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Sunday, May 31, 2009

Associations: Contributing to larger goals

Brian Blackmere, a senior planner with Stantec Consulting's Kitchener, Ontario office, and president of the Waterloo Region Home Builders' Association, in Ottawa for the Canadian Home Builders' Association Urban Council.

Yesterday, Brian Blackmere, the new president of the Waterloo Region Home Builders' Association, met me at a downtown Ottawa hotel. Blackmere is in Ottawa for his final meeting as a member of the Canadian Home Builders' Association Urban Council, which represents CHBA members in larger communities. (The CHBA is similar to the U.S. National Association of Home Builders (NAHB), built on state and grass roots local/regional home builders' associations.

The conversation started with Blackmere citing the current association PR mantra: Members in Ontario, especially are concerned about the impending implementation of the Harmonized Sales Tax, where the federal Goods and Service Tax is to be melded with the former provincial sales tax. The issue of exemptions, and the fact that Renovations are not exempt, is causing anxiety among many builders and renovators, who fear that the underground economy will get a boost.

I pushed back on this and other standard points. Sure, of course, the new tax will cause some challenges, but doesn't it also include built in savings through input tax credits. (Non-Canadian readers reading this blog may be utterly confused by this stuff -- this is always a challenge when reporting on specialized or regional topics.)

We discussed environmental issues, the Not In My Back Yard (NIMBY) issues relating to development, the challenges of defining "affordable" housing, and the huge cost in battling local development charges when they are imposed unfairly. (Blackmere said his association's 230 members tackled a local issue where municipal authorities were trying to use residential development charges to fund the infrastructure costs of an industrial subdivision. This cost the association's 230 membership hundreds of thousands of dollars in legal expenses -- and required significant fee levies distributed in a manner where the biggest builders/developers paid the highest costs.)

Blackmere, a senior planner with Stantec Consulting, said the Edmonton-based multinational recruited him last year from a major local builder to set up the planning division within Stantec's multi-disciplined Kitchener office.

He loves his work, and the challenges involved in juggling his association and business responsibilities. Within the association at the provincial and national levels, he gains insights and ideas about best practices and marketplace solutions he can apply in his home environment.
Relationships count, too.

So, you may be wondering, what does this reporting have to do with Construction Marketing?

Outside of the sales and marketing committees/activities at his and other associations, undoubtedly you can gain knowledge, connections, and relationships through effective association involvement and support, both within your own industry/specialty and (this is most important) that of your clients.

Consider who are the leading influencers, decision-makers, and the most connected people within your market area, and inevitably, you will find they ascend to the helm of their relevant associations, selected by their peers, and with the energy and eagerness to contribute seemingly countless voluntary hours to their causes.

You won't of course hit the jackpot immediately through association involvement. Friendship and trust never build immediately -- and you need to give, share, and contribute before you can even begin to reap the rewards.

But I sense (and my experience tells me) that you will get further by engaging and supporting relevant associations than by trying to learn how to get rich quick on the Internet.

Online marketing: Asking the trust questions

Perhaps with the previous blog posting in mind, I mucked into the debate on when an Ohio-based vendor started the thread
"Internet Marketing And Advertising For Offline Business".

The original poster, Matt Shields, and I have communicated by email. He says (despite my assertions in the thread) that he hasn't used Frank Kern's materials, but cites some other gurus who live in the space of long email promo pages with various devices to get you to sign onto their online info programs. (Shields first appears in my life when he comments on the thread I started reporting on my visit last fall to Columbus, Ohio, to see canvassing first hand. But we've not met yet in person.)

Out of his page, I discerned a lead selling program, which he denies is his actual service -- I just can't quite figure out what it is just yet. This raises the fundamental issue of transparency and trust.

Ironically, as the thread progressed, someone else offering a similar-style Internet marketing scheme popped up, offering a service for HVAC contractors.

Here, I'm scratching my head a little. Maybe these approaches really work and my failure here is in not following up and getting the online marketing religion.

If so, I should have a really solid e-book, lengthy 'squeeze pages' (or whatever), and videos showing me, dressed casually, to set up a sequence of communications via auto responder emails using one of the services the gurus recommend.

Then, I could sell that online marketing course that got me into the "idiot" trouble.

I dunno. Is my alternative approach, listening and understanding the values, issues, and needs of contractors, especially the leaders of relevant contracting associations, and maybe seeing them in person when possible, a better model? (See next posting.)

I can't be sure right now. This blog and my e-letter have generated some profitable business when people call and ask, and our new online publication will soon appear built from relationships developed in both the online and off-line spaces.

My guess is the best approach is to learn something from the online experts but apply it in a much more natural manner, reflecting your own business style and model. But maybe the canned stuff really works.

Saturday, May 30, 2009

Buying, marketing and selling -- an explanation of why the best contractors are often the least successful at marketing

Readers here may recall this rather fascinating piece of literature I received in the in-box a few weeks ago.

You are an idiot. Remove me from your sophmoric (spelling as sent by Arthur House/ed) trash!

You should attend my seminars - and maybe you should have attended my construction marketing classes at FIU (Florida International University/ed)

But you probably are not MBA material. What a bunch of crap you spew!


Arthur T. House
What provoked this rather amazing observation?

I had tried to turn my e-letter and blog into a selling tool for a truly ill-conceived Construction Marketing Course, something you would actually pay me to receive. House, with some legitimate teaching credentials, thought this laughable, and wrote his response. (Incidentally, no one took me up on the original offer -- perhaps two people tried the email address in my marketing piece, on a list of about 10,000 names, but they certainly didn't say 'yes' to my proposal.)

Yesterday, Susan Simion provided a clue to what provoked House's negative outburst and the lack of positive response when I actually tried to sell something here.

What makes people almost buy? What makes them get most of the way there, then drop out of your shopping cart at the last second? What makes them stare at your landing page, wanting what you have to offer, and yet, ultimately, close the page and move on to something else?

It turns out there’s a hideous troll hiding under the bridge. Every time you get close to making a sale, the troll springs out and scares your prospect away. Get rid of the troll and your copy will start converting better than it ever has before.

The ugly, smelly, dirty, bad-mannered troll is prospect fear. And it’s sitting there right now, stinking up your landing page and scaring good customers away.

She goes on to describe a variety of marketing tools and techniques designed to entice you to part with your money, only to find the entire experience disappointing. It seems the online (and real) world is full of scams.

