This morning, I received an enthusiastic comment for one of my blog postings, describing how someone purportedly received great service from a Los Angeles area plumber. I couldn't track the commenter's source identity (quickly at least) and the comment had conveniently embedded a hyperlink to the competing plumber so enthusiastically promoted.
Would you be suspicious of this type of manipulation and "accept" the link? (I decided to publish it, but removed all the built in hyperlinks, and put qualifying comments around it.)
Now, instead, what would happen if the competing plumber or its representative had really addressed the issue of marketing techniques and methodologies in the relevant blog posting, and described the importance of testimonials, then linked to his own web page where readers could read a long list of fully visible testimonials (with identifying information of all the testimonial-givers.)
Would I have been happy to publish the link? Yes. Would I have even made an effort to get in touch with the competing plumber to write a full hyperlinked entry about the competitive business? Most likely.
Great marketing always must be rooted in sincerity. You need to say something relevant and useful to the person with whom you are communicating. Note I use the singular expression here, even though you may print and send thousands of flyers, or hope your blog entry is read by dozens of qualified readers. If the readers don't find relevance, they will throw the material away or (worse) disassociate from you entirely, perhaps even throwing their hands up in frustration or irritation (especially if you are intrusive, by using the phone, spam, or knocking on their doors.)
Obviously, then if you are speaking to the masses (or a bulk distribution within a given area) your message needs to catch the attention and acceptance of a certain percentage of the readers -- and not irritate others so much that you alienate them. But when you are using individualized media or communications models, you really need to look at the needs of the person you are communicating with and throw away the canned model.
Maybe some auto bloggers would publish that competing plumber's comment (you can find it if you really want, by looking within the comments on the original posting.) But it didn't work because the plumber's marketing representative was simply trying to manipulate the SEO and making unvalidated claims in the process. (In case you are wondering, Leonard Megliola at Bestline Plumbing in Gardenia got my attention by publishing useful and immediately relevant information, essentially giving away his operating manual without expectation of any compensation, on the Contractortalk.com forum.)
Are you sincere or are you just trying to manipulate the process? Sincerity, but really, "smart sincerity" wins all the time.
P.S. If you are a plumber, you will want to connect with the Plumbing Zone forum. But don't go near there if you aren't. I was blasted out of there within minutes when I joined briefly after discovering references to my blog there.
Thursday, April 30, 2009
This morning, I received an enthusiastic comment for one of my blog postings, describing how someone purportedly received great service from a Los Angeles area plumber. I couldn't track the commenter's source identity (quickly at least) and the comment had conveniently embedded a hyperlink to the competing plumber so enthusiastically promoted.
Wednesday, April 29, 2009
A few postings ago, I observed that you must not fall into the trap of "wishful thinking" about your business and construction marketing. This should not however be interpreted as suggesting you should not take business and marketing risks by turning big dreams and thoughts into real ventures.
The most important element of risk and reward is that there are times when you must, indeed, dive into the unknown. For example, if you've always relied on repeat and referral business, and now are contemplating paying for advertising to attract new business, you will find the expense scary and most likely, the immediate results to be disappointing. (In earlier blog postings I suggest the least risky ways to develop your advertising campaigns, and these approaches allow you to systematically tap into your repeat and referral business, rather than to passively rely on this support, in starting and planning your first advertising campaigns.)
On a larger scale, decisions to expand your business scope or, conversely, deliberately jettison sideline enterprises and focus on core markets/businesses may appear risky as well. If you've worked as a lone wolf, hiring your first employee will be a challenge; even worse is when you discover you have to fire the employee, either for poor performance or because your business is tanking!
We all have different risk tolerances and entrepreneurs, by our nature, have a greater willingness to push ourselves to limits than others seeking superficial security. The paradox is that despite our apparent risk-taking nature, we have much more control of our lives and destiny with the entrepreneurial route. (This statement, I admit, applies more to Canadians who are less known than Americans for entrepreneurial leadership, but the fact remains the state-supported universal health care system removes a significant barrier to entrepreneurship in the North. In the U.S. if you are working for a company with a great health plan and have a dependent who is ill, is the risk really worth taking to leave and start on your dreams? The safety net for many in the U.S. is your spouse's health plan.)
You know you are on the right track when others around you perceive you are taking a major risk, while you know the dangers are manageable and reasonable. I'm thankful that in my youth I headed off to Africa to experience first-hand the end of the Rhodesia/Zimbabwe civil war, but am equally thankful that I had the common sense to (mostly) stay out of danger zones.
Later on, in my own business, I've stretched its expansion beyond my comfort zone and (worse) my knowledge of how to operate the business effectively on a larger scale. A couple of near-death (business) experiences because of ill-fated decisions certainly helps me understand that you need to be really thoughtful about the risks you take.
Some risks, of course, can be mitigated with insurance, but others are part of business life. For almost any achievement, at some point you will need to move beyond your comfort zone, defy your fears and go for your dreams. You can do it -- just remember that in taking the risk you are likely to fall flat and have setbacks as you move towards your dream.
Tuesday, April 28, 2009
Yesterday, I picked up my car from the local dealership. The air conditioner condenser had been damaged, and the total repair bill approached $900.00. Although high, I accepted the charge and paid the bill.
I returned home to find in my mail a letter in the dealer's name from the manufacturer (Honda) offering a 10 per cent discount on parts and service as long as you bring in the car for work before July 31.
Today, I returned to the dealership and firmly asked for the credit. To the dealer's marketing credit, they granted it, putting close to $90 back into my Amex account.
