Think beyond the bidding arena, and target new jobs based on quality and service.

Let's say you want to increase sales, and who doesn't, right? Consider this scenario: typically, your construction company bids about 10 projects each month. In years past, you would attend bid openings and see three or four of your competitors there. You knew them and spoke to them. Maybe you even joked a little over the last bid. On average, at the end of the month, you won approximately a third of your bids.

Now, you show up, and 20 to 30 bidders are at the bid opening (many of whom you do not know), and you can't win one bid. The prices are shockingly low. You go back to your office, head hanging, and go over the contract numbers again. You see that you cannot do that job for that price; it's below your field cost.

Sound familiar? The contractor marketplace has changed! It is almost impossible to exist or even prosper in the traditional bidding arena.
Today more than ever, marketing is a key component to the growth of any construction business. Unfortunately, few construction companies focus time and resources on achieving a successful marketing result.

Evaluate Current Efforts

The first step is to realize that your construction company needs a marketing plan. The second step is to analyze what type of marketing plan you are currently have and what it is costing you. First, list all the current marketing efforts and associated annual costs. At this juncture, don't be concerned with exact financial accuracy-it is okay to estimate actual costs at this stage.


 

This list will include your phone book advertising, business cards, direct mail campaigns and exposure you may get from donations to charities and sponsorships. Don't forget items such as vehicle-lettering and the cost of your web presence.

To understand the effectiveness of your marketing, create a lead-tracking system. This is a simple way to track how future prospects become aware of your company.

How many leads does the phone book generate for you? Now take this a step further: How many of those leads become profitable sales?

Suppose you spend $800 per month for phonebook advertising. That works out to $9,600 per year. If your average gross profit is 20 percent, you will need to sell $48,000 worth of work from phonebook advertising just to break even.
Many owners are shocked once they understand the level of sales needed for a positive return on their investment.

Design a Plan

At a recent meeting with a client in the asphalt paving industry, we agreed to refine the company's marketing initiatives.
The decision was made to create a detailed "marketing action plan" and to increase the amount of time and money that the company would devote to managing the plan.

 

A follow-up meeting was scheduled within the week that included the entire sales team and support staff. At this team meeting, we divulged our intentions and solicited everyone's ideas.

Out of this second meeting, one individual was selected to champion the project and a concisely-detailed action plan was born.
The plan clearly stated its objective(s) and identified the champion. Additionally, each event, task and decision was put on a line item. The line items had a start date, completion date, an estimated associated-cost, an actual cost, an estimated time required to complete and the actual time taken to complete.

Each task was given to one person who was held accountable for adhering to the budget and completion date. The team consisted of six internal people and a variety of vendors who were responsible for printing and web design.

The coordination between internal team members and suppliers was effective because they had a predefined budget and timeline.

Implement the Construction Marketing Plan

This company eliminated its Yellow Book presence. One of the first things the team did was update their customer and prospect lists by mining old files and making personal calls to the customers. They even traced customer leads that were an average of 10-years-old.
Some of the results were predictable. Several companies were no longer in business or just weren't interested in participating; however, they were in the minority.

 

The team was clear about what information they wanted to capture and the message they were sending in their calls. First, they identified the current decision maker. Second, they updated all the existing contact information and included e-mail addresses. Third, they let past clients and prospects know that their company had expanded its services over the last decade.

Here is what is interesting: Most clients remembered who they were even if they hadn't engaged them for several years. Most relinquished their e-mail addresses gladly.

The biggest surprise was that they were getting about three requests for proposals out of every 40 phone calls. This was much more effective from a results and cost standpoint than their previous phone book advertising.

Shortly thereafter, the team distributed an informational newsletter by standard mail and e-mail. This was followed up by additional direct mail and culminated in an invitation to an open house several months later at which the company offered educational seminars and performed onsite demonstrations. Employees were enthused and proud to pay attention to all the details.

The client had a profitable 2009, and duplicating and improving on what worked is making 2010 even better. Even with margin pressure and shrinking new work possibilities, the company has grown in profitability and size. Instead of focusing only on bids, they marketed to clients that fit their competencies and sold on quality and service.

 

At a Glance
Follow these 10 steps to jump start your construction marketing efforts:

  1. Acknowledge that you need a comprehensive, results-orientated marketing plan.
  2. Analyze your current marketing efforts.
  3. Create a strategy that eliminates what does not work and expand on marketing or branding the things that do.
  4. Be creative and explore new ways to reach prospects and existing clients.
  5. Convert your strategy into a “marketing action plan.”
  6. Appoint a champion to spearhead the plan and hold team members accountable.
  7. Develop a team of internal people and external suppliers to accomplish your goal(s).
  8. Ensure that the plan’s timetable coincides with a logical marketing calendar.
  9. Hold regular meetings to monitor everyone’s progress.

10.  Make the action plan a top priority!
 

Construction Business Owner, October 2010