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Wednesday, April 15, 2009

The Bestline Plumbing story -- Advertising flyers and marketing systems

Alex Lacek (left), with Leonard Megliola and David Callahan at the Bestline Plumbing offices in Gardenia, California (Los Angeles). Megliola shares many clues and his business documentation with other contractors through an obscure link at his website.

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.
Megliola says he will try new things, and learn from old. Early in his business career, he tried a cable television advertisement. It didn't work, but the agency he used as a secondary project developed a simple ad for the Pennysaver which, in the early going, attracted much business (this medium stopped working for him in the late 1990s.) He avoids the Yellow Pages and other directories -- the last thing he wants are clients calling several contractors for competing quotes.

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!)

3 comments:

Steve Chittenden said...

I've been following the Bestline canvasing and flyer campaign on Contractor Talk where I quickly gained a lot of respect for Baseline. This was a great feature story to read.

Mark Buckshon said...

Steve:

Thanks for your comments.

It appears Leonard has taken his flyers to a new level by the experiment with canvassing. Modifying things to build in a free service increases their effectiveness tremendously, it seems.

I will post further on this tomorrow.

Mark Buckshon said...

I received the following comment, obviously intended for Search Engine management. As I haven't verified its accuracy or source, I am publishing it without the intentionally embedded links.

"R J has left a new comment on your post "The Bestline Plumbing story -- Advertising flyers ...":

After moving to Thousand Oaks, California, my husband and I found that our otherwise perfect home was simply full of plumbing defects. In fact, it seemed as if every pipe in the house was malfunctioning. We tried a few local plumbers but they were pretty much helpless and unable to get to the root of the problem. Finally, our next door neighbor suggested us to contact George Brazil Plumbers And once we did so, we could'nt be happier. Their reputation in the field of plumbing is impeccable and to say that they live up to their reputation would be a major understatement. After these guys were through, our house was free of all kinds of plumbing problems. Thank you George Brazil."

Is this true, or is this a service intended to promote or draw traffic to the other plumber's site? I don't know, nor have time to investigate. So I'll allow the comment to be posted, but with the obvious qualification here and removal of the embedded hyperlinks.