Pricing and branding -- airline style

In August, 2006, Toronto blogger Thomas Purves wrote this entry: Porter Airlines or How to throw a smashing launch party. Many observers at the time thought the Porter would not survive in the hyper-competitive airline industry. Porter has succeed in building its brand and avoiding some of the price competiton excesses of its competitors.

Today, I'm heading to Toronto to research a feature about Porter Airlines and BECC Construction. Porter is currently a regional airline serving Ottawa, Toronto, Halifax, and Mont. Tremblant. (The Halifax and Mont. Tremblant routes are weekend services designed to use capacity that would go wasted on weekends when there are few business travelers between the major Canadian cities.

Porter uses fuel-efficient turboprop airplanes and operates from a terminal at Toronto City Centre Airport, a unique landing spot in lake Ontario. The airline uses a ferry to transport passengers the short distance between the Island and the mainland.

When Porter Airlines launched about a year ago, many people thought it would never survive. Competition in the airline industry is fierce, and its Island Airport location has stirred much local controversy -- especially since Toronto's mayor vowed to stop a planned bridge connecting the airport to the mainland. As well, naturally, competitor Air Canada did not much like the idea, especially since it had lost its access to the Island Airport for a limited service when Porter arrived on the scene.

But Porter has done many things right in differentiating its brand and product. It offers real service -- coffee in china cups and a glass of wine in a real glass -- and a comfortable lounge at the airport where you can use Wi-Fi Internet, snack, or enjoy a non-alcoholic drink. And the airport location is certainly convenient -- just minutes away from Toronto's business district and connections.

Nevertheless, the Porter project is exciting for its larger vision -- Porter plans to soon start services to U.S. destinations and other Canadian communities, using its Toronto hub as a base. And this expansion requires additional space and services -- the topic of course of our special feature.

As blog readers know, I am reasonably creative when it comes to airline travel -- figuring out ways to travel first or business class for the lowest fares possible. I'll even travel economy when it is cheap enough -- in one classic case a few months ago, Air Canada in a price war with WestJet charged me minus seven dollars to fly from Ottawa to Toronto. (That is right, they effectively paid me, before taxes, to use their plane.)

But, considering the story, the only right thing to do in this case is to Fly Porter. There fares are reasonable, but not the cheapest -- I would save a little money by using Air Canada. When I told the Porter spokesman about my "minus" fare with Air Canada, he laughed, and said Porter knows about this stuff, and isn't interested in playing that game.

This is absolutely the correct strategy business-wise. Porter is differentiating its product -- it has exclusive rights to the Toronto Island Airport -- and service levels; it isn't gouging its passengers; you can certainly receive top quality service without paying super-high fares. It is also creatively managing its capacity, using its planes on niche or under served routes when its business schedule allows.

I'll share more insights tomorrow -- note however, here how effectively Porter has achieved its brand success; while I've read about the airline in the general media, and used it a few times, I will only have the fuller story once my interviews are completed today. But, with the freedom the blog allows -- you can see how successful Porter has been in achieving and maintaining its Brand. Can you do the same for your own business?

Reflection time

Alberta's Calibre Group has built a successful painting business -- but along the way, it had growing pains. Nevertheless, this corporate history is inspiring.

Many people find it stressful -- and frustrating -- to spend nine hours in planes and airports to meet someone face-to-face for three hours. I (mostly) enjoy the process. While our employee hiring system is not big on conventional interviews, I think it important to have eye contact with candidates who make it through all the hoops and are about to be offered employment with us. This interview connects the dots, and allows me to gain insights into the potential new employee that wouldn't be possible earlier. However, it is important that the prejudices and perceptions created by the visual cues and 'instinctive reactions' be mediated against the various measuring and screening tools to get to this stage.

We still have two more things to do before offering employment: Validating references, and preparing/sending the employment contract. But I'm now confident that our newest potential employee in Sault Ste. Marie, Ontario, will be successful -- and help the business grow to the next stage (as she grows in a career matching her personality and skills.)

Still, to complete this interview, I had to get there and back. A regional airline Bearskin offers direct service between Ottawa and Sault Ste. Marie in tiny planes but (rightfully) charges 'business-use' prices for the convenience. But my "only on weekend and Tuesdays in January and February" Air Canada flight pass allowed me to fly 'free' -- (the modest flat fee for the unlimited use pass quickly can be recovered if the pass is used efficiently) -- and I could even feel like a First Class passenger with my credit card lounge access.

I don't waste my time in the planes and airports, however. I take reading material to catch up on new ideas or review concepts -- and sometimes scan and read 'off topic' magazines for additional inspiration. But most importantly, away from everyone, I think and reflect, and my main thoughts yesterday related to growing pains, and the challenges of ensuring we take a prudent and thoughtful approach to the business expansion now occurring.

Prudent thinking is essential with the external economic backdrop of looming recession. We haven't really experienced a nasty recession since the early to mid 1990s -- even the high-tech meltdown in 2000 and 2001 terrorism proved to be modest blips economically for the construction industry. This downturn will probably be tougher especially since the overall problems can be tracked an issue directly relevant to the construction industry -- the sub-prime mortgage crisis,which resulted in massive overbuilding because of easy and misapplied credit.

As a publisher selling marketing and advertising services, I'm well aware that the early stages of a recession are good for our business -- potential advertising and marketing clients who had a backlog of work and didn't need to promote themselves now suddenly have to find new business, and spend money on marketing, promotion, and advertising (often wastefully). This of course is good for us only until they run out of money!

So what should we do? Well, we need to treat our clients with respect, deliver real service and value, and realize that even in the worst of times, the best-run businesses will survive and thrive; and we are there to help.

