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Wednesday, August 22, 2012

Easy going, hard going for construction marketing

In the past two days, I have enjoyed fascinating meetings with two successful renovation contractors.  In many respects, the two competitors have contrasting business styles and practices. Both share an incredible intensity and depth of thinking, and an extremely assertive attitude towards their businesses.

Both have done all the easy things.  Now the challenges are intensifying.  I won't go into details in a public posting, but there are scales of energy and effort and work involved here which would blow most of us away.

Construction marketing, I've grown to appreciate, can be handled on three levels.

The first, "we don't market" level is unfortunately where most people in this industry operate.  They "rely" on word of mouth, or chase low bid jobs like lemmings.  If they do any marketing at all, they generally throw their money away on scams, telemarketed "advertisements" and other garbage.

If they took just a little bit of time and some simple thinking (perhaps by reading my Construction Marketing Ideas book) they could easily grow to the second level.

Here, they would have a simple but modest marketing budget, focusing on building a reasonably good website, developing an organized system to capture and encourage repeat and referral clients, and (depending on the market), some association and public speaking initiatives.  The true cost of administering this type of marketing would be minor and, with some sweat equity, you probably could build a really good set of marketing processes for less than $5,000 a year.

The third level, the type of marketing practiced by the competitors I met this week, is at another level.  These guys might spend 10s or even hundreds of thousands of dollars a year on marketing. It is thoughtful, strategic, and carefully measured.  These businesses have picked off all the low hanging fruit from repeat and referrals and simple website and association marketing arrangements.  They need to spend quite a bit more to get to the next level, but their businesses are well enough organized that they can afford the costs.

These businesses, also, will soak up professional advice, consulting and other resources -- to a level that would probably exceed the basic frugal marketing budget you need to succeed.

Which way is best?  Well, clearly the first, "no marketing" methodology is stupid.  You might survive in business, but you won't go far, and you certainly won't achieve your potential.

Reaching the second level is quite economical and should allow your business stability, security and even the capacity to survive truly hard economic conditions.  It is a good place to be if you aren't terribly ambitious to reach the top.

The third level takes more than just marketing drive; you need to think on a whole different and much more challenging and higher level.  One thing is certain:  If you try to go to the third level before you know what you are doing, you can be burned -- and so you should be very cautious before dumping huge sums of money into rapid marketing and business expansion projects.  Things can go wrong, fast.

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