Thursday, July 31, 2008
A couple of blog entries previous, I posted a question from a recently established central Florida general contractor, in business four months, asking me how they could escape the crunch of price competition. Before composing my response, I visited the contractor's website -- a truly professional, well-thought document, graphically appealing, which expressed credibility and experience.
Wednesday, July 30, 2008
Here is another question received in response to: "What is your number one construction marketing concern?"
Q. We are a young company and have just really gotten started in the last four months (we’ve existed on paper for two years). Our focus is commercial construction, specifically retail construction in Central Florida. Our largest challenge is getting clients and jobs. The jobs we learn of are generally from reporting agencies like McGraw Hill, Construction Data, etc, so we always have a fair amount of competition when submitting a bid. It’s a rough in the hard bid world. Any ideas?
We’ve been trying to grow relationships with one on one office visits, lunches, and cold calls with prospective clients too. We’ve had some success with this approach, but we just can’t seem land jobs with such heavy price competition. How do we overcome this?
Clearly, when you are responding to public projects, openly advertised (and available to the commercial leads services), you are going to be facing intense price competition -- especially in a depressed market. The problem is that the only way around the price competition is either exceptional specialization or exceptional branding, or both -- and the branding I am talking about is reputational, not superficial.
You know you have achieved success when clients call you back for more, and/or refer colleagues to you. So the first place I would go looking for business is among people you really know and who truly respect you from previous projects, perhaps at your former employers (however of course you must not do this if you would violate contractural agreements or the like).
Another approach to consider is to define your niche -- you must be quite specific here -- and then look at ways you can focus your marketing message upstream within that niche. Say, you are confident you can build schools well -- you would want to join the relevant associations/chapters for your sector. The wider and bigger the sector/market, the less this approach will 'work' simply because your entrenched competitors are likely to already be there.
This gets into the Unique Selling Proposition concept of marketing. If you are not number one (or number two) in your segment, you are not going to command attention -- so, again, you will be among the crowd bidding work on price! If you really are first in the space, you can 'own' it. In business, an excessively narrow niche may not be viable to support your entire enterprise, but it may give you some power and identification and draw out useful business.
In other words, from a marketing perspective, if you cannot draw on your existing relationships/reputation, you will need to dare to be different, to be focused, and to specialize in a visibly unique area -- and then you can command higher prices, which will be augmented as your reputation grows. Remember, your unique area can be geographically defined, by sector or specialization, or by something else. It simply has to be unique and relevant to your business (and your potential clients' real interests and emotions.)
Yesterday, in place of the regular email Construction Marketing Ideas newsletter, I invited readers to answer this question: What is your largest single construction marketing challenge. We received many responses, and I'm working today and tomorrow to send out individual emails which, in many cases, will of course also serve others through blog and newsletter entries.
Ted Lanzo, of Lanzo, Lutz, Insurance Brokers in Cheswick, PA, wrote:
I don’t know if this is what you are looking for, but being in the insurance business, it is difficult to reach construction people or should I say businesses to insure, given they don’t seem to follow the same patterns as the average person.These are excellent questions
1) They don’t or rarely use email, reading is not a strong suit, they’re hands on
2) They seem more disorganized, estimated taxes many times go unpaid
3) They seem to lack good management skills or they don’t care as much about learning good management techniques to grow their business
Yet they need insurance to get on any job site, so how do we reach them. I was going to do a one page newsletter, with a business tip or tool tip.
We have a website http://www.1-toolbelt-10.com/ that is the same as our vanity phone number 1-Toolbelt-10.
The thing I've noticed about most successful insurance brokers is that they thrive more on the relationships with existing clients than in the marketing to new clients; and that most successful insurance companies find a way to market so that they are at the centres of influence of their community. Newsletters, websites, and direct marketing/selling are an uphill grind. You need to get word of mouth and natural marketing in place. (Though I generally like your website, and e-letters and other resources are helpful in maintaining relationships or building them once your initial marketing position is established.)
