Photo credit: © iStockphoto.com/Richard
Scherzinger
It seems everybody has their own definition of marketing (of course, all are wrong except mine).
Some are long and confusing diatribes involving multipronged promotions and branding - another word no one can suitably define.
Yet to me, marketing means to “ethically acquire and keep paying customers.” “Acquiring” is lead generation. “Keeping” is retention.
Combining these two is where many contractors falter. They enter with the notion that you can “wait around” on word of mouth, or that the Yellow Pages will rescue them, or their website is the new project for hope, or that all ads are supposed to be lead generators.
Just as your customers’ systems won’t tune themselves, good marketing doesn’t happen on its own either. However, methods are available to crush your competition no matter the economic outlook. The techniques included here can help you stand out – and get the sales your competition is too afraid to go after.
1. Remember that your business is service.An old saying goes, “People don’t care what you know until they know that you care.” It’s not any different in the contracting business.Brad Lemus, a Midwest contractor and the owner of Lemus Services, knows this firsthand.
“We realized we were not taking care of every customer that called in here,” he says. “In other words, if a noncustomer called with a crisis, some of our staff almost took offense at the request to help him out.
“Our thinking was, ‘Who have youbeenusing? Why haven’t you called us before? So, your emergency means you want us to dropeverything?’”
Brad admits sheepishly: “We would tell that customer the equivalent of ‘go jump in a lake.’ But now, after you beat me over the head with ‘acquisition and retention,’ our mentality is to accept customers as a gift, especially in this economy, and win them over. If you’re just answering calls 40 hours a week, you’re missing out. If you’re not taking care of those distress calls on the weekends, you’rereallymissing out.”
That new mentality means Lemus Services drops whatever it is doing to take care of the customer. Besides, Lemus says: “You’ve got a pretty good chance of closing that call. It’s silly not to take it.”
2. Invest in customer retention.Remember, these are your paying, active customers, so this is, by far, your highest value list. Their relationship with you means they’re less likely to shop, more likely to accept the upsell than any other group and are more likely to refer you. With small effort, they’re also far less likely to leave you for the competition.
“The most important thing we realized is the key to our business is our customer base,” explainsMiles Neelyof Everett’s. “Marketing back to customers and customer retention is a big deal! Price is almost not an issue with them, which is a nice change. We never want to be the cheapest dealer. Our customers know we do a good job. Marketing to customers made it much easier to get top prices for top-quality jobs. In fact, 20 percent of our jobs from these ads have been 16 SEER equipment.”
3. Market when it matters.Saying, “If business slows down, the first thing to shut off should be your advertising,” is like saying, “If an airplane slows down, the first thing to shut off should be the fuel supply.” When business slows, you simply market smarter by maximizing your contact methods.
This can be done very efficiently among your customer and best-prospects base. Many companies use our ads and consistently maintain a $260 cost-per-replacement sale at a 45 percent gross margin. If you can’t rationalize spending $260 to generate $2,500 in profit, you don’t need to be in business.
“I’m sick of hearing people say, ‘What if it doesn’t work?’” saysRob Basnett, a Northeast contractor client. “I’d rather try it and say, ‘Look what we did!’”
Basnett knows from experience how important continual marketing is. In the midst of employee replacements and area-wide slowdowns, Rob confidently explains, “I believe marketing strongly is why we are busier than others, and as things turn around, we may have trouble keeping up.”
4. Get better response from your biggest expense.You’re spending good money on your Yellow Pages ad. How much is it paying you back? With the Internet age no longer on the way, but actually here, you don’t have money to waste in a medium that is quickly becoming digitized, localized and online. If your Yellow Pages ad isn’t getting the results it should, cut it way back, tailor it to produce leads, and invest your savings in e-mail, Web site, and localized Web marketing.
5. Don’t put all your eggs in one marketing basket.Different types of marketing and media serve different functions. The perfect recipe for bad results? Doing all direct-response and zero customer retention or all top-of-mind awareness (TOMA) but no image advertising. You must have a balanced marketing approach that incorporates many types of advertising in multiple forms of media.
Basnett’s balance of direct-response, TOMA and customer retention led to $18,920 in sales from a series of four letters. Not a bad return on a $512 investment. Brad Lemus boosted his company sales 94 percentin one yearusing this balanced method.
“I’m very excited by the results. Marketing has helped us change the definition of our company,” Lemus states. “Instead of ‘just’ being a plumbing contractor, I’m now a marketer of plumbing services. This has helped our whole company - in profit, morale and enthusiasm. We just feel better about things, which is helpful when the whole world seems to be talking about how bleak things are.”
In looking at these comments, I guess there is a sixth way you can outshine a competitor. It’s the “attitude” of great contractors putting these principles into practice. Attitude and altitude work well together.
