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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 like your customers’ systems won’t tune 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.
• 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, 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,” Lemus said. 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?’ “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, Lemus said, “You’ve got a pretty good chance of closing that call. It’s silly not to take it.”
• 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, 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. In fact, 20 percent of our jobs from these ads have been 16 SEER equipment,” explained contractor Miles Neely.
Free Thing: One of the most surprising marketing secrets is Automatic Customer Retention, which is trampling the old marketing model of hope for the best. Get a four-page customer retention report and a free Customer Retention newsletter sample. Simply make your polite request to firstname.lastname@example.org or fax your letterhead to us at 334-262-1115 with your polite request and mailing info.
• 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 prospect 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?’ ” said Rob Basnett, a Northeast contractor client. “I’d rather try it and say, ‘Look what we did!’”
Basnett knows from experience how important it is to continually market. In the midst of employee replacements and area-wide slow downs, Basnett confidently explained “I believe marketing strongly is why we are busier than others and as things turn around, we may have trouble keeping up.”
• Get better response from your biggest expense. You’re spending good money on your Yellow Page Ad. How much is it paying you back? Most contractors rarely even check to see if their No. 1 expense in marketing works at all. Your ads are either pulling or they’re not. If they’re not, yank them out. If they are, try to improve them. We redesigned and trimmed Basnett’s ad way down. It freed up some money and ended up generating more leads.
Free Thing: Sick of your Yellow Pages ad that blends in or doesn’t pull the leads? NEWS readers can fax their ad and polite request to 334-262-1115 for a free 1-page critique that’ll show you how to make your Yellow Pages ad a winner.
• 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 use 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 percent in one year using this balanced method.
“I’m very excited at the results. Marketing has helped us change the definition of our company. Instead of just being an HVAC contractor, I’m now a marketer of HVAC 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.”
Please note that The NEWS has corralled Adams Hudson into a 1 hour Marketing Webinar to be held April 14. We are taking reservations for this event now. Register at http://webinars.achrnews.com.
Publication date: 04/05/2010