While this solution is the correct strategy -- you don't want to alienate a client with marketing promises -- clearly if the intent of the letter is to attract new business and revenue, it backfired in my case. Not only do they have to give back money which would otherwise flow 100 per cent to profit, they have accounting and administrative costs to absorb in processing the refund. And I haven't purchased a cent more than I would otherwise spend.
Price discounts are dangerous, always, for marketing. They cut your margin, induce expectations "if I wait I can get a savings" and often cost real money rather than attract new revenue.
Consider, for example, all the other people who would -- without incentive -- use my dealers' service without the letter. Some marketing guru might count all the letters turned in and "new business obtained" because of the discount marketing piece, but how many would have purchased anyways, at the full price!
I realize many businesses set discounts into their system and expect people to pay the lower price generally -- anyone who pays the full price is just providing a bonus. We for example, charge 25 per cent less for advertisers who pay within 15 days of invoicing. We calculate our sales based on the discounted price, capturing the additional cash for the people who pay late as a bonus which offsets the bad debt.
However, you should always be wary about any strategy where you lower your price deliberately from your existing price base just to find new business. You could, like the auto dealer today, be throwing much good real money after bad in your marketing expense.
Monday, April 27, 2009
It is good to dream. Often indeed how we perceive and visualize our future predicts it. The stuff of "positive self talk", affirmation and visualization sometimes seems like hocus-pocus, but it works if you believe.
The challenge is being sure your dreams are not converted to short-term wishful thinking. A classic example is hoping to win the lottery or a big casino jackpot this month. The odds and probability are simply stacked against you.
In your business, an example of wishful thinking is when you think you can achieve immediate results, even though your objective early (factual) indicators suggest this is less than likely. For example, you have a monthly sales target, but your inputs of marketing leads and work in progress, based on historical ratios and experience, is not sufficient. Sure, everything might land up perfectly and you might pull the rabbit out of the hat, but how likely is this miracle to happen?
In marketing, as in all our business endeavours, we need to keep our dreams alive but remember the hard numbers count the most in the immediate and near future. Is your ratio between marketing cost and sales realistic and on target? Is your "leads pipeline" indicating sufficient volume to tell you that, down the road (using your normal conversion rates), that you will have enough sales going forward? Are your lead conversion numbers and ratios accurate? Things change. You should periodically review your norms.
Finally, if you have staff and they are giving you updates and reports, are you satisfied you are receiving real information about what they are likely to achieve, or are they transmitting to you their wishful thinking? You need to develop and maintain fast-acting measuring systems to ensure the information you receive is timely and can accurately predict your short-term business results. And when you see something isn't right, you need to take quick action to bring things back in line with reality.
Keep track of your hard numbers, avoiding wishful thinking, and then you can go back to dreaming big dreams, and visualizing your grand visions. If you are firmly grounded in the real world, your big picture dreams can indeed come true. Otherwise, you have a better hope of meaningful accomplishment at the lottery terminal.
Sunday, April 26, 2009
At the Ontario General Contractors Association symposium president's forum, an audience member asked this rather important question: "What criteria do you use in determining which sub trade to use?"
If you are a sub, obviously, the answer to this question may be one of the most important ones you need to win more opportunities and bids.
Although there were four panelists, only Frank DeCaria, president of Eastern Construction Company Ltd. of Toronto and Windsor, had the opportunity to respond.
"The trades give us most difficulty are the M and E (mechanical and electrical) trades; they can vary from 25 to 40 per cent of the project, DeCaria said. "When people are closing a project, they have 'here's this price, and here's that price,' depending on the spread (between bidders), you make a decision, depending on your risk.
"You know (the low bidder), he can't perform -- no one can take him," but it comes down to our risk matrix, on that scope of work."
"The M and E, and perhaps five critical trades, we make sure they can perform. . . to give you one example, we were doing a project in Toronto . . . the decision was made to carry a former contractor, with a significantly lower bid (than the competition... the sub trade) couldn't perform; he put us in a real bind."
"it's better for us to take care of the extra $100 grand . . . if we don't get the job, its cheaper for us to keep two bodies in the back cleaning stuff, than putting the company at jeopardy."
So, reading between the lines here, if you are a sub trade in a secondary area where the project won't succeed or fail because of your non-performance, your low bid, even if it is way below what it should be, might be accepted, and the general contractor will take a flyer on you -- but if your trade is critical to the project's success, only a sloppy GC will rush to accept your bid.
Of course, readers of this blog know that the conventional sub-trade approach to winning commercial work; pushing forward the lowest bid possible in order to win the work, is hardly the best way to make money. In fact, subs which have built substantial businesses based on marketing principals steer clear of commercial and institutional work where they are in bidding wars to win the general contractors' business.
Nevertheless, I think the question is important enough that I will survey some additional general contractors for their opinions on the topic and report back to you. While I can argue any which way that the best way to grow your business is NOT to fight for bids with the general contractors, you probably don't want to know that if you are a sub; instead, you want to know ho you can really win the job through the bidding process you follow routinely. So I will see what I can do to help find the answer you are seeking, even if it isn't really your best solution.
Saturday, April 25, 2009
Talk about intense! From 7 a.m. breakfast until the dinner session wrapped up about 10 pm at the Ontario General Contractors Association symposium, I could catch a few breaks (including a much-needed late afternoon 'crash' in the hotel room) but -- even as I gathered notes for several stories and future articles -- lacked the time and energy for serious blogging.
