collaborative approach, the marketing/selling process is built from healthy relationships, most often from existing clients who have discovered the quality of your work (and the quality of your ability to relate to them as individuals). They give you more work, sometimes steady contracts, and refer others to you. You can then use these relationships to enhance your opportunities with just a little effort -- maybe discovering the name of a mutual acquaintance, or (with their guidance) learning of a worthy community project or cause to support.

While industry leaders probably don't cite "marketing" as a reason they involve themselves actively in their trade associations/groups (serving on the executive and committees) or joining at a high level in community/charitable activities, undoubtedly they obtain true and meaningful advantages through these relationships. When you are a friend and community builder, it is never hard to be invited to quote on projects; when you are well respected and recognized publicly among the people with decision-making authority, you will find your proposals tend to be wired in your favour. This even creates ethical challenges; for example, your bid isn't the lowest, but the owner/GC wants you, so 'helps' you win, perhaps by redefining the scope of work, or finding some other approach to move you towards success, as competitors scream "they are bid shopping and peddling".

Now, look at the other extreme -- spam. It costs little cash to pour out thousands of emails to prospective customers, in the hopes that one or two might actually buy something. It doesn't matter how many people you irritate or offend (especially if you can forge things so an innocent person takes the heat) as long as a few people buy stuff.

The net cost, of course, of your marketing is far higher than the benefit -- the wasted time, energy, and frustration for thousands doesn't matter -- you are still making some bucks. Of course you are also probably breaking quite a few laws.

Telemarketing, broadcast faxing, and door to door canvassing all fit in this framework, though (thankfully) there are self-contained limits on these practices. You need to find "human resources" to do this type of work -- and since the work is so thankless, you generally find only desperate or naive people to do it (and if you can find really good people, with sensitivity and intelligence, so be it, you may well be successful with these marketing approaches, though I am intrigued by how much more successful you would be if you applied these individuals' talents to more collaborative and community-sensitive strategies.)

I am certainly not disputing that in-your-face push marketing works; my argument is the cost -- to all the people who don't want to receive your message; don't desire your interruption, and overall, to society/the environment for the complete waste they cause. How much more effective is it to share, to give, and to contribute to your community (and ensure your existing clients are so pleased with their experience they rave about it to their friends and even complete strangers?)

Tuesday, May 27, 2008

Bid shopping and peddling -- stories beneath the story

An image from the "about" page of the Mechanical Contractors Association of Canada. The association's history says: "In 1952, an assistant to the Secretary Manager was hired and an increasing number of issues were addressed such as bid-peddling, public relations and contract forms, and in 1956 the Association participated in a Royal Commission on Canada's Economic Program. A Bid Depository was established in Toronto in 1956 which subsequently led to similar depositories being adopted across the country."
Because I own the publishing business, I can break some of the conventional rules of journalism. One of these rules is "never show the story to the people you interview before publication". This is supposed to protect the independence of the writer from outside influences. It also creates challenges for accuracy and completeness because, I find, writing is best as a collaboration -- and the people who know the most what is really happening are, rightfully, part of the story.

I felt ready (and realized the deadline required it) to write a first draft of my feature about bid shopping and peddling yesterday morning. Then I sent it to a group of people -- some named in the story; others reflecting key associations and groups who might have an opinion and perspective on the topic.

By the end of the day, I had a very different story, or should I say, stories. Much of what I learned will never get to print -- it is always risky and rarely wise to publish negative stories about individuals or corporations unless you want to spend a lot of money on lawyers. I certainly can appreciate the complexity of the issue, more than ever.

An intriguing issue, relevant to this blog, is the observation that it take two to tango -- and where "bid peddling" fits into the marketing picture. One of my sources described the reality of the sub trade or supplier, desperate for work, needing the sale, and going back to the GC after the bid close, to find if there is some way to sharpen pencils and get the job. When does downright unethical behaviour become a valid business necessity -- or is there never an excuse for this sort of thing?

Monday, May 26, 2008

Learning, communicating and selling

The best "marketing letter" is probably the testimonial -- rather than extolling our virtues, a satisfied client does. This is from sales consultant Fred Firestone's website, http://www.ethicalselling.com.

Friday evening, one of our employees sent me a draft marketing letter for my review. Her letter extolled our publication's benefits --listing six really useful services we provide any business which contracts with us.

My immediate reaction:

I’m not sure about this – this is all about us. No one cares about us. The contract advertiser cares about their own business and all the ‘benefits’ cited in the draft letter do not connect the dots here. All the $$$ do little to appeal to meaningful emotions.

