ACHRNEWS

How Contractors Make the Phone Ring

July 3, 2000
A recent News editorial about a negative ad campaign by an hvacr contractor in the metro Detroit area provided the fodder for this question-and-answer installment from The News’ contractor consultants. They were asked the following questions:

  • What approach do you take to advertising? Do you tout your service or what you do better than your competitors?

  • Do you base your advertising on any marketing surveys of customers? Do you ask customers what they look for in a contractor?

  • What is your most effective means of advertising?

  • How much do you budget for advertising (percentage)?


The Medium and the Message

“There seems to be two general approaches to advertising in our area [Ontario, Canada],” said Roger Grochmal. “There are the price advertisers and there are the guys who push the customer fear buttons in order to plant negative seeds, which I presume will attract customers who are afraid or do not know any better.

“We’ve always taken a different approach. We spend all of our money and effort to educate our customers on every conceivable subject: equipment, service technology, contractors, and deregulation.

“This allows them to see through the pitches of our competitors and allows them to make the right decisions for their comfort, health, and safety in their home.”

Dave Dombrowski talks about his company and other issues that are important to his customers. “We talk about a drug-free environment, about our respect for the customer’s home, and our methods to show respect (booties, drop cloths, etc.).

“We do not invade the customer’s space and always wait to be invited. We answer by name and have visible IDs. I also believe in testimonials — having customers talk about their wonderful experiences when dealing with our company.

“We do not discuss price, but we may advertise a specific financial offer such as a rebate, extended warranty, or special financing terms.”

“Our approach to advertising is to talk up our own achievements as opposed to slamming the competition,” added Steve Miles. “We use slogans like ‘Missouri’s Most Trusted Contractor’ or ‘Voted Number One’ by readers of the Suburban Journals.

“Our current advertising campaign is ‘No. 1 Thanks to You.’ It’s on all of our trucks, business cards, letterhead, etc. in BIG lettering. It receives quite a response.”

Scott Getzschman prides himself on never mentioning the names of his competitors. However, he will use their work as an advantage. “We take pictures of poor installations and compare them to pictures of our installations, without mentioning the names of any competitors.

“On the doors of our trucks we have a trademarked motto: ‘Service Technicians You Can Trust Your Keys To.’”

“We tell people we are locally family owned and operated,” added Aaron York. “And we offer free second opinions.”

Targeting Your Customers’ Needs

“We take a targeted approach to marketing,” said Bill Flynn. “We perform ongoing market research to evaluate our market position and to direct our marketing approach.

“Presently, our market research tells us that our greatest chance of gaining a new customer is by leveraging existing relationships and by being in front of prospective customers when they become dissatisfied with their existing provider.

“We believe a targeted marketing approach is the most cost-effective approach to building relationships and establishing a positive performance image with prospective customers.”

Grochmal doesn’t use a lot of marketing but agrees that it can be useful. “We do market surveys from time to time but we use the information to fine tune our service offering.”

“None of our marketing targets our competition,” added Getzschman. “We use our own work to target our market, which includes a 100% satisfaction guarantee.”

The Most Effective Methods

“Word-of-mouth referrals become our most effective way to advertise,” said York. “Superior work and customer attention results in good referrals. Our policy is the customer is totally happy with what we do or the job is free.”

Mary Marble likes using direct contact with existing customers as an effective way to advertise. “We strongly believe in the old saying ‘the bulk of your business comes from existing customers.’ There-fore, the majority of our advertising consists of monthly mailings in the form of oversized post cards with seasonal messages.

“We mail to all of our current customers, anyone we have ever given a quotation to, and have purchased mailing lists of target companies and institutions.

“We endeavor to make these mailings meaningful to our customers by passing on hints on what they might do to improve the operation of their equipment and keeping them aware of new developments in the industry.

“We keep our name in front of the customer, which stimulates talking and eventually leads to calls to our service department.”

Grochmal takes the personal approach. “The single most effective way I advertise is through my newsletter. I write it personally and put it out with press releases to the media and specialty publications.

“To get new customers we have had good success with the Welcome Wagon in some areas, and postcards for service delivered to homes in target neighborhoods.”

“Direct mail, Yellow Pages, and cable TV are the advertising means we currently utilize the most,” added Miles. “We do use available co-op dollars, but produce our own media ads that promote our image as well or better than the manufacturers, who often just use a tag line at the end of their commercials with a local contractor’s phone number.”

Flynn depends on an active database of targeted customers to get his company’s message across. “We have built a database of 1,000 targeted prospective customers.

“From this database, we send periodic direct mail and establish relationships through ongoing telemarketing. Through these relationships, our marketing department sets up appointments for our outside sales reps to conduct capability presentations, perform needs analyses, and close business.

“A positive image, good relationships, and superior solutions to targeted customers is the cornerstone of our marketing plan.”

Dombrowski recommended saving some money for the technicians, who can be the most effective way to advertise. “It is important to remember that your most effective means of advertising is the technician referral.

“Funds must be available to reward the technicians for providing leads and to train them in soft skills and customer relations.”

Another means of advertising is often through goodwill efforts and small donations. Marble said her company supports church raffles and fairs. Miles added that his company sponsors youth activities and advertises in school programs and church bulletins.

Ad Cost and Expected Results

Most contractor consultants allotted between 2% and 5% of their total sales budget for advertising.

“The percentage to spend on advertising is a difficult question,” added Bob Dobrowski. “That is why it is important to do a yearly budget. Many contractors back into a number.

“The truth is that 50% of the contractors would probably say they spend too much while the other 50% would say they do not spend enough. It is important to track your results, your costs, and build a history of what works.”

According to Dobrowski, there are three important questions you have to answer each year when doing your advertising budget:

  • How much are you going to spend?

  • Who are you going to advertise to?

  • What will the message say?

“The number one objective of advertising is to make the phone ring.”