Today, after a key session where leading contractors will describe their experiences and sense of the market going forward, I must quickly pack my stuff and get on the road for the seven hour drive back to Ottawa -- and son Eric's final hockey party.
The consensus here is that the recession is biting, but (at least at present) the damage may be more on the residential and private sector commercial than the government/institutional markets -- even as new infrastructure projects are rushed in through the Canadian stimulus program, existing projects previously co-ordinated are continuing.
I also gained some insights about the evolving practices of successful marketing and relationship development, especially as online relationships meld with in-person connections. I believe we will soon be able to make these connections even more powerful in Washington DC as we move forward with the relaunch of Washington Construction News.
You'll see some of these thoughts more clearly expressed next week, but I'll part with some observations of Steve Sulpher from Infinite Source Solutions in Vancouver.
He said he had been trying to sell his company's package of bidding, project and document management software through cold calls and meet-and-greet activities, including events like the OGCA Symposium, but received an important wake-up call from some marketing experts who said the challenge is to get people to actually respond and express interest before selling anything.
As a result, he developed a seminar program, and sent email invitations. People who responded attended -- and, if they were interested, they received an in-person sales call. He said he attracted one large client not on his email list. Someone on the list, knowing the client's real need for his company's services, forwarded it to the new client -- who, Sulpher said, is virtually invisible from the outside (but is still a large and successful business.)
Of course, Sulpher has discovered the essence of the effective linkage between marketing and sales. Marketing that doesn't generate inquires or actionable responses may have some value, just as cold calling blindly through lists of names can sometimes generate some sales. The real skill -- and determination of marketing and sales success -- is whether you can economically attract enough leads which convert naturally and easily to sales. Good marketing enhances the selling process: With inbound inquiries, you don't have to push for the order; instead, you can focus on really understanding your prospective client's needs, and help them solve their challenges.
Friday, April 24, 2009
Here are two signs we are in a recession. The number of sponsors who paid money and/or services to market their services to general contractors at the Ontario General Contractors Association Annual Symposium increased to record (I think 59 total) levels. But attendance declined for the first time in the event's six year history. And, perhaps more disturbingly, I saw lots of empty seats at the first night dinner. Could this be a situation like a "sold out" hockey game where people with prepaid seasons tickets didn't show?
This blog entry is on the fly and maybe I have things wrong. But I sense the challenge is stress. As OGCA President Clive Thurston told the gathering, he is noticing a surge of bidding opportunities with new and unfair provisions transferring undue risk to the general contractors and/or requesting far too much information and detail at the initial stage of the bidding process. (The OGCA's position is simple: If the job is a fixed price project, does the owner really need to know how the contractor achieves this price, including the costs and names of individual sub-trades and project components?)
So, if you are a contractor and things aren't going quite right, can you justify the cost (even though it is highly subsidized through sponsorship), of a full day's learning sessions on Friday, plus two nights accommodation at the Blue Mountain Resort? The answer should be, of course "yes" -- with high speed Internet and blackberries you can certainly keep in touch with your business while attending this sort of event -- but the practical aspects of business, stress, and economic restraint still stand in the way of attending.
Of course the converse of low members' attendance is higher sponsorship. If fewer contractors are buying stuff (because they are able to sell less of their services, and often only at margin-busting prices), then the businesses which sell stuff to contractors of course have to work harder to find business themselves. So they engage in the rational marketing approach of reaching out to the relevant market through events like the OGCA Symposium.
As today progresses, I'll test the assumptions in this blog entry. Perhaps I'll edit it tonight rather than leaving it as written for posterity.
Thursday, April 23, 2009
In a few minutes, I'll begin a seven hour drive to Collingwood, Ontario, for the sixth annual Ontario General Contractors' Association (OGCA) Construction Symposium. This rather unique educational conference, which will attract more than 500 general contractors and associated businesses from throughout the province, is a great example of how networking, education, associations, and business development and marketing can be concentrated to create highly effective results.
This year, representing the importance of the event (and the central place of the OGCA in our marketing strategy), our company is one of two Platinum Sponsors for the event, and three of us will attend -- myself, Cindy Pilgrim and Chase. (You can reach them by email by clicking on their names.) I'll be the chief reporter and writer, and am bringing both my digital and video cameras along.
In the business-to-business community especially, associations are often the most effective environment for marketing. For our business, along with others who truly need to reach general contractors to achieve our marketing objectives, this symposium is a near perfect marketing opportunity. We can achieve branding 'presence' but more importantly, have much opportunity for direct interaction and communication with current, former, and potential clients. The sponsorship support and active engagement of many suppliers and participants also keeps the costs for OGCA members low enough that they can easily justify the cost of attending the intensive event.
If you are at the symposium, and wish to share stories, concerns, or insights, please feel free to email me at email@example.com. I'll text back my cell number and we'll get together. Depending on Internet access limitations at the resort, I'll do my best to communicate some updates as the day progresses, especially tomorrow, though will be 'quiet' during the long drive there today.
Wednesday, April 22, 2009
Here's a link to a PDF file of my latest contribution to the SMPS Marketer: Recruiting Rainmakers. In the story, I report on interviews with Ford Harding, recruiter John Kreiss of Sullivan Kreiss, and rainmaker Guy Geier at New York architect FXFOWLE.
The advice is simple: If you wish to use an outside recruiting agency, be prepared to pay upwards of $30 to $60,000 in fees, and if you wish to do it yourself, the best approach is to work your own network and connections -- and be aware that the process can be long and slow.