My other challenges right now are systems and process deficiencies caused by years of economic decline (our own internal recession lasted from 2004 to 2006). As things deteriorated, I cut all kinds of costs for non-essentials; resulting in (just like the real world) an infrastructure deficit. Old computers, poor records and circulation administration, and limited accounting and management systems operated at a basic level, and allowed us to meet essential obligations (without draining cash for overhead expenses). But now these need to be replaced, upgraded, and maintained -- and of course cash flow lags in a growth situation.

We'll manage, of course, I can work around the inefficiencies, weaknesses and problems here -- and the risk of hiring a properly qualified and tested sales representative, even with a generous salary guarantee, is low: Incremental sales, even while the representative is not 100 per cent effective -- more than pay the extra costs.

Interesting times, indeed.

Flying to Sault Ste. Marie

Today, I visit Sault Ste. Marie for the first time -- I feel some of the same excitement (and intrinsic motivation -- see previous posting) -- as I felt taking off for Africa. I enjoy visiting new places, especially when I can be home to my family the same day.

Of course, the trip for a meeting with a prospective new employee is quite strenuous, with plane connections each way; meaning I'll be flying and in airports about 9 hours today for about four hours meeting time. Still, I'm looking forward to the trip. With Blackberry and laptop in hand, communication with home office won't be a problem.

Punished by rewards?

Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A's, Praise, and Other Bribes is provocative and challenges many of the assumptions behind sales commissions and incentives in business.
I last published the article Punished By Rewards? in an early edition of the Construction Marketing Ideas newsletter (next issue will be distributed tomorrow). Then, in July 2006, the newsletter had a circulation of about 200, and my business was collapsing. Today, we're distributing approximately 2,000 copies of the newsletter, with increases each week, and the business is growing. (I'm heading to Sault Ste. Marie, Ontario to do the final pre-hiring interview of our new sales representative, who will, if all goes as I expect, be responsible for Northern Ontario Construction News.

At that time, I expected our sales representatives to work on pure commission -- now we offer everyone a fair salary to start. the people I interviewed in Montana and British Columbia ultimately did not join the business -- the candidate in Montana might have done well, but we couldn't commit to a (highly reasonable) salary requirement; the the poor candidate in Vancouver didn't score highly on sales evaluation tests and we should have not strung him along for several months while figuring out what to do.

But I think the message in this article is worthy of repeating, and (see below) I welcome your comments and observations about the points here.

Punished by Rewards?

This week, on an intensive three day trip from Ottawa to Vancouver, B.C. and Bozeman, Montana, I had plenty of time to read Alfie Kohn's provocative book: Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A's, Praise, and Other Bribes Right from the start, I knew this book would take some unconventional directions -- it is probably the first true business book (properly) catalogued by the book store in the Parent/Teacher/Education section. It is also a book that will not connect' with you if you oversee or work in sales area where pure commission compensation is the norm, you believe in B.F. Skinner's theories of behavioural psychology, or you are an ardent free enterprise believer in meritocracy. Of course, it may equally give you an 'aha' of unconventional but practical solutions to some of the most vexing problems of sales training and motivation if your business operates within any of these categories.
Kohn argues effectively that reward-based motivation, whether it be by bribes or manipulative praise, just doesn't work, at least for any length of time. He cites plenty of research that shows when you try to get people to do stuff that goes against their inner nature, you may gain co-operation, for a time, but you also create dependency, stifle creativity, increase conflict, and ultimately fail to achieve your objectives. His argument is that intrinsic motivation, that comes from within the individual's own interests and values, is far more important than extrinsic motivation; where the person is responding (through bribes and praise) to controlling or dominating authority.
Phew, this is something of a mouthful, but struck a chord as I waited for six hours in a rather unglamorous waiting area at Seattle airport for my delayed Bozeman flight. What in the world was 'motivating' me to fly across the continent to a small Montana city, to arrive at sunrise, get 90 minutes sleep, and then down to business discussing life in Zimbabwe?
Officially, of course, I had a practical business purpose for my travels -- I wanted to meet two prospective regional construction newspaper publishers (one in Vancouver and one in Bozeman) who, as expected, impressed me with their interest and talent. I hope I'm not guilty here in doing what Kohn describes critically as motivating by
praise. Those who know me well appreciate that my intrinsic motivation for this recently completed journey had less to do with any real business purpose than my deep enjoyment in being served by flight attendants in business class 30,000 feet above ground.
Kohn's point is that the best productivity and results are achieved by separating the money and rewards from the work, and giving your employees the freedom to express and respond to their intrinsic motivation -- to let them find their true happiness. Pay, he argues, should be equal, or at least dissociated from performance reward. He is quite convincing, though somehow I don't think this concept will get too far in a real estate brokerage office, or for that matter, most commission-based sales organizations.
Kohn cites one example where a business successfully abolished commissions and rewards and saw productivity and results soar, but I think the jury is out about whether he is overstating his case. I can give a contradictory example from first-hand observation. The business had prided itself on an egalitarian, salary based model, but (the owner discovered) he was losing all his best employees. Some, the high flying great producers, were going to competitors where they could truly 'earn their worth' on commission; others, the ones that were great at customer relations and maintaining rapport were (ugh) quitting his company to work for its clients! It is possible, of course, something else very wrong was happening at this business to drive the talent away; but I think it is equally possible that Kohn's model, where rewards are abolished and egalitarianism is the basis of the business, is fundamentally unstable and unsustainable over time.
On the other hand, I recall well in my earlier days in business the artificial sales contest and awards presentations I covered for my little newspaper serving the real estate industry in Ottawa. I thought: "Could these people really enjoy sitting at a banquet eating rubber chicken and learning that some of them were being 'honored' with a group vacation at some mass-market resort?" I mean, the last place I would like to take a vacation, I thought, would be with a whole bunch of other real estate agents from my company. And I certainly wouldn't feel good if I 'missed out' because I wasn't 'good enough". Yuk. Since the real estate brokerage was paying for the advertorial, of course, I wrote a positive story about the event.
I've seen in my own business how treating employees and contractors with respect, and allowing them as much freedom as possible to live and define their own approach to business, has given our enterprise surprising resiliency and sustainability, even in circumstances where the enterprise is struggling. While we haven't been 100 per cent effective, we have I think done a pretty good job in creating an environment where non-sales employees find meaning and satisfaction in their work without a need to bribe them with 'performance pay'.
But while Kohn makes a convincing argument, I am not sure if we should rush to embrace his approaches for the sales department. Rather, it seems to me, we should do our best to find salespeople and local publishers who are a good match for the organization and its values and, where possible, allow them the entrepreneurial freedom -- and rewards -- to reach their intrinsic levels of interest and potential.

