It seems like everybody has their own definition of marketing (of course, all are wrong except mine). Some are long, confusing diatribes involving multi-pronged 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 one media or another will rescue them, or that their website is the new project for hope, or that all ads are supposed to be lead generators.
Just like your customers’ plumbing systems won’t unclog themselves, good marketing doesn’t happen on its own either. There are, however, things you can do 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 a 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, the owner of Lemus Services, a Midwest contractor, knows this first- hand:
“We realized that we were not taking care of every customer that called in here,” Brad says. In other words, if a non-customer called with a crisis, some of our staff almost took offense at the request to help him out.
“Our thinking was, ‘Who have you been using? Why haven’t you called us? So, your emergency means you want us to drop everything?’” Brad admits sheepishly, “We would tell them the equivalent of ‘go jump in a lake.’ 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’re really missing out.”
Their new mentality means they drop what they’re doing to take care of the customer. “Besides,” Brad says, “You’ve got a pretty good chance of closing that call. It’s silly not to take it.”
Not only do you have a good chance of closing the call, you also have a good chance of getting an upsell. This is the perfect opportunity to sell your maintenance agreement (to prevent future emergencies). If your techs aren’t selling on emergency calls, it’s costing you a fortune, and it’s a disservice to your customers. If your tech identifies solutions that will help the customer, it is their responsibility to inform the customer. Plus, selling a maintenance agreement on an emergency call is barely selling, it’s more of a service to your customer. If done right, it’s an opportunity to save your customer money. And please tell how many of your customers would balk at that!
2. Invest in Customer Retention. Remember, these are your paying, active customers, so this is your highest value list by far. Their relationship with you means they’re less likely to shop around, are 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 that the key to our business is our customer base. 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.
The elements of a sound customer retention program are fairly obvious. At their most basic, they involve thank you cards, follow-up phone calls, reminder emails, customer newsletters, reactivation letters and referral requests. Customer retention is about communication, and you have many ways to start a conversation.
For example – your newsletter isn’t about selling; it’s about becoming familiar to your customers. Newsletters are the premier vehicles for customer contact – if done correctly. A newsletter that is integrated with your online presence and filled with interesting “home care” tidbits is not perceived as “advertising” and thus forges a far better image and strengthens the relationship.
Better relationship equals better retention.
Using QR codes to link your offline and online world is an added benefit to your newsletter, which can increase website traffic and allow you to fit more quality content (how to’s, energy saving tips, home remodeling) into your newsletter.
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 with your customer and best prospect base. Many companies use our ads and consistently maintain a $260 cost per replacement sale at a 45% gross margin. If you can't rationalize spending $260 to generate $2500 in profit, you don’t need to be in business.
“I’m sick of hearing people say, ‘What if it doesn’t work?” said Rob 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 slow downs, 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. Don’t put all your eggs in one marketing basket. Different types of marketing and media serve different functions. That means doing all Direct Response and zero Customer Retention, or all TOMA but no Image advertising is the perfect recipe for bad results. 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% in one year using this balanced method.
In looking at these comments, I guess there are 5 things that can outshine a competitor: the fifth is the ‘attitude’ of great contractors putting them into practice. Attitude and altitude work well together.