I consistently advocate contractors which “rely” on referrals and repeat business to become much more proactive in attracting this valuable business. You don’t need to wait for your phone to ring — you can use some simple and surprisingly inexpensive resources to attract this vital business. In fact, structured referral and repeat business programs should be your first marketing priority before you consider any conventional advertising.

How inexpensive and simple can the process be? Consider this posting in Michael Stone’s Markup and Profit Blog:

“Michael,

I have to tell you about an amazing marketing tool that we have started using and it works really well. We call it our ‘Referral Bonus Program’. We offer all our previous customers their choice of either a 1% cash bonus on any referral they give us that turns into a contract – or – 15 min of free remodeling on their home for every $1000 of contract sales they refer.

I realized 1) People want to work for someone referred to them because there is some accountability built into it. 2) Previous customers who think of us as a partner will tend to remember us when they need new things. 3) Our previous customers will put on a new positive mind set about us. While we have had virtually no disgruntled customers in the last 4 years (minus one woman who difficult to please), it is easy for people to think negatively about everything they deal with. If they are trying to sell our services to their friends that automatically puts them in a positive mood about us. 4) The cash back is insignificant to the total cost of a project for us but in a household economy even 1% is nice. (We just sold a $6500 job and the referrer was so excited to get a check for $65.) 5) If the customer opts for the free remodeling time (retail of twice the cash value), we get to come back into their house and cement the notion that we are ‘their’ remodeler.

I have sent out 12 letters and have already received 3 referrals from them. It is virtually free marketing.

What do you think?

Alan W. Gray
Principal Managing Member
Northwest Woodcrafters LLC”

Stone says in his posting: ” If you want a copy of his letter, send us a note and we’ll forward it to you.”

Note that the referral compensation is modest, indeed, and far less than you would normally pay for a lead (and the lead conversion is guaranteed!)

Popularity: 1% [?]

Yesterday, I observed how leaving the safe zone (from traditional perspectives) can help you score a potential marketing home run.  With a few minutes to spare, I decided to wander over and listen to one of the speakers giving a presentation at the side of the show floor at the Construction Specifications Canada Toronto Chapter No Frills Trade Show.

Usually, these presentations are boring, product or service-specific promotional exercises; usually following scripts and not terribly well executed.  Show organizers give these spots to exhibitors as part of the pay off for purchasing booth space.

However, John Hackett, an architct and vice-president, practice risk manager at Pro-Demnity Insurance Company, had an entirely different (and disturbing or refreshing message, depending on your point of view.)

He spent a half hour taking pot shots at the LEED certification program, the process of earning points through the organized program to encourage Green building construction.  He cited flaws in design, construction, and misappropriated resources, where buildings are not functional, don’t really contribute to the environment and create havoc for professional liability insurance companies such as his.

My jaws almost dropped.  I hadn’t come prepared for a real news story, so scribbled my notes on the back of a magazine I had grabbed from another exhibitors’ table  and used my cellular phone to catch visual notes from the overhead.  I also made sure after the presentation to get his business card and co-ordinate a full-scale interview for a proper story in our upcoming publications.

After the presentation and on the train ride back to Ottawa, some highly respected, experienced and well-connected construction specifiers told me in confidence they agreed entirely with Hackett’s perspective.  They also asked that I not attribute or quote them in any way.   This stuff is too hot to handle for most of us, it seems.

Of course the vice-president of the company which handles, effectively, malpractice claims for Ontario’s architects, has a unique perspective of the industry, its practices and its regulations.  He also sees the problems:  Claims which his company doesn’t need to pay because they don’t fit within the policy limits, but remain sensitive because the building owner and/or user is dissatisfied with the results.  He cited concrete examples, and credible U.S. research, to suggest the problems he sees are not minor, and are not going away.

One of the specifiers told me he had heard that “LEED won’t last another 10 years.”  I don’t know if that is true, but I know there is a story here.

