by George Hedley
What is the number one business tactic you must do every day to guarantee you'll make more money in good times and bad?
__ Schedule your crews
__ Bid work
__ Purchase materials
__ Train your crews
__ Collect money
__ Provide quality workmanship
__ Maximize field efficiency
__ Review contracts
__ Complete required paperwork
What was your answer? Do you think I left the most important business tactic off the list? The number one most important business tactic required to make a profit is to find and keep customers. Without customers, everything else is irrelevant. So, is your customer number one in everything you do? Suppose you're stranded on a deserted island for 30 days with your best customer. You only have enough food for one of you. Who's number one, you or your customer? Of course, you are! Your job is to make the customer feel like they are number one while you eat all of their food! (Just kidding, or am I?)
What is the common thread for these businesses or ventures?
- Pebble Beach golf course
- Hilton Hotels
- Putting on a charity golf tournament
- Owning an electrical supply house
- Being a site concrete contractor
- Home builders
- The Anaheim Ducks (Stanley Cup 2007 winner!)
None of these businesses or ventures can exist without customers. They won't survive or be successful with out taking care of their customers. Last year I participated in a major national charity golf tournament. The golf was fine but the player experience, prizes, food, gifts, and quality was not up to par. I and several other players told the organizers we wouldn't be back without major improvements. There is too much competition even for charity dollars today. Guess what? They listened and upgraded every aspect about the tournament. I attended this year and it was first class. Even charities with great causes must put their customers first in order to be successful.
Construction companies, general contractors, subcontractors, and suppliers who are the 'best in class' continually take care of their customers in everything they do. They pro-actively market their services, sell what they have to offer, nurture new customer targets, create loyal customer relationships, get involved in industry and community organizations, offer different services to customers, and work hard to put their customers first. And guess what? They also make more money than their competitors.
- Taking care of your customers
- Staying in touch with customers
- Seeking new customer targets
- Creating a perception of your company to potential customers
- Showing customers you care about them and their results
- Saying thanks to customers
- Presenting your company image to the public
- Sending customers materials to help their business
- Helping customers make more money
- Giving customers reasons to want to use your services
Marketing is NOT:
- Waiting for customers to call you to bid a job
- Picking up a set of plans and turning in a bid
- Calling your customer 3 weeks later to see how you look
- Getting a contract and then arguing about the clauses
- Sending out foremen who are not professional
- Over-billing for work not yet completed
- Asking too much money for change orders
- Leaving trash on the jobsite after your work is finished
- Not doing your own punch-list
- Not paying your suppliers on-time
- Promising to man the job and show up 2 days late
- Over committing to get things finished and then don't
- Finally finishing punch-list items 4 weeks later
- Waiting for the phone to ring again for your next job to bid
Construction general contractors and subcontractors have gotten used to providing mediocre service, using poor business practices and not marketing to their customers. If a restaurant or hotel operated like contractors, they wouldn't stay in business more than a few weeks. Customers just simply wouldn't show up or come back. But for 95% of all contractors, not doing pro-active marketing has become the norm and standard operating procedure. It seems like everyone's motto is: "No Worse Than Our Competition!" Or, "If our competitors don't do it, why should we have to?"
But there is hope. You can make a difference in your bottom-line by being just a little bit better than your competition. It won't take much to set your company apart. And, you'll make lots of money with little expense or effort. All it takes is your commitment to put customers first, let them eat a little bit of your food, tell them why they ought to use your company, and make them feel good about the experience. Answer these twelve questions:
1. What is your customer strategy?
2. What is your marketing strategy?
3. What do you do to attract new customers?
4. What do you do to get customers to call you?
5. What do you do to stand out from the crowd?
6. What do you do to get referrals?
7. What do you do to thank customers?
8. What do you do to help customers?
9. What do you do to show customers you care about them?
10. What do you do to stay in touch with customers?
11. What do you do to schmooze customers?
12. What do you do to convert repeat customers to loyal?
The Marketing Musts
The "Marketing Musts" I'll show you are simple to implement. They'll make you lots of money and they'll allow you to build a better business with better customers. But, if you don't do some or all of them, your company will stay at the same level and continue fighting for the cheap work and leftovers that most contractors scrape to find.