Questions for you to consider (if you wish, reply by email or enter a comment):

Assuming the business treated you fairly and honorably, and gave you the freedom to excel using your talents, would you accept an environment where the business ended compensation bonuses and commissions based on individual performance?

What do you think are your intrinsic motivations? Have you ever thought about what parts of the work you enjoy the most, and would like to do more of -- regardless of compensation?

Perception and marketing

If you only wish to read one book about marketing, Positioning: The Battle for Your Mind is the one you should read.

Marketing is not always what it seems to be. In the world of marketing, perception is often more important than reality -- at least at the front end -- and the preconceived notions of potential (and current) clients carry far more weight than what might, in scientific terms, be described as the 'true' picture. This is important because just because you have a better product, better service, better price -- in objective reality -- you may find that your potential clients just don't seem to care, or refuse to get it. Their frame of reference and perspective is defined by other values.

If you haven't already read the classic marketing book, Positioning: The Battle for Your Mind by Al Ries and Jack Trout, you must do it now. (It is inexpensively available in paperback at your local bookstore or Amazon.) The ground-rule of successful marketing is that unless you have extremely deep pockets, you need to be first in the mind-space of your potential clients. This is usually achieved by finding a niche, a small segment not occupied by others, where you can 'own' the space. So, say you are a general contractor. Your niche may be a small, rural geographic area ("We build everything in ... name of community); or you might just do fourplexes, and only fourplexes, in Minnesota.)

On a higher level, Sonny Lykos observed to me in an email that no one seemed to care on another forum about his system for ensuring back-end client satisfaction, as a key component of marketing. (See this thread on Contractortalk.com and my final thread posting, suggesting Sonny's approach to budgeting. Then silence.) People were more interested in advertising flyers, canvassing, and the like. Their perception of marketing is defined by their preconditions and expectations, and they cannot see beyond it to the alternative he encourages.

I got my first impression about the power of preconceptions in 1978-80 in Africa.

Before arriving in Rhodesia near the end of the 15-year bush war, I learned that if I entered the country as a "journalist" I would be put on the next plane or train out. So, with scraggly hair and youthful exuberance, I declared myself a "student" on entering the country.

Then I went to look for work, knowing the country -- with military call-ups at high pitch -- had a serious labour shortage for 'whites' jobs. I ended up with a job offer at the Bulawayo Chronicle -- I then went to the immigration department and said I had good luck in being offered a job as a "trainee journalist" (a little lie, of course). The result: I received immigration papers and a work permit marked "journalist", legalizing my presence in the country.

For the next 18 months, I spent my life watching the story unfold --and living it in real time. Notably, most of the whites said the "world press has preconceptions; they think we are all bad, and nothing we do good ever gets reported." They predicted horrors under black rule. They all cited the same mantra, seemingly without thought. They had their own "preconceived notions", I thought.

I filed several stories to a Canadian news service. Newspapers across the country could elect to use or ignore my stories. The wire service, along with a modest cheque, sent me clippings to show where the stories had been published. And I noticed something interesting.

At the beginning of my time in the country, many papers picked up my 'conventional' writing. But as the war ended, and I saw things through a deeper and more complex perspective, fewer and fewer papers picked up my more balanced articles. These weren't blindly supporting the whites or blacks, they were simply looking at the issues from a deeper perspective. Editors across the country didn't care, however. The stories didn't meet their "preconceived notions".

Today, Zimbabwe is a basket case and the whites ignored by the media appear to have been correct -- on the surface. But delve into this issue more deeply, and you would not draw such a simplistic conclusion. I think the mess in Zimbabwe is largely because the whites clung to power longer than they should have.

So what does this have to do with construction marketing? Perception is deadly important; and you will not succeed in breaking into a market by offering a 'me to' service. You need to differentiate yourself; and stand out from the crowd. But you also need to know how the crowd thinks-- at least the crowd you are trying to reach. At the same time, going off the deep end is risky -- it might work, but I would take a more incremental approach to change. (No one else may be cold calling businesses to sell commercial construction services; so you would be unique in your approach -- but I'm afraid you would fail and irritate rather than encourage business by trying that; unless you have a truly innovative way of selling yourself.)

So, say you are a general contractor whose business is slipping. What sub-set of services can you offer that would work for you? Perhaps you can offer a maintenance service package to existing clients; or you have proven an experience within a specific sector, and can build out from that.

Note as well that you may not need to change your product or service to achieve great results -- it could just be an exercise in positioning and perspective; in changing your client's mind frame. And, finally, if you are successful at branding, you reach the holy grail of marketing -- clients and potential clients form a positive preconception about you and this 'sticks' even when you don't quite get things right, or they know you little. So, if you want to get the branding right, consider again the Brand Harmony concepts. They work.

The online sales test

This image is from the website of salestestonline.com. Yeah, this posting is an absolute, free, endorsement of their service.

Some years ago, I posted a question on the now-defunct Google Answers service, inviting researchers to help me find an inexpensive test to evaluate potential sales candidates. Other services were charging $100 or more per test -- and the tests were cumbersome things. Clearly, if the test is too expensive, we won't be able to afford to administer it widely, and thus would have to screen out candiates who might otherwise qualify.