So how do you achieve this level of connection? First, the obvious one -- see if you can provide an insurance program with your local construction associations. Remember there are many specialized groups and organizations. One successful insurance broker here, for example, couldn't connect with the local mixed construction association, but found a place within the local general contractors' association -- sponsoring, for a minor fee, their annual Integrity and Ethics Awards (and providing lots of face-to-face meeting time both with the association's board members and other participants.)
You can also build out from your existing client base. I notice you have testimonials. These are really helpful. You might wish to put these on a static web page, with links back to the testimonial-givers' own websites. Of course you can ask for referrals, but you might go a step further and sponsor/co-ordinate some kind of marketing party or event to help your existing clients attract new business (and of course invite the people who you think might also benefit from your services).
Finally, I've seen an increasing trend within construction associations and groups to have at least once a year hands-on parties and events; again, the direct connection and involvement with potential clients is probably more effective than printed materials and the like (though I can reassure you that really high end potential clients -- the ones that will provide you with the most business -- indeed are readers.)
In our years of business, where we publish features about construction businesses supported by their suppliers, we've found that we almost always can sell ads to the featured companies' insurance brokers. They aren't purchasing the ads because they believe the advertising will (directly) attract new business. They simply appreciate the best way to build the business is to maintain the connection and support existing clients with energy and respect -- and these informal relationships invite the behind-the-scene referrals and recommendations that are the real source of long term success in the insurance business.
Tuesday, July 29, 2008
Yesterday morning, I read with some excitement that a new Internet search start-up, http://cuil.com/, would take on Google to beat the search engine giant with the depth and quality of its search. The new engine, started with several million dollars in funding, also started with quite a PR bang. But, alas, Cuil is not the best. It isn't even that good (or better). With just a little less than 100 per cent modesty, I tested it with something close to my heart, the keywords "construction marketing". Cuil couldn't find this blog. Google now usually puts it within the top three entries. So there.
Monday, July 28, 2008
Perhaps the most overly abused, misunderstood, and ineffectively handled concepts in selling and marketing is the cold call. In our perception, the cold call is just that -- an intrusive 'invasion' of space from an uninvited person who knows nothing of our business and wants to bother a senior decision-maker to make a 'pitch' for something he or she doesn't really want or need.
OK, I know, no one in sales really thinks that way, but you would have to wonder when canvassers drop by the office (or in the residential environment, knock on the door, uninvited), or phone us at work or home, with their pre-programmed script and mindless selling blather.
I hate it.
But cold calling doesn't have to be that bad; in fact, it can truly take you to the heights of business and selling success -- if you think about things in a truly different light. That is, you really have something of immediate and practical relevance to he person you are calling; something that would legitimately get a 'wow, this is news and important to me' response.
Clearly, you aren't going to get that just by grabbing a business directory and calling every name on the list; or walking down the street, knocking on every door, or phoning everyone in the book. This type of cold calling is much more thoughtful, specific, and relevant.
My favorite example, which I've cited several times, is the cold call I made to a major organization back in 1998. I had been at a meeting where some key people we were seeking to do business with virtually threw me out of their office, and then said they wished the other organization would 'leave town' too. So I called 'the other organization', cold! I didn't know anyone there, had no previous relationship with the business, but certainly had some interesting news to share.
We met, and formed a business alliance that continues to this day. (I won't cite details in this blog because some stories, no matter how interesting, cannot be shared in public.)
So, say you have a new technology, building material, resource, or idea. Clearly the best way to approach things is through relationships and referrals, but you might be in a position to actually know something immediately relevant to the business you are calling, because you know your market, the business, and its competition. Call them -- and share your observations. You'll connect.
A point to make here is the misleading 'sales training' line that selling is a 'numbers game'. In this thesis, the more people you call (bother!) the more you sell. So you call and call, and hope things will stick.
In some industries/sectors this argument might work well -- if you really know your stuff. A few weeks ago, a sophisticated and I believe successful investment advisor phoned me, cold. He left a message. I courteously returned the call (which I will do whenever I'm not overwhelmingly busy) and explained that my wife makes all the investment decisions in our family, she does her own thing, and, no, I am not introducing him to her. Then I asked him about his success rate with the cold calls.
