Construction Business Best Practices Series – Step 8: Marketing and Sales Systems

 Editor’s Note: This article is the eighth in a series of twelve to lead you toward entrepreneurial excellence by our regular contributor George Hedley, owner of Hedley Construction and Hardhat Presentations.

I’m playing golf, and my cell phone rings. It’s one of my best customers who tells me he just signed a lease with a manufacturing company for a new 60,000 square foot building to be built in Anaheim, CA. He then asks me the magic questions: “Do you want to build it for me? If you’re interested, can you attend a preliminary design meeting tomorrow at 9 a.m. at the architect’s office? Are you in or out?” This is what I call “customer magic!” My marketing and sales system is working.What’s Your Marketing and Sales system?

Do you have a marketing and sales system? A system to get customers to:

• Call your company first
• Only call your company
• Want your company to do its work
• Only use your company
• Be loyal to your company

Do You Have a “Loyal” Customer Strategy?

A great marketing and sales system will consistently deliver profitable work via loyal customers who use your company exclusively. An effective loyal customer strategy will increase profitable sales, create profitable customers, earn business at your price and convert repeat customers to loyal customers. Is your loyal customer strategy working? Do you turn down more profitable work than you can handle? Are you making more money than your competitors? Is your flow of work steady and predictable? Are you in control of your sales volume?

Are You the Same as Your Competition?

The prosperous economy over the last twenty years has created stress on pricing and profits. There are too many competitors who compete with your company. Most companies, including yours, can and want to do more with their current resources. There is too much capacity for the total work available in any marketplace. This causes a downward price pressure and a very competitive work environment. The only way to get lots of work is to bid lower than you want. In order to increase prices, you need to offer something different than your competitors. But most contractors continue to offer the minimum per contract or plans and specifications. Ask yourself:

• Why should customers only buy from my company?
• Should customers pay more to use my company?
• Am I different than my competitors?

Construction has become a commodity. Most companies provide good service, good quality and good prices. It really doesn’t matter which contractor customers hire because most operate the same. When you provide the same as your competitor, you have little chance to increase your profit margin and a slim chance to hit your bottom-line goals. This allows customers to chart your course. In order to get what you want, you must offer more than your competitors. What do you do to stand out from the crowd?

What Business Are You In?

Successful companies today are different than their competition. For example, Wal-Mart strives to sell for less. Nordstrom offers great customer service. Mercedes Benz provides the best quality products. These companies are market leaders. They aim for the edge of the triangle. Most contractors strive to be all things to all customers through service, quality and price. They aim for the middle and compete with everyone else trying to do everything for everybody. There is no money competing for the middle. In order to be effective with your marketing and sales systems, you must decide what you want to compete on: service, quality or price. Without a clear focus of what you provide and what makes your company different, you’ll never hit your targets.

Why Marketing and Sales Systems?

I am amazed at the number of companies who don’t market or sell. They don’t have a marketing program, a systemized sales plan, an updated brochure or website, a customer referral system or a program to keep their customers loyal. These struggling business owners say: “I don’t need marketing or sales. I stay pretty busy bidding work and getting awarded jobs based on being the low bidder. I tried a brochure once, and it didn’t really do much for us. And besides, I don’t have time to take my good customers to lunch and get to know them. Low bid seems to keep us busy.”

Without a marketing and sales system, it is impossible to get jobs at the price you want. You have repeat customers who use your company when you’re the low bidder. But to convert repeat customers into loyal customers takes more time and effort. This takes a systemized approach to marketing and sales. Without marketing and sales, customers run your business. They give you jobs they want, when they want, at the price they think is fair to them. You can’t control your future without marketing and sales systems in place. There are only two times when you need to market and sell: when you need more business and when you don’t!

Marketing and sales is finding a profitable opportunity or need in the marketplace and creating a business to satisfy it. It is everything you do to promote your business from start to finish including all customer contacts, impressions and service. It is making customers aware of what you do, how well you serve them and creating the right perception of your company. More importantly, it’s creating relationships that reduce the need to sell, negotiate or cut your bid.

