Five-year-old Heritage Construction Services, in Houston, has all the work it wants, but founder and president Jeff Hunt wouldn’t change his sales approach even if that weren’t the case. It’s not because Hunt tries to close as many sales as possible. “We don’t want to close more than 25% or so of the deals we propose,” he says. “We close the deals where the client really wants to deal with us and on our terms.”
Instead, if the company needed more work, Hunt would tweak his marketing to increase the number of leads. That would be easy because, for this MBA and former Big Six accounting company consultant, marketing is far more science than art.
Hunt divides the company’s marketing efforts into seven categories: repeat clients, referrals, signage, home shows, public relations/newspaper, print media, and the Internet. Four of those categories have subcategories. Put all those lead generators into the first column of a spreadsheet, which Hunt does, and they occupy 18 rows.
In the spreadsheet’s second column, leads get entered as they come in, according to the marketing method that produced them. A quick glance at the spreadsheet tells which method produces the most leads. That’s hardly the most important number, though. “How many of these [leads] do we pursue?” Hunt asks. That’s the third column — the number of proposals that Heritage Construction Services makes from the raw leads. Hunt also looks at the ratio of leads to proposals. In 2007, the company’s average ratio was just a tad more than one proposal for every four leads, or 26.54%.
Leads and proposals mean nothing without sales, which occupy the next two spreadsheet columns: the number of sales generated from each marketing method and the ratio of proposals to closings. “In 2007, we had 12 raw leads from vendors,” Hunt says. “We pursued five and made three sales for a total of $185,000.” Hunt’s spreadsheet also shows the total sales generated from each marketing method, as well as many more details.
All this analysis gives clear insight into future sales requirements. From the number of jobs and the total sales volume it’s easy to calculate the dollar value of the company’s average job. From that, “you can figure out how many jobs you need to reach your desired sales volume,” Hunt says.
Looking back from jobs to number of proposals and then to leads, “you can back into the number of leads you need per year, per month, per week, and per day,” he says. Thus, for 2007, Heritage Construction Services had 211 leads, 56 proposals, and 25 jobs at an average of just over $76,000 each, for a total sales volume of almost $1.9 million. For 2008, Hunt wants to reach $2 million, based on an average job size of $100,000. The spreadsheet reveals the requirements: the company needs 20 jobs and 169 leads.
Hunt’s marketing is mostly science, but it also has art and soul. “Marketing is defining who the market is — the geography, the demographics, the job size — and developing a message,” he says. Heritage Construction’s message focuses on the source of most people’s problems with remodeling, which isn’t the craftsmanship. “It’s about care and getting them through the remodeling nightmare,” Hunt says.
Bridget Mintz Testa is a Houston-based freelancer who writes about residential construction, remodeling, technology, and business strategy.
Targeting the Perfect Customer
In early 2007, Jeff Hunt, founder and president of Heritage Construction Services, in Houston, developed a template for a 37-page sales proposal. Then he went out and used it for sales meetings. “Twenty-five percent [of customers] didn’t care, and 25% weren’t impressed,” Hunt says. “It only made a difference for a small number of people.”
So he trashed the big proposal and developed a new sales approach. “Find jobs that fit,” he says. It’s an approach based on Hunt’s goal of eliminating prospects whose budgets, goals, or chemistry don’t mesh with his company.
To find jobs that fit, Hunt politely fends off callers whose budgets are less than his minimum $50,000 job size. He meets with prospects who survive the phone filter, asking them questions designed “to expose the raw pain or compelling reason” why they will endure the remodeling nightmare. “People buy with emotion,” he says. “They justify with logic later.”
Hunt aims for the perfect customer, and he knows exactly who that is. “A perfect [customer] is one who knows his budget, is looking for design/build, has looked at our credentials, who will let us run the project and be the experts,” he says. —Bridget Mintz Testa