News and ideas for architectural, engineering and construction marketing

The agency-based pay per click solution: Could it work for you?

David Steinberg of AdPearance in Portland, OR, invited me to his company’s regular Thursday free Webinar on Internet marketing for the construction equipment and supply industry.  Yesterday, I attended and heard a message worthy of repeating.  Steinberg advocates that AEC equipment and supply marketers use keyword advertising but test intensively and make sure that the landing page(s) used are carefully designed to be specific and have the right call to action.

Steinberg described how when he was in the lumber business in the mid part of the last decade, visiting architects and pitching his products one by one in face-to-face meetings, he discovered the power of Google keyword advertising.  Initially, this advertising produced incredible results.  But, he acknowledges, if he tried the same thing today he would be disappointed.  The cost per click has risen astronomically and (worse) the resistance to clicking and converting from Internet advertising has greatly increased.  In other words, without a focused marketing strategy and lots of testing, you can easily spend thousands of dollars on your advertising and end up with nothing but bad losses to show for your experience.

The right approach, he says, is to select your keywords carefully and then draw them to a specific site/landing page which is geared to the message you wish to connect to the people who respond to those specific keywords.  You cannot be generic and soft here, you need to be specific.  So if you are selling a variety of widgets, make sure that you pick the widget carefully and then send the potential customer to the widget page which has the correct call to action.  Then, measure the results — carefully.

The good news is that the sample size and speed of measurement with Internet advertising is much lower than conventional advertising.  Steinberg says you will know if your campaign is on the right track if you receive, say 100 clicks and if these are turning into profitable conversions, probably within a couple of weeks.  Sooner than later, you will discover a profitable campaign:  That is, one that generates enough inquiries which convert correctly by either requests for further information online or by phone to actual sales, that you know that you have a viable strategy.  Then you test alternatives against the base strategy — you can run the tests simultaneously with your primary campaign — until you get something better.  Direct calls to action seem to work well, as do videos, but these advantages may vary depending on the circumstances.

Steinberg’s business of course collects management fees charged monthly for the account management service.  Clearly, this can be a lucrative business because his staff can apply concepts for one business to another — and even excluding direct competitors, there are many different AEC service and supply businesses.  He can of course use free media like me to draw traffic to his site, but he can also practice what he preaches, with selected advertising placements drawing potential clients to the regular Webinars and then, through a conversion process, to actual clients of his service.  He shares my opinion that the AEC industry is certainly not leading the pack in marketing practices and technologies — this gives a real advantage to anyone who keeps apace of trends in other industries and applies them here.

While this model is valid, it works primarily for businesses with the resources for significant cash paid advertising budgets.  Smaller businesses with plenty of self-discipline (and cheap web designers) probably can implement AdPearance  strategy with 80 per cent effectiveness on a do-it-yourself basis.  (Another option, if your budgets are low, is to bite the bullet, use Steinberg’s services for a few months, and then move on — of course in those few months with his company your results may be so impressive that you would be nuts to stop using the service!)

The management fees of several hundred dollars a month (before you place any AdWords or other paid advertising) would blow the budgets of most of the smaller readers of this blog, and i’m not sure how well the model would work for professional firms and others who must work with extremely long lead times on very large projects.  But Steinberg isn’t targeting these markets.  Steinberg doesn’t discount the potential advantages of Search Engine Optimization strategies (SEO), but he rightfully points out that these take time and probably work best in conjunction and after you get your paid keyword strategies in place.

(I note that in the last year I saw a similar data-driven agency type of agency service promoting itself as an alternative to the Yellow Pages.  I won’t name the business here because of my policy not to describe by name any business negatively.  Unfortunately, clients within Internet forums I monitor who initially expressed enthusiasm for this business’s concept — similar to AdPearance — ultimately were disappointed by that business’s service and value. They felt they were pouring money into a black hole.  I obviously haven’t used AdPearance’s services myself but sense you are on much safer ground here in part because the company is quite up-front about its fees and target markets, and I’m confident wouldn’t just take your money and run.)

Steinberg also shows how you can build a great systematized conversion strategy into your processes.  Set up a regular Webinar, then drive traffic through paid keyword advertising, social media, SEO, and other resources.  Because the Webinar is at a set time, your staff is not strained and you can give it your fullest attention.  Then measure the conversion rates and success.  It is a good model for a variety of services.

