Returning to Washington

We published Washington Construction News from 2000 to 2005 -- and now, three years later, are preparing to resume publishing in the U.S. capital city.

A surprise --and much appreciated -- call from our former U.S. publisher, Chris Chapin, set the wheels in motion for this business restoration.

In the years we originally published in Washington, we did many things right, but some things wrong. Relationships and lasting connections with the community, alas, took second place to transactional selling. I didn't understand the importance of internal business controls, systems, meetings, and accountability.

You can go back to the very beginning of this blog (use the archives function) to learn more about what went wrong, and what turned things around.

We're hiring someone to work with Chris. You can live anywhere in the greater D.C. area -- job postings set the 'location' in Northern Virginia because Chris lives in one of the Maryland suburbs, but your talent is far more important than your street address. We'll pay a reasonable starting salary; your income potential will be in high five or low six figures (and if you are selected for the work, your likeliness of achieving this potential is high.) We can't relocate anyone, so you will need to live in the area to qualify, but direct sales or construction industry experience are far less important than your ability to do the work, which we will assess through a fair and comprehensive screening process.

Please feel free to email your resume to buckshon@cnrgp.com.

Sharing or selling: What should be your priority?

Chase, in his latest blog posting,

Does giving away more then you expect to get back actually help you grow your business?

makes a vitally important point.

It is a great question and sometimes not very easy to answer. This past year my focus has been on marketing our company and increasing our "brand" awareness. This has meant sponsoring events, offering free editorial space and even free advertising to help promote the events we are sponsoring or associations we are part of. By doing this I getting the perception of me always trying to find a new contract advertiser or project to feature a little further away from someones first thoughts and them focusing on me as a person. This allows barriers to come down and people to open up with me and build relationships first and discuss business second.

Chase is absolutely correct in these observations and, furthermore, he observes that the giving should never stop.

The most important thing I have learned is that you still have to keep giving and offering your help. You still need to keep looking for new events to sponsor and committees to get involved with. The worst thing you can do is stop giving and get back to just taking.

In the past, I allowed -- in fact encouraged -- this company's salespeople to think transactionally. They were primarily measured and compensated for their results, not their relationships. But the approach had serious flaws, and I only discovered them as the business began a painful decline. The business began its recovery when we refocused on contributing and sharing. The fabricated, 'take what you can and run' relationships have given way to a more sensitive and respectful approach to the communities where we are participants.

Why is this attitude shift so important, especially in the current economy? Chase writes:

Something to remember with all of this is that the current economic environment forces people to look closer and decide where to spend (their) dollars or where to put their focus, they tend to look at existing relationships a lot more and want to help existing relationships first. Being involved with events and associations will and (has) given me a competitive edge when people decide on which publication to use for a feature article.

I think of these observations with increased intensity now, as we prepare to announce a return to one of our major markets, largely because I am working with one of our key former employees who conducted his business the 'old way'. Can he see that relationships and networks are not based on short-term transactions, or is he going to push for the 'close' and then want to move on to the next file, right away?

The answer, I hope, will be that we achieve sufficient balance here -- his natural hunter-gatherer traditional sales approach will be sufficiently compensated by this business's overall business practices, and his understanding that giving without worrying about return, of truly putting your best effort forward, is almost always the best way build lasting and respectful business relationships.

Getting lucky

Matt Handal at Trauner Consulting Services, Inc. in Philadelphia, forwarded this link to a wonderful Readers' Digest article by Richard Wiseman: How to Get Lucky: Scientific Proof that You Make Your Own Breaks.

The article's main point is that your attitude and perceptions of the world around you, indeed, shape your 'luck' with an open mind:

Consider chance opportunities: Lucky people regularly have them; unlucky people don't. To determine why, I gave lucky and unlucky people a newspaper, and asked them to tell me how many photos were inside. On average, unlucky people spent about two minutes on this exercise; lucky people spent seconds. Why? Because on the paper's second page -- in big type -- was the message "Stop counting: There are 43 photographs in this newspaper." Lucky people tended to spot the message. Unlucky ones didn't. I put a second one halfway through the paper: "Stop counting, tell the experimenter you have seen this and win $250." Again, the unlucky people missed it.

The lesson: Unlucky people miss chance opportunities because they're too busy looking for something else. Lucky people see what is there rather than just what they're looking for.

The last quoted comment is worth repeating: "Lucky people see what is there rather than just what they're looking for." Maybe that explains why our business is now thriving, even as other publishers lay off employees, and maybe it explains this really interesting comment on Michael Stone's Markup and Profit blog from Paul Choate:

There is a prayer called the serenity prayer and part of it goes like this”…give me the courage to accept the things I can not change, the strength to change the things I can and the wisdom to know the difference”.

I am being inundated with negative attitudes from everybody about how bad things are out there. It’s depressing and if I let it get to me I will eventually be one of those guys always complaining about things instead of taking action to make things better. I can not control the overall economy but I can control how I deal with it and how I run my business in good times and bad.

I’m closing on a home next week to live in (not a flip) and plan on spending a good month or so and several thousand dollars renovating it. Some people think I’m nuts and should just hold on tight to my money…I would rather contribute to the economy! Things are good. I believe we live in abundance and if we take action to encourage positive results then all will be well. My phone is ringing, my guys are working and I will hopefully continue taking action to keep it rolling.

Realistically, things are indeed really bad out there for many people in our industry and I'm not a wild believer in the hype that your attitude is everything: You need to be well grounded in the real world. But maybe you will find your luck, as Richard Wiseman and Paul Choate suggest, when you keep your mind and eyes open for the opportunities around you.

Challenging times: How to adapt

Here is the publisher's viewpoint published in this month's edition of Ontario Construction Report

By Mark Buckshon
President, Construction News and Report Group of Companies

Times are changing. The heady, fun and sometimes overwhelmingly good times in the construction economy are finally ending, and many people in this business, who started during the relatively long 'up' cycle have little experience with the other side of the coin. Others (myself included) who have been through a few downturns know the drill: You survive and even thrive by keeping your eyes on the basics, taking decisive action whenever you need to, and always you must watch that red line – the point of no return where if you pass it, you cannot recover. At these difficult, critical points, you need to prepared to respond decisively.

