Editor's Note: As part of Marketing Month, we're revisiting some of our best, and most importantly timeless, articles of marketing advice.
Now that the recession has weeded out many of the also-rans, the competition is tougher, the search for new business is harder, and finding the time to hunt for prospects is becoming more difficult by the day. The competitive nature of this post-recession environment is why it’s important to have a good marketing strategy. If you attract the right customers to begin with, you’ll waste less time in the long run.
Marketing based entirely on referrals works only if your past customers are chatty, loved your work, and never moved out of town. Even then, you could be missing out on prospects who might make even better clients than the ones you’ve had in the past.
The top two mistakes that remodelers make when building a marketing strategy are failing to explore all of their options and failing to build that strategy on data, says Victoria Downing, president of Remodelers Advantage. Here are ways to help assure your hard work leads to sales.
Collect Demographic Data
Gathering information about current customers is a good starting point for creating a marketing strategy, but it’s only one slice of the pie. You also need to collect demographic data on your market to help you understand who your prospects are, where they get their information from, and what they’re buying. That data helps tell you how to communicate with your target prospects.
CoCo Harper of Jackson Design & Remodeling, in San Diego, understands that need. “We’ve got 3 million people [in our market],” she says. “We’re a high-end remodeling firm, so 5% of that market is going to be our clientele.”
Jackson’s audience is mainly 40- and 50-somethings, so print newspaper ads work well. Such targeted ad spending is one reason why Jackson Design & Remodeling’s revenue has grown from $5.3 million in 2009 to more than $12 million this year.
Demographic data can be costly to acquire, but good sources of basic data at low or no cost include business directories and government websites (see page 45).
Get Behind the Numbers
When it comes to knowing your customer, simply studying demographics isn’t enough. You need to assess customers’ psychographics, too, particularly their attitudes, values, interests, and lifestyle. “If you don’t have a clear picture of your target and your messaging, then everything you’re doing is going to fall short,” says Mark Harari, Remodeling Advantage’s director of marketing. “You want to address their emotional needs.”
To get a more detailed look at buying habits, try having deeper conversations with your customers. Ask them what they read, what radio stations they listen to, and which social media sites they frequent.
Michael Tenhulzen, director of Tenhulzen Residential, in Bellevue, Wash., is one remodeler who took the time to understand his customers’ psychographics. “Rather than just put money out there and have a shotgun approach to try to get more calls coming in, I just decided it would be better to interview our customers and find out what they really wanted,” Tenhulzen says.
His company wanted to find out how to reach its ideal customer. “We figured, if we can harness what that person’s buying habits are, ... we can attract more people like them,” Tenhulzen explains. So key staff members came up with a list of questions to ask (see page 44). What the company found is that its ideal clients don’t buy based on ads; they buy based on the quality of the work. They also liked the fact that Tenhulzen’s staff was invested in their projects.
As a result of the research, the remodeler’s marketing budget has decreased, but the business is spending more time on planning events. “Really, it’s best to get involved with people in a one-on-one setting,” Tenhulzen says. “The quality [of customers] that we get is much better, so our closing ratio is higher. We’re not wasting as much time going out and seeing people who are ‘shopping,’ for lack of a better term.”
The company even revamped its service offerings based on the research, dropping custom homes and adding a subscription-based annual maintenance program. Tenhulzen has also used a third-party service to conduct anonymous calls to past clients, using the resulting information as a springboard for greater changes in 2012.
“If our customers are looking for us to perform, we should really perform,” he says. Staff titles were changed—that’s why Tenhulzen’s title is director instead of president; while salespeople are executive producers. The design and production process changed as well, emphasizing collaboration with clients as part of the creative team.
Track, But Don’t Follow, Your Competitors
Differentiating your business from the competition is an important part of any marketing strategy. “If you’re trying to do everything and be everything to everybody, you end up being nothing to no one,” Harari says. Instead, he advises, develop a unique selling proposition. Offer homeowners something they can’t find anyplace else.
The easiest ways to gather competitor information are through their websites and tradeshow booths. Another—somewhat controversial—way is to call them, posing as a prospect.
