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?

Healthy business

Clearly, in business, your clients/customers are the basis of your success -- if they truly enjoy working with you, and pay their bills at profitable levels, you will do well. However, unless you are a sole practitioner/one-person-band, you also need to connect and build a culture of co-operation, initiative, and growth among your employees and key contractors. And this is perhaps the biggest test/challenge for any entrepreneur.

One approach is to regard all employees as owners/clients, and treat them like that. If your selection/hiring practices are solid, you won't be risking much with this policy. This approach to business turns the cliche "empowerment" into a practical reality -- your employees will respond with independence, respect, and treat clients like you would treat your clients if you didn't have any employees.

Of course, you need systems, processes, and rules, or things could get totally out of hand. And you cannot escape responsibility by careless delegation. Regular meetings with structured guidelines help here. In the meeting context, you can usually smell if something isn't quite right, and take measures to remedy the problems.

When things are working really well, you can almost sense you can 'go away' and employees will make the right decisions. You don't really leave, of course, but you don't need to micromanage them. Usually, you are in the enviable position of saying 'yes' to requests or deflecting the questions or concerns to other employees who can help better than you.

Don't doubt it -- your clients can sense this chemistry, and they will want to do business with your company when they do. Your employees don't fake it; they don't suck up, they aren't artificial, and they aren't following canned scripts when they encounter situations where creativity rather than rote processes are necessary.

When all is right, you'll find they contribute far more than you would expect otherwise, and you all can share in the prosperity.

It took me almost 18 years in business -- and a near disaster with the company -- to discover these processes. I have always thought that employee independence and freedom are the best ways to run a business, but needed to learn the structural systems required to manage the process and ensure responsibility, accountability, and shared respect.

These qualities, and this communication, is why we assessed the economy at our planning meeting and then projected significant growth this year. Best of all, I believe that the clients who chose to do business with us will grow as well.

(I give credit in this posting to the late Sonny Lykos for his thoughts, and to Bill Caswell of Caswell Corporate Coaching Company for solid advice. And, of course, to this company's employees.)