Kreiss makes an astute observation that while business for recruiting agencies has not surprisingly dried up for most construction personnel in the recession (there are lots of qualified project managers, superintendents and technical personnel looking for work), AEC businesses are still hunting for rainmakers, generally combining the requisite professional qualifications and several years experience and a proven track record in bringing in new business.
In the article, I also outline our method for recruiting and hiring non-rainmaker sales personnel; that is, individuals capable of bringing in new business but without necessarily having professional qualifications. The rules are different for this type of recruiting.
At times the debate on this contractortalk.com thread, Branding, Marketing, Advertising and Salemanship, has grown heated, and I've contributed to the heat. The issue: Is branding relevant for most contractors.
Readers here know that I consider that most contractors with a solid reputation and much repeat and referral business to have an excellent brand, whether or not they are great at marketing. Mike Finley, a successful Colorado contractor, disagrees that this client-centric perception of branding is correct. He says branding is far more related to whether people with no connection with your business "know" it and have a perception and desire to do business with you, regardless of your actual client relationships or product/service quality. He cites businesses with dubious service and client value with big brand names, who do well regardless of how "good" they are in the client experience process, and suggests that branding is out of reach for most contractors.
Of course, there is some truth in both arguments. Polaroid's brand is worth at least $58 million even though the company is bankrupt and its products have been replaced by the digital camera -- at least that's the value bidders are placing on the company name and assets in a current court-supervised bankruptcy auction. And in a large city, unless you define your community by a specific niche or neighbourhood (recommended!) it will be virtually impossible for you to obtain enough mental impressions on potential clients who don't know you at all to lock you in their minds.
The other side of the argument, the one that I've advocated, is that your brand is indeed healthy if current and previous clients are so impressed with your service that in good times you have enough business with repeat and referral clients that you don't need to do any marketing at all.
I advocate that successful marketing need not be expensive or complicated, but you are starting from a good base and now can leverage your existing healthy brand through creative outreach and client service programs, and if you wish to stretch things further (also recommended!) that you plan effective media and advertising campaigns built on the demographics of your best clients.
Regardless of whose side of the debate you are on, you will find the this thread's discussions rewarding and probably helpful to your business development process.
Tuesday, April 21, 2009
Ford Harding makes a telling point in this posting, "Bah to Brochures". I especially like the way, after he tries to explain to someone at a SMPS gathering in Washington, D.C., that brochures really don't matter that much, and in any case, you can prepare simple collateral marketing material (if it is really important) within a few minutes, Harding observes:
At this point, the man who had asked the question cautiously stood up and said, “Yes, but what I really want to know is, do you have an opinion about brochures?"Some people really don't get it.
You aren't going to sell any architectural, engineering, or construction services with a great brochure. The hours of time you spend agonizing over text, layout, printing, and (if you get this far) distribution could be better spent actually seeing current and potential clients, and finding work.
John Poole has the right idea. His blog, Constructionomics, is a good read, but he knows if he is going to find work in the industry he is actually going to have to knock on doors -- at site trailers, if necessary.
Monday, April 20, 2009
You cannot draw scientific conclusions from a two examples, but the stories of Leonard Megliola at Bestline Plumbing in Los Angeles (plumbing) and Mike Feazel of Feazel Roofing in Columbus Ohio have similar elements.
Both have discovered:
- The commercial and new home builder markets are not for them, because they have discovered they cannot earn enough profit working with builders and most non-residential clients (there are certain exceptions within the commercial maintenance and repair market, but this side represents 10 per cent or less of their business).
- Advertising in media where they achieve inquiries and calls independently of other contractors drives most of their business. Feazel finds business through saturation radio advertising; Megliola uses hundreds of thousands of flyers each month. They de-emphasise the Yellow Pages, commercial or residential leads services, or other environments where they are going to face pitched direct competition with other contractors for the "low bid".
While the sample size here is utterly unscientific, if I take time to meet more successful contractors I likely will find the same success formula. The advertising method may differ; I'm sure the Internet and website marketing works well for many; others get good results with their local newspapers, and still others have devised effective canvassing and door-knocking campaigns. But the successful contractors advertise wisely, within their own formulae and model, and stay clear of the crowds when they seek out new business.
Now, you may be asking the next logical question: If Feazel and Megliola have succeeded with radio and flyers respectively, where should you go to decide what to do? You can of course copy them -- and even pick their brains -- if you are in a non-competing market. But you can take another approach if you don't wish to visit Columbus or Los Angeles.
First, look at your best current clients. Take them for lunch or dinner or buy them a coffee. You want to learn what media they read, what catches their attention, and what their interests are. (Your market research conversations may also result in some valuable immediate spin off business.)
Take this information and conduct some research into the publications and media the clients like/respect/and answer. You can talk with media sales reps -- just don't buy anything right away, no matter how convincing the rep is that you have to act quickly. Just say you are formulating your plan and budget -- an absolute truth.
Review sources like this blog and contractortalk.com, along with your relevant trade associations and industry groups, for successful examples.
Budget perhaps 10 per cent of your current sales for advertising and marketing. Consider a modest price increase to offset this marketing cost. Advertise ONLY where you can dominate the space; you must not be one of the crowd. Just because everyone else is there, doesn't mean you should be (unless you want to fight for low-ball quotes.) It is better to have a focused presence in one place than a lot of little stuff everywhere (though it doesn't hurt to have some presence in a variety of media, if your budget is high enough).