1. Relationship Marketing
The easiest and most important 'marketing must' you must do is to create trusting relationships with your top customers who make you most of your money and pay your bills. Start by making a list of your top 20 to 100 customers. Look at every job you have completed or bid in the last five years. Who was the customer, architect, engineer, real estate broker, project manager, purchasing manager, or any other person who might have influenced the decision to hire your company? Also list out any potential or customer targets you want to go after in the next few years. List all of these customers, potential customers and referring parties on a spread sheet ready to sort.
- Loyal customers - Customers who only use your company
- Repeat customers - Customers who use you if you're low bidder
- Potential customers - Customers you want to pursue in your market
- New Target customers - Customers in different project types or areas
- Referring parties - People who can or do refer your company work
Next rank and sort them by these important factors:
- Profit potential
- Ease of doing business with
- Desire to do new business with
- Ease of getting on their bid list
- Competitive factors or competition
- Ease of negotiating work with
- Potential to become a repeat customer
- Ability to convert from repeat to loyal customer
Now you have a customer target list to begin your marketing program. Where should you invest the most time and money? In the construction business, the biggest marketing bang for your buck is creating customer relationships with your top customers, most desired potential customers and quality referring parties who refer your company lots of work. For most small construction companies, focusing on 10 to 20 customers is all it takes to make the most money. Pick the top 10 to 20 customers you want to create a deep relationship with, now plan out your marketing strategy to convert customers from potential to repeat to loyal.
How often will you have to see them to remain close? Think about your best friends. To maintain close loyal trusting relationships, you must spend quality time with them at least once every two to three months. Quality time includes what? - Face to face time at dinner, lunch, breakfast, ballgames, community events, golfing, hunting, fishing, or industry events together. It doesn't include job meetings, bids, phone calls, emails, or negotiating change orders! If you see 2 customers every week, every 10 weeks you'll see all of the 20 on your list and maintain quality customer relationships with them. If you never take them out, all you can hope for is to stay on their bid list by doing good work for them.
2. Constant Customer Contact
To stay in touch with your entire customer list, you must send everyone on your entire customer list something at least every 2 to 3 months. This will keep you at the top of their minds when they have a need to call. The easy way to do this marketing task is to assign someone in your company or bring in a college student once a month to help you for one day. Have them create the mailing piece, get it printed, stuff it into envelopes, and then mail it out. Ongoing customer contact should accomplish one of the following strategies:
a. Make customers aware 'why' your company
- Send expertise brochures or flyers
- Send photos showing your project expertise
- Send flyers of past project accomplishments
- Participate at industry meetings on panels
b. Create a perception of your company's value
- Show how you accomplished big tasks
- Speak at industry events
- Send charts & graphs of your value added services
c. Peak customer's interest to remember your company
- Send fun stuff that gets a reaction
- Send postcards, greeting & holiday cards
- Send jokes or cartoons
d. Reinforce your relationships
- Take to meal, event or meeting
- Send personal handwritten notes (1 a day!)
- Send jobsite photos of project progress
- Send thank-you cards after customer contacts
e. Show customers you care about their success
- Send magazine articles that help them
- Send tips guides to do things better
- Send books to help customers
3. Referral Program
When visiting your top 10 to 20 customers, ask for referrals. Make it a priority to ask each customer at least once every year for referrals. This will insure a quality target list to use to expand your customer base. Remember, don't ask, don't get! After they give you a referral, send them a thank-you gift of some value as appreciation for their help.
Either do your website right or don't waste your time. Your website must be a show place for what your company does best. It must list out why your company. What types of work you specialize in and where your company works. It must also be a resource center to help your customers solve their problems. Use quality photos, professional graphics, and good links to other sites. Include a home page, business profile, competitive advantages, your expertise and specialties, client list, corporate team, key management resumes with photos, projects photos, progress photos, testimonials, and a detailed research center giving customers information to use for their upcoming projects.
