Reaping Big Profits From Little Expenses

April 3, 2003
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Marketing’s true goal — whether through image, branding, all-purpose, or pure direct response — is to efficiently produce leads that result in paying, referring customers.

Yet HVAC contractors continually do three things that almost ensure this goal isn’t met.

One of the most common mistakes is not “sourcing” your leads. Imagine getting a monthly investment statement that reads: “Hi. Truthfully, we’re not real sure how well your investments are doing. We forgot to check, but anyway, we hope you’ll keep investing!” Yet this is exactly what’s happening to your marketing money if you’re not determining the source of your leads.

On every call you should ask, “And how did you hear about us?” or, “Were you referred to us?” (This indicates, of course, that you have and want referrals.) Remember that “Yellow Pages” will be the answer given more often than credit is actually due, since they’ve seen your signs, your vans, and then went to the Yellow Pages to find your number. You’d get more calls from more sources, except that you’re fond of making another key mistake, over-investing in the Yellow Pages.

Come on, are you choosing media based on which ad salesperson is the most persistent? Sadly, many do. The Yellow Pages is a very valuable place to advertise within reason, but with only 13.4 percent of your sales being sourced therein, as our statistics indicate, you should use seasonal, specific, targeted, effective media and message choices all year.

In two recent telephone calls, I’ve spoken with clients who saved $34,000 and $21,000 in the Yellow Pages, detect zero YP lead source loss (we redesigned a better, smaller ad), and are putting the savings into higher performance marketing. Now they get more calls, more often, from direct marketing sources metered out during the year. Regular mailings, including magnets, phone book stickers, unit stickers, and more, will boost leads all year. But you won’t get the maximum benefit from your marketing if you do not have a customer retention plan.

Not having a customer retention plan is the third key marketing mistake contractors often make. If you don’t make yourself memorable to customers, they’ll forget you. Sounds pretty reasonable, right? So when — not if — they forget you, this gives them exactly two options:

1. Go to the YP to find you. Good luck.

2. Call someone else who they’ve heard of more recently.

Neither answer is good. Plus, it costs you six times more to acquire a customer than to keep one.

Lastly, good customers buy faster, refer more, pay more, and price shop less. Those answers are good. But contractors will lose customers without a retention program.

It makes super financial sense to implement a customer retention newsletter. Why doesn’t every contractor use one? Even though it’s a simple answer, actually creating a newsletter is not simple. That’s why companies — including ours — publish them for you. We can send you a free sample if you’ll call, e-mail, or fax your request.

If you’ll overcome these three mistakes, you’ll be well on your way to marketing success. Your job will be far easier if you’ll let efficient marketing bring you the leads, sales, and profits you deserve.

April Marketing Tips

The second quarter of the year begins with a weather-generated slowdown. Thus you must force your market into activity with more aggressive means, primarily a service push for preseason tuneups. Your next wave is for spring replacement sales. In spring, your customer retention newsletters must go out or you’re asking your competition to take them! You paid to get these customers, don’t let them leave you for the competition.

April is big for IAQ and a continuation of tuneup plus maintenance agreement sales. Better to “cast a broad net” for tuneups, then go for maintenance agreements instead of attempting it in one step. (The only place you can sell an agreement effectively in one step is in your newsletter.)

Media Watch

Newspapers: Continue direct response service ad or insert for tuneups. Cooler areas are at the end of direct response “closeout” furnace replacement offers. Warmer climates are gearing up for preseason air conditioning offers in newspapers.

Newsletters: If your newsletters have not gone out already, you’re almost too late. You probably lost customers, so get it out.

Direct mail letters: Send tuneup letters to a target list of customers and high-probability prospects. You can also target with replacement letters for either deferred payments or monthly payments. Rebates can work well with a “tax time” tie-in.

Post cards: Direct response service postcards for tuneups should be in full swing. Get your service department trained on “up-selling” maintenance agreements. You can do very well with these. Focus on highest value at competitive price. Don’t “bait” with low-ball prices. Please.

Radio: Only use radio now to support your mail or newspaper offers. Make the same ad and offer in radio as in print. Track the leads to see which one callers remember.

On-hold messages: These should still be pushing preventive maintenance now.

Yellow Pages: If it renews soon, get it redesigned for maximum lead generation at lowest cost. (Fax to us and we’ll critique it for free.)

Gather all the names and sales you possibly can during April to use in mailings from May through the summer.

Hudson is president of Hudson, Ink. He can be reached at 800-489-9099, 334-262-1115 (fax), or www.hudsonink.com.

Publication date: 04/07/2003

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