Review your cash flow projections to be confident you will have the money to stay the course; as while the advertising should generate some immediate response, the results are cumulative and you may need some time to achieve repeat business.
Will this strategy work for everyone? Probably, but you will find trial and error and surprising results as you go along. You may find the thing you thought would do really well flops, and out of the blue something great happens that costs you virtually nothing. The successful contractors I've met certainly know how to advertise, both frequently and intensively. And they are thriving and growing despite the recession.
Sunday, April 19, 2009
To explain: On Friday, as I considered whether to risk riding what seemed to be the scariest rides imaginable (like a really fast roller-coaster with a 180 degree loop), I thought: "Has there ever been a fatality at a Disney site when a ride failed?" My reaction as I boarded the ride -- "This stuff is so safe that there is no real risk."
It turns out there have actually been some accidents and crashes (mostly fortunately minor in nature) over the years at Disney park attractions. You can find out additional details at Rideaccidents.com. But I didn't know this when I was there; I sense most Disney patrons have similar perceptions. In any case, most people consider the rides safe enough for the risk (certainly thousands of people fly or drive to Disney sites each year, and I expect there are enough plane and car accidents along the way to top the Disney accident frequency.)
Consider other elements of the Disney experience: You don't find the low-lifes that hang around many amusement parks and carnivals; all employees of course are briefed and trained (and I'm sure screened) for client suitability; the fun is tightly scripted and controlled, and once you've had the experience, you know what to expect.
There are changes every year, but the basic rules remain the same. You pay a flat rate to enter the park for the day, ride as much as you like (but usually get only one shot at the really good rides unless you are willing to endure a truly major wait), and you can spend as much as you like on extras including food and souvenirs (but Disney does not impose the irritating restrictions on your bringing your own food on site to save costs.) In other words, the experience, while not inexpensive, leaves you feeling you've been treated fairly.
Of course, Disney has turned it experience into corporate programs for training and motivation at the Disney Institute. I'm not sure if these services are worthwhile to most construction businesses, but you can see here how they are able to leverage their brand in new and interesting ways.
Fair enough. But what do amusement parks have to do with construction businesses? The answer is in your ability to overcome the fears of your current and potential clients of the bad experiences they either have heard or experienced in the past. If you are an architect or engineer, are you dealing with people who have had bad luck with sloppy design, missed schedule, or less-than-perfect trade relationships? If you are a general or sub-contractor, have you met people who have been burned by incomplete jobs, messy sites, and offensive employees? And if you are a residential contractor, do your clients have experience (or fear) of work not completed right, on schedule, and with massive inconvenience to their lives?
If your work shares any of these less-than-wonderful qualities, your brand is mud. You can spend a fortune on advertising and marketing, and end up with very little: Sure, a few new clients (or suckers) might arrive through expensive promotion, but your marketing cost will magnify because you will lose many potential clients as bad word-of-mouth spreads faster than your marketing can overcome.
Conversely, if your work is good enough to attract unsolicited repeat and referral business (to the point, in good times, you didn't need to advertise because you relied on repeat and referral business), you have an excellent brand. You now need to leverage and develop it through marketing, both to current and potential clients and new customers.
Here, advertising really will work for you and if you are truly successful, you will budget in the range of five per cent and 10 per cent of your sales volume for advertising (and additional funds, if you wish to use a direct sales force). Simply ensure your pricing is able to sustain this marketing cost -- but don't worry, businesses with solid brands (that is great reputations) can charge more for the same services as their competitors.
Consider Disney. They don't offer many coupons, discounts, special savings or the like -- especially for short-term visitors. Disney has built a brand based on safe, fun, family entertainment. The story may be partly mythology -- as I strapped myself into the roller coaster seat, I (falsely) thought no one had actually been injured on a Disney roller coaster. But I had been sold by the brand, and felt secure that when the ride ended I would be safe, and would want more of the same.
Your objective in developing your construction industry marketing is to achieve the same goal: A brand that attracts repeat and referral business, because clients perceive your service is really safe, fair, and enjoyable.
Saturday, April 18, 2009
Friday, April 17, 2009
So you are marketing your subtrade services and want to find new business.
How do you get through the gatekeepers, and earn the respect for your proposition?
You may think your wisest approach is waiting for the opportunity to bid the job and you simply need to get on a prequalification list, or (worse) wait for the job to be tendered publicly.
Go ahead. Spin your wheels. Lose your money.
You haven't passed stage one of elementary marketing and sales. And you are like a large percentage of the construction industry hoping for business and wondering why you are struggling.
You need to think differently. The key is to recognize the combined power of effective relationship-building and effective marketing. When your brand (roughly equivalent to reputation) is so strong that clients think of using you and no one else, and take it for granted that your sole source quote will be fair and doesn't need to be cross-checked against your competition routinely, then you have achieved success. When you are able to chose which jobs you bid, and you know you will be profitable going in, you have hit the business jackpot.
Can this be done?
Yes, but here is an important observation after seeing some successful sub-trades at work. Two whom I have met personally, Mike Feazel in at Feazel Roofing in Columbus, Ohio and Leonard Meglolia at Bestline Plumbing in Los Angeles, say they stay away from most commercial and virtually all new construction work because they cannot see any margin or opportunity for profit in the bidding-war environment out there. (They will do some commercial projects, presumably where they can be sole-sourced.)