One of the classics around is the variants of the "Google ATM" offer, in which people sign up for a "Work at Home" opportunity to make big money passively by running Google Adsense on their websites. (Like all good scams there is a grain of truth underlying the rip-off. Google Adsense provides great passive income for really well established and successful websites, but you certainly aren't going to get rich quick with a new home-made endeavour, and Google doesn't charge a cent -- certainly not $70 or so a month -- to set you you up in the business.)

Once burned, twice shy; twice or more burned, you are totally turned off by most marketing and sales conventions. You don't want to do that sort of stuff, do you?

So you don't. You build your reputation for quality, to the point that clients call you, refer friends, and you feel great about your work. Periodically, telemarketers break through your resistance, offering seemingly irresistible leads services or advertising opportunities. You "bite" only, always, to end up disappointed. You vow, to yourself, that you will never stoop that low; you will never waste money on marketing and sales, and you will continue to rely on word-of-mouth.

Then your business dries up. You are desperate. And perhaps you listen a little more closely to those marketing guys who call you (and who you listen to, because no one else, certainly not clients) are phoning you these days. Maybe, just maybe, it will be different this time. But it isn't. And you are worse off than before.

Maybe you think you are an "idiot".

You aren't. But you will have to get around some fundamental resistance whenever you go out to seek business, rather than passively wait for it to come to you. Susan Simion certainly has part of the answer in her blog posting, and this resistance explains why, whenever I try to "sell" using this blog, I end up disappointed. Similarly, you can see the consequences whenever you go out against competition in the marketplace, trying to entice people to respond quickly to your advertising or marketing messages. Fear, and bad experiences, build resistance and make it harder, much harder, to break through.

There are answers, however and here are some worthy of consideration.

You can use word-of-mouth in making your marketing choices, much like you like word of mouth referrals for your own business.

This is where forums such as and your local industry associations are really helpful. Members share their best experiences, and biggest problems, and (with this information) your risk of disaster is much lower than if you go out cold.

You can certainly work with your current clients,and learn from them, about what they read, like, and care about. This gives you ammunition in deciding your best course of action.

You can set up a plan, budget, and disciplined approach to marketing expenses. And within this budget, you can try different approaches, gradually gathering a group of tried-and-true methods that are effective in most conditions. Then when someone calls you with a brilliant construction marketing idea, you can elect whether or not to reallocate some of your budget or (more likely) decline the unsolicited offer, unless you only need to pay in arrears, if the great idea is truly successful.

These ideas work, I'm sure. But what about this blog? I can't get you to buy anything from me here, right? No, but I've told my wife that in 10 years I will be a highly paid Construction Marketing Ideas consultant. (If you click on the Construction Marketing Ideas consultant link, your email browser will open, and you will be free to write your own "idiot" email -- or ask for my insights into your biggest current marketing challenge, free.)

Years of accumulated experience, insights, and knowledge, coupled with practical understanding of what works and what doesn't, will achieve the results no get-rich-quick scheme can achieve.

She remarks: "But you are giving everything away for free."

Yes, with good reason.

Friday, May 29, 2009

Great needs and great deeds: The spirit of effective Construction Marketing

Can you do great deeds to achieve great needs?

If so, you'll change the world.

"Sure," you might say, as you struggle to find enough business to feed your family (or yourself, for that matter), and you go through the daily routines and habits, good or bad, that define your current life.

Maybe, however, greatness isn't that far away. Little things can sometimes mean a lot, and small changes in your life and your perception of how to market and promote your business could result in big changes in your results.

Here are some thoughts to consider. Maybe your answers to these questions will provide you with clues about an effective marketing strategy.

What charitable, community service, or social services can you provide in your community that cost you little in time and effort, but capture the spirit and needs of the people around you?

What cause or issue matters to you the most -- that reaches to your heart and personal passion? Maybe it is health related, maybe poverty, maybe environmental or ecological.

If you could spend an hour a day for a year on a project or activity that would do good for others more than yourself, what would it be?

Think about your passions, your interests, your values -- and, yes, your time -- in answering this one.

In asking these questions, you may be tempted to think about existing community projects and services. For construction-related businesses, especially in the residential sector, you might gravitate to Habitat for Humanity. This is good, but in completing this exercise, I would like you to think more about what you think you have to give/share, and what you perceive is your community's greatest needs, regardless of whether it is directly relevant to your business.

Then, find a way to take a first step to implement the vision.

Share the story with your clients, your colleagues, and your suppliers. If it is a good idea, they will immediately offer to help. (If it is a great idea, and they don't immediately support you, you will have to persevere for a while on your own until they catch on. Don't give up.)

Email or call me as well. I'll help you with some free publicity, or advice on how you can achieve positive media publicity in your local market/media. This (for me) is one of my great deeds.

You'll make a difference. And, yes, when it comes time to finding clients for your service, you may just find a few more yeses for the same amount of marketing effort as you would get by pounding the pavement or spending thousands of dollars on advertising.

P.S. You can apply these principals on a business, rather than community, level as well. Just think about the needs of everyone you meet or connect with at networking and business events -- focusing on what they really require, and where you can help, without concern about "What's in it for me."

Thursday, May 28, 2009

Traffic, conversions and meaningful business

When someone asks me: "How can I get more traffic to my architectural, engineering or construction blog or website?", I'm tempted to throw out an answer: "Does it really matter?

Isn't what you really want are real clients who will purchase or use your products or services?"

This is especially the case if you are following the Marketing 101 principal and focusing on a specific niche. Since niches are either generally geographically or specialty focused and the Internet covers the whole world, you probably don't want "everyone" visiting your site and responding to you.

But the word "niche" also suggests quality is much more important than quantity -- you want to be top place within your community/space but ideally (from a marketing perspective) want to be nearly invisible to everyone else.

How important is this specialization?

Say you are a "management consultant". You might be great, and capable of working in all industries and sectors, for businesses of many different sizes. And theoretically, your world is the universe, since you can provide consulting services over the phone and by video link anywhere, any time.

But how are you (a) going to get any attention out of the clutter and crowd and (b) have enough credibility to truly be successful in presenting your generalist services to people who don't already know you.

Now, when you say you are a "management consultant to general contractors which are family owned businesses in North America", you have a better chance of success -- but even better might be "Safety consultant to contractors in Toronto, Ontario."