Things of course won't be that bad for most of us. If you are good enough at your trade or profession to succeed in good times, you can likely do well in difficult ones; if you are marginal, you may have more problems (but then, should you be in the business in the first place?) But how do you adapt to the circumstances – especially since you haven't needed to 'market' your business in the past?

The answer here is to remember that, if you previously had a great backlog of work because of repeat and referral business, you have a really good brand – the cornerstone of effective marketing. The brand, by the way, is your clients' perception of you and your business – if they trust you to deliver top-quality work at a fair price, they call you back, and you are busy.

Your challenge in a recession is to realize that your brand remains your greatest asset, and desperate moves outside of this brand 'comfort zone' are likely to be disappointing failures. Chasing blindly after bidding opportunities and RFPs where you don't have experience or previous relationships will be daunting and frustrating – your energies spent on preparing proposals and travelling great distances to hope to win work, will probably lead to limited if any new business.

Similarly, blindly signing up for leads services or (gulp, considering this is our business) buying advertising where you haven't advertised in the past will probably produce disappointing results.

Your best bets are to look closely at your current and previous clients and see if you can develop a recessionary-value based add on or supplemental service; to prime the pump for more referrals and so on. You can also gain value, I think through your trade associations, especially the stories of successful peers in other communities – these businesses are not your competitors and should be able to guide you with effective suggestions.

If you are in Ottawa and sell renovation services, you will find the new Ottawa Renovates! magazine to be great value. We are producing this publication at the request of the Renovators' Council of the Greater Ottawa Home Builders' Association. For more information, please email Brian Warren at bwarren@ottawarenovates.com or Paul Scissons at pscissons@ottawarenovates.com.

Magic bullets (not?)

This istockhoto.com image cost $1.00 to license legally -- it is one of my 'secrets' in developing marketing materials. But will it solve your own marketing challenges?

Recently, one of my major suppliers offered to credit $1,000 off of his company's invoices in exchange for an hours consultation on how to save on airline fares. I of course had no problem accepting this proposition.

After the meeting, my supplier granted the credit, as promised, but I could tell he wasn't totally happy. He had fallen into the trap (hope) of expecting a magic bullet; a one-size-fits all 'secret' that would free him from high airline travel costs and crappy service forever. And all I could offer him are a mix-and-match collection of solutions, using commonly available tools, that could possibly help under certain circumstances.

"Where are you travelling?", I asked him. "Is business class comfort important to you?" "Can you make use of credit cards to accumulate large numbers of airline points?" So many questions, so much need to 'think', and not a single secret formula -- a magic 1-800 number you could call -- to win Aerolotto any day, any time.

In fact, a few years ago, I temporarily cracked the code, discovering a loophole in Air Canada's Aeroplan program you could drive a truck (or perhaps metaphorically more appropriate, fly a 747) through. I posted on an Internet forum a technique to convert cheap credit card points into virtually unlimited short-notice, on-demand travel for an entire business. The airline, seeing the damage this discovery could cause to their revenue, closed it within the year -- in the process alienating and angering thousands of loyal customers with the (necessary) rule change.

This level of knowledge led me to others with even more skills and understanding of airline programs, including someone who managed to hire 20 handicapped Thai nationals, pay for inexpensive short-haul domestic flights, and then create 20 "Superelite" accounts, each of which allowed brokering of expensive international business class tickets for virtually nothing. (In case you want to try this trick yourself, the loophole he discovered has also since been closed.)

Today, I continue to use my airline knowledge effectively. Eric, now 11, has sat in business class seats more times on family vacations already than most adults have in their lifetime.

However, this knowledge, while useful, is not a simple answer, and I fear there are few magic bullets in life -- or construction industry marketing.

If you simply want to purchase an ad and have qualified clients flock to your door; if you want to subscribe to a leads service and each lead is tailor made to you (and there is no competition for the job); if you are hoping that reading a free blog posting will tell you exactly how to get rich, quick, I'll be happy to introduce you to a scammer. You'll spend your money, of course, and your magic solution will solve all your problems, instantly, with no real effort. You can hope -- and dream, of taking a (diet) pill -- but the cure is likely to be elusive if you do.

You can of course discover insights and ideas here and elsewhere, and apply this knowledge to your own business to create your own 'magic bullets'. The supplier who hoped for the secret to airline success, for example, has contributed some knowledge that has simplified and improved my business harmony, saving me thousands of dollars in waste (while earning him, equally, thousands of dollars in well-deserved fees).

Yes, I could write a direct marketing piece with this phrase: "I earned $100,000 with a single phone call" and it would be true, but the question is, could anyone replicate exactly the circumstances that led to that profitable call? If anything could be that easy, of course, we would have a truly incredible inflation problem!

You can put the pieces together, and if you are lucky, over the course of your life, enjoy a few really exciting flashes of insight that change your perceptions.

But most of what you achieve in marketing will be on a foundation adapted from your experience, readings and conversations with others, and sometimes some luck.

(You can phone me at 888-432-3555 ext 224 or email your credit card number to buckshon@cnrgp.com for the Secret. The fee is $10,000. Just kidding.)

The (marketing) cost of business sloth

Today, on the SMPS Listserve, I read three posts about a competing publication that touched close to home -- too close, in fact, because the posts came close to describing some of our own business practices a few years ago. (The competitor will not be named here -- under no circumstances should any business speak negatively of the opposition -- I didn't of course initiate these posts.)

Has anyone had a good or bad experience with (publication name deleted)? They recently approached one of my clients to do a story on one of their projects and assured them that they had created a special edition under a new business model for clients who don't share vendor lists. But when my client said it was okay for them to do the story, the magazine's people contacted the project manager for a vendor/sub list; when he wouldn't give it to them, they went directly to my client's client and requested it from them. My client is really upset and embarrassed that the magazine approached this important client without her knowledge or approval. She said she will never do business with them again. I wondered if this was an isolated problem or if other people have had similar experiences.

This message resulted in the following two postings, both naming the same publication:

My firm will not do business with (name of publication) at all anymore. We had similar experiences. They also contacted our confidential sub list and solicited advertisement on our behalf, even though we told them not to. I have had many unpleasant conversations with them.

and

We worked with them on a couple of corporate profiles, but they merged two of the publications where separate profiles were to appear and they didn't tell me. They just posted both profiles in the same publication. The profiles were written for completely different audiences and distributions, so I was very irate. Eventually I got our money back, but that was the last time we worked with them.

I recommend avoiding them.