Marketing and Sales Tools

Changing your price will increase or lower your sales, keep you busy or slow, provide cheap or profitable work and give customers a perception of your company. If you lower your prices, it will only land you more business if you make your customers aware of your actions.

Another marketing and sales tool is to be different from your competition. By offering something more, unique or different, you can set your company apart. For example, being perceived as the fastest contractor in your marketplace will get you more work at your price. If you are the recognized expert in hospital remodels, you will be able to get more hospital work than most other contractors. Another excellent way to differentiate is to have great customer relationships based on friendship, trust and confidence in you and your company.

An effective marketing and sales system will exploit your differentiators, maximize your relationships with loyal customers and make potential customers aware of why they should only use your company.

Give Customers What They Want!

When your customers call, what do they want? They want you to help them solve a problem. Companies that focus on helping customers, increase the odds of getting profitable contracts. The more you offer and do for your customer, the more business you’ll do with your customer over time. Your marketing and sales job is to discover what your customers need and want and then deliver it to them.

An attitude of indifference is the No. 1 reason customers stop using companies. Customers stay where they are appreciated and cared for. Most companies fail to realize it takes five to seven times more energy and money to create new customers than to keep existing customers. Most spend more time trying to find new customers instead of working to make their repeat or loyal customers feel wanted and appreciated.

What do you do to show existing customers you care about them and their success? Here are a few ideas to help your customers and show you care about them:

1. Provide service and quality

• Stay informed of project schedule
• Do your own punch-list
• Submit shop drawings on-time
• Visit jobsite weekly

  2.  Educate your customer

• Seminars
• In-house
• Field
• Books and CDs
• Magazines

  3.  Recommend

• Architects/engineers/consultants
• Subcontractors/suppliers
• Bankers/equity sources
• Real estate brokers/title/escrow
• Insurance/bonding

  4.  Be a business consultant

• Review a customer’s systems
• Field operations
• Management ideas
• Administrative checklists
• Accounting tips

  5.  Improve their sales

• Provide leads to customers
• Play golf and go to dinner/lunch with potential customers
• Take clients to association meetings
• Offer joint marketing mailings
• Pick-up and deliver plans

  6.  Samples and literature-Stock and restock samples and brochures

  7.  Customer friendly website-Be a resource

  8.  Send something!

• Handwritten notes or cards saying “I Appreciate You”
• “Thanks” after a bid or meeting
• Magazine articles
• New product information
• Samples or guides
• Code updates
• Ten tips or your report
• Job photos
• Greetings
• Vacation post cards

Customer loyalty is the result of the quality of your relationship. By helping customers meet their goals and spending quality time with them, you will improve your marketing and sales success. Every customer has different priorities and areas where you can help them become better business people. Identify each of your top customers and make a list of what they want, your action plan to help them, how you can show you care about their success and your plan to convert existing customers to loyal customers.

Marketing and Sales Takes Time Energy and Money

A small investment in sales and marketing will generate a big return over time toward your bottom-line. Most competitors don’t spend any effort on this important area of their business. They figure if they do a good job, they’ll get lots of work. This is true, if you like building a business based on being low bidder to drive sales volume. In order to make customers aware of your company differentiators and develop loyal customer relationships, you must be willing to dedicate a small amount of time, energy and money to sales and marketing.

Create a Customer Motto

Start by creating a customer motto or slogan you can use in everything you send out. For example, my speaking business customer motto is “Let’s talk about building your business!” Our construction company motto is “Our goal is to help make your project a success!” Customer focused mottos set your company apart from the crowd. Create a customer motto focused on what you DO for your customer. Use words that describe how you help your customer’s project, business or life when they do business with you. Use your customer motto on your business card, estimates, proposals, invoices, letterhead, job signs, trucks, etc.