We need to capture the prospective clients’ needs, interests, values, dreams, aspirations, emotions, and so on. So I’ve made my observations -- can I come up with something better? Maybe. Have to go out early tomorrow (when I write best) but I’ll see if I can generate something by Sunday. I think it will be a 100 per cent give letter with absolutely no selling! We’ll get the sales once we’ve won the prospective clients’
hearts.

Sunday evening, I asked our employee for the context of the letter; who she wanted it to go to.

She responded:

I am going to sit down tonight and see if I can put together something. It takes me awhile to get that initial sentence out but once my thinking kicks in, I get on a roll. Once my kids are in bed and it's quiet time.......I'll use one company as a sample and draft it as if it was for them only.....it's a start. I think they will have to be individual to each group....electrical, contractors, equipment suppliers....etc.. I will try one for the various equipment sales companies....

Then she followed up with a further observation, and a useful link.

http://www.bizine.com/saleltr2.htm I found this website. I figured I better research this a lot better than trying to wing it.

I'm looking forward to reading her revised letter, and working with her on improving it even more.

Here, I think, we are encountering the challenge that most sales representatives have in finding/developing leads. The sales representative's source, it turns out, are advertisers in another publication with some competitive overlap with ours. The information we have are the actual ads, and the general business contact information. This publicly available data is legitimate and useful of course, but will we sell much with a head-long intrusion into the prospective client's space? (Ironically, our call will for certain have one unplanned side-effect -- it will reduce the value perception the advertisers have in their publicity in the other publication; they are looking after all for potential clients to call them, NOT other businesses selling advertising!)

My argument would be that we have a much better opportunity of doing business if we find/develop a healthy relationship with the potential advertiser before we start pushing our benefits and features in their face uninvited. This suggests that the initial sales letters should either be highly individual and personalized (based on real knowledge and connections) or, if it is going to be a form-like thing, share useful information relevant to that business and give it something free without obligation or pressure.

"Personalization" these days can be manufactured -- perhaps to good effect, though in my case, I am skeptical of anything too friendly from someone I don't know. You've probably received the faxes that appear handwritten but are really computer generated; and I've seen real handwritten envelopes which, when opened, contain content touting overpriced or dubious network marketing or "Internet business" seminars. I guess this stuff may work, but not on me.

Maybe salespeople and marketers need to respect the intelligence of business owners more. I felt right at home at the Ontario General Contractors' Association symposium when, after completing an interview with Clive Thurston, he introduced me to someone selling a training service for the construction industry (who had paid the necessary fees to be a symposium sponsor). He had a demonstration meeting set up with a major general contractor. On Thurston's recommendation, I agreed to stick around and take a picture of the demonstration. The contractor -- who has been one of our advertisers -- showed up -- and looked at the demonstration. "How much does it cost?' he asked. The vendor hesitated; so the contractor asked again. When he got the number -- surprisingly low -- the contractor said: "Sign me up."

Here, we see the correct seeds for business and relationship development; face to face, relevant referrals, some luck (I just happened to be there at the time) and, when it comes right down to it, the offer made sense for the price -- no hemming and hawing around that important fact!

I'll respect the intelligence of our employees, meanwhile, encouraging them to think for themselves, try new things out, and grow. I'm confident we will soon have a truly effective marketing letter.

Sunday, May 25, 2008

Consistency

Drew McLellan writes: "Be Consistent, Be Consistent, Be Consistent". In this blog entry he relates one form of consistency, but there is another (equally, if not more important) variation (which he relates elsewhere,as do other successful marketers.)

Always remember...you get tired of your message much quicker than your audience does. You may not even get noticed the first few times someone hears from you. You just have too much competition for their attention. After six or seven times, there might be recognition, but perhaps they don't need you yet. Typically it takes 8-13 interactions for your audience to really register that you are talking to them.

But what would happen if you stopped talking to them after attempt #7? Or if you speak to them differently each time?

We've been sending out a weekly e-mail marketing tip since 1999. We get calls from people who want to hire or interview us - some who have been putting our weekly e mails in a 3-ring binder for several months or even a couple years, but they just hadn't needed us until that moment.

Thank goodness we didn't take them off the list after the first five contacts didn't elicit a response!

Yes, and of course, your marketing message must resonate with the real life experience you share with your existing and prospective clients. If you convey a sensitive, respectful and client-centric model in your advertising, and someone calls your office, and ends up in voice-mail jail, or (worse, even) encounters an insensitive or unresponsive employee, all your efforts go to waste.

In other words, if you get things right, you need to get them right within your business first -- then your external marketing initiatives will pay off. And once you find a model that works, as long as it is working, keep doing it (and give any new idea you introduce enough time to validate whether it is working, or not.)

Saturday, May 24, 2008

Which numbers really matter?