He says he disciplines himself to do the calling for an hour a day, three days a week. He says he can calculate over time how many leads he calls convert to business, and it is worthwhile. And it may well work like that, if your market is wide enough, your offering is relevant enough, and you have the confidence and maturity of someone who has achieved success in your business -- this comes over really quickly on the phone, I can assure you.
(However, I am becoming immune to investment advisers and others who use lead generators -- cold calling telemarketers -- to set the stage for their own work. They are passing the buck to someone else, and it is not just annoying, it is irritating to me.)
I would argue that you will get much better results, overall, if you research your proposition, and if you are going to cold call, either have something directly and immediately (and almost exclusively) relevant to the person you are calling,and/or an offer/proposal that is so good that it is foolish to ignore.
If you are, instead, going to play the "numbers game" remember, you have to have enough numbers to play with in the first place, or you'll burn through all your leads and be left with very little to show for your wasted effort.
We've been experimenting and expanding the marketing applications of blogging technology. See the new Ontario Readers' Choice Awards blog, reporting on the special annual initiative where we invite our readers to select the best businesses and individuals in key industry-related disciplines.
Of course, you can learn about the Readers' Choice Awards in our printed publications, and we send out faxes and e-letters, as well as invoice stuffers and direct mail pieces. But the blog has special advantages and capacities.
- It is easy to maintain and update
- It doesn't cost anything to operate (and takes very little time to develop/maintain)
- It extends the scope of awareness of the awards program.
- The process of setting up and including content in the blog took just an hour or two. In our case, with an existing Google Blogger account, we simply created the new blog under the original account and uploaded using built in resources the necessary logos and content.
Sunday, July 27, 2008
Chase's Chase Marketing and Bob Kruhm's North Carolina Construction News blogs are their own responsibility -- but are easy to set up and maintain through the blogger.com system.
Saturday, July 26, 2008
Great marketing, in my opinion, starts with great employees delivering the product or service that clients are amazed and entertained as they do business with us. Your marketing resonates when, as Steve Yastrow advocates, employees and clients are in harmony, with each other and the larger community. When this connection is complete, you have the magical strength of exceeded expectations and solid word-of-mouth referrals. Then you can extend your reach with various forms of publicity and sometimes advertising, and see your results skyrocket.
So how do you do this in practice? Here, things get a little tricky, because neither clients nor employees (nor the larger community) are seeking textbook perfection. If you run your business with such a tight ship that employees are systematically forced or coerced into doing the 'right thing' you'll defeat yourself -- people can see really quickly through plastic 'friendliness' and insincere remarks like the famous "Have a nice day!"
And, in any case, the so-called 'wow' factor might be just a little over the top at a typical architectural, engineering or construction office. I mean, you want your calls returned properly and problems fixed or resolved with courtesy and respect,but you aren't expecting a dancing choir of "customer service" every time you send in a proposal for a quotation or invite response through an RFP. You certainly want competence, job site respect, cleanliness, and -- most importantly -- just the right amount of sensitive imagination where you discover you can save a little money or you know in advance that some expensive change-orders may be required, and you can see the general and sub trades are working together in a co-operative approach with the design consultants to minimize their costs or stresses.
The point is all of these things happen sometimes subtly, almost in the background, and when you have it right, your clients almost take them for granted, just confident that you are delivering the goods and that you aren't taking advantage of them. They call you back, then, and are willing to serve as positive references, and your insurance broker and bonding company representative hear this stuff in the background, and they learn you pay your bills and fix problems promptly, so your bonding limits are increased and you can grow, and win more and better projects.
I'll share some examples of how these pieces fit together; they in themselves may seem disjointed but when I'm done you'll get the idea.
- In Florida, in Absolute Aluminum's supplier-paid magazine, the company includes a page of head shots of its employees who have served in the military, coupled with a brief patriotic thank you message. While I suspect this message would not go over well in parts of Vermont, it is probably perfect in Venice, where many military families live. The employees feel recognized as special, they receive connection and respect from their fellow residents, including the families of military service personnel on active duty. In Venice, would you feel good about doing business with Absolute Aluminum for your sidings, gutters, or pool enclosures (especially since the entire service process is entirely satisfactory)? You bet.
