With leads dropping like flies throughout the industry, refining your marketing strategy might be an option you can't afford to ignore in 2007. “The good news about a falling market is that it makes you better at what you do and weeds out the riffraff,” says a successful high-end remodeler whose leads declined sharply in 2006 (see chart, below). Here are some of the actions this remodeler is taking to keep his business strong — as well as suggestions from two marketing consultants.
STEP IT UP “Look at external and internal factors before springing into action,” says David Alpert, of Continuum Marketing Group ( www.continuum-mg.com). Key external factors are the economy and consumer confidence, which the remodeler says are hurting his competition as well. Historically, businesses that suffer least and recover fastest during these times are those that market throughout them, Alpert says. These companies also “put greater emphasis on sales efforts to close the leads they have,” he adds.
Marketing consultant Michael Stone ( www.markupandprofit.com) says the lead drop-off is a “typical swing” among companies that rely heavily on referrals. “When interest rates go up, their leads go way down. If leads that come from referrals are more than 20% to 25%, then the company needs to do a better job of advertising,” he says. Business cards are one of the cheapest and best sources of advertising, he adds.
The remodeling company also had some difficult internal factors in '06, including the unexpected loss of two key employees and the owner's premature decision to hand off many of his sales responsibilities. “These factors aren't so typical,” he says, “but they're typical in that they always happen to somebody.”
In response to the overall slump, the remodeler says he is “kicking up” his marketing in a few ways. For instance, for the first time ever he is buying a targeted mailing list to complement his longstanding practice of marketing to his home-grown list of clients and other referrals. Also new: advertising in local magazines. The lead quality may be slightly below that of his in-house list, but “if we have to see more people to close the deal, then that's what we'll do.”
Being his company's strongest closer, the remodeler is also reinserting himself into the lead sales position for the time being.
“Determine which lead sources generate the most productive leads, not the most leads,” Alpert says. “Then focus on those efforts.” One strength for this remodeler is his business associates. So he's stepping up his professional networking efforts by being visible (and influential) in local business groups.
TUNE THE MESSAGE Scrutinize your marketing message as well, Alpert suggests, and consider tweaking it if you believe it's no longer in tune with what homeowners are looking for. To that end, the remodeler's new marketing efforts focus on what the company has identified as its key strengths: completing projects quickly and smoothly. For instance, postcards show color “after” photos of projects next to their impressive start-to-finish timelines — 12 weeks for one substantial project, for example.
Mailed in November, the postcard generated an immediate jump in leads. The remodeler attributes this to the need for speed. “Our clients are fairly affluent people who exert an awful lot of control over their lives.” Poor communication and management are their “hot buttons,” he says. “It's mostly not about price.”
A photo of the company owner also appears in the new marketing materials, an idea he had always rejected but finally did at the urging of his own marketing consultant. It turns out that this personal touch is something that resonates with people, the remodeler says. “I've gotten a surprising number of positive comments about it.”