Next, once you have your niche, you need to go the next step, and build your reputation.

Here is where content really works wonders. I share several others' belief that you lose very little by being totally open about your ideas and insights, without worrying about giving away your "secrets". (Obviously I'm not talking about processes or technologies you are about to patent!) Seth Holdren makes the reasoning clear in his blog.

By posting articles, insights, and information on your website, starting a blog and updating it with content, and generally sharing your soul, you'll attain some authority and reputation, and begin "owning" your niche. (And yes, your search engine rankings will rise, and this will increase qualified traffic further.)

There is a final element to this problem, however, and frankly I haven't solved it yet. Say you have a niche, obtain lots of traffic, and can build a list of great names of potential clients. How do you convert these initial contacts, inquiries and interest into real business?

Sure, this blog has generated some business for my companies, but the revenue from it and the related newsletter tracks to less than 10 oer cent of our total annual earnings. (This is helpful, but can we improve the results?)

More challenging, of 1,000 people who put their names down on the list for more information or the free Construction Marketing Ideas newsletter, only one or two ultimately buy anything from us.

Of course, part of the reason is that I may have found a niche, but don't have the product or service its members require (except if you are at present in Ontario or North Carolina).

Does "Construction Marketing" require hands-on locally based consultations, or advertising in relevant media that we don't provide?

Do we have the credibility and proof that we can deliver more expensive services, for a fee, because of this blog?

Whenever I've overtly tried to sell anything through this blog or the newsletter, I usually achieve nothing but negative backlash.

Do you have ideas or suggestions of your own to solve this challenge?

Maybe you can help me solve this marketing puzzle.

Wednesday, May 27, 2009

Does the emperor have any clothes?

Whose advice should you follow when we are in a time of economic distress? Can a guru whose sales are declining and laying off employees dare to tell you the secrets of marketing success?

The answer is: Do you know what drives your own business forward, and do you really know what is going on around you?

Yesterday, for example, I had a conversation with a well-placed person who I respect as a true genius about sales, marketing and business development for the professions. We discussed online marketing issues, pricing (we both agree that if your business is not a commodity, the last thing to do in a recession is to lower your prices), and the need to make hard business decisions in hard times.

I've earned this relationship -- and some others of similar nature -- by not worrying about the short term, the "take", the quid-pro-quo, and immediate reciprocity, In essence, these relationships have been built through generosity of spirit and (last year), an overly open budgetary spigot for travel, business development and business expansion.

Today, on one level, some of the expenses I incurred in 2008 seem like a waste. Perhaps not spending the money would have bought some more time before I needed to make hard cuts and changes in the business.

However, on a second level, the expenses in relationship and business development have proven to be wise. They are providing the seeds for new, inexpensive, and low risk publishing projects with exceptionally high potential, one which I expect to announce in greater detail within the next couple of weeks.

Clearly, when the wolf is at your door, the long-range stuff needs to take a back seat. You need business, now, and you may need to do some things you don't really enjoy. But if you spent time, money and effort during the good times in planting the seeds for healthy relationships, these will do you much good when things are less rosy.

Just recognize the importance of these longer-range connections and values if you are tempted to take rash, short term actions. Sometimes the immediate potential reward may not be worth the potential long-term cost.

Tuesday, May 26, 2009

Not-so-painful pain

Yesterday's painful changes turned out not to be so hard, after all.

The affected employees accepted their situation and even reflected relief. They should be eligible for Canadian Employment Insurance benefits and I hope they can be recalled; one by the end of the summer and the other when the personal stress issues affecting work performance have been resolved.

The budgets, cash flow and general health of the business are much healthier, so a personal salary reduction won't be required (though I must carefully monitor and restrict non-essential expenses).

So I will get back to the keyboard and a lot of writing this summer. It is my best way to handle personal marketing. Every time I engage with potential advertisers in the editorial role, I have a natural advantage and am able to sell our services quite effectively.

Here are some key business sustainability and recession survival principals outlined in previous posts:

Business owners who understand their enterprise have more job security than any employee.

We can keep our jobs because we control our work. This is why people who are suited to self-employment generally have much less personal stress, even in recessions.

You always do best by focusing on your strengths, talents and natural abilities.

I have always been a writer and journalist. It is in my bones (and I'm pretty good at the craft.) So blogging makes 100 per cent sense for me. Even as my workload increases this summer, I'll still find time for the blog. Should you blog if you are a contractor who prefers to work building stuff (physically)? Maybe. But perhaps you should correlate your marketing with the opportunity to build stuff, maybe in a community-service initiative.

We do no live in isolation.

In making my decisions, I listened to several advisers, often providing conflicting suggestions. I also took into account the employees' needs and how to minimize hardship.

Business owners must be prepared to take tough decisions, often quickly.

I could have buried my head in the sand, and been buried as a business person. But that isn't the way to stay in business for more than two decades. When the business required me to respond with blunt choices, I did. Fortunately (as is usually the case) the pain is more in the perception of what might happen, than the actual experience.

Monday, May 25, 2009

Painful (but necessary) choices

Today, I'll take some hard and painful business decisions.

It is never easy to reach the point where you know you must hunker down and reduce costs drastically in line with much reduced sales projections, but every business knows there are red lines which must not be crossed, without dire results.

These circumstances of course have affected many of you over the past year. Architects and engineers, early in the construction cycle, were the first to feel the pinch (after many residential contractors and sub trades). Now, as backlogs disappear within the non-residential environment, general contractors are feeling the pinch. Surety brokers tell me that bonding companies generally run into problems about 18 months after a recession begins -- as some contractors default, pushing them into losses.

Well-managed companies either have reserves and/or contingency plans for hard times.

What about the marketing budget?

Our major marketing expenses is association membership and dues, and we'll review the "value for money" in these. We are also curtailing our travel costs for events and conferences. However, we won't overall reduce marketing resources and, when we are satisfied there will be a return on investment, will increase our marketing commitments.

Successful contractors with solid marketing strategies increase their marketing budgets in hard times. Unfortunately, few businesses and professional practices within the AEC sector have really good marketing systems, closely tied to lead development and sales.

If you have trackable and measurable systems, you can simply increase your advertising budget to maintain your lead flow. But you can't do this by the seat of your pants.