I ended up using salestestonline.com. This Toronto-based service has delivered the goods. The electronic test is so simple it almost appears dumb (and hardly worth the actual cost per test of about $35.00; purchased in blocks). But the report and rating system the test uses is crystal clear -- and the results are instant. We send the test results to all candidates who complete it. It is the perfect 'brush off' to people we don't want to hire (its the test, not us!), and is a great motivator for those we want. And, while the test has not been 100 per cent foolproof, we've found virtually total success if the score is 8 out of 10 or higher on "prospecting" and "closing" and low on "need for direction.

Marketing in challenging times

For an online tutorial about the definition of a recession, this How Stuff Words posting about the Fed is useful.

We're in the early stages of a recession. Anyone who denies this is putting their heads in the sand. You can see the outline of the problem on various online forums, as contractors (especially in the residential sector) report business drying up. We shouldn't be surprised about this -- the overbuilding and mortgage crisis seen as one of the 'root causes' of the current recession obviously will have a backlash within the residential construction sector, and quickly.
In the commercial and institutional side, things aren't as imminently bleak -- the projects often have a longer-range budgeting scope, and in some areas, infrastructure and government spending will offset the decline within the private sector.
So what should you do? I've posted some general ideas previously, but will update in periodic blog columns strategies that can work to help out. Simply put, you either need to increase your revenues, or reduce your costs, or both -- and be very wary of debt and capital depletion.
So lets look at increasing revenues. You need to market and sell, inexpensively! So, what is the best way to sell more?
Your first line of defence are your existing/previous clients. Keep in touch. I'm a writer, so I like newsletters, both printed an e-letter format. You don't need to be a great writer to produce a newsletter. But you can also call them, meet them socially or visit.
Networking and canvassing can work. Networking is usually slower (done right!) but can lead to high quality results. Canvassing is a drag emotionally for most people. I think it is debatable to try canvassing techniques for business-to-business sales, but in the residential side it can work.
Internet advertising, either paid keywords or through organic search marketing, will produce high results at low cost (and with great budget control) if you do it right. The challenge here is you either need to learn how to do it yourself, or you must be very careful to select the right consultant/marketing service to help you (alas, the best ones don't need to advertise or promote their businesses.). Do it yourself isn't that hard; Google Adwords has tutorials, and blog sites can be built quite easily and quickly.

Be cautious about lead services. Read this ContractorTalk.com thread before using some of the services that market and promote themselves widely. There is much controversy a bout the lead services' ethics and value. Also, in a recessionary market, more people are chasing fewer leads, making for a truly rough environment.
If you are a professional or consultant, you need to achieve visibility in the right places, by speaking at conferences, in media appearances, with trade magazine articles, and the like. This won't produce instant results, but will pay off long term.
So, in the residential sector, if you need a quick fix, I'd work on cultivating and recontacting existing clients either in person or by newsletter systems -- or better, both. You can also consider canvassing and some keyword/Internet marketing.
These quick fixes won't work for you in the ICI sector -- the lead time for projects is usually too long -- so you need to start planning your visibility/relationship development and marketing strategy right now.
(Note: Especially in the commercial sector, you must be very wary of your existing clients' solvency and bill paying ability. The worst thing that can happen to you is to be in the mist of a project when things go bust and you a re left as an unsecured creditor, or are caught waiting months or years for liens and litigation to clear.)

Using Jigsaw

Jigsaw.com allows you to purchase and trade business card data. I used one of my 'free purchases' -- to f ind Craig Galati's email address -- but won't be posting any of my own contacts' business cards here.

I wanted to send an email to Craig Galati telling him about the previous blog posting, but didn't have his email address -- a web search took me to the Jigsaw.com site where, indeed, his business card data is posted.

Of course these resources can be abused. I would be reluctant to 'trade' my business cards for such a database. What about privacy? (Intriguingly, however, under Canadian privacy legislation, business card data is not considered protected information -- you can use it freely without breaching some pretty stringent privacy management regulations.) The bigger issue, however, to me is whether your decision to share or sell this information on a public database without the informed consent of the person from where it originates is respectful of your relationship with that person.

But in this case I feel no guilt about using the resources to contact Galati. I could easily enough connect with him through other networking channels -- in fact I learned his name and blog through a document temporarily marked 'confidential' -- or phone his office. Here, the web-based resource simply speeds up something that would rightfully happen anyways.

The Heart of Business: Craig Galati

Las Vegas architect Craig Galati (Principal, Lucchesi Galati) 's blog, The Heart of Business, is worthy of your attention and certainly qualifies for a permalink here.

What matters to you? -- Keyword search analysis

The blog Marketing M.O. -- Marketing tips from the trenches, provides some useful insights and resources on making more effective use of paid search engine marketing.

Previously, I reported that the bulk of inquiries to this blog are in the 'long tail' -- that is, most of the 676 distinct keyword searches leading to here in the past month happened only once. However, I think it might be useful to look at the top inquires -- that is keywords selected three or more times. With the statistics you can also see the number of visitors, the average number of pages viewed, the average visit time and the "bounce rate."