A few minutes later, excited by the refreshing insights, I rushed over to listen to another trade show presentation, hoping for more of the same.  Well, I got “more of the same,” the standard, ill-prepared and boring stuff intended to hype and market the presenter’s service.  I exited, stage left (actually, there was a door to the hall outside the trade show floor.  I used it.)

Of course, it is hard and sometimes dangerous to go out on a limb and speak against commonly-held assumptions.  You need to be prepared for a backlash and if your clients have invested in the traditional approach and you are disputing it, you may not win many friends.

However, if you sincerely believe in something and it meshes with your real business objectives, contrary thinking can sometimes be a brilliant approach to marketing.  Maybe most architects, consultants and contractors have nothing to gain and much to lose by speaking out against LEED and the environmental rating/consulting industry it has encouraged.  However, we aren’t employees of malpractice insurance companies, are we?

Popularity: 2% [?]

Through most of my life I’ve been an optimist.  I tend to see things with a hopeful eye.  Vivian, on the other hand, often sees the depressing problems.  A sign of a healthy marriage is we know our differences and often joke about them (and probably our respective attitudes balance to create a realistic perspective).

My positive attitudes, in part, were shaped when my parents, desperate to teach me some rudimentary social skills, sent me to the Dale Carnegie Public Speaking Course at age 17.  At the time, I was the youngest program graduate.  I learned not to be afraid to speak in front of audiences. I also discovered I didn’t have fear in doing rather risky things like, a few years later, arriving in Liberia a week after a military coup where the soldiers beheaded the former political leaders and stuck their skulls on beachfront poles. One night in Monrovia, I spent a drunken evening in a commandeered taxi with a soldier, who at night’s end, wanted my watch.  I declined to give it to him.  I solved the problem by defying him in the very busy lobby of the town’s five-star hotel.  My real accommodations were, of course, much more modest.  The room even had a slow rotating fan on the ceiling.  Right out of those old African movies.

However, I couldn’t say “hi” to someone who knew me and I still have real troubles recognizing faces and names.   It took me a long time to work through things to reach some level of normal functioning.  In other words, I’m a social basket case.  I’ve compensated for my lack of people skills and social relationship capacities with my writing skills and some healthy internal attitudes.  One is, I can poke fun at my own weaknesses.  The second is, the lines from the Dale Carnegie Course stuck in my head like glue:  “Don’t criticize, condemn or complain.”

I follow these rules by never bad-mouthing the competition, no matter how bad they are.  As a rule, you will never find a blog posting on this site that attacks an individual or organization.

There are always exceptions.  What if a reader decides to slag someone specific, for example?  Well, a few days ago, Rick Pratt had a few words to say about the Bobby Darnell’s blog, which received the most votes in the Best Construction Blog competition.  I received Pratt’s permission to publish his email and it has stirred up lots of response.

You can see some of the response on this RemodelCrazy.com forum thread.

Did Pratt err in speaking his negative opinions?  Well, he certainly attracted a lot of visitors to both his own profile and his friend’s blog site.

It’s not my style. My reading (and  Dale Carnegie’s teachings) is that this sort of negativity isn’t good practice, but, heck, Pratt’s blunt and less-than-positive posting certainly attracted a lot of attention.  So maybe being negative isn’t that bad, after all.

Popularity: 3% [?]

John Poole, in his Constructonomics Blog, posts some insightful observations of the challenges of starting work as a general contractor in this brutal economy.

Competition, he has discovered, is fierce, and provisions to ensure fairness and openness invite/encourage cheating or manipulation to game the rules. When upwards of 14 businesses bid for the job in the open RFP, the winner either is doing something odd, or is losing his shirt.

Poole writes:

Over the past six months, I have had the wonderful privilege (ahem) of bidding about 15 public Requests for Proposals. While I have complained constantly about the process, I probably wouldn’t have any work at all at the moment if they were not available. As a brand new company there are very few private owners that would take a chance on an untested and unproven no-name. However, in the world of public bidding, while a municipality may not want to take a chance on an unproven no-name either, the law simply states – they have to.