Reading these observations, I think of any business which fails to understand the basics when is representatives go out into the marketplace and oversells, under-delivers, and manipulates people for short term gain. I'm haunted by our own previous business practices where, with a lack of management control and common-sense respect for clients and the community, we sometimes stretched ourselves beyond the point of rightfulness to manipulate the process. Sure, we got the sale, but we lost respect for ourselves and our place in the community.

How expensive is it to get things wrong? Consider this: The Society for Marketing Professional Services (SMPS) has more than 6,500 members in most major U.S. cities (and soon will have an Ontario chapter) and the members of this association are responsible for recommending and allocating the marketing budgets of the nation's largest and most successful architectural, engineering and construction businesses. Now anyone who had any doubts about the unnamed competitor, reading these observations, knows what to think about it and its proposals.

On the surface, this type of publicity is no good for us as well, because, gulp, we earn most of our revenue by publishing features about businesses and selling advertising to suppliers largely from lists provided by the featured businesses. But there are differences, and they are fundamental -- and we learned these lessons the hard way.

• You never win long term by misrepresenting short term to get the sale. Ever.
• You can sometimes manipulate the story by going around some one's back. But when you do, you will effectively stab yourself in your own back.
• Conversely, you can achieve the seemingly impossible -- achieving co-operation where you would otherwise not expect it -- by playing fair, expressing creative and sincere generosity, and respecting everyone in the process; regardless of stature.

Clearly, you risk major long-term costs to your reputation and brand if you allow your sales practices to degenerate to the point that you invite and allow the type of negative word-of-mouth represented in the three listserve postings reproduced here. Thankfully, we learned our lesson.

Construction Marketing Website FAQ's

Seth Holdren offers some fundamental resources in this video.

The referrals are drying up -- What to do?

Publications such as Ottawa Renovates! can be effective in building your business and brand, but we note that most of our advertisers in the publication's first issue are experienced marketers, who have consistently used advertising as part of their marketing strategies, in good times as well as difficult. If you've never paid for advertising before because you have relied 100 per cent on referrals and repeat business, you need to proceed cautiously when purchasing advertising in any media. (In this case, as we are producing this magazine at the request of the Greater Ottawa Home Builders Association Renovators' Council, the risks of trying something new are of course greatly reduced.)

You've relied on word-of-mouth and referrals, and repeat business, and your reputation for quality and service and meant you never really had to advertise or market your business to keep busy. Now, with the economic slump, things are different. Your backlog has eroded, you are starting to think about advertising, or maybe leads services, or something, anything to find new business. What should you do?

My first piece of advice is to think carefully (but quickly) before spending any money on promotion or marketing. You'll probably throw much good money after bad if you don't. The problem right now is that while advertising and other marketing services will still work to bring in new business, they will be much less effective than in good times, and the quality of leads you receive will be significantly poorer than the type of leads to which you are accustomed.

Businesses which had a systematic advertising and marketing campaign in good times are in better shape to handle the current circumstances since they have metrics and experience on which to base their budgeting. Knowing they will achieve fewer results at a higher cost per lead, they can plan their campaigns accordingly to keep their pipelines full. But if you have relied exclusively on referral and repeat business, and never 'marketed' because you didn't need to, you won't have this track record, so you could end up in a deeper hole, quickly, if you are not careful.

What should you do, then?

• Your first and most important priority is to engage with your previous clients both for referrals and for new maintenance business. You can phone, visit, or email them (or all of the above). If you have their email addresses you can send them an electronic newsletter on a regular schedule. Seasonal greeting cards are helpful. Meet them at community and association functions.
• Are their community and trade groups where you can connect with potential clients, build relationships, and discover opportunities? You can get in front of current and potential clients this way.
• Canvassing and cold calling are hard rock, painful, and perhaps demoralizing approaches to find business, but if you have nothing better to do and you are starving, you can bring in results quickly. But I understand if you don't want to go that route. I wouldn't, myself.
• Take advantage of free listings with Google Local, possibly Craigslist, and maybe inexpensive media like community newspaper listings.
  
• Finally, and this is perhaps my best advice, check with your peers in other communities who are experiencing some success. If they advertise, learn what they do that works, and copy it.

Also, remember that if you in good times had a backlog with really satisfied clients referring others to you you have achieved the first and most important success in marketing: You have developed a great brand. If people trust you and respect you enough to refer friends to you, you are on the right track and you can, and will, survive the hard times. Remember that not all work disappears in these conditions; and if you have the highest skills in your trade and profession -- and a passion for your work -- you will be able to survive even the most severe downturn.

The real value of (commercial) leads services

Bobby Darnell in Atlanta makes some interesting points in his blog posting: "Where will the economy 'lead' us?"

One of the profound incidences that led to me this business is when I was working at Construction Market Data (Now called Reed Construction Data) and would see companies paying up to hundreds of thousands of dollars for leads and using the information to just a small degree of their worth. My analogy is they were purchasing a new set of woods and irons (golf clubs for the non-golfers out there) and when it was time to play; they would grab just three clubs and leave the rest in the bag.

This is the time to review your sales and marketing strategies. How do you feed your pipeline? How do you process your contacts? How do you measure your results? How do you leverage each lead? What are you doing that your competitor is not?

With the days growing shorter, construction slowing down because of the season, now is the best time to review your sales processes and sharpen your ax.

A lead is not a contract or purchase order but merely the first step in that direction. What will you do differently that will give you the edge over the other hundreds of companies who have the same information?

There is no better time than now to refine the processes that fill your pipeline. I do not believe the economy will stay down but who knows when it will turn? In the mean time, use any time you have not fulfilling business to do all you can to build new business.

I think the point he is making is that the leads services provide indications of potential opportunity -- they rarely can lead you down the garden path to a sure thing.

Most projects, by the time they reach the RFP or bidding stage, are 'set' for one contractor or another -- or, if they are an open competition, will be commodity-priced opportunities only really valid to pursue if you are truly the lowest cost producer within the segment. (This happens, of course, if your expertise and specialized knowledge allow you to compete on these terms.)

But the contact information, project data, and other resources within the leads services ARE useful clues to set you on the path of building meaningful relationships and contacts, and deciphering what may appear to be hidden opportunities.

For example, if you are a sub-trade or supplier, and you see a project within the pipeline that might need your services, you can research and discern the likely 'winner' and then build your relationship with that business well in advance.

