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Thursday, December 11, 2008

Readers' question: Should we send out brochures?

An image from Surrey, United Kingdom

This morning, an employee of a substantial British contractor sent this email to me:
Hello there

I came across your website and out of many that I’ve looked through this morning yours seemed to stand out to me. I’m not sure whether you would work with companies in England but I would ask for your advice. We are building contractors and specialize in the refurbishment of hotels, we turn around about £40 million, well we did until the recession hit us. Our major client has pulled all our jobs from us and we have had to make many redundancies, it’s not looking good. As a result my directors have asked me to send a mail shot out to hotel groups, schools, hospitals, supermarkets etc with our company brochure. I know for a fact that many builders will be doing the same at the moment and most of these letters will go straight in the bin.

I feel that we need to do something to stand out from the normal, do you have any suggestions?
My response:
I agree with your interpretation that a mail-out will likely not produce great results. It can be part of a campaign, but you will get limited response. The challenge is that (as you are undoubtedly aware) this business is built on relationships and if you enter the space cold, you will likely receive a cold shoulder.

With the limited information I have, of course, I cannot suggest a simple solution. But it looks like you best bet will be to look to your network, your connections of connections, and you may find these are at the relevant client-focused trade group and association level. In other words, go where your current clients network among themselves and build out of this to develop your new relationships.

The other approach that might work is to prime the pump of your existing clients, suggesting value added or cost saving services to them. Perhaps energy saving retrofits, or connecting government subsidy programs to your clients' needs will be helpful. In other words, rather than waiting for existing clients to suggest ideas, propose things that don't cost them any cash but will achieve operating savings. If your design/estimating team isn't working at full capacity, then this would be useful work for the skilled professionals to do.

I wish I had better answers here -- the problem of course is global in nature.
You can see from this inquiry, and a similar one (from a residential contractor) in Australia received not-to-long ago, that the challenges your business are facing are spread around the world. Long-established businesses, with experienced labour forces and competent managers are all facing the difficult task of trying to find new business in a competitive market, as they prepare for layoffs and cut-backs in their operations.

The temptation in these situation is to reach out of your comfort zone; to grasp for straws, to hope for some business, anywhere. You need to be careful especially about anyone who promises a solution -- for a price. If you know who you are dealing with, okay, but otherwise, watch out.

I expect the most successful contractors in this environment will be the ones who know how to work the system for government procurement. Infrastructure funds are likely to be released by governments spending their way out of the recession. This money will most likely go first to contractors who know the lay of the land. The challenge is this public sector funding is not always fairly distributed, at least in the perception of outsiders. Qualitative relationships often count more than quantitative facts -- and you can't just walk in the front door and expect the business to emerge.

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