"I am a craftsman. Very few people can build what I build. Why do I need to know anything about marketing and sales?"
This is a question that has been asked by far too many new contractors who statistically have a very small chance of being in business five years after they started their construction businesses.
I do not mean to be flippant. But most new construction businesses are created by true artists, people who excel at and have a passion for the trade of their choice. When failure occurs, it is not related to the construction process. It is, in fact, due to a lack of understanding the management and organizational process of the business. An important part of that process is marketing and sales.
I am founder and president of GCS Construction Services, a landscape design and construction company. We specialize in the design and construction of unique landscapes on private estates valued in the $5 to $25 million dollar range.
My background is a little different than the typical construction business manager. I spent twenty-two years in the marketing and sales profession. I was fortunate to have been trained by those who I consider to be some of the most talented people in the marketing and sales field. I want to share with you some of my experiences in how our approach to sales and marketing has helped our company. I also admit that I continue to learn how to improve at both.
What is the difference between marketing and sales? Many people confuse these two words and lump them together. They are two distinctly different functions. Successful marketing includes understanding your product or service and developing a plan on how to present that to your target market in a way to profitably run your business. You cannot sell a product or service until you have a defined marketing plan. For example, when we made the decision to enter into the construction business, we wanted to create a true niche in the market. Our choice was to concentrate on the high-end estate landscaping market on the West Coast. We then began to analyze that market and tried to develop a marketing plan on how to service that market. Our main marketing goal was to create a niche where we had little competition and would not be put into bid situations. Bid is one word that makes me lose interest in a project. We politely decline.
Your marketing plan must work smoothly with your business plan. It’s a giant puzzle and all the pieces must fit. The reality of our world is that the pieces always change size. So you also need to be flexible in your plan. While GCS has stayed consistent to the core of our original plan, we massage it monthly to keep our company in the lead in our industry. We focused on the following ten items in our marketing plan:
- Our quality of work is beyond compare. This is a given in our industry niche and expected by our clients. This is the core value of our company.
- We made the marketing decision to do all of our own work other than electrical. Some people would say this is a business decision. We disagree; it is a core component of our marketing plan. This is what sets us apart from our potential competition.
- We work directly with the client—no architects, contractors or project managers between our company and the client and no “hidden agendas” that impede progress.
- All of our employees are dressed in the same professional uniform—shirts, pants, hats and jackets.
- All equipment is painted in our company’s blue and red colors, and logos are on each piece of equipment—from our largest excavator down to our wheelbarrows. We also list our website on all equipment.
- All jobsites are clean. We actually have trash cans with our company logo and a decal that is printed with “Keep the jobsite clean.”
- We print professionally printed brochures.
- We produce re-prints of magazine articles that feature our company. This is the most cost-effective marketing you can produce.
- We enter high-end awards programs.
- We network with the best in our field. We consistently visit and communicate with others across the U.S. and Canada that do similar work to ours. It is beneficial to share ideas with others in the field.
The majority of contractors do good work, but it is our core purpose, the focus of our business plan and therefore our marketing plan. We have two sayings in our company: “Quality of work that is beyond compare,” and “If you are going to do it, do it right.”
Now, other than quality of work, how do we separate ourselves from our competition through marketing? The decision to put our team members in uniforms and paint our equipment has paid great dividends. It projects a professional image of our company while also indicating our attention to detail in our projects. If we pay attention to the appearance of our crew and our equipment, we will certainly pay attention to the quality of our work. Our equipment and its branding is now associated with quality in the marketplace. It has given us an added bonus by helping to pre-qualify our potential clients. If we hear the comment, “If you can afford to paint all of your equipment, you must be making too much money," we instantly know this is not the client for us. We want clients that understand and demand quality. Our marketing goal is to put our company in the position to be recognized as the most professional in our industry.
Now that you have developed and refined your marketing plan, how do you sell that to your target market?
First, accept that "sales" is not a bad word. There is not a product or service in the world that is not sold. As a society, we think negatively of the “used car salesmen” image. This vision sells "sales" short. As much as we have artisans in the construction industry, sales is an art. It is also a process. Being a good salesperson does not mean you need to have the gift of gab. Most sales are lost from a lack of listening, which translates to the salesperson talked too much. Some of the best sales people I have been associated with are the quietist.
Second, do not sell on price. You are in a service industry not a commodity market. The contractor that chases bids to be the low price provider will not stay in business long. Understand your product and your market through proper marketing techniques, and then develop a good sales strategy.
In our business, we developed the following sales strategies:
- Our quality of work is beyond compare. This is a given in our industry niche and expected by our clients. This is the core value of our company. Sound familiar? I told you it was a core value of our company.
- Take the time to network, network, network! Talk to everybody about your business. We talk about our business to the CEO of a company the same way we talk to the guy driving a delivery truck. We are currently in the process of completing $3 million worth of landscaping on a 4-acre private estate for a local developer. This lead came from two sources: A pump supplier and a concrete truck driver. They happened to be talking to a supervisor in the business our client owns. The client then called us and asked if we would consider doing their project.