Or you may find indications of future projects within the pipeline, so you can allocate your marketing resources and energies to develop constructive relationships with these businesses.

Or you may find a rather different use of the leads service -- you may forward the lead to someone you know who can legitimately act on it, more than you, and your good-will here will generate further reciprocal business (of course I am not advocating you violate the copyright from the leads service -- you should adapt the information and interpret it from your own perspective.)

Darnell's point is that the 'leads' you receive actually have much more information than might be obvious at first glance; it is up to you to develop and learn how to apply them.

Always be closing (but define closing!)

An intriguing contractortalk.com thread, Time To Close, starts with this question: "How much work is it to close a sale, the process is different for everyone. What is your process and how long does it take?"

The answers are interesting. I offer my own observation, indicating that closing is a constant process, but doesn't need the brutal hard rock approach represented by the Glengarry Glen Ross speech.

Some people really are successful at hard-rock selling; I think my former employee who may soon rejoin the organization referenced in the thread fits into that category; but increasingly, I believe effective selling is a much more patient, long-range and relationship-focused process.

What are your thoughts?

Experience and Youth

In the mid-1980s, I volunteered to work on a committee to prepare for the dedication of a small local park in the name of Raoul Wallenberg, a Swedish diplomat credited with helping to save thousands of Hungarian Jews from extermination near the end of World War II.

At one of the early committee meetings, I asked: "Can you find me a survivor?" Indeed, someone knew someone in town who could recall being rescued by Wallenberg. Then in his 70s, Andrew Fodor could clearly remember his fate.

I met Fodor, and enlisted his assistance, immediately impressed. Here, a relatively young guy (I hadn't quite turned 30) would work co-operatively with someone well past twice my age. Fodor certainly had all his wits about him: In fact, he operated a home-based typesetting business with the then up-to-the-minute computer equipment. He helped design and produce a 'backgrounder document' for the news release I prepared.

I then called on other committee members to research media names, and send out the news release.

The phone rang. Newspapers, radio and television all picked up on the fact that, while we were publicizing a rather bland event -- a park dedication, -- we had someone real who lived to remember his survival story. When the park dedication day occurred, hundreds attended. I stood in the background, outside of the public and media's own eyes (because of my full-time employment I couldn't be directly and publicly identified with the project) but everyone in the organizing committee knew that I had pulled off exactly what they had hoped to see: Real recognition and publicity for their cause.

Today, I see some important lessons from the experience, which you may find useful in your own business,especially if you are struggling to survive under recessionary conditions.

• When you combine young people with people who are 'young at heart' -- that is, with the magic of experience yet the eagerness and willingness to learn new things -- you have a potent business and life combination;
• When you work together collectively for a higher purpose, you achieve wonderful things;
• When you combine your natural talents, with your passions and interests, in community service, you excel;
• Fame is much less important for you than your cause or objectives;
• You win when you magnify your group/business power through positive media publicity.

Only a few of us have life experiences as dramatic and soul wrenching as Andrew Fodor -- escaping evil and horror; and even fewer have been put to the test of risking our lives to save others such as Raoul Wallenberg. But we can all contribute useful resources, services, and (if we have it) money to our communities and causes we respect.

If you are young, and going through your first real recession as an adult, call on older business people who have been through the process before, and survived. If you are older, hopefully you have learned your lessons from previous challenging experiences and know that you must combine responsibility for yourself with respect for forces beyond your control.

And, on a business level, think about how you can create positive publicity for your company; or find (through your network and community) someone who understands the media processes and wants to help you succeed. Note you may have some luck with organized public relations agencies, but I think you will do much better with supporters who combine media savvy with a passionate interest in your cause.

Some thoughts about branding

If you have built a reputation for integrity and have great client satisfaction, you've achieved the essential first step in construction marketing success. Your challenge is to move beyond that level: To obtain your true "marketing degree". (Image from istockphoto.com)

This comment from Mike Finley on contractortalk.com is worthy of repeating here. He responded to a thread started with this question: "I was just wondering how useful a marketing degree would be in a construction job ... maybe a high powered one??"

Well, if by high-powered you mean the owner of a small to medium sized construction company, I guarantee you it's invaluable. You're basically describing me. My marketing background eliminates the #1 problem almost all companies have which is getting enough work. Ask yourself if you could eliminate one thing in your business such as never having to worry about the phone not ringing what would that change for you? A marketing background would do that for you.

However, "High-powered" is still an ambiguous description, so I'm not sure what exactly you are referring to.

I just read a good article about construction companies and it said something along the line of:

When you are working in the field in construction you have a construction job. When you own a construction company you have a job in marketing, sales and management that just happens to work within the construction industry.

What that means is business is business. Being in the construction field is irrelevant. Running a successful plumbing company should be no different then running a successful Subway sandwich shop.

This is a vitally important message. Far too few construction business owners really understand marketing. Like lemmings they either chase bids (hoping to be lowest, and win) or on a more positive level, rely passively on repeat and referral business.

If you are successful in that regard -- if your clients love you, and refer their friends -- then you have succeeded in reaching first base. But here most people in the industry stall. You need to learn the techniques and methodologies to reach home plate.

Here is the interesting thing: Getting to first base, in a marketing sense, is the 'hardest' and most important challenge. The rest is relatively easy, and surprisingly inexpensive, if you know what you are doing.

The reason is that your good reputation is essentially your brand. Your marketing challenge is to broadcast that brand success to current and potential new clients so they will purchase -- and pay -- more. And if your brand is well managed, if you understand the basic principals, you can leverage your successful business practices so you can create a reliable and relatively predictable business volume, regardless of economic circumstances.

So, if you are relying on 'low bid wins the work', look at your internal and client service practices to create enough value and satisfaction that your clients are truly impressed and happy with your service. And if you have achieved that level of success, then move on -- get your 'marketing degree' -- and learn how to effusively promote your business.

(Consider resources available at your local home builders' association or, if you are doing higher end or non-residential stuff, membership in the Society for Marketing Professional Services.)

Prepare For The Worst - Expect The Best

I received the following email yesterday evening. In many parts of the U.S. economy (and around the world) businesses which practice Open Book Management practices -- that is, actively engaging all of their employees in the business operations -- now are facing tough, challenging times. The Great Game of Business, founded by entrepeneur Jack Stack, advocates openness and ultimately employee ownership/equity in businesses. I believe these practices, conducted properly, are both effective and vital.