1.construction marketing
92 1.72 00:02:27 77.17% 67.39%
2.constructinmarketingideas.blogspot.com
69, 1.30, 00:01:14 0.00% 79.71%
3.change order boat
42 2.74 00:03:02 85.71% 19.05%
4.construction+marketing +niche
17 3.76 00:13:46 0.00% 41.18%
5.construction marketing ideas
12 1.67 00:02:60 66.67% 50.00%
6.change order boat picture
8 4.62 00:01:52 100.00% 50.00%
7.construction social network
8 2.38 00:03:50 62.50% 62.50%
8.marketing ideas
8 1.00 00:00:00 100.00% 100.00%
9.construction ideas
7 1.43 00:00:58 100.00% 57.14%
10.commercial construction marketing
6 3.00 00:02:28 83.33% 16.67%
11.boat change order
5 1.80 00:01:57 80.00% 20.00%
12.constructionpublishing.blogspot.com
5 1.20 00:01:29 100.00% 80.00%
13.best marketing ideas ever for construction business
4 2.25 00:04:59 25.00% 50.00%
14.branding 101
4 1.00 00:00:00 100.00% 100.00%
15.construction company marketing
4 1.50 00:01:18 75.00% 50.00%
16.construction mission statements
4 1.25 00:00:17 100.00% 75.00%
17.construction name ideas
4 1.00 00:00:00 100.00% 100.00%
18.construction subtrade marketing letter
4 2.75 00:03:60 0.00% 50.00%
19.marketing aec
4 1.50 00:00:20 0.00% 50.00%
20.marketing construction
4 1.50 00:04:11 75.00% 50.00%
21.change order boat photo
3 6.33 00:00:60 100.00% 0.00%
22.construction + marketing
3 1.33 00:00:17 100.00% 66.67%
23.construction+marketing+tips+niche
3 2.00 00:02:13 33.33% 33.33%
24.dewalt marketing
3 3.33 00:01:27 100.00% 33.33%
25.environmentally friendly homes
3 1.00 00:00:00 100.00% 100.00%
26.how to build environmentally friendly homes
3 1.00 00:00:00 33.33% 100.00%
27.marketing for construction
3 2.00 00:00:40 66.67% 66.67%
28.marketing ideas for contractors
3 1.00 00:00:00 33.33% 100.00%
29.marketing in construction
3 1.67 00:01:51 100.00% 33.33%
30.michael stone construction
3 1.00 00:00:00 100.00% 100.00%
31.remodeling marketing ideas
3 1.00 00:00:00 100.00% 100.00%
32.sales commission ideas
3 1.00 00:00:00 100.00% 100.00%

What can we learn from these numbers? Outside the obvious -- hopefully people searching for information about "construction marketing" are finding their way here -- the picture of the yacht "change order" moored next to the dinghy "original contract" continues to be the most popular search topic here. My suspicion is this viral email, making its way around AEC offices throughout Canada and the U.S., is inviting questions, but since there is virtually no information about the boat, other than my blog postings on the topic, it is propelling to the top of the search engine inquiries here.

I find it interesting that "construction marketing niche" have been grouped -- I can't imagine any contractor or construction professional using that kind of language; this suggests marketing agencies and the like, looking for some information about the construction community, are searching the words and finding the blog.

Looking at things from another perspective, I searched out the keywords which led to long visits to this blog -- 20 or more minutes per visit. Users selected each of these keywords only once, but when they found the blog, they stayed a long time (they also looked at several pages on their visits):

1."brand harmony" construction marketing
1 11.00 00:42:42 0.00% 0.00%
2.construction marketing blog
1 11.00 00:38:08 0.00% 0.00%
3.construction marketing ideals
1 6.00 00:34:58 100.00% 0.00%
4.construction marketing know how
1 3.00 00:31:59 0.00% 0.00%
5.general marketing contractor
1 2.00 00:29:27 100.00% 0.00%
6.marketing ideas for engineering
1 6.00 00:29:27 100.00% 0.00%
7.informational marketing for construction
1 19.00 00:29:06 100.00% 0.00%
8.corvinelli homes
1 3.00 00:27:26 100.00% 0.00%
9.free construction telemarketing scripts
1 4.00 00:26:19 100.00% 0.00%
10.roofing contractor marketing ideas
1 2.00 00:24:49 100.00% 0.00%
11.marketing renovation business
1 7.00 00:24:26 100.00% 0.00%
12.marketing don'ts
1 2.00 00:24:06 100.00% 0.00%
13.problem selling a house comment (1)
1 10.00 00:23:54 100.00% 0.00%
14.construction social networking
1 1.00 00:21:50 100.00% 0.00%
15.marketing ideas for hockey
1 3.00 00:21:24 100.00% 0.00%
16.hilton remodeling kansas
1 3.00 00:20:41 100.00% 0.00%
17.aec marketing
1 1.00 00:20:39 100.00% 0.00%

Theoretically, knowing what blog visitors are finding/care about should provide a better idea of what we should cover in the future in greater depth. Of course, the challenge here is that search engine inquiries are based on the blog's previous content and, to another extent, whether other websites are covering the same words and have higher or lower rankings. Yet they also suggest that once people arrive here, a significant number are exploring their way around -- I can't imagine that anyone looking up "Hilton Remodeling Kansas" would find much directly on that topic here -- but perhaps the searcher operated a GC or sub contracting business and found useful insights (or just had a lot of time to spend surfing around).

The types of statistics available for free today (through things like Google Analytics and the FeedBurner reports) would astound a marketer just a decade or two ago. Our ability to pinpoint and assess data and inquiries -- and presumably modify our approaches based on this information -- would be unheard of; except for perhaps the largest corporation with huge budgets. With this granular information, we can assess details and opportunities, 'hot points' and priorities, and shift our focus accordingly. We can also determine where we may wish to spend money on paid keyword searches and marketing -- using, as well, the analytical tools described in the marketing blog link under this posting's top photo.

But equally I cannot emphasise enough the importance of truly understanding our clients and their relationship with us. I believe we indeed are misplacing our resources if we focus the bulk of our energies on the front end -- attracting brand new clients -- and ignoring the key to our marketing and business viability -- retaining existing clients and encouraging positive vibes and referrals.

