February 14th, 2012 by Nolan Borden
Generating new business—it’s the lifeblood of every successful company. Construction companies—in fact, all companies—that market themselves effectively differentiate their services from the competition and stand a much better chance of driving qualified new business. Those with the willingness to hone their messaging and offerings to specifically serve a particular niche within the wider market do even better.
It’s no secret that construction companies that develop and exploit a particular specialty niche tend to see a greater degree of success than those who try to be all things to all customers. A survey performed by North Carolina-based construction industry management consultants, FMI Corporation, found construction companies that specialized in serving a particular segment won bids nearly twice as often as those that did not.
Given that sort of advantage, if your business lacks such specialization, it may be time for you to re-evaluate to whom and how you’re marketing your services. Of course, a lot of companies still have reservations about narrowing the focus of their business, afraid they’ll push away other opportunities in the process. This just isn’t the case. In fact, it’s almost exactly the opposite.
By focusing on serving a particular segment—say restaurant or chain construction, high-end residential projects or sustainable “green” building—your company gains a golden opportunity to own that market space. You benefit not only from decreased competition for bids, but you’ll also come to be seen by future and repeat clients as a “go-to” expert in that space. The result: Increased growth in a field that suits your company’s specific sales goals and identity.
Finding Your Niche
When determining the niche your business will target, make sure it’s an area in which you’re both comfortable and capable. A good place to start is in considering your current and recent customers: Who is good to work with and why? What sort of projects does your company excel in completing, and which bring the greatest returns for your efforts?
Answering these and similar questions will give you a good idea of where you should be directing your marketing energies, allowing you to build the business most desirable while pruning that which veers from your overall goals. Having a formally developed, ideal prospect profile will aid your next steps immeasurably. In essence, ask yourself what the ideal customer looks like, what their specific needs are and how your specialization would fit into what they’re looking for. Solidifying your goals in terms of desired (and realistic) growth will also help determine the scope of your marketing efforts.
Once you have clearly identified your target niche, it’s time to roll up your sleeves and get to the work of developing business intelligence on the companies and/or individuals who fall into this market segment and meet your profile. For instance, you want to know who they are; where, when and how they do business; what publications they read; and where they congregate (i.e., trade shows and industry events). Of course, this is in addition to gathering statistical information on the overall size and saturation of the market, active competitors and growth opportunities.
Pre-existing customers whose qualities guide development of your ideal customer profile can be a wealth of actionable information, helping you to zero in on the hot-button issues faced by those in your target niche. Armed with this understanding, you can more accurately communicate your differentiating factors to other prospects who fit the bill. More importantly, this information will help you tailor your services more and more effectively to meet the unique needs of the niche.
Identifying Your Prospects
With the ideal prospect in mind, the next step is lead generation. The form and scope your lead generation efforts will take depends on a multitude of variables, including but not limited to the size and nature of the niche, the scale of your own operations and your pre-determined revenue and growth goals. Obviously, the larger and more complex these elements are, the larger and more complex lead generation becomes.
There are some constants, though. You’ll want to find those prospects that most closely match your ideal profile, identify the key decision makers you’ll need to approach and gather as much contact and background information as possible. If the niche is a sizable one, chances are you’ll be able to find directories, contact lists and research sources to help you build your prospect database. Even smaller, localized markets will have common points of contact, and these can provide direction as well.
Regardless of its size or scope, methodically developing and maintaining a clean database of prospects gives you a roadmap to follow as you begin to communicate with that niche. Remember though: Contact data is a continually moving target. Statistics show that more than 70 percent of people change one or more elements on their business cards each year. Keeping your database clean and accurate must be an ongoing affair.
One of the key benefits of targeting a specific niche is that it makes allocating marketing dollars easier and more effective. Rather than blindly casting the widest possible net and hoping for the best, you can intelligently focus your efforts, messaging and face-time on those prospects who represent the highest potential return over the shortest timeframe.
A Roadmap for Success
Now it’s time to map out a plan for connecting with these prospects, whether through advertising (print and/or online), direct mailings or over the telephone. The best approach is a coordinated combination of all three. Ideally, all of the above should address the specific needs and interests of the target niche and be geared toward transforming that initial contact into a relationship.