Open Book Management (OBM) : The Survival Guide
Succeeding in tough time's means staying committed to your Game. No Excuses.

A Letter to the Open-Book Community from Your Friends at Great Game.

Managing through difficult times requires the full engagement of a focused, educated and informed workforce. Success will have everything to do with how well you communicate and encourage your people to stay in The Game. Show the big picture, stay focused on your critical numbers; make sure your people are acting on the right financial drivers; and persistently- let me repeat- persistently keep score and follow the action. This is what rallies an organization to face challenges head on. This is what provides the focus, the alignment and the sense of urgency we all need in an economic turmoil. And most importantly, this is what brings people together.

Open-Book Management has long been embraced by leaders with the courage to share practically everything--the good, the bad and the ugly. While communicating effectively is always important, it takes on a much greater significance during tough times. As Open-Book leaders we must continue to talk candidly with our people about the realities of the business and the marketplace. Keep in mind "what your employees don't know can hurt you." The unknown can create a huge distraction in the organization and if you don't let your people know what's really going on, they will certainly fill in the gaps. An Open-Book approach can drive out negative rumors and help eliminate the emotions and fear that comes with uncertainty. Emotions can cloud our judgment, but communicating with the numbers can put everything back in perspective. It's time to play smart and how you get smarter is by studying the numbers and listening hard for the stories behind them. That's where you will find the opportunities and the smart way forward.

As Open-Book leaders, communicating with your people should be your number one focus. Leaders should never delegate communication...and they should do it face-to-face. We should communicate in a way that creates healthy dialogue by giving our people frequent opportunities to ask questions and openly discuss the realities the company is facing. If you give your people the opportunity to talk it out and discuss and debate the challenges, they will help you find solutions.

When we do communicate the realities of the marketplace, we should be very careful not to blame everything on the economy. This implies the situation is out of our control and sends a message to our people that all we can do is ride it out. When in fact, we must fight it out. Direct your energy towards the opportunities and give your people something positive to focus on and reach for.

Successfully weathering the storm will depend on how well you maximize one of your only true competitive advantages, your people. We should have confidence in our people and trust them to find new ideas and ways to work through these tough times. Leverage the knowledge and expertise of your team. Motivate and engage your people in the business by including them in the problem-solving process and enable them to act and take responsibility for improvement ideas. Try not to be single-minded on cost savings and driving optimization. Encourage innovation and creativity. Find ways to take advantage of every opportunity and build on them to get even better.

And don't forget to keep your people fired up. People rally towards leadership that is positive and optimistic. Leaders need to stay energized and show true resilience. Create small wins; the big ones may be hard to find. Those small incremental improvements will make all the difference. Give your people a chance to win and then celebrate, celebrate, celebrate when they do win.

And finally, sometimes success can simply depend on what outlook or attitude you choose to take. So stay energized, stay positive, and most importantly stay in The Game.

The Great Game of Business

All the Best,
Rich Armstrong
President, The Great Game of Business

Scams

Alas, hard times also bring out hard people. When you get desperate for business, for opportunities, the dishonest play to your emotions, with enticing and apparently appealing offers for work, bidding opportunities, or new business.

With experience hopefully you know what seems fishy -- stuff out of the blue which looks too good to be true, or is just plain unexpected but 'good', often isn't.

Your usual first line of defence in fighting scams is to check with people you know and trust -- hopefully you've already built a network of professional advisers (including your accountant and lawyer). They are trained to think conservatively, and usually are.

Unfortunately, the worst and most difficult scams catch the vulnerable in positions of trust. When a scam infects a church group or community organization, it can spread like wildfire because people believe and trust their peers and colleagues.

Be wary of any situation where you ship goods or provide services to people you don't know; any arrangement where you are spending money on "finders fees" for further opportunities, any situation where you just hope it is the pot of gold at the end of the rainbow.

Sometimes it is. Read the postings at the beginning of the blog and you'll see how, at the bottom of a self-induced business collapse, amazing things happened, suddenly, and wonderfully, to restore the business. So, in a moment of vulnerability you may confuse a scam for serendipity.

(I think the sign that the matter is serendipitous rather than a scam is that a variety of unrelated amazing and positive things from different sources happen at exactly the same time -- the opposite of the perfect (negative) business storm. If you see surprisingly good news happen on several fronts all at the same time, you truly know the tide has turned.

Recession sadness

Our family stayed at the High Country Club home in Punta Mita, Mexico, and enjoyed a truly "wow" experience. Too good to be true? Turns out, yes, as the Destination Club is failing in the real estate crash.

One of the most disturbing and painful elements of a recession is the way that some high-fliers during the (recent) good times are brought down to painful reality and failure. Consider this email sent to members of the failing High Country Club destination club (a form of deposit-paid resort home sharing plan) and posted on the public destinationclubforums.com site.

Dear High Country Club Member,

It has been a tough 2 and a half weeks. I have been doing everything in my power to save the company I built from scratch and dedicated my life to over the past 4 years.

Against my best judgement, I directed my membership base to Destination Club Forums instead of having a private member only forum knowing that if we had our own private forum people would eventually be directed to Destination Club Forums, which at the time I was confident the truth would eventually prevail. The forum phenomenon in general is truly remarkable. It is impossible to manage truth in this day and age where people can speculate, accuse and make false allegations with no consequences. The sad thing is that a forum can make or break a business. A business that truly has its customers best interests at heart. Businesses, reputations and consequences are not something that I take lightly. I have made the decision to not even look at the forums, but have been advised of some of the content and truly believe it is inappropriate, counter productive and damaging to our company and the industry. I actually heard that someone accused me of buying a $1M property in June when I actually sold my home in June to pay off debt incurred by starting High Country Club and am now renting a home. With that said, I sincerely appreciate those that have done their best to support HCC and reveal truth amongst the ridiculousness.

The feedback of complete support and respect and I have received from the members directly through thousands of emails and hundreds of calls is humbling and contradicts the disrespect and false allegations of the forums. It makes me want to do everything in my power to not let them down. I apologize to my members for subjecting them to such a high degree of negativity and speculation. Unfortunately, the success of High Country Club has been deeply affected by the madness the forums have created. The Success Plan is a plan that will work and will get us through this difficult economy. It is not perfect, but we have a business plan that is better than any club in the industry moving forward. A plan that will no longer require new sales to be sustainable.