- In Thunder Bay, Ontario, Finn Way General Contractor Inc. puts together the most comprehensive and well designed responses to RFP documentation I've ever seen. Through tabbed links, all the essential requests and documentation requirements within the RFP are addressed (you can't skimp on the mandatory requirements) but Finn Way goes a step further, with detailed employee descriptions, colour project photos, and piles of testimonial letters carefully selected to reflect the project they are quoting. Virtually every RFP they answer is followed with an invitation to bid -- and of course Finn Way uses common sense and only submits the RFPs where it thinks it has a reasonable chance of success.
- Finally, a story from our own business. Through an association event, we discovered a fascinating and important project under construction -- and the key decision-makers were in the meeting. We arranged the feature; but unfortunately one of our employees made a serious error --linked to a sudden deterioration in performance. We addressed the employee problem quickly (he left quickly, on good terms, and is now doing work he really enjoys) and the client, initially disturbed, has become an enthusiastic supporter of our business.
Note that just doing fancy RFPs putting veteran's pictures in your marketing materials, or having fast-acting human resources policies will create the marketing chemistry I'm describing here. But I sense the companies which get it right all share in common:
- Really solid hiring and human resources policies; encouraging the kind of employees with initiative, respect, and community-centredness to apply and stay with the company.
- Consistent and cohesive marketing materials that connect the competence of their employees to their communities and markets;
- The ability to resolve problems quickly, best at the front-line employee level, but if anything goes wrong there, with a management that can quickly see and correct the difficulties when they arise.
Note that great marketing, indeed, need not be expensive. Marketing materials can often be supported through supplier co-op funding (and if you get it right, the suppliers who are contributing to your marketing budget also gain from the process -- I can assure readers here that anyone who buys an ad to support their client's advertising feature in one of our publications will be treated with respect and offered free services and resources far in excess of the cost of the advertising.)
You, too, can find your harmony -- and enjoy the success that is possible with great marketing effectiveness.
Thursday, July 24, 2008
Some days in business, things work just the way they should. And, as I prepare to turn the computer off tonight, I sense that dynamic in our organization and truly am grateful. Tim Klabunde, in an excellent posting in his CofeBuz blog, describes Four Steps to Changing Corporate Culture. His approach is much better than what I went through as this business contracted through three painful years of decline and dissension -- and hit bottom in November 2006, about eight months after we began implementing the necessary cultural changes with the guidance of consultant Bill Caswell.
The reason I'm really happy today is the amazing idea generation and initiative shown by our employees, along with co-operation, sharing, and respect. Best of all, new people want to join the business and are ready to go through our rather stringent pre-hiring procedures to qualify to join the team. All of this, of course, is translating to respect for our clients and this is creating the marketer's dream -- repeat inquiries and business.
I realize now that a great business needs some key structures and controls, but the biggest thing you can give employees is freedom. Therefore, in our case, the most important operating system is our hiring policies. The employees who join this organization must have the ability to thrive in an environment of limited supervision -- and that includes respecting and working well with each other. (This is why it is so important for prospective employees to work with us long enough for the current employees to decide and 'vote' on whether the potential employee fits in.)
I've noted several times in this blog -- and cannot understate it -- that your employees are your marketing department. Yes, in some cases, especially where there is a skills shortage, you may have to hire less-than-perfect people to get the job done. In these cases, you need to find a way to keep these employees away from your clients! But I would argue your business will be stronger in the long run if you slow down your hiring, and only accept people who really are great at what they do, and great at working with each other.
I can't share all the good news today -- no one in their right mind broadcasts every internal business development in a public blog! But I'm truly impressed with the quality of the emerging corporate culture.
At today's internal sales meeting, just as we were about to start, I decided to test whether we could use the live broadcast feed capacities of justin.tv effectively. I emailed the meeting participants (including some guests), and within minutes they could visit our video portal site at http://www.justin.tv/publisher1 and watch me. No, the video production qualities were limited -- and this is obviously not a fully functioning video conferencing approach as you can only view one person, one way. And if you are concerned about security and privacy, the format doesn't work as well -- anyone can view, and in fact, we had one outside guest who noted on the instant messaging screen attached to the system that the meeting was utterly boring (it should have been, because it really was an internal business meeting.)
