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Friday, April 03, 2009

Construction marketing is only part of the story

This image of an unfinished basement is from Connecticut's WSFB TV.

The tragic failure of Custom Basements in Glastonbury, Connecticut, provides an enlightening reminder that great marketing (short term) will never replace solid business practices and ethics, and when you abuse the basic principals for short-term marketing gain, you can cause truly long-term damage.

According to the WSFB TV website, the business promoted its success in receiving the local Better Business Bureau Torch Award for Integrity and Ethics. To make things worse, the Connecticut Attorney General attended the awards ceremony in recognition of the winners' purported high ethical standards.

Unfortunately, according to Michael Stone, the whole thing represented a deck of cards. Stone had worked with one of Custom Basement's competitors who could not figure out how they could stay in business with their uneconomic pricing and business practices. In the end, dozens of people lost (each) tens of thousands of dollars, including clients and sub trades.

This news is sad on several levels.

A few years ago, I served on the board of directors of the Ottawa Better Business Bureau as the Bureau launched its Torch Awards program. Everyone involved in the selection and assessment process maintained high standards, and we found it satisfying to be able to grant the awards without charging any fees to the entrants; relying on client testimonials and independent judging.The recognition really helped the contractors and other businesses who won the awards attract hundreds of thousands of dollars in new business.

This is why I encourage contractors with good reputations and business values to enter (free or low fee) awards competitions. (I am not talking about the commercial services where the awards publicity company charges tens of thousands of dollars to promote the purported "winners" and where for some rather obvious reasons, anyone with the money, regardless of ethical standards, is able to "win" the recognition.)

But what happens when a business enters legitimate competition, wins the award, and then fails to deliver? You have marketing muck everywhere.

Maybe Custom Basements meant well. They certainly got their marketing practices on the right track initially, including selecting a clear and valid niche speciality (basements), while making use of the free recognition awards programs.

But what good does great marketing do when you can't pay your suppliers or complete your projects? You need to put everything into perspective and run your business properly. Effective marketing is only part of the story.

4 comments:

John Poole said...

I think that local awards are typically great marketing, but sometimes I question how some companies win. I've worked for the "best company of the year" and I found it very hard to believe. To what extent are these awards legitimate?

Mark Buckshon said...

Some are more legitimate than others. The Torch Award (in Ottawa, at least) is quite valid but the vetting and review and judging are of course not as thorough as for a major national award.

Dan said...

Always amazed me how the BBB got such legitimacy. It really resonates among the general public. Most people think they are a non-profit or a government agency. They are an example of what good marketing can do.

Mark Buckshon said...

Agreed. While serving on the Board of the BBB in Ottawa, we were dealing with fallout from problems in Toronto where crooks apparently gained control of that city's BBB! Done properly, the BBB system is a great resource for self-regulation within business, but unfortunately it has been abused or the source of abuse in many situations.