The future of HCC is in jeopardy due to the fact many of the yes votes have become no votes over the course of the day and many have downgraded. I understand and acknowledge the model is not perfect and am asking for members to recognize that this is temporary until the economy turns around.

I will not be sending out the Addendum until after the Wednesday vote due to the fact that we are having so many yes votes turn to no votes or downgrades, which makes the prospect of success unlikely. The Addendum is a simple basic form that will have no effect on member's decisions. In order for HCC to be successful, we all need to re-evaluate our decisions and think logically. $350-$450 per night is a tremendous value. Yes, it is more than the original arrangement, but the global economy has changed and we are adjusting to meet the new demands.

I send this email with the utmost respect and compassion for everyone involved. I have and continue to put you and my investors in front of me and my family. I feel that that is my duty.

Please email us your final decision by Wednesday so we can determine whether or not we can move forward.

Respectfully,

Christian V. Kirschner

HCC, based in Denver, purchased or leased vacation spot properties and members used their pre-paid dues (after paying sizable deposits with no refunds guaranteed) to access these properties. The result: while it lasted, incredible luxury vacations at prices purportedly within the income of middle income people.

Of course, like most things that are true good to be true, the business survived largely because of optimism. New member deposits coupled with rising real estate values ensured cash flow and the money to purchase new properties, and so the thing looked like it could on for ever. Of course, real estate bubbles never do (or for that matter) any commodity.

Setting aside the obvious personal angst and frustration in Christian Kirschner's email -- and his likely impending bankruptcy, possibly painful litigation, and more -- consider the cost to hundreds of participants in this scheme, who had put their money in and booked vacations, only to find, poof, all is gone.

This sort of thing is happening all over the place. It is 'normal' in the early goings of a recession. The biggest victims are usually businesses fuelled more by leverage than experience; with lofty dreams and inflated visions, that really couldn't withstand the test of time and economic pressure.

Can we learn lessons from this sort of experience? I wish I could say we will, but this recession will end, businesses (especially new companies started during the lean times who operate efficiently, provide real value, and keep their overheads and operating costs low) will thrive, the economy will improve, and then people will fall into the trap of faulty 'eternal' optimism and big dreams, only to experience the pain and angst of hard failures, again.

Relations, trust and the golden rule

This image is from Bob Littel's NetWeavers International web site. Littel advocates focusing on giving rather than taking in your networking; an altruistic attitude and spirit to give rather than receive. The key to success here is to really put yourself second and focus on the interests of the people around you. Then good things start to happen.

In his most recent Cofebuz blog entry, Defining Success, Tim Klabunde writes:

"I believe that the best way to succeed in life, and business, is to help other people. A life built around helping others will yield not just the joys of relationships, but also the sweet success of achieving your own goals.”

Tim of course is capturing the essence of networking and business success -- you don't succeed (at least in the ethical world) by plotting, scheming, and taking -- you find enjoyment and success in life through trusting, long-range relationships.

There is an irony here, though, in that the best way to build these relationships is to do what you enjoy, and do it well. In other words, to contribute the very things you (apparently) selflessly enjoy the most.

The reason this type of 'selfish' selflessness works so well is that you can sustain it without feeling pressure or discomfort -- and because you do your thing so well, you truly provide a valuable contribution to the community.

Does this work? Yes -- but the irony is you can't succeed by worrying about making it work. When success happens through the relationships, it occurs naturally, and without artificial effort. You receive the call, the opportunity, and the success when it is meant to happen; not when you set it out to occur.

The difference

The thought behind this modest thread on contractortalk.com is intriguing and important.

"How do you market your business as being different from the rest? What makes your business different from your competitors?, Booga writes in his introductory post. "When a client asks you, 'What makes you different?' or 'Why should I choose you?', how do you answer for yourself?"

Aha, this poster, who doesn't identify where he is from but provides this image on his profile page, is touching on one of the most important questions in marketing: Differentiation.

The basic principal is that if you are one of the crowd, if you are a 'me too' provider, you won't get much business. The idea is to create a unique and strongly influential identity, and then clients will be more predisposed to doing business with you.

But the responses Booga has received so far suggest that high-powered differentiation finds second place to, for want of a better word, validating your reputation.

GeneCarp (concretecentral.net) says his differentiation is:

1/going the extra mile regarding cleanup and job site condition
2/daily calls with progress reports
3/frequent appearances on the job site
4/normal, clean cut, personable employees
5/a genuine and sincere concern for the comfort and satisfaction of you and your family

DavidC writes:

The condensed version is, you should expect a biased answer from me. If you really want to know you should call a few of our references. (the list is provided on the first visit) They'll tell you what it was like for them to work with us.

Dave Mac responds:

I would rather show you then tell you!! Here are four pages of references ask them, here is my bid package lets go over the project.

So what do we see here? It may be obvious, but it is one of the mantras of this blog: Do a great job, treat your clients well, and help your former clients share the good news through word-of-mouth recommendations, and you'll achieve the basics for marketing success.

But, realistically, you need to add something extra to the mix unless you are content to remain small, local, and somewhat vulnerable. Effective marketing is largely about magnifying things so that your pool of potential clients is large enough that you never lack for profitable work (and if you have effective business systems you can scale your marketing methods and best practices depending on the economic environment.

What is your difference?

Proposal development costs (one solution)

For AEC businesses, one of the biggest marketing costs is the challenging and expensive business of preparing responses to RFPs and tender opportunities. Much time and work must be put into the process, especially for complex projects -- where estimating and budgeting errors would result in horrendous losses if you bid too low.

Of course the best way to get around this problem is to respond only to RFPs where you are sure (or at least likely) to win: This is especially important in situations where the game is wired in and set up in favor of one business or another.

Really successful marketers take things a step further -- they get their clients to pay for their proposal preparation. In other words, not only do they wire things in their favour, but they actually receive cash to get started.

This happens when the trust between you and your client are high enough that your client, appreciating the effort involved, and really wanting you to succeed, is willing to help out. You don't of course abuse this respect: The money you charge is at the low end of your billing spectrum and you may expect just hard cost recovery.

But even if you need to go out of pocket in your proposal preparation, I would advocate strongly you spend more on fewer proposals -- make the ones you really want to win so incredibly good, and well researched, that you will get to the short-list, and then, prepare properly for the final presentation, even if you know you have a natural edge or 'in' (and these are frankly, with few exceptions, the only proposals I would bother submitting.)