Then he adds something that should send shivers up the spine of anyone who thinks public bid work is actually fair.

I take that back, they don’t have to. What they do have to do is give the job to the lowest responsible bidder. Of course responsible is the key word there and they could make a contractor look irresponsible rather quickly if they wanted to (or if a few Benjamins were slipped into their pocket). But the reality is that there are tax dollars at stake and all information regarding bidders is one hundred percent public. So if a town wants to disqualify a low bid, they better have darn good reason to do it, or some villagers may get quite angry. If a low bidder is able to produce a bid bond as well as the necessary insurance requirements, I would think that it is a very difficult sell for a town to disqualify a bid. If they did, I wouldn’t be surprised if some rumblings began around town about councilmen with “greasy pockets”.

I used this system to my advantage by going after these public bids and bidding at rock bottom prices. And when I say rock bottom, I mean rock bottom. I looked high and low for the lowest sub numbers and then marked them up a meager 5% plus a few miscellaneous overhead costs. This is honestly the climate we are in right now. Which conveniently brings us to the ugly side of public bidding.

New contractors, skilled, with lean overhead and a willingness to work for a “salary” that might be virtually nothing, can sometimes “win” this type of work, and survive, but it is hardly a great way to succeed and survive in construction. (However, anyone who can start and survive in this rather brutal economy will likely do very well when conditions improve.)

The challenge is that whenever things are “fair” and “open” in the true, total sense, the successful contractor can often not hope to make any money unless there is some element of corruption or fraud beneath the surface. Poole describes one example in his posting relating to getting around wage certification rules (to protect union jobs). I know of a Midwestern contractor who explained to me he wins all the hard local bids for his local hospital. He genuinely submits his low bid, but has pre-arranged with hospital officials the scope of work and change orders required to make the work profitable in the long-run. The work always comes in within the hospital’s real budget.

This sort of stuff, along with the sheer amount of energy and effort required to submit public RFP opportunities, results in a rule of thumb within the design community (architects, engineers and consultants) that you should NEVER respond to a public RFP unless you have an established, confident, and reliable relationship with individuals in the bidding authority first. This is especially important for the designers because of the Brooks Act provisions for most federal and many state and municipal projects, which mandate that price must be a secondary consideration. Relationships, here, are everything.

While the Brooks Act only applies to the design side of the relationship, and “low price wins the job” may work for GCs and subs, undoubtedly you are much better off knowing the personalities and building relationships with responsible bidding authority decision-makers before the RFP is made public. This may seem to be a frustratingly slow and uncertain task, especially when you need to find some work quickly, and seemingly tantalizing (and “open”) RFP/bidding opportunities are available to you. However, the evidence is that if you take much of your time that you devote to grinding out conventional RFP responses and quotes, and allocate that time to relationship development at the front end, you will be in a much better position to succeed long-term.

Where can you find/develop these relationships? Here are some of the tools I would use:

Leads services (but not for current projects)
You can see who is bidding current works, and get the names and backgrounds of the responsible authorities. Your challenge is to look beyond the current projects, and figure out how you can connect with the bidding authorities to start the relationship-building process. (Note: Bidding on a job that you don’t hope to win only to develop the relationship is usually not the most effective and wisest way to introduce yourself.)

Current projects (for future work)
You are on the “inside” while the project is under-way. Needless to say, you should do great work, both in the actual project, and in developing relationships within the bidding organization. Perhaps you can connect through relationships and referrals across departmental boundaries and get to know others with projects in the pipeline worthy of your proposal.

Associations
For marketing, you have the greatest chance of success with associations of practitioners within your target market; but you can sometimes gain value from your peer-based associations, especially if you work in multiple markets and either need/seek connections in communities where relevant association leaders may live.

Creating your own project
This isn’t for the faint-hearted; and is hard for a start-up, but you may consider an entrepreneurial approach by developing your own project, perhaps using Public/Private Partnership resources. This type of proposal takes much more work and effort, but if you are winning one in 10 conventional RFPs, it may be wiser to spend time on developing one or two PPP initiatives.