“For us, that’s never felt right,” Danielle Frye, director of marketing for Anthony Wilder Design/Build, in Cabin John, Md., says. “We feel like, if that was done to us, it would be such a huge waste of time. We would never want to do that with our peers.”
So the company developed a different method. When promising prospects don’t become clients, the staff finds out whether or not that homeowner received a building permit. If so, a company rep will call that prospect after their project is complete to ask what made the homeowner decide to use the competitor, and what they liked and didn’t like about the experience.
“You’ll always get the occasional person who looks at every call as a solicitation,” Frye says. But for the most part, “when you’re genuinely seeking information, people are really happy to give it.”
Have a System
Data only helps you if you have a system to put the information to good use. According to Downing, that’s a failure of many remodeling companies. “They haven’t developed a pipeline that tells them how many jobs they need, how many leads they need, and how many appointments they need, so they don’t know what their target is,” she says.
Jackson Design & Remodeling and Anthony Wilder Design/ Build both use customer-relationship management (CRM) software constantly to assess marketing efforts. “I can look on a dime and go, ‘OK, where are the leads coming from, how many do we have, how many did we have last year?’” Harper says.
Anthony Wilder Design/Build invested time and money in Salesforce CRM software. “We can monitor our conversion rates, our close rates, and our appointment-to-close rates,” Frye says.
The company uses the information to figure out why certain leads convert more easily than others. It also calculates return on investment for each of its marketing strategies. “We’ll evaluate quarterly if we need to drop a certain strategy or add something,” Frye notes.
The company looks at the raw leads per month. If that number is under the company’s target, they take action. “We say, OK, this is how much money we’re going to allot to this urgent matter, and this is the result we expect to see. Typically, we would do some extra advertising to stay top-of-mind, and then a few grassroots efforts,” she says.
This year, the company allotted a significant amount of its networking budget to generating leads through golf outings. It’s an idea that the company’s head of business development, J.P. Ward, has championed for some time. But even though the golf idea was seen as somewhat of a risk, the decision wasn’t based on just a gut feeling: Anthony Wilder Design/Build’s data shows that many of its clients are golfers. And, Frye says, “it’s already yielding results.”
Ward has also connected with many real estate agents and is learning how they come to refer remodelers. “One thing we’ve learned is, making contact with somebody one-on-one is one of the most effective ways to get qualified leads.”
Pay Attention to Branding
Even a company without a big budget or many staff can boost business via marketing. One great way to get started is to examine your brand. Husband and wife home improvement team George and Dana Hedges, the sole owners and employees of Virginia Shower Door, in Richmond, Va., recently started doing business as RVA Shower Door, capitalizing on the city of Richmond self-branding as “RVA.”
“Virginia Shower Door was a great name,” George says, “but we got calls from all over the place, and we are strictly a local business. So we wanted something with more of a local flavor.”
The change “took like lightning,” Dana adds. “On everybody’s bumper stickers, and everywhere you looked, it became ‘RVA.’” The Hedges also came up with a logo that shows a frameless shower door opening onto the Richmond skyline.
Before making the switch, the Hedges tried to anticipate whether the name change would work. They gathered information, asking every prospect who called their business where they had found out about the company, and asking every client why they chose to work with the company. To further test their decision, they sought opinions from friends and local members of the National Association of the Remodeling Industry.
The Hedges are only a few months into the change, but the information they gathered has been reliable. “The feedback thus far has been very positive,” George says.
Launch, Measure, Revise, Repeat
The marketing process should include not only a strategy based on collecting data but also on monitoring and analyzing what your company does. “You should be modeling your metrics on everything and comparing,” Harari says. How long it takes to see real results will depend on which particular tactic you’re assessing. “Some things take longer to work through,” Harari points out. “Overall, I’d say every quarter, you’ll know whether you should reassess.”
“It doesn’t matter how big or small your business is. The process of branding and marketing a company is the same,” Harper says. What isn’t the same is what will work best for each company. That mix is what you need to figure out.
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