Surely, however, subtrades and suppliers find a way to make some money dealing with builders, developers, and owners on commercial projects. They succeed, I think because their business is at the scale where they can achieve incredible operating efficiencies and their relationships with their clients are strong enough that they can squeeze just a little more margin through scope of work or other arrangements than the neophytes trying to win bids through public competitions.
If you aren't at that level yet, consider smaller scale residential and limited-scope commercial projects where you can provide direct services to your clients; and develop your own advertising and marketing strategy to achieve this business.
Or if you wish to work within the conventional space, remember that a little energy spent learning how to market effectively will pay you really big dividends, especially if you an escape the rat race of "low bid wins the job" (and loses a fortune in the process).
Wednesday, April 15, 2009
Leonard Meglolia at Bestline Plumbing in Los Angeles says he finds virtually none of his business from the Internet, and virtually all of his clients are middle aged or older. (The older client demographic has remained consistent from the start of his business, he says.)
Accordingly, for him, the website doesn't serve much marketing purpose, and if his salespeople are going to provide images of what needs to be done, they will print and give the photos right to the homeowner.
Is this the only way to go? I think not. Just as some people drive Buicks, and others prefer sportbikes, still others believe motor vehicles are gas guzzling environmental headaches, and prefer the bus or bicycle. The right marketing approach depends on many circumstances, including your target market. (Bestline may not find younger clients profitable, but surely homeowners in their 20s and 30s also have plugged drains, failing pipes, and wish renovations including new bathrooms and kitchens.)
As well, it is interesting that Leonard Meglolia engages in communications in online forums like contractortalk.com and uses his website to connect and provide resources for other contractors.
You might also note how Meglolia is willing to try new things, and in the process, discovers ways to make his core marketing methodology -- flyers -- even more effective. He tried a canvassing strategy, and developed a new kind of flyer offering free services to support the canvassing initiative. He is shocked by the huge response to this new flyer. The natural question to ask is: Why not just use the new flyer (modified to correct some flaws he developed) and forget the canvassing process? In other words, the enhancement to his core business method has occurred when he tried something different.
How can a plumbing contractor, who started with $1,800 and some bad luck in 1973, grow to a $5 million business (and continue growing) during recessions? I wanted to find the answers to these questions, and did yesterday, finding my way on the rented sportbike through the Malibu Canyon and then some urban streets few Los Angeles tourists would ever visit to arrive at Bestline Plumbing in Gardenia.
Leonard Meglolia says he obtains about 90 per cent of his business through advertising flyers -- 50,000 to 100,000 per week. These flyers, hardly works of art but obviously effective, blanket his service area in the Los Angeles area, largely lower-to-middle income neighbourhoods, several times a year.
He says if other plumbing contractors followed his system they would see their phone ringing immediately. At present, he says he receives about 15 to 20 service calls a day. The phone rings, in good times and hard (though he can find neither rhyme nor rhythm to the calls; some days the phone doesn't ring at all; then everything goes crazy, some seasons things work really well; others are disappointing. Megliola knows, however, that if business slows down he can step it up by sending out more flyers, which represent most of his marketing budget (about 10 per cent of sales.)
Is repeat and referral business vital to his success? Surely it is. He estimates about 73 per cent of his clients return for more, and he uses a few mailers and reminders for his 6,000 name list each year. "But I can only 'remind' my old clients a few times -- most just respond to the regular flyers they receive like everyone else," he says. "You can only communicate with your former clients a few times a year, anyways, but they all receive a calendar and pens from me each year."
Is this the flyer story the entire picture? Not exactly. Here are the other essential pieces of the Bestline success story:
- The sales culture is deeply ingrained in the business. Crews led by a sales leader earn commissions for their work, not fixed salaries. The average employee earns about $65,000 per year. However, no one minds -- Megliola's flyers and marketing provide enough leads to keep everyone busy.
- The company has a non-scripted but highly effective relationship-building model when its sales plumbers are in homes. The Bestline representative takes pictures of the problems and provides photographic evidence. This time and care to communicate the situation builds rapport and confidence. (Before digital cameras were available, Bestline used more than $1,000 a month in Polaroid film.)
- The company avoids long term debt -- equipment is purchased at distressed auction prices -- and (with its commission based model) avoids fixed costs. This is not a business with fancy offices and state-of-the-art electronics.
- Megliola focuses on his niche: Middle-aged and older residential clients who need plumbing work done. Early in his career he was burned by a new home builder who stiffed him for thousands of dollars. He doesn't rely on the Internet for business, and generally is not successful in selling to younger clients, who often seem to know more about the work than his team.
Home shows sometimes work, but less than before. He is experimenting with door-to-door canvassing; he says the project is initially working, but he is not sure how sustainable his canvasser will be; but the revised advertising flyer he is using in co-ordination with the canvassing program might work well on its own.
Megliola says if he had to start from scratch, he would use his flyers. He said anyone in a smaller community, say 80,000 to 100,000 people, could quickly dominate the market with effective flyers, and the results would be fast. But few people will actually follow his model. "I had someone in here who spent several hours with me, and then said, 'this would not work for me,' and gave up before he even tried the process." If you are on a low budget, you can deliver the flyers yourself, like he did at the very beginning.
There is another aspect to Bestline's success, however, which I realized when Alex Lacek and David Callahan joined us in the interview. The two employees bantered freely and easily, they reflected equality and mutual respect with their boss and a comfort with the work standards and rules.