Sunday, May 24, 2009

Blogging and Construction Marketing: Should you do it?

I've been blogging daily since late 2006. The entries have varied in quality, some great, some lesser. Much has changed since this blog started -- notably, several others have joined the Construction Marketing space.

Observing one of the most fundamental marketing principals, where "first in the niche is best" this blog has maintained the highest keyword rankings in Google.

The questions are: Is Blogging effective for your marketing, and should you blog yourself. And if you do, are there some best practices you should observe?

Here are some answers.

Direct business results (and time cost)

We can trace some real business to the blog and the related Construction Marketing Ideas newsletter, perhaps about $25,000 in sales. This is useful, of course, but he incremental sales are less exciting if you consider the time spent on the blog.

At close to 1,000 days, with an average time (rounded) of 30 minutes a day writing, (weekends and holidays included), the project has consumed at least 500 hours. That works out to about $50 an hour in compensating, since the blog doesn't require capital to maintain. (Small fees for stock photos and the like are easily covered by the modest amount of advertising revenue the blog generates itself.) This isn't bad, but hardly is a marketing jackpot.

Indirect branding advantages

These are harder to measure, but I sense the blog has helped out in building relationships, trust, and communication.

Recruiting and employee relationships

Again, this is an indirect benefit, but it seems the blog is useful in helping prospective employees know this business and decide if it is a right match for them.

Areas for improvement

I'm not sure if we are really obtaining the fullest power of "conversion" from blog reader to client. Certainly, various efforts to encourage or motivate direct business have been less-than-successful. It seems that no one buys when the blog is used to try to sell anything. The purchases related above result mostly from inbound inquiries and calls initiated entirely by the blog reader.

Surely we can do better here in attracting/encouraging more responses within the marketing funnel. The conversion rate from people requesting the "Seven Tips for Construction Marketing Success" and and the free bi-weekly newsletter is not high enough in my opinion (We receive 10 to 30 newsletter requests each week; how many readers, however, actually buy anything!)

The blog and your business

Blogging is time consuming, but I like to write, and so if the business traces some profitable results, even if $50 an hour seems low, then it is still worth doing. But if you are not a writer and this work is a pain, you have to consider the real cost/benefit of forcing yourself to do something you don't want.

You need to maintain reliable frequency

On the few days I know I will be away from the computer, I 'pre-set' a blog entry to appear on a time.). Most likely, you will find it hard to blog daily, but I wouldn't do it less than weekly, and ideally more often.

You need patience for results

If you are hoping the blog will enhance your search engine rankings and inbound inquiries, be prepared to be patient -- perhaps you will need to spend at least six months to a year before (if you use Google's blogger) you receive the warning email saying they will be inspecting the blog for "Splog" (or deliberately creating computer-generated back links to enhance search rankings.

You need meaningful content

I see some blogs where the writer simply lifts stuff from elsewhere with modest comments. This is okay, to a degree, but really good blogs have material that you won't see elsewhere.

You must be part of the story (or the story itself)

The blog is a highly personal form of journalism. Your personality should be readily apparent and you should avoid "corporate speak" and carefully manicured wording (unless that is who you are). If you make a mistake on a blog entry, you can always go back and edit it. However, you should still sleep on and be very careful if you wish to post anything negative about any individual or organization.

Saturday, May 23, 2009

Relationships and Marketing: Untold stories

Many of our business's greatest sales and marketing successes never reach this blog, at least as they are developing. Generally, as things progress from initial possibility to final transaction, several things happen and putting the process into the public eye rarely helps.

I should say, putting the WHOLE process into the public eye rarely helps. Sometimes the story includes a "public" element and since our business is publishing and publicity, we'll use these resources and capacities when they make sense.

But what about all of the stuff you never see? Sure, much of what we do is the standard stuff -- building the brand, communicating, sharing and winning trust, and then (finally) achieving commitment for clients to spend money. Fair enough. But that is only a fraction of the story.

For example, yesterday, a good client paid for my lunch, then I went to a retail business owned by a non-client. My assignment: To gather notes and write an impressively positive editorial profile about this non-client business for one of our publications.

We volunteered to do the story, without charge or expectation of anything in return, when we heard our client had decided to do business with one of our competitors, expecting similar results to the experience with us. (We earn most of our money through supplier-supported advertising features.)

The competitor had produced a poor-quality feature, while using some high pressure sales techniques. And the company which I visited yesterday had purchased a grossly overpriced ad to support the feature for our client.

In case you are wondering why we should voluntarily offer to help a client out by solving the problems caused by a competitor, you have failed Marketing 101. If your cash cost is low by helping out a client in repairing the damage caused by your competitor, you are almost certain to come out ahead in the long-run; if only by really encouraging referrals and more repeat business.

As it is, our client, besides buying me lunch, purchased an ad in this 'non revenue' feature (because he has such respect for his supplier), that we ended up making a little bit of money because of our generosity.

Great marketing is often a series of simple and small decisions. Little extras and respectful responses for your clients rarely cost very much, but pay heavy dividends. Never saying bad things about your competitors, but listening to your clients complain bitterly about the competitors' failings -- and then offering to solve the problems the competitors caused -- is great stuff for your brand and referrals.

"Listen, if you have anyone who is approached by that (unnamed here) competitor, have them give me a call, and I'll set them straight," our client told me yesterday. (It doesn't harm that he is a leader of some of the major trade associations around here.)

Sure, marketing is about branding, and can include advertising, company policies, pricing decisions and the like. But in the end your real success will come down to how you and your employees connect the dots and relate to your clients and your community. If you can capture the opportunity to go beyond their expectations as your competitors do things the "same old (bad) way", you will come out ahead of the game, always.

Friday, May 22, 2009

Remembering the basics: Owner or employee (or both)

This blog's readers fall into two groups, I think.

One group are architectural, engineering and construction practitioners and business owners looking at marketing as part of the overall business picture. They may be in charge of large businesses, or small one-person start-ups.

The second group are marketing employees or consultants seeking to come up with ideas to help their businesses. They have important responsibilities, but ultimately don't have final decision-making authority (or responsibility).

In most organizations, owners and employees see things through different eyes. Owners, of course, set the leadership style for their business. If they are selfish, arrogant, and cynically opportunistic (lining their personal pockets at the expense of their employees and the long-term health of the business) they may survive in business as long as they have a market, enough power, and the ability to either exploit or coerce their employees. Maybe if they are dumb they deplete capital and carry on until they fail.