Become the Recognized Expert

Experts make more money, get the first call from their customers and get the last look. Are you an expert? What do you specialize in? Do your customers know your expertise? Most construction trucks driving down the freeway say: “XYZ Construction Company, Commercial-Industrial-Residential.” This describes them as a “jack of all trades and a master of none!” I wouldn’t call them to work on a hospital remodel, a commercial project or a house remodel. They are not experts. I bet they get their contracts by offering low bids on any type of work they can get!

When you start your marketing and sales system, you must decide what you want to become the “perceived expert” in. More than one expertise is acceptable and often desirable. But your marketing message must focus on your expertise. We have one main focus in our construction company: Multi-building business parks. However, we also build self-storage projects, office tenant improvements and manufacturing buildings. The key is to create separate marketing and sales materials that show you as an expert in only one type of product. Create separate marketing materials for each of your specialties. If you’re a plumbing company that builds medical and retail buildings, create two separate brochures and marketing campaigns focused on the target customers who want what your company offers.

You’re in the People Business!

Like it or not, you’re not in the business of building. Those who realize they are actually in the people business make lots of money. For example, our flooring contractor we regularly use is in our office at least every week or two. He spends time with me and my project managers discussing the construction jobs plus personal things that affect our future. He shows he cares by asking us questions about our lives and family. He offers ideas and solutions to make our business more profitable. And he is fun to be around. By the way, he is also the owner of one of the largest flooring companies in the United States. But he focuses his time developing loyal customers by getting to know them as people. Consider these questions about marketing and selling to your top customers:

• How much time do you spend with your customers?
• When was the last time you took customers to lunch or a ball game?
• When was the last time you sent a thank you note to a customer?
• What do you do to get to know your customers?
• What is your system to build customer relationships?

No Trust = No Sales!

When you get to know your customer, you begin to build trust. Trust is earned over time. The more time you invest in a relationship, the more trust is built. When you have a trusted relationship with customers, they want to do business with you. This trust is built during face-to-face time in relationship building sessions. Relationships grow when you are together having fun or discussing ways to help each other. These are best during a meal or at an event away from day-to-day activities of building a project. Think of a close friend. You build friendships by spending time with each other frequently doing fun things together.

The three steps to create a trusted relationship with your customer are:

1. Familiarity-time getting to know your customer
2. Awareness-making customers aware you care
3. Frequency-lots of face-to-face time

To develop trusted relationships, your marketing and sales system must include time with your targeted customers in relationship building sessions. Frequency is the most important factor to build relationships. Create a “Customer Contact Chart” to keep track of your top twenty customers with which you want to create trusted relationships.

Customer Contact 

1. Loyal Customers
2. Repeat Customers
3. New Targets
4. Referring Parties

Keep track of each of your top twenty customer targets and track the following:

• $$$ – Rank by sales volume and profit
• ROE – Return on energy to keep customer
• Customer – Customer name and information
• Contact date – Date of face-to-face appointment

Contact type:

• FTF – Face-to-face appointment
• F – Food
• E – Event
• M – Mail
• O – Other

Your goal is to see your top twenty customer targets every two to three months. This will insure you maintain relationships that result in getting a majority of their work. The balance of your customer list should be contacted at least every two to three months via the mail. Send out something to your entire list to keep your company at the top of their mind. This will show you care and get them to call or refer you work when the need arises.

Remember, the goal of contacting your customers is to get them to call you. Stay in touch by sending customers things that help them grow their business. Mail magazine articles, postcards of completed projects, ten tips to build faster or project checklists. These ideas can be created quickly with little expense. My marketing and sales budget is $5 per customer per quarter. For every 100 customers on my “Customer Contact Chart” we spend about $2,000 per year. This breaks down to $500 for mailings and $1,500 for face-to-face relationship building sessions. This is a great investment of time and money and a small price to pay to create loyal customers who will pay us top dollar to do their work for them.

Marketing and sales systems are simple to maintain and generate big results. All it takes is a commitment to do it! Get started building an excellent company based on installing marketing and sales systems.

Construction Business Owner, August 2006