Marketing perspectives: Where is your place?

With several years "active watching" of construction industry marketing, I am starting to notice that industry participants fit into four distinctive categories.

We don't 'market' because we believe in word of mouth and referrals.

Common practice, indeed. Some contractors say they are so busy, even in the recession, that it doesn't make sense to advertise or spend any money on marketing. Existing, repeat clients return for more, and tell their friends and colleagues. No need for a marketing budget, they say.

This could be a recipe for disaster, especially if you are relying on one key client for business or leads. When things go wrong, bam, you are in a deep hole and have no idea what to do.

We bid public work. If we are low, we win.

This is common practice for some well-established contractors, and some start-ups, who don't know any other way to find business. Supposedly fair and open competition, with low prices, seems to be the way to go. Of course, you can't make much if any money this way if the competition is true and open, and if it isn't -- if you are receiving preferential treatment from your public sector clients, you may be behaving more like a member of the first group.

We market, but never (or rarely) advertise.

Common for larger AEC practices, the organizations have marketing department but focus on proposal preparation, media relations, networking, conferences, and the like. Often these approaches are successful and effective.

We budget for full-scale advertising and marketing.

Friends of marketing media, these companies allocate significant resources both for general communications and marketing activities. They are often lead in the residential or speciality markets within their areas.

You are unlikely to jump from one group to another in a quick flash -- if you do, you are likely to be highly disappointed, at least in the short term. But if you are relying on word of mouth and referrals, rather than organizing campaigns to manage them, or if you are relying on repeat business and referrals from just a few key clients, you should take a close, critical look at your business. You may be heading for deep trouble, and not know how bad it is until it hits.