Frequent (but not oppressive) meaningful contact with the filtered prospects in your database will help you secure the face-to-face meetings with decision makers that make deals happen. It’s therefore important that each subsequent contact build on prior communications with a prospect. This is known as nurturing the prospect, and it’s important to see it as an ongoing process rather than a single action.
For example, information requests coming as a result of ad placement should trigger subsequent contact with more information. Likewise, initially targeting your ideal prospects with a direct mail offer should be followed up with a telephone contact. Telephone representatives can reference the initial communication and further nurture the prospect relationship, asking questions that enrich the prospect database while also answering questions and communicating your company’s unique value proposition. Each subsequent contact then becomes a means for deepening the relationship and breaking down any potential barriers to the in-person sales calls that follow.
Of course, the telephone specialists you enlist to make initial and follow-up contact with your prospects must be well-trained. Their role is to essentially begin a conversation between your company and the prospect, not close a sale. While they’re not calling to engage prospects in deep discussions, they should be capable of delivering your message with enough detail to solicit the desired action.
Desired actions may include getting the prospect to accept further information on your company’s offerings or to schedule a follow-up call or meeting with a more experienced sales professional, depending on where the prospect is in the decision-making process. The key takeaway here is the compounding value of repeated, sequential and meaningful contact to build a relationship. Even if you’re not turning prospects into customers immediately, you’re still penetrating your target niche and keeping your company at the top of prospects’ minds.
Delivering Your Message
Successful niche marketing depends on clearly defining your niche, gathering business intelligence on ideal prospects and then reaching out to the niche in its own particular language, addressing its own particular needs. By profiling and gathering intelligence on these ideal prospects, you’re able to use marketing dollars much more effectively and efficiently, generally gaining greater penetration at a lower cost than wide-reaching marketing efforts.
The quality of the prospect database is a key component to effective niche marketing, and it’s in your best interest to make sure it is as clean, accurate and up-to-date as possible. Your database will give you the opportunity to act quickly on marketing opportunities to those prospects who fit your niche, and it will make establishing a calendar of mailings and other contacts much more feasible and easier to manage.
Of course, once you’ve gathered the necessary business intelligence and developed your database of qualified prospects, it all comes down to persuasive and informative messaging. Take the time and invest the necessary resources into crafting your messaging, making sure you’re addressing the hot-button issues of your niche and clearly delineating your company’s unique value proposition.
Depending on the size and sophistication of your niche market, it may make good sense for you to engage marketing communications professionals to help you craft your messaging. In fact, partnering with such professionals can give you a clear advantage in successfully achieving all the requirements and aims of your niche marketing efforts. Regardless of whether you partner with a firm or go it alone, the steps outlined above will help you make the most of your marketing dollars and see great gains in capturing new business in your niche market.
February 7th, 2012 by Nolan Borden
There are lots of ways to make a profit in the construction business. They include cutting costs, reducing overhead, improving field productivity, accurate estimating, reducing field mistakes and having an excellent training program. Each of these will give you a small improvement in your bottom-line, but not enough to make a significant difference.
The easiest way to make more money is to create it! Profit starts with revenue. The more profitable revenue you create, the more profit you make. Revenue comes from customers. Profitable revenue comes from satisfied customers who want what you provide and will pay a little extra for your excellent service. To make more profit, you must find and keep more profitable customers. Are customers your No. 1 focus? Do you have a business plan to take care of your customers and put them first? Studies show it costs and takes five to seven times more money to find new customers than to keep existing customers satisfied. Maximizing profit is dependent on satisfied customers-current, repeat, loyal and future.
Are You a Money Maker?
Are you focused on making or saving money? What do you spend most of your time doing? What are your top priorities? Do you really care about your customers and what’s best for them? Do you keep your commitments? Return customers calls immediately? Man jobs properly to finish on-time? Do you keep your customer’s jobsites clean? Schedule jobs based on what’s best for your customer or what’s best for you?
Money makers are focused on making money. Money is made by taking care of customers. Look at the hotel business. The large successful hotels are 100 percent committed to giving their guests a great customer experience from the minute they enter the front door until they checkout. They treat customers as guests and strive to give them what they want. These hotel managers don’t focus their time trying to save as much money as possible or scheduling people based on running the most efficient hotel operation. They focus on creating satisfied customers who’ll come back over and over again. This customer focus creates profitable, repeat loyal customers. It also stops customers from shopping price when choosing a hotel chain to frequent.