Wednesday, July 23, 2008
Yesterday, in the midst of the challenges and chaos of multi-tasking as our business grows, I took three hours for a program by Bill Caswell, "Making Professional Staff Accountable". I thought the topic would be peripheral to our business -- but relevant for this blog; especially for mangers at architectural and engineering offices, responsible for supervising talented professional employees.
Indeed, many of the people in the room with me live in different spaces -- including managers at law offices, and government crown corporations. But Caswell addressed some of the major issues I've been struggling with in building out your business plan: How do you ensure your team achieves the highest level of performance, and how do you measure this effectively?
Underlying these observations (and explaining the relevance to this blog) is the fact that perhaps 80 per cent of marketing success within the construction industry is defined by the quality of your actual work product and, in creating that product, the quality of your employees and their relationships with each other and your clients.
To summarize a simple non-mathematical equation:
(The equation of course is NOT mathematical because the employees, quality, and relationships all build on each other; that is, they attract each other so the actual numbers on the left side of the equation will multiply rather than simply add to marketing effectiveness if all is working the way it should).
Caswell advocates establishing for each job some very simple and easily measurable performance indicators; no more than three, which can be assessed quickly and simply. The assessment of these indicators should also be simple, with only three choices: Exceeding expectations, Meeting Expectations, or Not Meeting Expectations (which can be translated to a traffic signal, with Green, Orange and Red indicators).
In defining these expectations, Caswell emphasises, "Only items over which the employee has control should be measured". This is vital -- you can't impose stuff on your employees without giving them the power to decide, to act, and be in control of their responsibilities, if you wish them to be properly accountable. In defining expectations, obviously the priority should be on the client interests -- that is, the person/group to which the employee reports (or, in the context of this blog, the interactions of the employees/business with your clients). Again, Caswell uses some common sense -- he advocates you focus on the most important 80 per cent of the job responsibilities in developing these measurement tools; you can spend much time worrying about the 20 per cent remaining, but it doesn't really matter in the scheme of things.
The expectations with a feedback loop from the clients then are incorporated into the quarterly employee evaluation. This evaluation, Caswell notes, should not be tied to compensation -- that should be assessed separately. (This is wise, of course, because evaluation systems quickly can be 'gamed' when money is involved!)
Some of my colleagues in the room enjoyed the theory, but pointed out problems. The concepts might be nice in theory, but how do you implement them in a unionized work force, or within a government bureaucracy, where individual managers really don't have the authority or control to implement these processes. Caswell acknowledged these limitations, but added that people can make changes within their own scope of responsibility, and when they do, the larger organization often takes positive notice.
Of course, since I own the business, I don't have these constraints, and in general I like the approach. I'll summarize my take-aways (though if you investigate this stuff you may find other things of value):
- Many measuring systems are quite complex, with gradations and multiple scoring. The "three choice" model, essentially: Less than satisfactory, satisfactory, and more than satisfactory, is appealing because it is simple -- it won't be hard for someone to give a simple check-box on a report sheet -- and lends itself to really easy to follow graphical dashboard images (the traffic signal).
- The suggestion that not more than three things be measured for each employee, and you only measure the top 80 per cent of relevant performance elements, again, keeps the process simple and easy to follow. This also means it is much easier to act/resolve and fix problems.
- Finally, and most importantly to me, I can see how this measurement system can link the employee performance to our marketing assessment.
I will test the concept in the next couple of weeks and see if we indeed have the means to gather meaningful, and quick, assessments of client/employee quality and satisfaction.
I'm happy to have this problem, but I'm swamped. With two, in fact virtually three, unfilled positions here, for the last couple of weeks I've been 'filling in' on different jobs while overseeing the hiring process and doing my best to keep a forward thinking management perspective about the business (see next post).
Of course there are some advantages/efficiencies in doing everything. Yes, I can meet a client, handle the sales process, and gather the information needed to write the story, all at one efficient call. And the cross-fertilization of ideas and insights keeps me grounded and connected to the business.