Employees see the world from their paycheck, "job security" and (in the ideal circumstances) their pride and ownership and satisfaction in doing their work well. Hopefully you are in the latter category -- probably you wouldn't be reading this blog if you weren't.

Many successful businesses meld the vision and needs of owners with the respect of employees through variations of employee ownership models. This is the stuff of "open book management" and various employee share ownership and profit sharing schemes.

Note that implementing these processes in a half-hearted manner is worse than doing nothing. I've heard laughable stories of employees given senior responsibilities and then deciding this entitles them immediately to private club memberships, leased BMWs, and the right/ability to hire their friends for whatever jobs they want filled (and without a need to ensure clients pay their bills).

I admit my limitations. It has taken me many years in business to see things from different angles and perspectives, and to realize you need to observe these rules:

  • Owners need to be sensitive and responsible about their discretionary expenses, perks, and "extras". They need to behave as much as under the same rules as their employees for what they take out of the business. If they are successful, they can collect their dividend cheques from profits and live well (and capital gains on selling the successful business.)
  • Employees need to think like owners in having a big picture perspective of how their work relates to the overall enterprise. Sure short-term requirements and issues must be resolved -- especially cash flow -- but great employees think like great owners (and follow the basics of the principals above).
Most importantly, both owners and employees need to understand how marketing principals relate to the overall business and its success. You need to know the details of the marketing discipline, but you also need to see how it fits in the big picture.

It is wise to think like a (successful) owner and employee at the same time.

Thursday, May 21, 2009

The General Contractor's Question: "What criteria do you use in determining which sub trade to use?" (2)

At the Ontario General Contractors' Association President's Panel last month, someone asked an important question: "What criteria do you use in determining which sub trade to use?"

Only Frank DeCaria, president of Eastern Construction Ltd. of Windsor and Toronto, had the opportunity to answer at the Symposium, but I think the question is important enough for me to see if the other general contractor panelists could provide their own direct answers.

Yesterday, Doug Burnside, president of Dolyn Developments in Ottawa, contributed this answer, which is worthy of careful review if you are a sub trade hoping to find work in the non-residential environment.

Here's my answer for the panel question you re-raised:

When tendering on a project in the traditional way, we General Contractors can certainly become real risk takers. We often receive our quotations very close to the closing time leaving us little or no time to properly evaluate them, read the fine print, or contact the trade firm to discuss it.

In a relatively small town like Ottawa we often know most of the trade firms that are sending us quotes and usually have a good sense of their competence.

The Sub-trades that we value most are those with whom we share mutual trust. They will provide their quote early enough that we can analyze it and discuss it with them, in turn, they can fully expect that their price will not be shopped to other trade firms. Without that trust, the bids come too late to analyze properly and a problem can ensue after closing, when there is a misunderstanding, hidden exclusion, scheduling
problem or a pure "walkaway" from a price.

When a price seems erroneous to us we endeavor to contact that bidder to discuss it, but if it comes 2 minutes before closing there is not much chance of remedy. Now we have to decide if we carry an excessively low quote or not, knowing that in all likelihood one or more of our competition will. If we don't, we will have wasted the time preparing the bid as we will likely now lose, if we do, we may well have a conflict. We truly do often face a "Catch 22" on many occasions.

When we have the luxury of inviting tenders under a Cost Plus or Design - Build methods of procurement, we can clearly spell out what is to be included; offer the opportunity to a bidder to withdraw a bid if it seems flawed; and invite those we know to be well suited to the project and proven and competent. Without conflicts, and better trade firms, we can better serve our clients.

Many of us have had a bad experiences carrying a trade that we do not know at a questionable value, resulting in one of the many possible perils. Alternatively, it is just this way that we sometimes meet those trades who become among our preferred.

....not for the faint of heart.
Subs looking for non-residential work should read this response carefully -- your chance of success is highest if you can put yourself in the mind-space of the general contractors with which you wish to work. Intelligent trust and allowing them some time to review your bid will save aggravation and give you the fairest chance of winning the work.

Wednesday, May 20, 2009

Getting your phone calls returned

Mel Lester posts some worthy suggestions in his blog entry: Getting your phone calls returned. Lester wisely points out that you won't get far cold calling with a scripted message that doesn't meet your prospective client's interests.

Yeah, coming up with a good reason for the client to return your call (what I call your "entree") isn't easy. But it works. It requires more work up front. So you can make 20 shotgun calls to prospects and maybe get 3-4 to return your call. Or you can offer your entree to 5 prospects and get 3-4 to return your call. Which seems the better strategy? By the way, your chances of eventually making a sale are substantially increased when you take the more client-focused approach, starting with that initial contact
Alas, these days, the number of "bad calls" seems to be increasing disproportionately. This is because the in the era of email, the phone is used much less for casual conversations, and much more frequently for important or meaningful connections. Almost all uninvited and scripted calls are from inept marketers, and are simply not worthy of a response.

As a good example, today, one of my top sales representatives received an unsolicited call from someone representing one of our competitors, pitching advertising in an association publication.

Alas, the caller had absolutely no knowledge of our real relationship with the association -- or, for that matter, our business, or he would have never called us -- as he rattled on in a lengthy and (for us) amusing voice message.

So how do you get calls returned, and meaningful action? Assuming you have a good reason for your call, I'll add one idea to Lester's list, especially if you are calling a senior executive or CEO of a larger company with much authority.

When you call, don't ask for the person directly, ask for his (or her) executive assistant. Better, find the EA's name first (often through the receptionist) and then call the EA.

Explain your purpose, provide whatever documentation s/he requires by email or fax, and seek her guidance on the best way to proceed.

I've never had a legitimate call to an EA shunted aside or not followed through properly. Today, for example, I received a return call, not from the company president, but the person who could really answer my inquiry -- and he was being really courteous to me because he knew the company president wanted him to speak with me.

Executive assistants know which buttons to push, and more importantly, they can handle your inquiry in the most appropriate manner for their busy executive's schedule, perhaps by forwarding an email note, faxed documentation or the like, and getting the response you need. If an appointment directly with the decision-maker is appropriate, they will set one up, but usually on a cold or initial call this is way too presumptuous.