The cheaper budget motels, in contrast, are money savers and do whatever they can to save every penny possible. The furniture is bolted down to the floor, you only get one thin towel, you don’t get a morning newspaper, you can’t remove the clothes hangers from closet rods, the hot water is turned down to warm and the hotel clerk’s goal is to make your life miserable. These motels offer poor service, average quality and cheap prices. Guess what? These cheap hotels are like most small businesses. They sell low price and don’t have loyal customers. They also constantly struggle making a significant profit.
What’s Your Focus?
What do you do to give your customers a great customer experience? Have you forgotten where your money comes from? As your business grows, you get busy and don’t have time to take care of your customers the way you really want to. But those who make customers their number one priority make 100 percent more money than those who provide mediocre service. The vast majority of small business owners and managers focus their energy on getting work done and saving as much money as they can. They don’t focus on making money by creating profitable revenue and satisfied customers. Meeting their customer’s needs and providing great customer service is an afterthought in their every day activities. Small business owners start their company with a dream of working for themselves, calling the shots, making a lot of money, having some freedom and extra time off. They were good at running jobs, estimating or installing materials. But they never spent much time focused on taking care of customers.
The typical business owner is a good worker and builds a good product or service. So when they start their companies, they don’t have trouble getting customers. They get busy doing the work and then hire some workers to help them get the work done. Because employees aren’t as efficient as themselves, the owners scramble to get everything done and forget to take care of their customers. They get overwhelmed, overworked and don’t have enough resources to hire enough qualified people to stay ahead of their workload. This causes customers to get upset as deliveries and completion dates begin to slip. This causes their overall company operation to leak customers, people, money and profits. The business owner is now stressed-out and doesn’t know what to do to fix it. He works as hard as he can, but it isn’t enough to keep all the balls in the air.
Business owners mistakenly focus on saving money instead of making it. What’s your focus? Are customers your No. 1 priority? How much time do you spend satisfying customers? Do you have a customer service training program? Or do your customers seem like an interruption? I once heard a customer tell a rude store clerk: “You don’t get it! You’re overhead, I am profit!”
Do You Lose Customers?
Have you ever been to a store and waited in line to pay while the clerk talks on the phone? What do you do? Scream and yell. Wait patiently. Tap on the counter. Look for another clerk. Go to another cash register. Give them a lecture on customer service. Ask for their supervisor. Studies show that nine out of ten men and four out of five women have stopped using a store forever because of long lines or long waits. What ticks off your customers?
- -Not returning phone calls
- -Lack of instant e-mail contact
- -Missing deliveries or scheduled installations
- -Not enough men on the job
- -Don’t show up when promised
- -Not protecting adjacent work
Customer Focus Test (Rate on scale of 1 to 10)
____ We regularly survey our customers:
– To find out how satisfied they are
– To ask for suggestions to improve
____ We regularly review these suggestions and make positive changes.
____ We have a customer mission statement.
– I can recite our customer mission statement.
– Everyone in our company can recite it.
– Everyone understands it.
____ We track customer satisfaction:
– Errors, problems and call-backs
____ We continually train our entire staff in customer service at least four times per year.
____ New hires get an in-depth training which includes customer service.
____ Our compensation and incentive pay includes customer satisfaction.
____ We regularly reward and recognize for great customer service.
____ We don’t have any stupid rules that are not customer friendly.
____ Everyone has the authority to do whatever it takes, to satisfy our customers.
It Pays to Please!
According to surveys satisfied customers will pay up to 10 percent more. Satisfied customers also tell two to three people about your great work. The bad news is that dissatisfied customers will tell ten people how bad your company is. It is imperative to remember that satisfied customers are the No. 1 reason for your daily activities, your job and your company. Your customers are not interruptions, distractions or problems. They are why your company is in business!
Your customers don’t care how busy you are or about your employee problems, your cash-flow issues, your broken down equipment, your chain of command or your company rules or policies. They hired your company to perform, not make excuses. Your problems are your problems, not your customer’s.
Are You Leaking Cash?