Recently, we enjoyed the experience of preparing a winning proposal. Our team took time to prepare an exceptionally detailed graphic presentation. The day arrived for formal presentations, and we arrived early. The chair of the committee greeted us warmly outside the meeting room, saying he was happy to see us, considering that some of the other people scheduled to present seemed to be late or absent.

Sitting in the reception area, we watched as two other candidates for the competition arrived, and then went into the meeting room to make their presentation. I found the experience of watching the 'others' go into the lions den somewhat saddening -- did they not know who would win this one? (Though the other candidates may have suspected something was 'up' -- our team had three people ready to go into the room, they were walking in alone.)

Our turn came up, and we made our proposal clear, and then equally made it clear that we weren't going to 'buy' the job -- either by over promising sales totals, or by guaranteeing significant revenue sharing with the prospective clients.

I knew things were working well when, after our presentation (the last of the day), the entire committee applauded. (Sheesh, this is a somewhat technical proposal, not a concert performance, but I suppose we got the technique right.) Not surprisingly, an hour later, we received the acceptance call, and the project is now well under way (and significantly ahead of projections.)

The point here is that you really need to think carefully about how you go about participating and responding to RFP situations -- pull out the stops, and do a great job (and spend money) on the ones where you know you should win because of your connections, relationships, and inside knowledge, or when you know the competition is truly fair and no one has an edge. (It sometimes happens that way, if rarely). If you have the inside track and a good idea where the proposal process itself may be of value to your client, I wouldn't be afraid to ask for compensation, at least for cost recovery, in setting things up.) Then, you may find that, your marketing process becomes cost neutral or in the best of circumstances a revenue source.

The easy decisions

We're producing a substantial consumer magazine for the renovation market -- a project that defies the boundaries of our long-established business practices and focus. How would you handle a new opportunity that seems to go beyond your experience or expectations?

Have you ever noticed that some of your best life and business decisions and choices are the easiest to make? You simply know what to do, and then, with what seems to be a flick of a switch, turn things in new directions.

I've seen this a few times in my life, the most recent, the decision to 'go' for the development of a new product -- a retail-focused Renovation Guide -- and then the decision about how to go about it.

Our business has always focused on the business-to-business market -- we've never published anything directed directly at consumers.

I could have simply declined the opportunity, but my sixth sense said 'yes', lets proceed. But I didn't struggle about the best way to organize this project.

The answer: We would run this business as a joint venture with others with expertise and knowledge of the business-to-consumer marketplace; who can be trusted, and without diverting investment capital or significant human resources to the project. And I knew who to call to get things rolling.

It is still early going, but the project has legs, substance, and potential for growth.

Here is a suggestion. Take a look at your own business; and recall the simple, fast, and effective decisions you made; where things just naturally seemed to fit together in (to use a rather overworked expression) perfect harmony.

Usually, you can trace the roots to some experience, success, or accomplishment in your past. Many times your brand and your reputation will guide opportunities to you, and your responses to the opportunities.

If you are stuck, read through this blog: You'll see the names of a few consultants repeated and linked -- how much will it cost to invite them to help?

Where are you truly talented; truly passionate; where do you feel your greatest moments of strength, achievement, and effectiveness? And which people do you know (or you can find) who can enhance the process?

When you answer these questions, you will find your solutions are surprisingly simple; and the seemingly hidden opportunities appear in flashes of insight and seemingly good luck.

Repeat and Referrals: 74 per cent holds steady

The numbers here are holding steady, despite several additional responses through newsletter and this blog's publicity.

At present, 74 per cent of readers say they find most of their business either from referrals, or from their existing clients.

The poll isn't scientific, of course, but I expect even if you asked a fully qualified survey the results, they would be in the same range.

Where should you direct your marketing energies and expenses, then? The Yellow Pages? Internet lead services? Or maybe, just maybe, you should focus on creating an atmosphere for your existing clients so appealing they'll spread the word about your brand and call you when they know something interesting they would like you to do.

And you can be systematic about this, and plan it, and build it into your marketing budgets rather than leave it to chance.

Editor's note: In case you are wondering why the numbers don't add up to 74 per cent; this is a live poll -- so as you and others respond, the numbers can change. As I write this note, the referral/repeat share is now 75 per cent.

Can you feel it?

Gord Cooke says marketers don't use the sense of touch enough in their marketing? Do you know of any good examples where this sense (or for that matter, the senses of taste or smell) might work effectively?

Gord Cooke president of Air Solutions Inc. from Cambridge, Ontario, made an interesting point when he presented the case for rationally including environmental considerations in your marketing strategies: marketers don't use the sense of touch enough.

Speaking to the annual environment dinner meeting at the Greater Ottawa Home Builders' Association (GOHBA), he said, to sell 'green', marketers need to find the emotion in the decision. "Its about finding logical reasons to help people make emotional decisions," he said.

Cooke said granite counter tops sell well, even though they aren't terribly practical, because "it feels great".

"How can we get people to touch green?" he asked, citing the marketing success of the original textured coke bottle "designed to make you feel comfortable whenever you touch the bottle."

"Our sense of touch isn't used enough," he added. "here's lots of logical side to green. What we tend to lack is emotional side."

Cooke added however that most consumers want 'green' but don't want it to change their lives -- they'll buy into systems which improve energy efficiency and save environmental waste, but don't want to have to 'water their sofa' (made out of green plant material) or walk on bamboo floors.

And he made a telling point that you can realistically sell you are making green improvements by just finding a 20 to 30 per cent improvement -- with modest cost and virtually no stress, these kinds of advantages are possible now, and allow everyone to get involved in the process.

Fear, loathing, hope and change

Today, Election Day in the U.S., will probably bring about change. Not everyone in the construction industry is happy about where that change is taking things -- I sense leaders within the various chapters of the Associated Builders and Contractors (ABC), advocating the merit shop, are wary of union support of the Democrats and Barack Obama (and even more afraid of state and local shifts, which could muck up long-held political alliances.)

Meanwhile, fear stalks the halls of many developers and real estate investment organizations; with equity vanishing, and borrowing virtually impossible, some of these businesses are seeing their cash reserves dwindle to dangerously low levels; and of course, if they are forced into liquidation, more 'fire sale' properties will come on the market, depressing things further.