But the biggest lesson today is a reminder how how much work I ask our employees to do in their day-to-day responsibilities. This is helpful because, when you get good at delegating, you also can get good at dumping -- just sending the workload, stress, and pressure downwards without allocating or allowing enough resources for the people who actually have to do the work. (Of course the converse applies; although I would never expect anyone to consistently work with the intensity I'm experiencing now, I know we can often do a lot more than we expect, if we are organized and ready for the challenges.)
Posted by Mark Buckshon at 2:35 AM
Monday, July 21, 2008
Ford Harding's blog posting: No Extra Points for Originality in Rain Making is worth bookmarking because it concisely summarizes or links to some of the simplest and most effective prospecting methodologies for rainmakers -- and provides simple shortcuts to make the process easier.
Guru Malcolm Gladwell, in a rather fascinating speech, outlines an observation that the practices used for selecting key employees in most organizations are badly flawed. His best example, the NHL Hockey "Combine" -- the workout session just before the entry draft, where potential NHL players are put through a series of tests and evaluations, to allow scouts some 'objectivity' in determining who plays where. Trouble is, says Gladwell, that success in the tests at this pre-draft event have no correlation to success as a player.
Worse, he says, a similar process used for the National Football League in the U.S. includes an intelligence test. You might think, he said, that you would need to be at least moderately intelligent to play well at the NFL level -- after all, the game at this level requires strategizing, complex player move analysis, and the like. Guess what, he says, the people who scored "dumbest" on the intelligence test actually are the true stars on the field. (This leaves me with some intriguing thoughts about whether certain stereotypes about football players are indeed true.)
Ok, does this translate to the professions and the like? Well, he says, conventional 'metrics' used to assess teachers' performance seem to lack correlation with real ability; ditto for lawyers and police officers. The problem is that the testing criteria try to ascertain certainty to something that isn't so easy to measure -- the best meaningful measure is, indeed, performance on the job.
In other words, I would speculate, if you want to find great teachers, set up situations where anyone can 'teach' and then evaluate their performance at the work, and if they are good, give them some teacher training.
This gives me reassurance that our model for employee selection is indeed on track. We ask prospective employees to do stuff -- initially, answer a questionnaire, then, if they make it through the screen, to actually work with us on a brief trial, before hiring them. Resumes, interviews, and tests have places in the hiring system, of course, but they are not the key issues. "Can you really do the job?" we ask, and seek to learn before hiring anyone.
The video is quite lengthy but worthy viewing.
Here is a further news item on the suggestion that McGraw-Hill might be interested in Reed Elsevier. This Washington Post article notes that they originally believed McGraw-Hill had interest in Reed's construction titles, but the scope of interest may have widened.
Sunday, July 20, 2008
This article, McGraw Hill plots bid for Reed Elsevier, in The Telegraph from London, England, is intriguing. For those unfamiliar with the competitive landscape in construction industry advertising and publishing, the story is could be compared to Coke preparing to bid to buy out Pepsi -- with Pepsi arranging the financing to make sure the deal goes through! (Or, since I'm not sure whether Coke or Pepsi are number one or number two in the marketplace, Pepsi offering to purchase Coke.)
Saturday, July 19, 2008
Increasingly, I'm a firm believer in the importance of systematic and rational approaches to hiring. Brad Smart's approach to Topgrading holds real resonance here -- by focusing our efforts to hire people within the top 10 per cent of ability and commitment, we are much more likely to be a successful business than if we just hire 'okay' people to fill vacant positions.
- Use personality/sales tests carefully -- these should never be your final tool but I believe they can be effective in screening or evaluating 'special' candidates, or as part of a systematic hiring process.
- If possible, create a realistic (paid) working assignment in place of multiple interviews. You won't be frustrated with lengthy and tedious interviews, and your employee candidate will be happy to go through the process.
- Don't skimp or avoid reference checking. Even organizations that have a policy for legal reasons not to provide references will always give a positive reference to a truly good former employee. You need to ask, or have the employee set up the call for you, however.