"Drew's Marketing Minute." Here's my 'give' for today -- a link to Drew McClellan's blog, Drew's Marketing Minute. This is his book, 99.3 Random Acts of Marketing. I haven't read it (yet) but you don't need to pay anything to read his blog.

Our sales deadline for June has just passed, and the tentative final numbers are in. We've broken even, just. On one level this is good -- the business isn't sinking -- but on another, it is disturbing, because the final results are significantly below projections set and reported by our team in the weeks before deadline.

"So what do we need to change here?" I ask. Logically, and commonly, businesses set sales quotas and sales reps make projections on request -- and they give numbers either through wishful thinking, hope ("If I say it will be, it will.") or, if the sales representative wants to prove exceptional talent, lower than reality. ("Now, I've gone ahead of projections, again.") So while the final numbers have some meaning -- we need as a business to know if we have sold enough to make a profit -- the numbers we are hearing on the way to the goal don't do us much good.

One 'solution' is to discount or enhance the numbers based on subjective credibility perspectives. "OK, salesperson A always under-projects so we can add something to the calculations; and salesperson B over projects, so lets discount." But again, does this really help the business -- or trust -- between the manager and the sales team.

Maybe the solution is to break the final number into components, based on our understanding of the business and previous experience. If X number of calls leads to Y number of appointments and Z number of sales, we could ask the sales people for call reports. But again does this measure anything useful. I fear the possibility of wasted calls to people who don't really matter -- or pestering and irritating calls to those who do -- so the sales rep can meet the number or quota.

"We could do nothing, just trust the sales team to do their work?" might be an answer -- and it could be -- but here, the problem is blind faith often results in blind results.

Then something dawned on me as I woke up this morning. Why not try measuring something unconventional, somewhat fun, and maybe habit forming. Maybe it won't work, but maybe it will provide something useful. It is this. "What good (business) deed did you do today?

The argument goes that sales come from sharing, from respecting, from giving, rather than hoping people will purchase something -- so the steps we take to provide a little extra value, some worthy assistance and support, and some contribution to others within our market community really matter far more than how many people we call, how many appointments we set, and how many orders we write (though the latter is the final number we need to achieve).

Will this strategy work? I don't know. It is a morning thought and needs to be tested in the crucible of real work and real relationships. And maybe I am trying to force quantification of something that cannot be so easily structured. But at least it is measurable, tangible, and real. And it can be reported daily, in a brief huddle meeting or email (I tend to like the huddle idea). Could this be our Key Performance Indicator (KPI)?

Friday, May 23, 2008

The bid peddling/shopping survey (2)

I am receiving intriguing -- and shocking -- feedback to my bid peddling and shopping survey. This issue is touching a nerve, especially among estimators and some trade associations who have asked permission to forward the survey to their members. (I am of course agreeing). If you wish, you can take the survey and view the live results here. But the most interesting stuff is in the comments and emails I've been receiving. I am reviewing these observations for the first story to be used for our printed Canadian publications (also need to ensure that identity of respondents is disguised, or I have permission to use the comments, before publishing them).

Please feel free to take the survey and/or respond to the poll question. Responses from these links are confidential; I won't know who you are unless you let me know!


Advertising, generosity and branding


One way to build a reputation for generosity is to support community projects financially and with trade services -- such a s The Ottawa Hospital Foundation. But your business brand is even more effective when you take a leadership role in the process -- your network of contacts, and good-will, will translate into much additional business. But you have to do it without worrying about immediate reward or return.

How do businesses which sell advertising for a living succeed. If you understand the answer to this question, you might learn something about your own marketing -- and how and when to use advertising or other resources to achieve the results you are seeking.

Fact is, most advertising-supported businesses need to deliver something of great value to enough of the right people for a truly low (or free) price that the audience is large enough to encourage people to want to pay to access that audience! In other words, a television station attracts millions of viewers, a local newspaper goes to virtually everyone in the community with some money, or Google develops such an effective search engine that virtually everyone on the Internet uses it (often at the moment they are considering a purchasing decision).

In our case, of course, we reach a highly specific -- but important -- audience of construction industry readers, who need many products and services to do their business.

The cornerstone of the media business is successfully giving away enough real value that people want to do business with us -- then delivering the advertisers enough value that they want to keep doing business. Like any business, we have competition, both from peers and interlopers. The competition challenges us to improve our practices and effectiveness.

And, like any business, there are a few players who go over the line, over promising and under-delivering (or not delivering at all). Most of these outfits fail sooner or later, or find some scammy way to find a continuous number of new suckers (or sit close enough to the edge that a few people think they are getting enough value, that they can continue despite high turnover from the majority.)

You can see from our survey results that advertising is a valid -- but minority -- source of new business for most construction enterprises.