Callahan joked that he knows he will make a sale when he sees a Buick in the driveway -- every time he appears at a home with that model of car, he sells plumbing services. (I suggested he should become really good friends with the local Buick dealers and their sales reps.) Lacek noted that the company doesn't micromanage its employees, perhaps some plumbers take some materials from the shop without clearing this stuff with management, but in turn, the group keeps an eye on everyone.
Formal and routine staff meetings are rarely necessary; but "if you screw up and we have to go back after hours to fix things, you'll hear about it the next day," Callahan said. Everyone gets along, most of the time.
So, should you commit a few thousand dollars and have some flyers printed up? Sure, go ahead, but maybe spend a few days in Los Angeles and see if Megliola will allow you to ride along with his plumbers on sales calls. He hasn't set up a consulting business; he doesn't charge for his working manual which is freely available here, and relates exactly how he does business.
My sense is most people won't follow his lead because he doesn't look successful like in those get-rich-quick marketing pieces; you know, the guy standing in front of a luxury mansion and riding the coolest car. Gardenia is not Beverley Hills or Malibu. Bestline Plumbing doesn't look like anything special from the exterior.
But Leonard Megliola has indeed discovered the secret for a plumbing business success -- one which could, I think, be replicated with most residential-focused trades -- and he'll share it with anyone who is interested.
I've posted a link to a downloadable copy of the complete Bestline Plumbing manual at http://www.constructionmarketingideas.com. (Just leave out the .blogspot and you'll get there!)
Monday, April 13, 2009
One of the best things about this blog is that it has allowed me to develop relationships with some really competent people. Reflecting my business, I have an interdisciplinary approach. I'm looking forward to rolling up on my rented CBR 600 to meet Leonard Megliola at Bestline Plumbing in Los Angeles tomorrow; equally, I've enjoyed many dialogues with Harvard graduate and rainmaking guru Ford Harding.
If you are intimidated by power, you should read Harding's latest blog entry where he suggests the best way to capture the ideas and minds of CEOs is to have coffee (or maybe network through linkedin.com) with their subordinates.
Great marketers of course learn to relate across cultural, geographical and economic lines to achieve their business objectives. Paradoxically, the best way to succeed is to be yourself and do what you enjoy doing. I'll never be a championship motorcycle racer, but today enjoyed the experience of riding through the Malibu Canyon on a powerful machine that burns $7.50 in premium gas if I use the entire tank. (And yes it is a legitimate business expense as my wife and son will be using the personally-rented car while I am doing business tomorrow -- though I will rebate the cash cost of the rental back to the company as it is unfair to abuse this mixture of business and pleasure.)
Later this morning, we will head to Vancouver airport to take the three-hour flight to Los Angeles. At the airport, we will pick up a rental car,. We will then will drive to a nearby motorcycle rental place, and I will rent a sportbike for a couple of days (while my wife carries on in the rental car). This mobile orientation of course is appropriate for the freeway and auto-focused southern California communities we will visit during our stay next week.
Our itinerary includes a couple of days in Augora Hills, then a brief stay in Anaheim (for Disneyland), and finally to Palm Springs. Tomorrow, on the motorcycle, I'll head out to visit Bestline Plumbing and discover how a successful contractor markets in a truly competitive environment.
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Sunday, April 12, 2009
We've tried this approach, and continue doing so. The people in which we target when we do things like this are mostly architects and doctors. I go online and go to the website of local hospitals. When I'm there, I pull up their doctor directory, and basically that's where my work starts. We do this with doctors because in the past we've discovered that some of them are in the process of leaving the hospital to start their own practice. Obviously, the area that they will use to conduct their business will need some extensive interior remodeling, in which will require the services of a licensed and insured General Contractor to ensure that the process is as smooth and painless as possible. This approach in the past has worked and has helped us get several big projects. We recently completed offices of neurologists, cardiologists, and a doctor who does endoscopy.I like the website from this company, owned by Claudio Fernandez. See http://www.generalcontractorinmiami.com/
In addition to our construction related services, we also offer expediting services (running permits/plans to the corresponding cities). This is how we approach architects when we mail them. We offer our expediting services to them and you'd be surprised how many of them do it themselves and are willing to hire others to do that for them. The thinking behind this, which again has resulted to be true because we've won several projects because of it it's because at times architects are working on plans for a client whom at the moment has just completed the "design phase" of their project and don't have a G.C. to turn too. By offering our expediting services to these architects, we've basically put our "foot in the door" with their firm. We make them aware that we're a licensed and insured General Contracting company and that our service are available to them or their clients at any time, in which that's when the doors open for us. I basically do Google searches to see architectural firms within the South Florida area to target. From time to time I also purchase those Architect Digest magazines because obviously many of them advertise there.
In the past we've targeted interior designers/decorators, but the outcome hasn't been that favorable. We've probably landed a couple of jobs from them which is still good so from time to time we still target them, but not as heavily as the other two.
Another group of people we target are luxury hotels, restaurants, spas, lounges and nightclubs. Again, being that this is Miami, many of these establishments are constantly doing upgrades in their facilities for an updated look and to compete with others. I've also sent out letters to management in luxury condominiums, which in return have referred some of their new buyers to us to help them out with whatever remodeling idea(s) they may have.
This is a very good approach and quite inexpensive compared to other choices out there. The key is knowing how to approach all these prospects. Approach them wrongly and you've just closed an opportunity for you and your company.
It is good to blog, to be open, and to share with readers the heart and soul of this business. But some internal business issues should not be public -- at least when they are current and uncertain.