Of course, most contractors will disregard this advice. You are trading off the chance to win a sure thing  for something nebulous, distant, and invisible. The trouble is, if you ignore the advice, you fail to see the other side of the picture: When you reach the stage where (because of your marketing, relationships and work quality) you are on the inside and you receive the call or “heads up” well before the project becomes public. It is fun going into a competition knowing you’ve won it even before it has been announced. I know. I’ve had that experience, as have most successful contractors.

Popularity: 9% [?]

Yesterday afternoon, I enjoyed a rewarding conversation with Adams Hudson on a range of themes relating to construction marketing.  Hudson’s business (http://www.hudsoninc.com) focuses on the retail-oriented contractors, especially in the mechanical trades (HVAC and plumbing).  His early strength:  Developing better and more effective Yellow Pages ads.  He described in hos conversation how he won points with contractors fed up with Yellow Pages reps, the one-sided contract, and the painful problems of paying for a year’s advertising (which you can’t change) and with no assurance of success.

Of course, these days the Yellow Pages role is diminishing rapidly.  It still has a place in certain older demographics and for emergency circumstances when Internet service may be difficult.  But who in their right mind starting a business these days would spend thousands of dollars on an unchangeable directory listing in a book that many people discard the minute it arrives on their doorstep?

Hudson, of course, has built a marketing services base beyond the Yellow Pages ads, and here his service — with a strong weight on print materials — still has significant value.  Mailers, follow-through communications systems, advocacy of maintenance agreements, and effective, thoughtful and response-provoking advertising templates in a variety of media provides real value for his contractor clients.

He enjoys the power of leverage because he can serve the needs of many local contractors in diverse locations from his home base in Alabama.  He attends major relevant national conventions and speaks to contractor associations, sharing his insights and observations.  (He also is an excellent writer. I have to admit he puts words together far better than I can.)

At one point in the conversation, after I offered to give him some publicity in this space, he asked:  “Is there anything I can do for you?” and I responded, “No, I’m happy to share your ideas with my readers.”  We could, I suppose, try to commercialize the relationship, but readers here know that I don’t believe that you get far by forcing everything you do into a profit-making or “sales” model.  Sometimes just being yourself and being generous in spirit and outlook produces the best long-term results.  You can’t always tell where these achievements turn into dollars, but the calls, indeed,  come out the blue with real opportunities and business opportunities.

I can assure you that you will want to sign up for Adams Hudson’s free e-letter (you can find a sign-up link on his website) and his collateral marketing materials and resources will be truly helpful for your business.  We both agreed that the contractors most likely to use his services will have the least ‘need’ for them — they are aware of the value of well-thought marketing resources and materials and are ready to pay for useful consulting and ideas.  The others, unfortunately the great mass in our industry, think that they should either chase open bids or rely on referrals/word-of-mouth, and I use the word “rely” here deliberately.  Great marketers see solid word-of-mouth and referral business as a sign of a healthy brand. If you have this successful base, you can then market effectively to achieve predictable and reliable sales/profits, rather than simply hope for your phone to ring or e-mail to ping.  Adams Hudson will help you get there if you let him show you the way.

Popularity: 3% [?]

As voting concluded in the Best Construction Blog competition, the campaigning and voting for the Ontario Construction Report’s 2009-2010 Readers‘ Choice Awards has moved into high gear. Unlike the Best Blog competition, which is international in scope, the Readers’ Choice Awards is a much more regional competition; closely tied to our long-established publications in Ontario, including Ottawa Construction News, The GTA Construction Report and Northern Ontario Construction News.

Daniel Smith proposed the Readers’ Choice Award concept about three years ago, and it has proven to be a successful marketing resource for several contractors, engineers, architects, suppliers and consultants in Ontario. The rules are simple: There are no fees to be nominated, no cost to vote and finalists receive free publicity in OCR and online. (If some of this seems similar to the Best Construction Blog competition, you are correct: In fact the Best Blog competition can trace its roots to the OCR Readers’ Choice competition.)