But at root of our business -- and perhaps the biggest clue about how you can succeed at yours in marketing -- is we take something really useful, do it well, and virtually give it away! Google provides a wonderfully effective search engine and we provide editorial content -- information and news about the industry that just is not available elsewhere. For free.

Now, I am not suggesting if you are a drywall contractor that you will be in business long if you give away your services without charging for them. But if you share your expertise, your ideas, and your insights into effectively reducing drywall installation costs -- or making the product more effective -- with your community or clients, you may find some surprisingly positive results. Or if you strategically give away your services as a community service initiative; or take a voluntary leadership role in a relevant industry group or association, you may find results far beyond your expectations.

You can provide this benefit informally and quietly (creating an aura of exclusivity with your clients) or publicly, perhaps using media such ours, or by email, or speaking, or association participation.

Your generosity needs to be sincere, and if you expect a quid-pro-quo response, you will not get very far. (Of course I am not suggesting giving and giving indefinitely to leeches -- there are some out there!) But over time, you will find amazing things -- potential clients will come to you, you will be able to charge more than others for the same service, and you will build a successful business. Essentially, you will create a brand for your enterprise. And that is the essense of marketing success.

Wednesday, May 21, 2008

Ethics and marketing -- some thoughts

If you are looking for a clear and obvious answer to the ethical issues in our industry, I won't be able to provide them (I am not that brilliant!) This image from an academic paper suggests some of the variables here -- but if you read the whole thing, you'll see how downright complex your choices really are.

In the previous post, one of our readers describes how, to ensure a successful low bid a co-operating vendor and purchasing agent (and some friendly 'competitors'), arrange higher competing bids to ensure compliance with multiple bid requirements and still ensure a profitable job. Similarly, if you read my "Seven tips for construction marketing success" (by request on the blog sidebar) you can read about a general contractor who conspires with a local hospital to "come in low" all the time -- with the mutual understanding that the scope of work is deliberately left vague enough to allow for profitable change orders. Both practices, of course, are blatantly unfair to competing bidders and could well be in violation of the law, especially anti-combines (or in Canada, Competition Act) laws.

Last November, the late Sonny Lykos addressed these issues in a blog comment:

In my opinion, deceptive practices can never be justified any more than when an employee steals from his employer, justifying the act by telling himself that he deserved the raise he didn’t receive.

And that’s the problem with far too many people, their cavalier attitude of rationalizing unethical acts to get what they want. We know what the GC wanted, being awarded the project. We don't know what the hospital administrators wanted, and obviously got. Either way, the agreed upon tactic is tacky!


Of course, we don't live in a perfect world and ideals of fair business practice are challenged every day by the competing demands of expediency, personal relationships, and (on a more positive ethical note) job quality/satisfaction. We all know that the low bid is not always -- or even often, the best -- except in purely commodity transactions where quality standards can be highly specified. So, arrangements to get around the bidding rules sometimes serve a higher ethical purpose. (Should you take the low bid and get a crappy job that will cost more in the long run, or work with a trusted supplier who does things properly, without question, and will fix problems without complaint or manipulative change orders.) But we are playing with fire here and the ground rules are shaky, indeed.

I'm facing many of these contradictory ethical issues in my writing, for example, on the bid shopping/peddling issue. I cannot disclose the intellectual foundation of the story, for example, in part because it would divulge or interfere with sensitive and important business relationships. And I know that I cannot attribute or publicly identify in any way the many people who are contributing to its substance -- including the people who have graciously responded to my survey, and my own network of personal contacts who have shared insights that usually don't find their way into the media. (No one issues a press release saying they are about to bid shop or peddle, of course!)

Here, I cannot wave a magic wand and tell you what is right, and what you should do. But I am certain that successful marketing is very much intertwined with ethical and sometimes legal dilemmas. We should, I think, strive to build our marketing/branding advantage, but equally, strive to be fair in our practices. Done right, I suppose, this has advantages in business practice and sustainability. In the real world community -- not that of public relations experts and photo opportunities -- people get to know who is who, and what is what, and behave and respond accordingly. Your (real) reputation for integrity I think, with some common-sense shrewdness and talent, will ensure your business survival no matter the economic environment or ethical practices (or mispractices) of your competitors.

The bid peddling/shopping survey

The American Subcontractors Association, Inc. and its local chapters in several U.S. cities, speaks up for sub contractors facing bid shopping and bid peddling challenges. Our business belongs to the ASA in North Carolina -- I wish there was a counterpart in Canada.

Early responses are arriving from our survey on bid shopping/peddling, and not surprisingly the majority of people who have answered so far say the problem is serious, and growing.

But one person responded in a way that shows the challenges of ethics, good client service and effective construction industry marketing. The practice described here might be more accurately described as something other than bid shopping/peddling but I think you will see how good branding/relationships (and thus effective marketing) can clash with what would commonly be thought as proper business practices. Obviously I will not say who provided this response.