But your stage is set for discussions with more junior employees of the organization and you have a natural follow-through with the EA if you need to communicate further at the higher levels.

EAs may be "gatekeepers" to keep uninvited intruders out -- but they also facilitate your entry if you really have something of relevance to offer. If not, why are you calling in the first place?

Tuesday, May 19, 2009

Discretionary spending and marketing

Charles is my newest nagger. He's keeping a close eye on the company books, helping to impose some discipline in our operations. And lately he has been reminding me at every occasion that every dollar in discretionary spending requires $7.35 in revenue to offset.

In other words, he says if I buy a business book for $20.00, I should appreciate that we will need to spend $147 to pay for it.

"Go to the library," he said. (And I have, and picked some really interesting books I'm reading now that will cost exactly $0.00 in sales to read).

So what do you do about your marketing budget?

The advertising, new business cards, website redesign, your business lunches with important clients, golf games, and so on are all discretionary expenses. You can spend them or cut them, often at the drop of a hat. (Your rent, employee's salaries, and the like are much less discretionary -- sure you can change these costs, over time, but they are much more fixed than discretionary.)

Of course many discretionary expenses make real sense IF they will help you achieve the sales to the ratio you find is right for your own business. If our business spends $100 on advertising and achieves $735 in new sales, we're fine.

When you look through your discretionary expenses, you'll likely find real savings, however, on the things you don't really need, your "nice to have" luxuries, your lazy purchases because they seem small -- but aren't so small when they recur every month. And sometimes you find surprises.

For example, we've been spending about $200 a month on Constant Contact fees for our e-letter. Not much for a multi-thousand dollar business. I brought the fees down by $75.00 a month simply by removing invalid emails and some really old names, reducing the list to below 10,000.

Good, you might say, but could we do better?

I noticed that only about 20 per cent of the people receiving my emails are actually opening them. What would happen if we took measures to boil the list down to the number of readers who really want the emails. Now the list is less than 5,000 -- and the Constant Contact fees will drop even more.

But has our effectiveness diminished? Not one bit. We simply aren't spamming people who don't want the emails but haven't bothered to simply say "stop".

In watching your discretionary expenses, don't cut your marketing budget. Just make sure you are spending it where it will provide you with results and real value.

Monday, May 18, 2009

Are they really interested?

Just two weeks ago, our email list included more than 11,000 names, and seemed to be in a trajectory of unlimited growth. Today, the list has 8,500 names but soon upwards of 5,000 will be removed.

Is this marketing suicide?

Your database includes a list of 1,000 "potential clients" for construction, renovation or related services. The names come from "somewhere" but you really don't know them at all -- and they haven't responded or communicated with you in any (serious) way in the past couple of years.

Are they really potential clients?

Sometimes we accumulate names -- or on online services "friends" -- way too easily and superficially to build any kind of meaningful relationship. We diverge from our priorities, and waste money and time trying to convert people who have no real interest in our services.

I suppose if you are maintaining the names on some sort of free service and not spending any money keeping them on file, no harm is done. But would you not be better off marketing wise to have a smaller, but meaningful and manageable, list of real prospects, current and former clients, with whom you can develop rapport, relationships, and new business?

Sunday, May 17, 2009

Your marketing budget and plan

Sometimes the simplest and most common sense ideas fail to receive the attention they deserve. Here is one: You need a marketing budget and plan.

Checking this blog's archives, I find I haven't discussed this rather important and obvious element of construction marketing, at least in recent months.

You can choose to make the planning process complex, expensive and sophisticated -- and you can (as we do) engage all of your employees in the decision-making through open meetings and discussions.

But you can also keep it simple. And simple is often best.

Here is an easy-to-implement strategy which will allow you to pull together a marketing plan and budget within a few hours, at least in rough form. (You may need to investigate the details and that will take more time -- but certainly not so much time and effort that you will be distracted from your other responsibilities.)

Estimate your total desired volume of profitable business over the next year, and allocate 5 to 10 per cent of that sum for marketing. (The higher number applies more likely in a start-up, recession, or when you wish to plan an aggressive expansion.)

Add another 5 to 20 per cent for sales costs, depending on your margins, size of sale, and industry norms and traditions (if you aren't certain of these, check with your peers through your industry associations.) If your business is small, the sales component here may be your salary!

Your marketing costs ideally will be fixed, your sales costs should if all goes well be variable depending on results. (Commissions, referral fees, and the like are part of the sales budget. If you have salaried employees, you need to be satisfied your projected sales will at least cover their costs within the budget.)

Next, you need to determine how to spend this money. This is where you need to think for yourself, combining previous experience your own imagination and objectives. You may want to put all your eggs in one basket or allocate resources based on a variety of options. I would advocate focusing your efforts in a few places with a small 'slush fund' for experiments.

First priority

Internet/web presence/website with (effective) Search Engine Optimization -- 1 per cent or less.

You don't need to spend much here, and your results can be truly impressive. The cheapest approach is to study successful businesses in non-competitive markets and borrow their template, either perhaps by purchasing it from them, or reverse engineering using inexpensive offshore providers.

(Or you can use reference points such as your relevant trade associations or Internet forums such as to learn who can do the job. For example, although the design concepts originated locally, we built the Ottawa Renovates! site for approximately $500.)

Second priority

Structured and organized referral and repeat business initiatives. See the references here to how Toronto renovator Paul Danys turned a $5,000 dinner/client appreciation evening into $749,000 in businesss. Clearly, some thoughtful and programmed mailings and events, and possibly some referral commission systems, can generate plenty of business, at low cost.

Third priority

Other marketing and advertising options

This is where things get more difficult and challenging. Some contractors use flyers, some use radio, and some use association memberships and organized community activities. You may also consider trade and home shows. Some pay for leads services. (If these are paid in advance leads, I would put them as marketing costs; if they are commission-based leads, they might more accurately be put in the variable sales cost budget.)

Your strategies will depend on a variety of components, including local market conditions, your demographics, what has worked in the past, and (perhaps most useful) what your best current clients suggest. For example, while I would not recommend the Yellow Pages to most contractors, if they provided enough profitable leads for you last year, why not continue?

Now that you have a budget, you can spend the money. Obviously you may change things as the year progresses. Track your results. Don't worry about a day or a week (unless you know from experience that you should be able to measure your results for a particular medium or marketing approach quickly), but at least quarterly, assess the results from your media -- and if you aren't satisfied, be prepared to change.