Gloom, doom . . . but maybe hope and change.

The famous cliche that "Crisis is the Word for Opportunity" applies here to many people who understand that when the status-quo is upset, when staid and established and self righteous leaders are put in their place, new approaches and ideas come to the surface. Not all of these are healthy -- we need to remember how the Nazis took over in Germany in the 1930s. But much good comes out of so-called hard times; people with talent, determination, and perseverance rise to the challenge, and do okay, sometimes really well.

Pricing theory: The grounds for raising your prices in 'hard times'

You know the knee-jerk reaction to increasing competition in a recessionary environment: Drop your prices and cut, cut, cut.

But you have another option IF you have been successful in your branding and business development -- you can raise your prices, offsetting any loss in volume with your increased margins.

In some cases, you will find you have a double-win: Your sales rise even as your prices increase. In other words, you sell more AND improve your margins.

How can this be?

A large part of the price you can claim relates to perceived as well as real value. And this is the stuff of your brand. If your current and potential clients wish to do business with you because they believe their experience will be rewarding, satisfying, and profitable, they'll pay more.

As an example, say you are being sued for a million dollars (as my business once was). Would you choose (a) the lawyer with the cheapest hourly billing rates or (b) the lawyer with the best reputation in the community for winning similar lawsuits? Thankfully, in this situation you will likely choose the correct response: Here, paying more up front actually means paying less long term-- especially when you win the lawsuit and costs are awarded to your favor!

When should you consider raising your prices? You can see some obvious answers, and some which may be surprising:

• When you are so busy you can't handle all the order backlog (a nice problem to have). You could elect to incur additional costs, expand, hire more people, or ask them to wait -- or raise your prices to draw out only the clients who really want your services. (This is not likely to be a big issue in the current environment).
• When your costs are rising; obviously to cover them;

(Now for the more interesting situations)

• When your prices have been static for some time, even though you have kept the lid on costs, you may find you can safely raise prices without offending anyone;
• When your brand is strong enough that clients really want to do business with you; respect you; and trust in your competence (the best reason).

Obviously, you don't want to rashly raise your prices when you are engaging in a commodity service business -- but if you are doing that, you don't need to read this blog as you are not marketing effectively! And you need to be sensitive to your current clients. If you are afraid of disrupting established relationships, you can consider grandfathering prices for selected current clients. Some businesses offer a 'last chance' at the lower prices -- this can generate a nice (short-term) bump in sales as people get in before the deadline; the trade-off is you will drain away business in the months immediately after the price increase; when if you had simply implemented the higher prices, the enhanced margin would be yours to keep.

See: Discount, nah "I raised my prices"

Construction band sings recession song

Which will give you better return?

Here are additional details about the ongoing Construction Marketing Ideas poll.

If you could allocate $10,000 with the goal of achieving a 10 per cent increase in results on a $1 million business, would you achieve better results by improving your client service/employee systems to attract more repeat and referral business, or should you advertise, telemarket/canvas or spend it on leads services?

The ongoing Construction Marketing Ideas poll shows that, at present, 76 per cent of businesses find most of their new business through repeat and referrals. This means, your $10,000 investment in increasing your repeat and referral volume would generate on average $76,000 in new business (assuming a 10 per cent gain.) Compare the results for a similar investment in telemarketing/canvassing -- your return would be $6,000.

Of course these numbers are misleading for two important reasons:

First, if you have built our business around advertising, telemarketing and leads services, you are undoubtedly using these resources effectively and profitably, or you would stop.

And, secondly, if you are using these resources, if you convert the new clients into long-term customers who speak highly about your business, you'll garner years and years of valuable business from each lead you convert through the resources among the 24 per cent.

Nevertheless, it makes sense for you to consider improving your processes and systems to encourage repeat and referral business before you spend significant sums of money on other forms of marketing.

The Construction Marketing Ideas search engine

If you wish to find additional information, even off site, you can use this new resource. Just key in your search terms and find your answers.

The Renovators Guide

What should you do when you are presented with an apparently tempting business opportunity which doesn't fit within your business plan? Do you forget your plan and grab the opportunity, or do you say "no thanks" and walk away? In some cases, you'll find the answer is bluntly straightforward -- it doesn't match your markets, skills and resources, and you really don't expect to make any money on it. Then it is easy to say 'no'.

But sometimes situations are more complex, and we had just that challenge a couple of months ago when I learned that the Greater Ottawa Home Builders' Association Renovators Council wanted a new Renovators Guide for the public in time for the annual January renovators' show here.

As contract publishers of the associations' internal newsletter for close to two decades, we clearly know the people there, and are knowledgeable and experienced in print advertising. But this is a consumer-focused publication, not a business-to-business publication serving the construction industry, our mandate and focus. In other words, while many of our clients would be interested in the Renovators' Guide, and we had a logical inside track on winning the contract, I needed to decide (quickly) whether we should pursue it.

In making this sort of decision, you should remember one of the simple rules of PCL Construction founder Ernie Poole: "Don't have sidelines." But is this initiative a sideline?

I decided the right way to handle this opportunity would be to set it outside my existing business and so called designer Gordon Keith, who I knew from years within the GOHBA as a competent retail focused designer and marketer. He instantly suggested a third partner, Brian Warren, who has published primarily retail magazines and special projects for years within Ottawa.

We had a meeting and I provided some information about the project and why I thought we had a very good chance of winning the bid, and decided on a three-way-joint venture. Gordon will co-ordinate design and editorial, Brian sales, and I will oversee client (GOHBA) relationships and administer the accounting and billing. The result: Our business is not strained; sales staff are not diverted and editorial and production resources are not forced to absorb an unplanned publication (but our administrative staff will have an increased workload, to some extent, in handling the back-end accounting and paperwork for the project).

Is this a wise decision? In deciding to move forward with the joint venture, I looked at the potential -- the profitable opportunities that could be extended from this simple initiative -- but I also considered the risks; without a place in our business plan, the project could truly disrupt and damage the business cohesion and focus if we pushed forward internally, or, for that matter, extended this initiative too rapidly. But right now, the decision seems right -- if it is an opportunity not in the plan, and it isn't a wild-goose-chase sideline, the best answer, indeed, may be to segregate it and put it into a new business.

Have you ever had these types of choices/decisions? How did you handle them?