Sometimes a company wants to buy only from you but can't because his purchasing agent requires bids. We will send purchasing our quote and contact other vendors we know out of our territory that sell our product to quote higher than us. They don't want the job anyways and we return favors back to them. I don't know if this is what you are talking about. I'm not sure if this is illegal but it helps everyone and makes the customer happy.
Of course, your survey responses are welcome -- and will be totally anonymous if you answer though the link off this blog.

Making the most of the economic downturn

You can view a PDF of Randy Pollock's SMPS Marketer article on "Making the most of an economic downturn" at Tim Klabunde's CofeBuz blog. If you look carefully, you'll see my modest contribution to the piece.

Tuesday, May 20, 2008

Bid shopping and construction marketing

Miller Grading Company, Inc. in Atlanta, has published some concise definitions of bid shopping and bid peddling, and explains why these are unethical.

If there is ever an issue that tears at the soul -- and challenges the fundamental practices -- of the construction industry, it is bid shopping. The practice of using confidential bid information to play one supplier against the other is deemed by industry lore -- and ethical standards -- to be wrong. But anyone who knows anything about this industry knows it happens, all of the time.

How much? And can/should anything be done about it? And what does bid shopping have to do with marketing, after all?

Well, if you think at it at the most elemental level, bid shopping's corollary -- bid peddling -- is all about marketing. You aren't the lowest bidder, but want the job, so you offer to come down and match the lowest bid, or (perhaps on a slightly higher ethical plane) suggest variations to the project/scope of work that allow you to be 'lower' than the others -- and still win the job (presumably by helping your GC come in lower, hopefully -- from the GC's perspective -- on a fixed bid contract where the owner doesn't engage in bid shopping or reverse auction practices.)

I'd love to catch first hand evidence of the bid shopping/peddling practices within this industry, but sense only a fool will let me anywhere near the action, especially if I am equipped with a digital tape recorder and camera. But occasionally, people let their guards down and (knowing I would never identify them publicly) give me a peek into the real world, at least real to the participants.

The mayhem (and bid shopping/peddling) I suspect is greatest around the fixed bid deadline as the general contractor is wrapping up the process of closing for the fixed bid deadline. Faxes, emails, phone calls, and other mechanisms bring in the sub-trade prices at the last possible moment. But maybe there is a little room for haggling, a little nudge, a little wink, and the invitation to just lower that bid a little (or a hint that if the original bid is too high, an adjustment can be made.) And so the deal is sealed, or is it, on close.

Bid depositories supposedly solved this problem, as (especially in the U.S.) procurement regulations requiring all sub trades to be named and prices quoted on completed projects. But of course these ideals have been lost in the era of Public Private Partnerships, construction management, and design-build contracts, where transparency is often lost in the name of efficiency and flexibility (and bid shopping).

So how do you win the war here? I would argue you want to get in a position where you can command a higher price -- and a higher ethical standard -- by achieving a brand reputation for integrity and fair value. If your business practices are above reproach (and your internal costs and efficiencies are strong enough), you should be able to win enough business without resorting to the bid-shopping/peddling game.

But maybe I'm dreaming in technicolor. Maybe there is no solution to this problem. I will seek out some insights and invite your response to an upcoming survey. You can also communicate with me by phone or email (and I promise not to disclose your identity to anyone, without your consent.)

SMPS Facebook group reestablished

SMPS has established an official SMPS Group on Facebook, some months after an "unofficial" grasroots group appeared and then disappeared following a firm cease and desist letter from Lisa Bowman. This time around, you can only get into the group with the SMPS administrator's (Molly Dall'Erta) permission.

The group now has 19 members -- an increase of eight -- including the original unofficial SMPS Group founder Liz O'Rourke Kupcha.

Meanwhile, our own business received a slap in the face from Facebook when we (not fully appreciating the rules) set up Facebook 'pages' in the names of some of our publications, with Facebook accounts tied to these pages. This is a no-no, according to Facebook rules -- pages can only relate to individuals, not organizations. Obviously, the "Groups" function serves the organizational purpose, and that is where we will be managing our own sites.

For some insights into Social Networking marketing, you can view this PDF of my article on the topic for the SMPS Marketer.

Monday, May 19, 2008

Your Ins and Outs of Construction Marketing


How do you obtain the best construction marketing results, by looking in, or looking out? This is a trick question. The answer is "both" and "neither" because the explanation depends on what you are looking at!

Looking in

If you are introspecting, thinking, reviewing and questioning, if you are asking yourself the question: "Am I doing the right thing to build and improve the business and its client service?" then clearly looking in makes sense.

