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Saturday, September 08, 2012

Construction marketing basics: Focusing on repeat and referral business

New LinkedIn Construction Marketing Ideas group members are invited to share their biggest challenge.  I receive two or three emails a week, and do my best to provide a succinct answer.

Yesterday, a reader observed:

Here is what we struggle with. 
Getting potential clients to do an apples to apples comparison. We give detailed spec sheets with our bids and referral list of past clients to call. Yet unless it is a direct referral from a past client who has seen our work first hand, we hardly ever get a job. Any leads we get from our website so far have not got past the bid stage. Just trying to find out how to get a better percentage of signed contracts.
My answer:
It is hard to get anyone to do a true "apples to apples" comparison because of the invisible variables relating to branding and trust.  Direct referrals from satisfied clients, obviously, are golden -- they are able to share their experience with people they trust, and radiate their trust in you.  When you go outside that orbit you are competing against others who have earned a similar level of trust, or you are competing against "low price wins" clients/competitors -- a loser's game for most of us.
The best advice I can give is to spend more of your time finding those referrals,  building them into the basis of your marketing; coupled with testimonials (videos may be effective) to back them up on your website and in other media.  I offer some suggestions in my "construction marketing ideas" book. 
In my ongoing poll, about 3/4 of most contractors' business arises from repeat/referral -- so even an incremental gain in the percentages in these areas will pay off more effectively than other media.   
Now, in terms of capturing the "other" 25 per cent, I tend to believe that marketing should have its highest impact with approaches that bring you as close to real clients as possible.  Again, if you are seeking to build your brand (trustworthiness reputation), perhaps the highest and most effective longer term approach is to focus energies on community service and charitable initiatives.  Of course, you can't put these in your "marketing budget" because if you do this sort of stuff, you can only succeed when you absolutely don't expect anything in return (a real paradox, but one I've seen play out many times.)
Indeed, the challenge with most contractors' efforts to reach beyond repeat and referral business is that they fail to capture the trust and reputation inherent in their successful client relationships in their outbound marketing, and in communicating with new clients not within the repeat and referral orbit.

You can "build a brand" with lots of money, but I think a more effective approach is to build on the successful qualities that lead to happy clients being willing to refer their friends.  You can do this in two ways:

First, focus on enhancing and improving the "wow, this was great" element of your client experience so you can naturally attract more repeat and referral work -- and strong visual and written testimonials for your other marketing;

Second, reach out into the community with service and contributions which have nothing to do with selling, but everything to do with sharing and community respect/involvement.  This enhances your trust and reputation.  You should worry far less about reciprocation and recognition than in conducting your good deeds -- but these arise naturally when you least expect and demand it.

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