Salary vs Commission: Another option

In a recent SMPS Listserve thread, one member asked about the possibility of using commission to create incentives for sales in the AEC space. Most members (including myself) agree that commission-only models simply don’t work for long-cycle projects especially when many people are involved in winning and working on the jobs.  See this earlier posting on the topic.

But Michael Wong, CPSM, LEED AP, Business Manager at Tom Green & Company Engineers, Inc. (TGCE), a mechanical, electrical, and plumbing engineering firm in Austin, TX, suggested this option:

“I think the best way to address this issue is that the whole firm comes up with a formula for incentive pay based on profitability of the company. That way, the company acts as a team for all project efforts. For example, in this situation, the marketing department is not just bringing volume, but also needs to pay attention to the type of projects that are brought in. This also gets great buy-in from the technical staff to assist with marketing efforts.”

I reached Mike by phone to learn more and discovered TGCE is a practitioner of Jack Stack’s “Open Book Management” philosophy. In this system, everyone in the business is made aware of – and participates in determining the company’s business direction. Employees see how individual and group efforts contribute to company profitability, and where waste hurts.

Mike said the profit sharing is a major part of the compensation structure at TGCE. This helps in retention – but he acknowledges, can make recruiting engineers and other staff a greater challenge, as new candidates usually have not been exposed to this method of management and must buy-in to the true team concept. And while being a true part of the team means being able to share in the spoils, it also means that all share in the risks of running a business. Therefore new candidates must not only be seeking a job, but also a place to develop their entrepreneurial spirit as well.

Of course, personal salary information is kept confidential, but employees certainly see the entire picture – from a big picture level to the ability to access information about projects throughout the organization. “We have a report that summarizes activity on every project on a monthly basis,” Mike says. “Basically everybody gets the summary. And project managers regularly get more detailed reports on their projects, and individual team members can request any information they are interested in reviewing.”

While everyone shares in the company’s success, there still is room for individual recognition and achievement. Incentive pay, for example, Mike says is about “half and half” — “half is for things like seniority and stuff like that and half is for recognizing individual efforts.” An example of the individual recognition is that each quarter, employees vote on a MVP – most valuable player. Bonuses and rewards are calculated on a “cash” basis, so the practice does not get caught in the trap of paying out money when it doesn’t have the matching revenue.

Open Book Management has many advantages, I think, for AEC practices seeking to balance the need for individual recognition and achievement with the understanding that the group is often more responsible for a business’s success than single stars. TGCE’s approach may be one worthy of consideration in your practice. For questions or comments, Mike may be reached via e-mail at mikew@tgce.com or phone at (512)345-7793.

Receiving and giving the “yes”

Yesterday, I received two uplifting “yeses”. In the first, Construct Canada confirmed I would be invited as a speaker to the conference’s seminar program based on my Construction Marketing Ideas book.  In the second, I received a surprising invitation to be a “Top Contributor” to Google’s AdSense Help Forum group.

Neither of these acceptances directly will bring in piles of cash (if any at all).  But both represent invitation to groups where not all who wish to enter can be invited.  We like to be liked.  We especially like to be liked or admitted into  exclusive groups reflecting our values and objectives.

There is a converse principle here which I’ve started applying in my marketing approaches.  When third-party organizations who might appear to be competitors approach me to promote their organizations or explore co-operative ideas, I watch my tendency to say “no”.  Instead, I now look for ways I can help, contribute, or support the initiative.  I say “yes”.

Sometimes, I sense, at the start this approach seems counter-intuitive and uncomfortable.  “Why should I help someone who might be my competitor?” is a natural question to ask.  But genuine selflessness and co-operation creates a positive karma.  Simply put, when we say “yes” to options which take us in new and interesting directions, our perspectives are enhanced and we see opportunities we might otherwise have missed.

There, after all, is some merit behind the story of the “Yes Man” movie.  Saying “yes” opens up possibilities, creates good-will and invites growth.  (Of course we don’t need to go nuts about this:  If the “yes’ requires me to spend lots of cash and/or time, I’ll evaluate it realistically.)