But if you are doing that in front of your clients either in your marketing communication or (worse) your immediate interaction with them, you are in big trouble. Steve Yastrow's recent blog entry "Stop talking to yourself" captures this point really well.

Looking out

We of course must see beyond our current business bounds to obtain ideas, insights, capture market insights and understand industry trends. And we of course need to find new clients -- and some of them are people we don't know, and who don't know us. (So it is helpful to advertise, promote, create publicity, and develop recognition resources to find these new clients.)

But since most new business either arises from repeat business from current clients, or first-hand referrals and recommendations (again from your current clients), logically we should focus most of our marketing resources internally.
So look in, and look out -- but watch that you are focusing on the right construction marketing priorities.

Sunday, May 18, 2008

SMPS Georgia -- New Blog

The SMPS Georgia Chapter has just launched a blog for AEC Marketers. First entry is recorded from Friday, May 16. I will set up a permalink and am looking forward to seeing other chapter blogs -- if I can see two or three more, I'll create a special blogroll section for them.

Motivation, eh (2)

The low budget 1992 movie, Glengarry Glen Ross, (see video clip in previous posting) can teach us something about motivation.

I learned about the movie clip in the previous posting from a contractortalk.com posting by WPC07834, a New Jersey based marketing consultant who has been using the forums to (effectively) promote his door-to-door canvassing consulting service. He started the thread "10 step selling method" with this question: "Does anyone have the 10 step selling method they can post or email me?"

I piped in (before someone posted the video clip) with this 10-step program, which reflects my values:

OK, here's my 10 steps

1. Hire sales reps systematically, carefully, prudently

2. Treat all employees with respect; expect the same (with accountability) in return

3. Ditto for current/potential clients and the community at large

4. Return calls promptly even from solicitations (I've converted more than a few to sales!)

5. Blog, involve yourself in your community, support associations, without worrying about 'getting business' (it will come).

6. Deliver more than expected to current clients, with respect and where possible fun.

7. Respect your clients and prospects time -- if you are going to call cold, be sure you are offering something more than just another 'offer'.

8. Recognize the power of relationships, especially within the supply chain, and position yourself accordingly.

9. Respect privacy, (I will be courteous with business callers during business hours, but never knock on my home door to sell anything, ever!)

10. Have fun. If it's a grind, find something else to do (or get someone else to do it who enjoys it.)

WPC0784's response:

Ok, Nice try but not what I was looking for. This is more like what I had in mind.

Does anyone know this?

1.Entry

2. Warm Up

3. Measure

4. Company story

5. Product demonstation

6. Price condition

7. pre close

8. Close

9. Button up

10. Replace the lead

I use the 3 step method.

W arm up

P itch

C lose


Ok, but what about that video clip, posted to the thread without comment by California kitchen remodeller A.W. Davis? WPC0784's initial response: "I love that part. Its pretty motivating."

I decided to take a few minutes to look into the source of that clip a little closer. Turns out, from Wikipedia, that:

Glengarry Glen Ross is a 1992 independent film, adapted by David Mamet from his acclaimed 1984 Pulitzer Prize and Tony-winning play of the same name. The film depicts two days in the lives of four real estate agents and how they become desperate when the corporate office sends a representative to "motivate" them by announcing that, in one week, all except the top two salesmen will be fired.

It turns out that the big-name actors for the low budget film liked the script so much that they voluntarily took pay cuts and (without compensation) stayed around the set for the filming-- no one needed to coerce them or 'sell' them on working on the project. Also, it turns out that, despite the film's low budget, it still lost (a little) money in production.

This takes me back to Alfe Kohn's "Punished By Rewards" thoughts regarding intrinsic and extrinsic motivation, the debate between salary versus commission, and the values and approaches we use in instilling pride and motivating sales results. I sense, reading the posts here and looking into these issues more closely, that WPC0784 are at the opposite end of a very close spectrum.

It is no secret that I detest selling models which involve pushing yourself in the face of reluctant consumers (or business owners) and instead advocate the more positive approach of systematically building on referral and repeat business (a process, incidentally, that WPC0784 uses effectively in the forums to attract clients for his door-to-door canvassing consulting service). Instead, I advocate building a talented team, with a culture of mutual respect, high performance standards (accountability) and active integration of your current business operations with the market business development for new clients. The idea is to attract the right people (with the right intrinsic motivation) to draw out the positive qualities of clients, suppliers, and the marketplace to attract and retain business. In this context, cold calling and pavement pounding have their (small) place but effective and meaningful long term relationships are the centre of the strategy.