Where is your company being held back, clogged or stopped up? What is blocking you from achieving your maximum bottom-line potential? Where is your weakest link? This profit pressure point causes your company to leak cash. You are not making the money you should if everything was working properly. You work hard to get signed contracts. Then during projects, things go wrong and your customers don’t get what they want or expect. This causes conflicts and hurts your bottom-line. I call this the “profit pressure point.”
In order to unclog your pressure point and stop leaking $$$, look at your company systems, policies, people, service, quality, technology or training issues that restrict the flow of your operation. These clogs and obstacles don’t allow your company to take care of customers and cost you lots of cash.
Check Your Calendar!
Think about what happens every day. Most business owners and project managers spend at least 90 percent of their time doing the work at hand. They multi-task as they manage employees, subcontractors, suppliers and projects. Their only customer contact is during project meetings, bid negotiations, haggling over change orders, fixing field problems and scheduling crews and materials. They take repeat customers for granted and assume if they do a good job, their customers will put them on the bid list for their next project. This may be enough to build a business in good times, but what about during a slower economy?
When new customers call with project opportunities, you immediately drop everything and put them first. You call your existing customers and cancel meetings to allow time to wine and dine potential customers. You put on your best clothes, take them to the finest restaurant, and present them your shiny brochure filled with glossy photos of your company’s accomplishments. All while current customers wait for you to return their calls or fix a project problem. Sound familiar?
Your calendar doesn’t lie. How much time do you invest creating satisfied customers versus getting projects built? Do you take time transforming current customers into repeat customers by finding out what they want and then delivering it to them on a regular basis? Or better yet, do you make time to take your loyal customers out to lunch, a ball game or a monthly round of golf to get to know them better?
Does your company have an action plan to make every customer satisfied? A customer satisfaction program takes concentrated effort and will return big-time to your bottom-line. You can be a repeat customer of K-Mart or Wal-Mart, but you aren’t satisfied, so you’ll shop anywhere the products are available. Satisfied customers will use your company over and over again and pay you more than your competition. People want to help those who help them. Look for ways to help your customers make more money. Be more of a business partner than a provider of services.
Time is money. How you focus your energy will decide how much you make. Meaningful time satisfying customers is big money. Make it your priority to invest at least 50 percent of your time focused on satisfying customers. This will return more profit than you’ll ever make ordering materials, scheduling crews or supervising operations. Rearrange your calendar, put customers first and watch your bottom-line grow!
February 6th, 2012 by Nolan Borden
The Construction industry’s unemployment rate increased in January to 17.7%, from December’s 16%, but it was much lower than January 2011’s mark of 22.5%, the Bureau of Labor Statistics has reported.
BLS’s latest monthly employment update, released on Feb. 3, also showed that construction gained a further 21,000 jobs in January, after adding 31,000 in December. That brings the industry’s total employment to its highest level in two years, according to Ken Simonson, Associated General Contractors of America chief economist.
January also marked the 16th-straight month in which construction’s jobless rate was lower than its year-earlier figure.
The BLS industry rates are not adjusted for seasonal variations. Construction’s rate generally worsens in winter months, when the volume of building drops.
Nearly all construction sectors posted gains in jobs last month. Heavy and civil construction was the lone exception, recording a decline of 1,400. Another encouraging note came in architectural and engineering services, which added 6,900 jobs last month. Design services numbers are not included in the BLS construction category.
AGC’s Simonson said the construction’s industry’s two-month 52,000 job gain is “great news,” but cautioned that the increase came during periods of unusually mild winter weather.
He said, “It will take another month or two to see if the recent job growth reflects a sustained pickup or merely acceleration of homebuilding and highway projects that normally halt when the ground freezes in December and January.”
Simonson noted that construction employment is up by 116,000, or 21%, over the past 12 months, but is still down 28% from April 2006’s peak of 7.7 million.
Anirban Basu, Associated Builders and Contractors chief economist, said, “Clearly the recovery in private construction has been accelerating.” Basu said job growth was especially strong in the manufacturing, commercial and power industries. But he noted that “the impact of strained public finances also continues to be apparent,” pointing to the reduction in heavy-civil construction jobs last month.
There were other negatives in the BLS report—construction’s jobless rate was the highest among major U.S. injury categories and also was more than double the overall U.S. level.