- Make sure you are prepared for every sales call. Wear a dress shirt with your company logo on it. Go to a local stationary supply store and get a laminated pocket portfolio that is close to your company’s colors. Put your company brochure and reprints of articles about your company on the right side and a professionally created proposal on the left. Make sure your logo is on the outside of the portfolio. To personalize the proposal put a label on it that states “Grading Proposal for the XYZ Development Corporation." You are looking at less than $5 in cost not counting your time.
- Magazines and newspapers love news. We recently notified a large local newspaper that we had received an international award for one of our water features. They devoted a page and half in the Sunday business section to our company. This is the cheapest advertising we have ever received. Magazines in our industry love articles about construction companies. You can have reprints made of these articles to use as marketing and sales tools.
- Trust your intuition. If the relationship between you and a potential client feels uncomfortable in the beginning, there is little chance that it will improve in time. I had a manager for years that taught me something I will never forget: “All business is not good business." We are very particular in the type of client with which we choose to do business. It is not about how big you are. It is about how profitable you are and how happy you are in your business.
- Do not bad-mouth your competition. Sell your business and your capabilities. Let the less professional get mired in the dirt and the negative.
Let me give you a sales scenario: Three of your competitors and you walk into XYZ Development Company. You are all making a proposal to do a grading project for XYZ. You are all going to tell XYZ that you are a wonderful company to deal with and that they should do business with you. I have not met a contractor yet who walked into a proposal meeting and told the prospective client that they were not a good company. How does XYZ decide other than by choosing who offers the lowest price? I have already told you my opinion of contractors who sell on being the lowest price.
Let’s back up six months and go over what you have accomplished with your marketing plan:
- You have required your employees to wear shirts in your company color with your company's name imprinted. They also wear hard hats in your company's color with your logo on the hat. Reflective safety vests are also required that also have your logo imprinted on the back.
- Your equipment is on a maintenance and cleaning schedule to make sure you present a professional image to the public. You also painted the ROP’s on your tractors in the company color. Your company logo has been applied to all of your equipment—no magnetic signs! Nothing says unprofessional like a magnetic sign. I always wonder if the company will still be in business next week. If the owner of a company does not have enough confidence to apply a high quality decal to his equipment, what will potential clients think?
- You have stressed to your employees the importance of a clean jobsite and communicated to them clearly that it is important to the company.
- Two media publications have recently done stories on your company. One was a short story about the safety award you just received. The second was about a project you were recently involved in.
Now let's see what happens at that proposal meeting during your presentation. You know one of the companies that is also making a proposal that day. You know that they have been typically 20 to 25 percent under your recent proposals and you know that they have not done a very good job on their latest projects that they have been awarded. You go into that meeting professionally dressed to present your company. You stress your attention to detail. As an example, you explain how you maintain your equipment and the professional appearance of your crews. (You have pictures of both in a “Brag” book.) You also give them copies of the recent articles about your safety award and feature article on one of your projects along with your new brochure. (All of this was included with your proposal in a twin-pocketed, laminated portfolio in your company color.) All the managers from XYZ have their poker faces on during your proposal.
Now let's listen in after you leave. They have all looked at the different proposals, and you are one of the highest. One manager mentions that he has seen your distinctive color on your tractors and comments further about the professional crews you have. Another manager talks about his dissatisfaction with going with a low-ball bidder. Through his experiences, they have been burned too many times by contractors doing poor work with low budget bids. Another manager brings up the safety issue and how a backhoe had recently backed into a car at a jobsite. Are you getting the picture? You have begun to separate yourself from your competition. You have not sold on price, and you have not bad-mouthed your competition.
In our company, we are not afraid to tell our clients that that we are a "for profit" company. If we run a profitable company, we will be here ten years from now to take care of their needs in the same professional manner that we take care of them now. Do not sell on price. There will always be somebody cheaper. The potential clients that get fourteen bids and buy on price are also the ones that complain the loudest when they do not receive quality.
You will notice that we never talk about our company as "I." It is always "We." We are lucky to have some of the most talented, dedicated and loyal crews in our industry. We sell our business as a whole. Our clients get a true team when they do business with us.
One of the most important qualities of a good salesperson is the ability to listen. Is your potential client really telling you “your price is too high” or “I really did not have that much in my budget"? Without saying it, could he be asking you to justify the price, that he is willing to pay for quality?
In closing, here are a couple of my favorite quotes. The first is from an old-time sales guy that was my mentor in my twenties, “Plan your work and work your plan.” Create your marketing plan. It gives you a head start on your competition in the sales process. Stay consistent and persistent to your plan. The second, “Opportunities do not come to those who sit and wait. They are captured by those who attack.” This was from a book written by William Dansforth, the founder of Ralston Purina, in the 1930s. I do not interpret his meaning as being aggressive. I take it as advising us to be prepared, consistent and persistent.
When you look at the successful construction businesses around you, I can bet they have a plan and are prepared, consistent and persistent in the daily fulfillment of that plan. Finally, remember that marketing comes first, and sales is not a dirty word.
Construction Business Owner, June 2007