5. Company Brochure
Ditto the website criteria. Except don't waste money on twenty page brochures. Create several small tri-fold brochures or 8 ˝ x 11" flyers for each project type you build. Then have standard backup pages ready when you call on potential customers. The days of big expensive brochures are over. Spend the cash on your website!
6. Get Active In Your Industry, Associations & Community
People want to do business with people they know. A great way to get known is to be active in your industry, association and community. Join organizations where your customers hang out and will see your involvement. And for sure, get involved by volunteering to chair committees, get on the board of directors, or lead the golf tournament or annual fundraiser. The more you're seen doing good things and helping out, the more people will see the good in you and call you to help them out. Decide where you'll get the most bang for your buck and join today.
7. Image and Promotional Items
Rule #1: Don't give out junk! Rule #2: Don't feed the monkey when you need to sell to the organ grinder! I see lots of construction companies fall in love with giving out cheap tee-shirts, throw-away pens, ugly calendars, and useless notepads to the wrong people. Don't waste your hard earned money on giving small stuff to the wrong people. Save it up and invest in season tickets to your local team and take your top customers out with you. I have never seen your customer's foreman, journeymen, or apprentice wearing your tee-shirt or baseball hat award a construction contract to your company.
Placing ads in newspaper or magazines is expensive for contractors serving their local markets. You are investing lots of cash aimed at lots of people who don't need what you sell. Advertising has its' place for suppliers, specialty contractors, and other types of businesses. But don't think advertising will keep your pipeline full of profitable work. But I do think you should invest in unique job signs, awesome looking job trailers that stand out, bright company uniforms, clean and professionally painted trucks, and other ways to promote your company image in a consistent manner.
Now go make it happen!
These 'Marketing Musts' will make you lots of money! To get started, begin first with the number one 'must do' Relationship Marketing. This will give you the biggest return for your investment of time and money. If you take out 2 customers 50 weeks per year, you will need to budget between $5,000 to $15,000 depending on your location and taste. This is small potatoes compared to making another $50,000 to $100,000 on your bottom-line by building for loyal and repeat customers versus attracting all your work by being the low bidder.
Next implement number two: Constant Customer Contact. If your complete mailing list comprises of 250 customer targets and you mail out to them 4 times per year, at the rate of $2.00 per piece of mail, you will only invest $2,000 annually. You WILL get a return on this marketing effort.
And then next decide which 'Must Do' will give you the greatest return. Some companies will need a professional website, others will need a company brochure, and others will be able to get lots of referrals. Choose what will work for you best and make it happen! Remember, any marketing plan in place is better than a perfect plan never executed. See you at the bank!
George Hedley owns Hedley Construction and Hardhat Presentations. He is the author of the "The Business Success Blueprint Series" now available in 8-workbook & audio CD sets. He is available to speak at your organization on his proven system to build profits, people, customers and wealth. Construction company owners are invited to attend his 2-day 'Profit-Builder Circle' boot camps held regularly. E-mail him to receive a free copy of his book entitled "Everything Contractors Know About Making A Profit", signup for his free management e-newsletter, visit his online bookstore, or receive more information. Call 800-851-8553, visit his website at www.hardhatpresentations.com or e-mail George at firstname.lastname@example.org.
3300 Irvine Avenue #135
Newport Beach, CA 92660
Phone (949) 852-2005
Fax (949) 852-3002
Email: email@example.com website: www.hardhatpresentations.com
George Hedley owns a $75 million construction and development company and
Hardhat Presentations. He speaks to companies on building profitable businesses,
leadership, and loyal customers. He holds 3-day in-depth "Profit-Builder
Circles" open to construction company owners in an interactive roundtable
format every 3 months. His "Profit-Builder System" includes proven
tools to always make a profit, build equity, create wealth, win profitable
jobs, motivate your people, and enjoy the benefits of owning a profitable company.