The "marketing budget"

Tom Lykos receiving the Renovator of the Year award at the Florida Home Builders' Association. Tom, president of the Lykos Group in Naples, Florida, is Sonny Lykos' son

Recently, in response to my posting quoting the contractortalk.com thread reporting on participants' advertising budgets, Sonny Lykos filed this comment. It is important enough to be worth republishing here:

I found the discussion on contractortalk about budgets for advertising and marketing (A/M) a little off the track. Let's say one has $300K in annual sales. If budgeting six per cent of sales for A/M, the dollar amount would be $18K. For sales of $600K it would be $36K.I wonder if any or these business owners ever considered that every dime of that A/M budget could be eliminated if they would just do something different, like taking care of the past and current customers. In other words, "Brand" their company in a manner that would eliminate the necessity to find and sell new customers. How about doing things for their customers that would be not only different from our industry, but literally WOW their customers. One idea I've suggested a couple of times in various construction forums but never got any interest, typifies the mindset of most contractors. And my idea would not even cost the contractors a dime.
Calculate the labor charged labor rate of a field person. Say it's $75/hr. Multiply that by two hours and you arrive at $150. Multiply that three times to get $450. Say you're about to sell a kitchen remodel for $40K. Increase it's sales price by that $450. If it's a large remodel, say about $200K, or a house for $500K, increase it by $900 ($75/hr x 4 = $300 times three = $900). If a job is sold at $40K, it can certainly be sold at $40,450, and the same for selling a house or large remodel at $200,900 vs. $200,000. Here's the prepaid marketing part of it. This cost is part of the selling price, and costs the contractor nothing. Not a dime!
At three months, then again nine months, and again, 18 months, an appointment is made with the customer for a field technician (with great personal skills) to stop by to inspect the completed work. On small projects two hours are allocated including travel time. On large projects four hours. And at every appointment something is looked for, and corrected on the spot, whether it's just some caulking, adjusting cabinet doors, anything.WOW!
Name me just one customer anywhere who has ever been serviced in that manner. Yep the above is just one more part of the "branding" process, and one part totally alien to our industry. This idea can be expand even further, but that's another rant. So I have no sympathy for contractors who find the need to spend thousands or tens of thousands of dollars to just market, when other options are available to them should they decided that indeed, they are in business to "serve". And when "serving" in a manner we all which to be served, A/M budgets are eliminated while margins rise.
Understand, that obtaining net profits is not goal #1 - serving is. And "how" one serves, determines the size of the net profits, or a lack of them.Yet a tradesman mentality, and even many with a business owner mentality, will never understand that basis aspect of marketing. Stop now, being mediocre. Think WOW! No. think double WOW!

Now, Lykos also reported to me in an email that he disagrees with one of my other favorite gurus, Michael Stone, about advertising budgets. Stone recently visited Lykos' son in Naples, FL to provide consulting services and help the local business grow with solid business management principals.

However, my philosophy on that subject is 100 per cent the opposite of Michael Stone's. It's the one thing he and I disagree about. Actually one of two things. He thinks no company should depend upon referrals. When he was here, hired by my son Tom, (about 4-5 weeks ago) he told Tom he should budget 4 per cent or more for marketing. At $6M for last year in sales, that's about $240K. In my opinion, ridiculous! Besides, if Tom did that and generated an additional 20 per cent or more in sales, could have been catastrophic if Tom did not have the "systems" in place (he didn't) to service those additional sales. Exceptional grown that's not prepared for can be just as devastating to a company is not having good cash flow.
That's why I suggested to Michael, as Tom did, to concentrate on helping Tom create those systems (Tom will not accept advice from me) so he would be better prepared to sustain his current growth rate.

In a further email, Lykos added:

I think Michael's marketing percentage is fine for start ups, and could be good here and elsewhere for certain seasons. For example, Tom gets a lot of jobs while the snow birds are here, and schedules most of the major jobs for while the owners are up north. If he had less sales, not enough to keep everyone busy during the summer, he could market specifically for full time residents for that summer time slot."

So, what can we discern from all of this?

Lykos' point that if you took some of the 'marketing budget' and put it into really WOW client service and follow up makes a lot of sense, but Michael Stone is also right in warning about a passive approach to referral and word-of-mouth marketing. One good reason, as noted in Lykos' second email, is that this is a seasonal business -- you need to adapt to different market conditions/environments, and the referrals won't necessary 'carry you' consistently through all market conditions, both seasonal and (as we are experiencing now) a major economic slowdown. This creates balancing challenges -- as to maintain your work-force with steady employment (a real important marketing advantage, because secure and happy employees represent your relationship with your clients) you need to be able to manage the work flow volume and create a steadier cash inflow.
However, of course I would advocate that you would do better developing a systematic client follow up and communication system coupled perhaps with strategic advertising/marketing for seasonal variations rather than blindly repeating your Yellow Pages ad (of course repeat it if works). And I also agree that your marketing needs to be thought through and budgeted, and planned, not seat of the pants (though it probably doesn't hurt to allow a little 'slush fund' for last minute ideas, inspirations, or that really resourceful media salesperson with a great idea to test.)

The things we enjoy

Many states and provinces, supported by industry groups and associations, have mounted campaigns to encourage young people to consider construction careers. This image is from The Building Industry Workforce Development Initiative in California. While I agree it is good to encourage young people to consider construction careers, I hope the current downturn won't turn into another example of why many people choose alternatives -- of course, 'hard times' are not really a problem for the people who really want to do the work -- and are really good at it.

In 1988, at age 35, I became a publisher -- combining my passion for journalism with business. It proved to be the right career choice. Through ups and downs, good times and bad, lucrative and struggling years, I've always enjoyed this work enough to carry on, to continue, to take the hits and surprises, and painful moments and risks.

So, when I go out and interview successful construction company owners, what do I find?

Me. . .

Well, not exactly -- you wouldn't want me running a construction project! But I see the same passion and enjoyment in the work; the same inner joy in the career choice.

The reason is that if you are as fortunate as I am -- and you are if you are among the construction business owners who have built successful enterprises through their enjoyment of their work, and skill in their trades and business -- you get to wake up most mornings looking forward to your day at work.

Those of us running businesses know that the creativity required for successful business is just as great (if not greater) than the artist, novel writer, or musician. We need to juggle many different elements -- connecting ideas, individuals, and insights in a constantly changing environment.