You likely can discover similar competitions in your own community. Is it worth entering and then encouraging supporters to vote for you? I think so, especially if there are no fees associated with the contest. (Some marketing companies set up competitions where fees need to be paid either to use the results or to win. I’ve noticed that businesses which are savvy about marketing indeed enter and support these fee-based competitions, treating their participation as an advertising expense, though I find the idea of paying to win this sort of contest somewhat unsavory.)

An alternative competition model involves independent judges. Often associations co-ordinate these, with modest entry fees. Finally you can find hybrids. A good example is the Greater Ottawa Home Builders‘ Association annual Housing Design Awards competition. Independent judges select the finalists in several categories, but the local daily newspaper sponsors a public competition for the People’s Choice Award and that finalist ultimately obtains the most significant public recognition and marketing value.

Popularity: 3% [?]

Rick Pratt believes this blog from Wolfworks Designers/Builders in Colorado, not nominated for the Best Construction Blog competition, is a much better example of excllence than the other entries and finalists.  Do you agree?

Yesterday evening, I received this blunt and provocative email from Rick Pratt in Colorado.  He gave me permission to publish it.

I commented on the website contest you had and I just cannot keep myself from remaining silent on this one as well.  I like your e-magazine.  I like these emails and think you are an asset to our community.

However, once again I am dismayed with the results of this “contest.”  What are those of us wanting to learn about blogging (or website development, the last contest) suppose to learn here. The winner of this Best Blog is barely average.  Not really worthy of nomination let alone to be the winner. Usually these sort of marketing contests have the benefit of teaching us subscribers about “better blogging” or “wonderful websites.”  Instead this information is now going to encourage people to create average to poor quality blogs because they think they have seen a “winner.”

The only thing Bobby Darnell and Michael Stone should be congratulated on is being expert promoters and sales people which I honestly believe they are and deserve recognition for.  However this is a different skill and talent than blogging.  Blogging is a subset of this skill.  They actually got people to vote for these below average blogs.  The first place winner only posts once a month, with no graphics or photos or videos, his posts are too long and only moderately interesting or captivating and there is absolutely nothing to draw one in.  Now I don’t doubt that Bobby is a great person and deserving of attention and respect.  He writes well enough and appears to be a humble, nice and intelligent guy.  But his blog is not of high quality and teaches a very poor lesson on quality blogging.

This is a blog a friend of mine has.  It is far superior and something to shoot for if you really want to become a “winning” blogger.  http://www.homesthatfit.com/blog/ I show you his blog and not mine because I am not a blogger nor a great promoter of my work.  I could learn some things from Bobby & Michael.  I just don’t think I should learn blogging from them.

In case you are wondering about Rick’s credentials, here is his public Linkedin.com profile.

What do you think about Rick’s perspective?  Do you agree, disagree, or think he is partly right?  If you agree, how do you think we can improve the Best Construction Blog competition next year?

Popularity: 6% [?]

Readers here should be well aware that the key elements of effective marketing include attracting valid potential client leads and then converting them into profitable sales.  So I built some lead gathering for my own business in the Best Construction Blog competition.    Voters could check two boxes in addition to their votes.  One offered the free Construction Marketing Ideas newsletter.  The second, with a qualifying reference, invited inquiries for a full-scale publicity/advertising feature in the Design and Construction Report.

We received 1,170 votes in the competition over the past two months.  Of these, 284 requested the free Construction Marketing Ideas newsletter (the current issue goes out this morning) and 26 asked for more information about advertising features.  I won’t communicate to the hundreds who voted but didn’t check one of the inquiry boxes.  (It is debatable whether a communication announcing the competition results is in order to all voters, but they didn’t explicitly give me permission to use their email address for ANY marketing, and so I won’t bother them.)