Certainly, this vacation, I've been very busy reviewing crucial concerns and even fending off a panic attack or two. This is the nature of the self-employed person's lifestyle; we experience stress of a different sort than the regular employee (who might worry about losing his or her job but doesn't generally have to spend vacation evenings pouring over financial reports). The difference is that I have more control over the outcome; I can make decisions and respond to the situation creatively, and this morning, I could see things are under control.
Construction marketing, always, needs to be seen in the light of your entire business; you cannot market in isolation of your circumstances. The good news is that you can manage, project, and even control your results with a little foresight, planning, and cautious optimism.
Saturday, April 11, 2009
Yesterday, our family visited Science World near the Olympic Village site in Vancouver. As we enjoyed our White Spot meal there, we could see the construction site for the 2010 Winter Olympic Village outside the window. Caught in the financial crisis, the city has had to approve a $100 million bailout for the Olympic developer -- ultimately creating true budget risks and challenges.
If you look at things superficially, of course, you see construction continuing on the site, and and elsewhere in the city, and indeed things are nowhere as desperate as in the Dirty Thirties.
Vacation (especially over a long weekend) changes the work-time rules. The computer with high speed connections in my mother's place is in the room where our son sleeps, and family time is not best spent with a blackberry tethered to my hand. So I catch up during morning sessions at a nearby Starbucks while the family sleeps (and regular business hours have commenced in the East.)
In a few minutes, I will distribute online versions of our April issues to readers in Ontario and North Carolina.
Friday, April 10, 2009
At our special meeting yesterday, we decided to focus attention on online publishing. The combination of versatility and effectiveness, and much lower distribution costs, makes this a no-brainer for improving the product while reducing costs.
Online service yudu.com has solve the problem of putting the publications online. There are several other page turning services out there, but I've found all of them to be astoundingly overpriced for an online service -- yudu.com's basic service is free and its enhanced offer, which we will soon purchase, is only a few hundred dollars annually.
You can see our online editions by visiting the relevant publications' websites -- for example, Ottawa Construction News is at http://www.ottawaconstructionnews.com and Charlotte Construction News in North Carolina is at http://www.charlotteconstructionnews.com.
When you go online, you'll notice that hyperlinks and email addresses in editorial and advertisements are set so you can click right through to the relevant websites or email addresses -- an obvious advantage to advertisers. With the enhanced yudu.com version, we will also be able to import video ads and make other revisions to the pages; creating a new multi-media package.
We won't stop the print publications just yet, but I expect the migration to an online business model is imminent.
(In our cost cutting meeting, we decided, however, not to reduce our allocations and resources for editorial quality -- savings on freelancer fees will be offset by my own efforts and harder work.)
Thursday, April 09, 2009
Mixing vacation with high-level financial analysis and review creates a rather unique business/life mix. Right now, I'm sitting in a Starbucks near my mother's place in rainy Vancouver, B.C. I've just reviewed extensive financial reports and prepared materials for a special teleconference planning meeting this afternoon, as we pull things together to ensure our business's ongoing viability.
In a few minutes, I'll close the laptop, and return to vacation -- for a few hours.
The most important thing in preparing for today's meeting is to respect the values that define our business: To acknowledge the importance and contribution of every employee, and to treat everyone with respect and recognition for their contributions to the organization. I've seen too much corporate mismanagement, where senior managers take care of their own needs, at the expense of owners (shareholders), employees, and clients. This type of corruption tears at the soul of the business and ultimately destroys its brand and marketing effectiveness.
Consider how your own business and professional practice handles its internal relations and operations in thinking about your marketing strategies. You cannot really separate the two perspectives, as the external marketing manifestation will reflect either directly or indirectly your internal business realities.
Sure, it's raining in Vancouver, but the Starbucks coffee is warm (as are the hours with my family) and in a few days we are heading to the Los Angeles and Palm Springs areas, where things will be much brighter.
Wednesday, April 08, 2009
In a couple of hours, our family will head to the airport for a 10 day vacation to visit family in Vancouver and friends in southern California. As we prepare to travel, I am also burning some midnight oil (with our accounting contractors who are also working overnight) to get to the bottom of some very real and critical business challenges.
About the time of our business planning meeting in October, something went off in our expense and income assumptions and practices -- and losses have been mounting when my immediate interpretations were we were in reasonably healthy shape.
We now have to make some hard and challenging business decisions, and our employees will assemble tomorrow for a special meeting to discuss the situation. We've always practiced open book management but (gulp) the books have not provided a clear perception of what and why things are the way they are. I certainly don't hold anyone but myself responsible for this problem.
Of course, in 2009, you can take a vacation yet still remain very much in touch with your circumstances. High speed Internet, instant banking information, and conference calls allow me to stay in touch and work on the problems -- and something can be said for seeing these things from 30,000 feet (in business class, but on points rather than with cash.)
The answers we will find will combine elegance with creativity and practicality. I won't force top down solutions on the team; rather, we will provide the most accurate information possible and invite everyone to share in the problem-solving exercise.
So what does this airing of our internal business situation have to do with construction marketing? The answer to this question is at the core of most marketing challenges. Unless you are running a fraudulent scheme, your inner business workings define your marketing place -- h interactions between your employees, and your employees and current, potential and previous clients will give you the answers about whether you are succeeding or failing.
You need to get the details (and numbers!) right, of course. In the end, however, the numbers are created and the results are determined by you, your employees, your contractors and suppliers, and your clients. You can find your answers by respecting and recognizing the people around you.