If you aren't happy in your work, if you are doing it "for the money" or because "I'm expected to do it" or "I don't know anything else but it is where I am", stop, think, deliberate, and then when you are ready, take the jump and make the change. (I am not advocating doing this blindly or without respect for your family or other obligations; you may also need to spend some time learning the skills before making the change, but you should still do it.)

Resources for new Marketing Directors

Say, you've suddenly found yourself as the "Marketing Director" and know little about what you are doing. (It happens.)
My suggestions: Join the nearest Society for Marketing Professional Services (SMPS) chapter; If you are in the residential/renovation sector, look at the contractortalk.com forums and consider Michael Stone's services/blog; Consider qualified, well referenced local consultants -- but beware of the consultant's trap where large fees are charged for off the shelf advice.
Here is Ford Harding's quick reading list: The items listed with * are books.

General information on managing a firm
David Maister, Managing The Professional Service Firm*:
Suzanne Lowe is the expert on this and has written books and has a blog on the subject (www.expertisemarketing.com)
Selling
Heiman and Sanchez, The New Strategic Selling: The the Unique Sales System Proven Successful* is best-in-class on planning and monitoring a complex sale (multiple buyers, multiple meetings and competition);
Rackham, SPIN Selling* is an excellent book on face-to-face selling;
Joe DiMisa, The Fisherman’s Guide to Selling* is another good book on selling.
My own books, Rain Making: The Professional's Guide to Attracting New Clients* (2nd edition to appear in February with 40 per cent new content) and Creating Rainmakers: The Manager's Guide to Training Professionals to Attract New Clients* might also be helpful as might my blog(www.HardingCo.com/blog/)

How much?

This contractortalk.com thread, Marketing and Advertising budget . . . gives some ideas about the percentage of gross revenue that construction businesses (mostly in the residential/renovation sector here) are allocating -- with some other interesting gems.

Little things and big things

Book publicist Maryglenn McCombs did her work properly yesterday, reporting to her publisher client the little flaw I found on Brand Harmony author Steve Yastrow's Brand Cafe website.

It is good to put things into perspective. We spend much of our time worrying about little things, and then discover something truly major dwarfs the apparently minor concerns. So, for example, is my last posting -- where the company president at a family-owned business decamped for the competition -- just ahead of the previous post, where I noticed, in lamenting my own failings in Brand Harmony, that marketing guru Steve Yastrow's organization had itself failed in a minor (but significant) way to manage brand harmony by allowing a dead link at a key ordering point for his book.

Losing a website link is one thing; (possibly) losing the market driver for a well-established family business is another. But there are important correlations between the two entirely different levels of concern here.

First little things can create big connections -- I enjoyed Steve Yastrow's personal comment and email last night where he explained how the bad link occurred. He promised to send me a copy of his new book: We: The Ideal Customer Relationship.

Second, little things, unchecked, can become big things -- and little things, handled in perspective, can be corrected easily. When I discovered the website flaw, I quickly found a public relations/communications link on the same website, which worked, and contacted book publicist Maryglenn McCombs. She acknowledged the situation and escalated it -- to ensure the problem is fixed. Yastrow's prompt personal response ensured the flaw I discovered is compensated by the overall brand harmony. When you have good harmony and systems in place, you will find self-correcting mechanisms.

Third, big crises can become big opportunities, if you pull together your resources, think rationally, and act quickly. It is best to avoid the crisis in the first place; and second best to have a good plan in place to deal with the situation. When all fails, however, it is wise to be humble enough to ask for help.

With the limited information at hand, I responded to the contractor in the previous posting, and will follow up with a call today. I also forwarded the story to my network of connections, to see if they have any suggestions (obviously protecting the contractors' privacy in the process -- I make it a policy never to name businesses in distress in this blog.)

Here we find how a simple missed link on a website and a mammoth business crisis find their place on the same page; little things count, cumulatively they can become big things.

The huge crisis: When things go very wrong . . .

Although I think this book Crisis Management: Planning and Media Relations for the Design and Construction Industry is designed for external, rather than internal, crisis situations, it has rather good Amazon reviews and I think is worthy for your bookshelf.

Today, I received this email (I am of course not disclosing the sender's name or anything that would give a clue about the business's identity):

Mark – Saw an article you wrote online called Seven Tips for Construction Marketing….
I have just taken over as the Marketing Director for my dad’s 25 year old construction company, and thought I would shoot you an email just out of curiosity.

We have recently lost our President to a competitor, so Marketing for us now is CRUICIAL. Are there any other articles by you that I can look at for my information?

Thanks so much.

Wow. What a mess! Of course, the questions not answered in this inquiry are crucial, and I cannot pretend to know exactly the best solution to this mess. But I post it here to open the doors of dialogue and thought.

What would you do if something like this happened to your business? And what would you do to prevent something like this happening to your business?

More on Brand Harmony

Steve Yastrow's "Brand Cafe" site offers some useful insights and additional articles -- while of course promoting his book and consulting practice.*

This morning, I woke up with one of those disturbing insights that might be insignificant, but could represent an important change in perspective. My question: "What are we doing about Brand Harmony for our own business?" raised a second question: "Are we practicing what we are preaching?"

These points touched home as I reread a portion of Steve Yastrow's Brand Harmony book, where he discussed "touch points" -- the places where our clients interact with our own business. As I've noted several times in this blog, marketing is NOT all about the front end -- getting clients to call and creating sales leads for the business. It is in fact the entire client experience, leading (if done right) to so much satisfaction, enjoyment and value that the clients enthusiastically return for more -- and create word-of-mouth positive awareness. To be successful, brand harmony needs to be consistently applied to create just the right degree of client respect and personalization. Little things mean a lot -- failures in some aspect of our process, like a voice mail system that doesn't work properly, or the failure of our administrative employee to return calls promptly (perhaps because the voice mail system doesn't work) -- could mean more than any front end communication and messaging.