The 26 inquiries for the advertising feature “should” represent golden leads, but nothing is ever that certain.  I’m sure some just clicked the wrong button and others are not qualified.  Chase has suggested a really good offer which will make it possible for them to respond one way or another, without feeling any pressure.

I’ve  received permission to send the newsletter to the other 284 readers.  This could be the beginning of a worthy relationship, which is where it all is about.

I will keep track of the conversion process — seeing how many elect to do business with us in the next year and that will provide the quantitative measuring tool to suggest the direct business/marketing value of the competition.

This type of analytical measurement of course is easily co-ordinated because we have the hard data and records.  You can develop similar measuring strategies for your other marketing initiatives.  While hard sales results are not an essential goal of this competition, you certainly want to build in measuring systems for any marketing process where you are spending money, time and resources.  I’ll update you on the results each month.

Popularity: 5% [?]

The Best Construction Blog and Forum contest has concluded and the voting results are in, but what do they mean?

Obviously, results from what essentially is a “get out the votes” competition provide a different perspective than we would discover from an independent judging panel.  They suggest, for example, that Bobby Darnell (http://www.buildingnewbusiness.com) in Atlanta has mastered the art of online viral relationships and networking, while Michael Stone (http://www.markupandprofit.com/blog) has the most enthusiastic and loyal followers, certainly judging by the positive comments associated with his votes.  Burgin Construction Inc. in California (http://www.burginconstructioninc.com/blog) , meanwhile, has proven that a local construction business can be a contender in an international competition.

What happens next?

In the next couple of weeks, I will interview by phone, email and possibly video link the top five bloggers and representatives of three most popular forums and report on their approach to marketing, blogging and business success in individual Construction Marketing Ideas blog postings.  These results will then be co-ordinated into a comprehensive article in the next Design and Construction Report, to be published within the next month.

Meanwhile, I’ve started reassembling the blog and forum hyperlinks into their new home on the Construction Blogs links page.  One challenge is organizing the long list in a cohesive and useful structure and I’m not sure if the categories I’ve used are the best and whether I’ve categorized the individual blogs correctly.  (I also need to set up a separate page/system for forums.)  This process will take a few days to get right initially and I will revise it again within a few weeks with your feedback and suggestions.

Here are the final results:

Popularity: 6% [?]

The recently-concluded Winter Olympics, with the rather magical combination of sports, achievement and nationalism all rolled into a two-week extravaganza, remind me of the importance of passion, energy and willpower in achieving our goals.  However, you don’t get there without real and fundamental talent.  Of course, The Olympics are a marketing machine in their own right.

The challenge for all of us in defining our business and marketing success is to connect these soft and hard elements into a cohesive picture and then develop the habits and discipline to stay the course as we grow.  As I’ve noted in previous postings, most of us find the behaviors necessary for marketing and sales success to be uncomfortable and unnatural so we either avoid doing what we should be doing, or try things for a while before reverting to our usual patterns.  We alas also are often suckers for sales reps who play their emotional sales and marketing secrets on us and get us to do what they want us to do, which may not always be in our best (business) interest.

I’ve seen plenty of situations where the best contractors, architects and engineers are not really the best marketers.  They are so good at their craft that they attract enough repeat and inbound referral business to succeed.   Then the economy turns rough and they need to think marketing.  They’ll sometimes grudgingly then go to work to drum up some business but the last thing they want is to be associated with “business development,” that rather fancy word for “sales.”

So they look to “marketing,” somehow getting people to call in, but advertising is expensive and never works as well as word-of-mouth (and I suspect, for some readers here, has never worked at all.)

I’ve spent the past few years seeking a sustainable and practical way for non-marketers to succeed at marketing and have concluded that your best chance of success is to have fun with the process.  Do what you love doing and connect your passion with the real passions of your current and potential clients.  The challenge is (a) to determine your passions, (b) figure out who your clients/potential clients are and their passions and (c) find the match.

Popularity: 6% [?]