Some additional notes:

  1. If you've been "relying" on repeat and referral business, these marketing costs may seem truly scary -- especially if you are just getting by. You of course need to price your services properly; build into your plans a price increase to more than cover the additional marketing costs. Then focus on the first and second tier activities because these will provide the greatest and best results.
  2. Maintain your discipline in your marketing budgets; If you need to cut, look for the fat in your discretionary (non marketing) expenses. Are you taking any 'extras' out of the business you can defer, and do you have employees not pulling their weight? Cut them first. Successful businesses actually increase their marketing budgets in recessions.

Friday, May 15, 2009

Business balance: Learning the lessons

Recent experiences have taught me some important new (but fundamental) business lessons.

In the past two months, with the advice of a knowledgeable and highly experienced consultant who hasn't charged us for his time or services, we've learned much about the basics of financial reporting, accountability, and the separation of personal and business interests.

Most of this stuff is common sense, in hindsight, but frankly it took a good few "whaps" and a decent-sized business crisis to drill some of the basics into my thick skull.

But there is an irony here. If our most recent consultant hadn't been countervailed both in presence and experience by our primary business consultants, Bill Caswell and Upkar Bkihu of Caswell Corporate Coaching, the business, I think would have spiralled out of control into self-destruction, mistrust and hostility.

The reason: the new consultant, while highly skilled in pulling together the business financial requirements (and meaning well 100 per cent), managed, in a few weeks, to break many of the rules we had learned from Caswell and Bikhu about respect and mutual understanding.

Our new consultant considers this stuff to be airy-fairy, touchy freely and meaningless puff, at least in the context of a business in financial stress, and he has plenty of "war stories" of businesses which may have been superficially fun places to work but, without the necessary financial and management discipline, would face ultimate destruction at the hands of black-suited bankers and bankruptcy trustees.

(Caswell and Bikhu, conversely, certainly agree that financial projectons, cash flow management and business discipline are vital for success but you need to temper these qualities with human respect and interaction. The challenge is: When do you need to get tough on under performers?)

But there is a third element to this balance: The essential purpose and reason for the business itself. You may have the most wonderful and respectful business culture, where employees feel wanted and accepted and as full partners and participants. And you may have the best financial discipline, accounting, record keeping and rule book around. But neither of these mean much if no one is buying your product or service. In other words, without clients willing to pay you enough to earn you a profit, you are gone.

Marketing, of course, is one piece of the puzzle of attracting and retaining profitable clients for your architectural, engineering or construction business. You must have something they need and desire, and you need to let them know you are around and are available to provide the service.

And, of course, you need your current clients to be happy enough to return for more, buy new stuff (or services) and speak well about your business to their friends and colleagues.

But you won't be in business long, even if your product and service are in high demand and clients love you, if you lack the financial discipline to ensure profitability, and you lack the culture of respect and recognition of clients and employees alike.

You need balance to succeed in business. Keep everything in perspective.

Lead generation services: Some further observations

Mark Paskell has posted this comment on a National Association for the Remodeling Industry (NARI) group thread, which is worthy of republishing here:

LinkedIn Groups Group: National Association of the Remodeling Industry (NARI)

Subject: New comment (140) on "Should NARI lead the charge to expose the unscrupulous tactics of lead generation companies to protect the rights of contractors?"

Hello Everyone

Thanks again for sharing. I think maybe its time to conclude this thread. I would like to share some observations.

I think most agree that the relationship between contractors and LGC's is seriously strained.

This thread did not receive any participation from the trade publications that sell their magazines to contractors. Maybe they don't want to risk their advertising revenue that they get from LGC's.

There were no happy contractors sharing their stories about how satisfied they are with services provided by LGC's. One would think that the LGC's would ask some of their happy clients to come and counter the comments made by so many contractors.

We learned that NARI is not a partner with SM and has allowed them to join as a national member.

We learned that many NARI members are concerned that some LGC's may be in conflict with the code of ethics. Specifically bait and switch tactics, misleading advertising and claims about the service provided by LGC's.

We also learned from SM that they can't provide qualified leads because they don't know the needs of their contractor clients. See the following quote from SM

"A lead generation company can't qualify your leads. They don't know enough about your business. A LGC provides an introduction, where a homeowner who wants some help leaves their contact information. While there is a place on the service request to list budget and timing, most homeowners don't know the answers to these questions. They want help and direction, and they go online to try and find that help.

"What LGC can do, however, is provide you with the contact information for homeowners in targeted areas that match the demographics of your best customers. You may not know their budget, their timing might be unrealistic, or they might just be window shopping. But you do collect their contact information so that you can follow-up in the future. If you can demonstrate that you are an expert in what you do, provide project pictures, and helpful tips and checklists, you have an opportunity to make them a customer.

As Robin said, a LGC is an add-on to a company's marketing program. Build a database of potential customers, and over time, some of that potential will convert into sales." (Dave Lupberger, Service Magic)

We learned that if someone wants to complain officially to NARI that they have to file a grievance in writing. Otherwise NARI cannot do anything officially. One would think from reading the posts that there is a preponderance of evidence to support a grievance. Maybe no one wants to be the bad guy.

Finally, we learned that the if you want good qualified leads you are probably better off generating leads yourself through methods not including LGC's.
The observation that lead generation services provide information that can be integrated into your own marketing and relationship-building strategies is probably the most important consideration in using Lead Generation Services. Too many contractors dream that the commercial, high volume services, will provide highly qualified leads that will convert into sales in one or two calls -- and many are disappointed with the results, especially contractors who have relied primarily on repeat and referral clients and are unfamiliar with effective marketing practices.

(There are exceptions, usually local services where the individual operating the LGS has an intimate understanding of the market and contractor clients. Here, fees are significantly higher -- sometimes upwards of 10 per cent of contract value -- but contractors report the leads are relevant and problems are quickly corrected, and often the leads service provider only expects commission payment when the lead converts to a meaningful order.)

I've applied to join the Contractor Lead Generation Forum group.

Thursday, May 14, 2009

Twenty years of success -- and just discovering marketing

Amsted Design/Build founder and president Steve Barkhouse outside his Stittsville, Ontario, office. The stones recognize employees for five years of service -- at the company's annual breakfast before our interview, several received the recognition.