So how well is our own business doing with its own Brand Harmony? Here, I am not just a little concerned. The voice mail system we are using, for example, is it working right? Am I practicing my own preaching and returning phone calls promptly? If a client has a concern or is confused about our invoicing practices and methodology, are we responding quickly -- and/or do we need to improve our forms and processes.

These things are just the basics, however, areas where I sense we haven't lived up to the ideals. But what about the deeper issue, the entire picture of the relationship between client, business and employees. What are we doing -- or not doing -- to induce the real sense of connection and respect; of underlying value and positive spirit -- between our customers and ourselves? Are we falling into the way of what Yastrow describes as "entropy", the 'old ways' of "get the job done and move on". This is a real issue in a business where many of our sales are, frankly, transactional one-time events.

Yastrow's book advocates a systematic process to developing and maintaining Brand Harmony -- I've been (I fear) glossing over the parts of the book where the real work is required; the process of thinking through and implementing the structures we need to use to create a much more meaningful experience. I don't want to use "customer satisfaction" -- it is a cliche. I don't want to get trapped in the horrendous "measurement" process where surveys are foisted on clients and become intrusive ordeals, to generate the numbers we are seeking in our own minds but which really mean little to our clients. (Take for example, the awful audit survey call someone made to me yesterday from a trade magazine I had never requested but didn't mind receiving. She started asking question after question, telling me the call was being recorded. Rote questions, rote concern, "just get the numbers" -- no, I wasn't playing her game. I gave answers which would be useless for any positive audit measurement. She didn't even ask me at the beginning: Is this call convenient for you?")

So, I will look inwards now; and ask my own questions. Right this moment, at 6:00 a.m. on a winter Wednesday, I'm not exactly happy where I am at. "Brand Harmony", eh. Maybe before telling anyone else to do this, I should put my own house in order.

* Aha, so I go to the site, and there is a link "Buy the (Brand Harmony) book" and the link doesn't work. It is a dead link. I don't feel so bad now. Even the organization which has the leadership role in the Brand Harmony concept has failed to practice at the key execution touch point, at least when I checked this morning. You can purchase the book at Amazon.com, though.

Disgruntled?

Disgruntledworkforce.com has some gems of postings from employees who are, well, less than satisfied with their places of employment. Key in "construction" in the search function and you will discover some gems from within our industry.

Why is this important for marketing? As I've noted several times (with the leadership of Sonny Lykos in many cases), marketing is about the whole picture of the business/client relationship -- and if the internal processes of your business are so sloppy that your employees find it necessary to post on this website for relief, then you really have a major marketing problem as your clients are likely also to be disgruntled.

Here is posting to give you an idea of what is on this site:

http://www.disgruntledworkforce.com/blog/2007/11/23/the-longest-month-of-my-life/

Four (different) routes

When searching for an image to go with this posting I came across this book, Construction Management Excellence, by Gene Fessenbecker.

When it comes to marketing construction and related professional and trade services, with experience, I can discern three basic business models. Each model has advantages -- in practice, we probably all use some parts of each model, to varying levels of intensity.

Low bid wins the job
We seek out public tender/bidding opportunities, review plans, and put in our bid. This is the pure "low price wins the work" model and until the last few years proved to be the way many businesses won publicly tendered jobs -- supposedly in a fair competitive structure with bid depositories and the like. In this model, you don't waste money on marketing (outside of using perhaps paid lead services), and focus on sharpening your pencil to find a way to come in lower than anyone else. It is a grind.

Selling your services
Old-fashioned selling techniques, including cold calls, canvassing, and telemarketing are sill widely used in certain retail sectors (such as vinyl siding, driveway pavement sealing and the like) but are of course truly uncommon in the professional services area. They 'work' for businesses which can stomach the hard-rock approach; and may prove to be surprisingly effective if you are in the professions and are willing to take the risk.

Value/relationship/informal branding
These are businesses which build and maintain trusted relationships; deliver exemplary service and value, and never need to 'advertise' simply because repeat and referral clients keep them busy. Pricing is competitive but they can beat the commodity pricing trap by having a solid reputation. They deliver the goods, and are known for it.

I generally prefer the third route but wouldn't discard the other two models. If your marketing is 100 per cent 'reactive' -- that is, you are serving your existing clients well and relying on repeat/referral business for everything, you may be pricing yourself lower than you need, and failing to replenish and revitalize your client base and opportunities. If you refuse to engage in "low bid wins the job" competitions, you may fail to see options for reducing costs and improving efficiencies which could truly help your bottom line.

And of course the opportunities within these three frameworks vary depending on your market segment/trade. Some businesses, perhaps because of low entry points or traditional business practices, work in one segment more than the others -- and deviation from the norm is risky.

This leads me to a fourth option, the one that I like the most:

Integrated/planned and creative marketing
We combine the elements of the other three models in a creative -- sometimes unconventional -- approach; drawing out and finding new high-value clients, attracting and retaining loyalty (generating referrals), within a cohesive, low-cost and highly effective business model; one that can both grow and weather the most challenging economic environment. And that, of course, is what this blog is all about.

Fog and choice

I am supposed to be preparing to head to North Carolina tomorrow, to meet with Bob Kruhm and some clients, and attend an American Subcontractors Association chapter meeting in Raleigh. But sometimes things happen.
The airport is fogged in at Ottawa. I checked, and found that I might be able to catch a flight from Montreal, but this involves a midnight bus, a 5:30 a.m. flight, and . . . the very real risk that the morning flight, too, will be cancelled.
Still, I prepared to make the trip. It has been a year since I last visited North Carolina, and I really looked forward to the meetings and opportunity to connect with the business.
But my 10-year-old son has a cold. He cried. "I don't want you to leave." And when I left his room, he sobbed some more.
Sometimes tough decisions are easy to make. The North Carolina vist can be rescheduled. Eric's cold cannot. In life, and in business, we must remember our priorities. I will reschedule the North Carolina visit at the earliest convenient time.