But, when we go back to the Glengarry Glen Ross example, we find some interesting points, showing the delicious ironies here. The film's producers were able to tap into the intrinsic motivation of highly talented actors who took a (personal) financial bath to have the opportunity to play in the movie, but even a low budget, and talented stars, could not make the film profitable In the end, effectively, you may find both ends of the marketing and sales model -- the high-pressure, intense, performance based in-your-face push marketing; or the softer, more humane, respectful, and longer-range vision relationship approach both 'work'. The explanation of which approach to use, and in which context, probably relates to your own values, and your own marketplace. And as WPC0804 shows, you can use one approach (soft) to sell the other (hard). Just some food for thought.

Motivation, eh

Please read the next posting for the context from where I learned about this image.

Saturday, May 17, 2008

About Ascribe

video

This video image is from the home page of the Ascribe website.

Ascribe Buildings & Projects CPM (Collaborative Portfolio Manager), "is a simple plug-in to your website allowing you to build and manage reciprocal links through your project webpages with other companies that had a hand in that project," the company says on its website.

"Manage your company’s portfolio with Ascribe and increase your project’s traffic by over 40 times! Ascribe has been the missing piece of your website that makes it a real marketing tool, not just an online brochure."

An intriguing concept -- and they have a blog, which is how I found about them, by researching possible additional permalinks. It turns out they are attending SMPS conferences both regionally and nationally. The Ascribe blog certainly qualifies for a permalink.

Friday, May 16, 2008

Employee blogs



Two of this company's employees, Daniel Smith and Chase, have started their own blogs. Both have qualities that define people who are great at sales and who are suited to this business's culture -- they have a reasonably competitive and individualistic spirit but can see beyond themselves. I certainly don't require nor expect anyone working in this company to start a blog; blogging is something you should do if you enjoy it, not for any immediate return. Still, I enjoy peeking into their contributions because they are certainly not following (my) corporate script and I can learn from them.

Daniel has two blogs, one personal at http://www.smithereensblog.blogspot.com/ and the second more closely related to our business, at the second, Tracking Construction Trends, at http://constructiontrendtracker.blogspot.com/. Daniel has discovered that Google's Blogger allows you to set up several blogs on one console; I've used this facility to create one page blogs to address highly specific issues while we rebuild our websites. His writing is evocative, informative and fun. You'll enjoy for example, Filtering Through Online Information Overload To Find The Gems Worth Reading (Part 1.5)

Meanwhile, Chase recently moved his blog to Blogger as well, at http://chasemarketing.blogspot.com/. His recent postings, Tracking Value for Your Client: How to do it effectively (Part I) and "Show me the Value!" "Show me the Value Jerry!" - Tracking Value for your client part 2 are inspiring articles which support clients and show how you can find more business through advertising.

Is blogging worthwhile? I'm noticing some marketing consultants, members of the Society for Marketing Professional Services (SMPS), have revitalized or restored earlier blog efforts -- and new blogs relevant to the theme of Construction Marketing Ideas are launched with increasing frequency. This means my blogroll is getting longer. You'll especially enjoy reading Tim Klabunde's CofeBuz -- the Marketing and Business Blog (he recently referenced one of my blog entries) and Ford Harding's postings. I also enjoy Craig Galati's Heart of Business and recently Bernie Siben reactivated his BuiltEnvironment Blog.

If you know of other blogs relevant to construction marketing, please let me know. I'll be happy to add relevant blogs to the listings.

Key Performance Indicators -- unintended consequences

It took some searching (because link backs aren't obvious from the blog), but I traced Jerry's Blog to Jerry Tice (see his linkedin.com page) and The Appalachian Group of Companies.

Ford Harding graciously sent me a link to this posting "Is accountability a performance management issue: Unintended Consequences" in Jerry's Blog -- Striving for Organizational Excellence. The writer addresses the problem that setting measurable targets can distort business practices and result in dangerous excesses; sometimes serious ethical breaches, or possibly seeking short term gain at the expense of long-term viability.