Yesterday, I met with Amsted Design/Build president Steve Barkhouse as we prepared a 20-year anniversary feature about his renovation business for the GOHBA Impact!, the newsletter of the Greater Ottawa Home Builders' Association. Amsted's business longevity closely matches mine and, as we parted company, Barkhouse observed how few businesses reach the 20-year milestone, let alone as successful as his enterprise.

Notably, Amsted to a large extent followed the conventional pattern of successful renovators and contractors. By doing great work, consistently and effectively, repeat and referral clients provide the basis for success and growth. In fact, Barkhouse said only recently has he started marketing.

(I'm not sure if this is entirely accurately, if you define marketing more broadly than conventional advertising. For example, he served as president of the GOHBA about a decade ago; and connected/worked within the community -- all valid marketing activities.)

Barkhouse offered an important explanation of why marketing has become more important to him recently. With 50 plus employees, without marketing to induce new client interest, he would have one other choice in a downturn in the market -- to lay off employees. Sure, he would do this if absolutely necessary, but he says he has built a competent team of qualified people -- and the company's scale of operation with design build, and in-house trades, would not nearly be as effective if it needed to shrink. So marketing allows him to manage the work flow -- and prepare for growth when conditions improve.

Of course, Amsted observes the core techniques of successful businesses including vision and mission statements and core values, which are discussed with employees at monthly meetings (meeting frequency increases if the business is working through a potential crisis):

Vision Statement
We will be the most sought after company in it's industry. To be highly respected for integrity, excellence and success. To provide a work environment that is enjoyable and achieves a balance between work and personal time.
Mission Statement
In order to realize our Vision, our Mission must be to exceed the expectations of our customers, whom we define as clients, partners and fellow employees. We will accomplish this by committing to our shared values and by achieving the highest level of customer satisfaction. In this way we will ensure that our profit, quality and growth goals are met.
Core Values

INTEGRITY -- Integrity is our trademark. We adhere to moral and ethical principles through soundness of moral character and honesty.

EXCELLENCE -- Excellence is the key to our continued success. We continuously strive for excellence in all we do.

TEAMWORK - Teamwork is our strength. Our chosen team works cooperatively, achieving common goals.

RESPECT -- Respect is the basis of all our relationships. We recognize and value both women and men around the world in all their diversity, whether inside or outside the group.

TRUST -- Trust is the foundation of our team. We build relationships and create a climate of trust among us all.

LOYALTY -- Loyalty is our commitment to the future. Loyalty is rewarded and highly regarded.

FULFILLMENT -- Fulfillment is our obligation. We continuously strive to exceed expectations and fulfill dreams.

PROUD -- being proud is our reward. We set high standards for ourselves every day, both as individuals and in our teams, so that we can give our best maximize our performance.

EMPATHY -- Empathy provides our peace of mind. We know the importance of experiencing the feelings, thoughts or attitudes of another in order to succeed.

PROGRESS -- Progress is our movement toward a higher stage. We know how to look ahead, anticipate and educate, in order to develop new solutions that drive progress.

Wednesday, May 13, 2009

The "Wow" gift

Ned Overton of FW&D LLC in Arlington, Virginia gives out his own private label wines to clients and key referral sources. He says he makes sure the wine is of the highest quality.

Can simple gifts be helpful both in attracting and retaining clients? Absolutely. Thoughtful remembrances really work, partly because of the reciprocity principal. Under this business guideline, simple and small acts of generosity are often rewarded many times over. The challenge is to get it right and match the generosity and spirit of your gift with the values of your clients. And don't forget the packaging!

For example, consider these two gifts suggested and used by forum members.

The first is the private label wine provided to clients and key referral sources by Ned Overton of FW&D LLC in Arlington, Virginia. Overton says he is careful to ensure the wine in the bottles is of the highest quality because he knows the people consuming it often know as much if not more about wine than he does. It leaves a lasting and memorable impression, and the well-designed label on the bottle seres as a great reminder any time he or his clients serve it to themselves or friends.

Does this "WOW coffee" Wow you? Just a little care in packaging will turn this concept into a great idea.

My second example shows the dangers of raising expectations and suggests how just little improvements may help the cause. The contractor (I won't name him here, as I never name anyone when I don't speak positively about them in this blog), promised that he would be soon sending me a package of his "WOW" coffee.

A week or so later, I eagerly opened the package. Alas, the home-roasted coffee had been sent in a store-bought zip-lock bag and I could barely read the "WOW" on the label (you will have trouble reading it too, on this photo, but that is more a reflection of my lack of skill as a photographer than the label's actual quality.)

In a follow up email to me, the contractor wrote:

The real reason I'm writing you is I sent a bag of coffee to (name deleted), he gave it to his wife who was very negative about the coffee, she said it tasted like sh*t. And then said I shouldn't give out coffee that I roasted myself?

It's Colombian and not great, but I've been drinking it and thought is was OK and better than supermarket beans. I won't buy it again but let me know what you think. It would be terrible if I'm giving out bad coffee."
This is of course not the "WOW" you are seeking.

I haven't tried the coffee yet, but I fear the packaging does more harm than the coffee itself.

Perceptions and habits shape the value of gifts. For example, for some reason I have a preference for a blue coffee mug which I've been using for years. In fact, about 12 years. The mug had been in the gift basket provided by the builder of our new home on closing. The builder's logo has long disappeared from the cup, but for some reason I find my coffee "tastes better" with the cup than without.

(The builder in Ottawa, while successful and reputable, is not perfect --but I still like and use their cup.)

My sense is the contractor who sent me the WOW coffee is close to being onto a brilliant idea.

Coffee, especially self-roasted coffee, is much less expensive than wine, and it is probably harder to go wrong on it. You also have a story to share. Just a little packaging will go a long way -- get coffee bags of the durability and quality of places like Starbucks, and prepare a much larger WOW label (when you get really successful, you can print it on the package itself).

Then, have your designer prepare the overall package label with your logo and some thoughtful imagery. You can then give half-or quarter pound bags out as samples, and perhaps full pound bags with a couple of custom mugs on closing.

(Even better, if you know your clients' particular tastes, go to Starbucks, buy a pound, and replace it with your packaging! And if you know the clients and they are sources of referral business, this gift can continue year after year, since coffee (and wine) are consumed and need to be replaced.)