Advertising and repeat business

Mike Feazel (left) of Feazel Roofing in Columbus, Ohio and Leonard Megliola (center right) at Bestline Plumbing in Los Angeles have discovered the value of advertising -- but they don't follow everyone else's example in selecting their media and method. Still you can learn a lot from their success.

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:

1. 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).
2. 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".

Both have healthy businesses with significant repeat and referral volume but neither would rely on the repeat and referral business for their survival.

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.