As everyone in business knows – if you don’t measure it, you can’t manage it. But what happens if you are measuring the wrong thing? Well obviously it can drive the wrong result. Worse still is that it may drive exactly the result you hoped it would, but it drives it way too far or drives other undesirable results along with it that are not seen until something hits the fan. In nearly every one of our consulting engagements we work with our clients to set up a set of metrics that can be measured directly on the floor in very short intervals, typically 1 to 2 hours. We do this to enable front line managers to drive barriers to performance to the surface so that they can be resolved on the fly instead of building up to unrecoverable levels. Often, probably more times than not, we discover after a few days that the measure that the client told us was the one to watch turns out to be the wrong metric. Either its focus is too narrow and other important metrics suffered (the old production vs. quality dilemma for example) or the focus of the metric is way too broad and we never achieve the intended result. I see the same thing on the verge of happening on a grand scale with a trend that is developing in the talent and performance management fields.
Ford Harding, in comment, writes:
Jerry
This is a serious issue for professional firms pushing for growth. As the incentives to sell go up, so must the controls to avoid both selling something the firm shouldn’t and providing advice to a client more geared at selling more work than looking after the client’s best interests. Note that in Andersen’s case the partner in charge of the Enron account successfully challenged the firm’s controls.
Firm management may exhort its partners to sell, sell, sell, but it seldom balances that message with a reminder of the need to use good judgement, behave ethically and abide by controls while doing so. They take it for granted that the partners remember and care about such things. Unfortunately, not all partners do.
Good post,
Ford Harding
Jerry's initial solution -- that is to make sure the measurement cycle is short and fast enough to quickly determine if something wrong is happening, is a good approach, of course, for production-line or fast acting situations, but our business (I think) operates on a longer cycle and in any case, our staff are highly decentralized, often working from home offices with much autonomy. So how do you determine an appropriate fast acting and quickly repaired measurement cycle?

However, I shudder to fear when we get down to setting out our KPIs that we mess this up -- and fall into the traps described here. This is a problem that needs attention; but I am (alas) still at a loss for a good solution. Hopefully, our short term internal KPI (something I don't think should rightfully be broadcast outside our organization) is valid, and we can review/implement it without damage pending our full-scale planning meeting in the fall.

Thursday, May 15, 2008

Selling: Working hard, smart or both

This is a great quote from Napoleon Hill -- and is the foundation of success, and happiness. If you do work you really enjoy, and do it well, you'll persevere -- and succeed. Since I really enjoy writing and journalism it certainly makes sense for me to own a publishing business, and I can contribute the most to the company by simultaneously writing and selling -- even though we have really competent writers and salespeople on staff. So why not write about selling -- and, voila, you have the Construction Marketing Ideas blog.

Some things -- sales especially -- work best when you do less to achieve more. Of course you have to do less of the wrong things, and more of the right ones. And the "wrong things" can include trying to hard; forcing yourself into a desperate bind where clients feel your angst and need to meet quota -- and run for the hills to avoid you.

Yet the irony here is that you need to get yourself in the right places, at the right times, to find the results you are seeking. This can involve hard work, working smart, or both. You can achieve great results without hard work if your work is truly smart -- but woe is you if you think you are 'smart' but really aren't doing the right thing. Conversely hard work in itself can be a quick road to burnout and failure, if you don't listen to the signals and adapt and change course -- or persevere where appropriate.

Some say sales is a "numbers game" and advocate measuring the number of calls you make, the conversion rate, and the revenue per effort. The theory goes that if you know the numbers, and make enough calls, you will get the results you are seeking. But I can think of few things as demoralizing and disenchanting -- and generally ineffective -- than cold calling down lists of names in a rote-like fashion, hoping someone will buy something, anything.

Certainly in the not-too-distant past I could be held responsible for working not too hard and certainly not too smart. I purportedly delegated things to my employees, and then I embarked on projects which I could "justify" saved the company money, or helped its interests, but really were expensive distractions. At one point, in the midst of the distractions, I brought myself back on track briefly -- personally taking charge of sales for a failing publication. But the minute someone showed up who looked 'good' (he ultimately pulled a fast one on me), I dropped the real hard work like a lead brick, to get back to my hobby-like distractions.

Eventually, out of absolute necessity, I got back to basics -- taking on more jobs than anyone my age should; writing the papers and (for several months) holding on with one competent salesperson. This meant that I had to be actively engaged in the sales process as well -- any slip-ups would leave us well below viability and quota. We now have a competent sales team of three; with salaries, this increases overhead and the break-even point, but gives the business a little more stability and reliability; it leaves room for one or sometimes even two representatives to have an off-month, and we can still find enough business to meet our numbers.

I don't work so hard now, since hiring a competent staff editor, but I continue to write, to fill in, and to look for leads and opportunities. And I find them. This is not the 'grind it out and hope they will buy' type of work; it is a series of seemingly spontaneous but highly effective responses to opportunities. A few minutes here, a brief call or email there, and I can contribute some useful business to the sales team and bring in some worthwhile orders.

Everyone I realize has their own style, and you aren't going to get very far in sales unless you are able to find and seek out the business; but I think the best business comes when it simply doesn't feel like you are 'selling' but are naturally engaged in sharing, contributing, and relating to current and potential clients. Hence this blog. I enjoy the topic; it is certainly relevant, and, yes, it generates a few worthwhile leads and some useful opportunities.

I am an advocate of receiving by giving; sharing, contributing, supporting, and bringing worthwhile businesses together. Can you do the same thing -- and find the way to sell effectively by working hard enough to work smart?