Marketing Is Key to Contractor's Growth
October 29, 2007
The numbers don’t lie. In 2003, Smith Services Inc., an HVAC contractor in Vero Beach, Fla., had annual revenues of $875,000. In 2006, that number had ballooned to $10.2 million.
That is a 1,065 percent growth rate in three years. Imagine tripling your business every year for three years in a row. Inc.com ranked the business No. 8 on its Top Inc. 5,000 Companies by Retail Industry - 2007 and No. 30 on its 2007 Top 100 Companies Intending to Go Public.
This remarkable growth has been due, in part, to an aggressive marketing and advertising campaign - at a substantial cost, too. Since buying the business from a former a/c technician in 2003, CEO Chip Woody has spent $20,000 a month on advertising and has been acquiring smaller firms for depressed prices, thanks to a downturn in construction.
“Air conditioning in South Florida? There’s no ceiling on how much you can grow it,” he said.
To understand how Smith Services, founded in 1974, has enjoyed its meteoric rise in recent years, The NEWS asked company president James Brann to explain the various marketing and advertising tools he has used to set his business apart from competitors and retain-acquire a strong customer base.
IDENTIFIABLE BRANDSMost of the marketing materials contain Smith’s brand image - Smitty the greyhound. The sleek logo is recognizable both on the company Website (www.smithservices.org) and on the company literature-signage.
“Our marketing plan revolves around Smitty,” said Brann. “We set a budget of about 3 percent a year for marketing and advertising, and we typically will not contribute unless our logo is involved.”
He noted the marketing budget ran slightly over this year due to special local advertising such as charities, community affairs, papers for specific developments, or new direct mail pieces Smith Services tries. But that budget has a minimal impact from Yellow Pages advertising. “Our plan consists of very little Yellow Pages,” Brann said. “We don’t believe our customer profile is the phone book shopper, where people typically look there to find our number only.”
Brann believes in taking the bull by the horns and overseeing his company’s marketing plan. “The program here is headed up by myself, but we do use an outside firm to work with us on the creative side,” he said. “We can come up with great offers but we do have someone to turn it into something the public will want to see.”
MARKETING METHODOLOGYThe marketing and advertising plans at Smith Services utilize several media outlets. Brann explained how each is used.
• Newspaper advertising: “We do some newspaper ads, consisting of full and half-page stand by ads to gain the most for our buck. Again the papers seem to be so full of ads if you are not careful, a standard ad will get lost. We do some small top-of-mind-advertising (TOMA) in the winter to keep our name out weekly. We will utilize manufacturers for co-op money to help with the ads. We do use inserts in the newspaper religiously every month. They are full-color two-sided inserts and are very inexpensive. These are a consistent source of leads every month.”
• Television advertising: “We run TV ads in local markets where available.”
• Directories/coupon savers: “We do as many neighborhood directories as possible; they are inexpensive and are delivered every month in some areas. We do use moneysaver magazines, as they seem to work well when it is the season for us from April to September.”
• Direct mail: “We do a lot of direct mailing out of our office to existing customers and to specific neighborhoods. We will send out 2,500 to 5,000 pieces each month, with 75 percent going to our customer base. These are typically maintenance-driven cards.”
• Co-op advertising: “We have stayed away from industry-driven programs except for the rebate program with Trane each spring and fall. We like to drive our name in the marketplace not the manufacturer. We feel we have a dominant name in the marketplace and a dominant icon in Smitty and will continue to press here.”
• Home Depot leads: “We have also benefited from the rapid growth of the construction industry locally and the addition of the Home Depot lead program. The consistent marketing has given us name recognition so when our people knock on a door of a contractor or show up to an appointment at a homeowner through Home Depot, it is typically not the first time they’ve heard of us. It is a lot easier to sell when you are not trying to convince people of who you are.”
Brann added the recent downturn in the housing market has made it necessary to continue a strong marketing program in order to keep his company’s growth and to keep his employees busy. The plan has worked well so far.
Publication date: 10/29/2007