Next time, when you are preparing to “chase a bid” or start a set of cold calls, consider that you might get better results by offering support, assistance and resources and saying “yes” to others.  You might just end up receiving a few “yeses” in return.

Testimonials: Are you using them effectively?

Today’s Construction Marketing Ideas Newsletter (you can request a free subscription here) discusses the effective use of testimonials and positive client references.  If you have your own stories or examples to share, please feel free to use this blog’s comment function or email me directly at buckshon@cnrgp.com.

I’ll also use this posting to give a “plug” for an upcoming event.  David Steinberg at Adpearance in Portland, Oregon is offering a free 45 minute Webinar on Thursday June 29 on internet marketing for the construction equipment and supply industry.  I haven’t attended yet so cannot provide an after-the-fact testimonial, but will still go if only to gain an insight into how he appears to be effectively using free Webinars to develop his business.

How much should you budget for architectural, engineering or construction marketing?

Perhaps one of the most common (and reasonable) questions for anyone starting out on the process of planning an AEC business’s marketing budget is:  “How much should we allocate for marketing?”  Recently, a Society for Marketing Professional Services member asked on the association’s Certified Professional Services Marketer (CPSM) Listserve this question:  “Does anyone know where I can find statistics on marketing/bd budgets?  Is it a % of revenue?”

Here are some of the answers (no one is identified here as they are responding on a semi-private Listserve, but all are credible and experienced marketers):

A consultant

I don’t have resources. But I have been in the industry for many years. It depends on whether you are referring to a start up or established business. And whether there is a plan in place or not. Starting from scratch is always more costly. Maintaining is less.

On average, your marketing/bd budget should be anywhere between 4-6% of total annual revenue.

That has always been my  theory.

A marketing service provider

3-5% sounds right based on my experience. That does not include the salaries of the marketing staff.  It also does not include coop funds that you might get from vendors if you are in an industry where vendors give out marketing coop funds. The coop funds are added to the funds allocated to marketing by the company.

An architect’s marketer

Totally agree with (previous responder).  One thing I might add…..the 4% would be for a well established market….if you are pursuing a new market sector, the spending can be as high as 10%.  We create separate budgets for each market sector that rolls into an aggregate budget and we track by individual markets.

A general contractor

Check the SMPS Marketing Survey…it has some information on % of revenue from the survey.  (Editor’s note:  I believe you would need to be an SMPS member to view this.)

A second architect’s marketer

I asked this same question of my colleagues in the Mid-Atlantic a few years ago.

I found that firms had varied mixes of marketing, sales, and BD costs.  Most, however, were spending a total of 7-14% of revenue on these combined efforts (including salaries).

Another consultant

7-14% has been my experience, but this really depends on the make up of your firm (size, services, market, and geographical locations).  A great reference is Lisbeth Quebe’s book Plan It (available at the SMPS Bookstore).  The book has great information on developing a marketing budget.

Once you read these responses, you’ll understand why the snappy answer to this question, “It Depends” is really not that far off the mark.  Are you counting salary costs — especially those of principals and rainmakers — and are you considering the interface between marketing and business development in calculating your numbers?  Are  you primarily maintaining existing accounts and relationships or are you breaking into a new market?  What is the “ticket price” of a typical transaction in your business?

In my Construction Marketing Ideas book I suggest a wide range of budgets for marketing and business development ranging from 5 to 25 per cent of projected revenues.  The highest number would apply in new business development or in businesses where business development expenses are for relatively small ticket items or which (by industry standards) require a high business development expense.  (Remember, I am counting salaries, including those of rainmakers and the portion of the Principal’s time in marketing and business development) for this figure.

If your marketing and business development costs are greater than 25 per cent, I would be concerned about sustainability.  After a certain point, you will have trouble delivering enough value to your current and potential clients to justify this leel of expense — when BD costs get too high, the only businesses that succeed are operating scams or near-scams.  Of course, you may have to spend more in critical or start-up situations; in these cases, i suggest your “budget” should more be in sweat/effort and creativity than cash.

At the low end, it is unlikely you are doing even the barest minimum if your marketing budget is less than five per cent.  In this situation, you have a largely captive and loyal client base, your princples and staff are spending more time on client service than business development, and you are using the budget mainly to keep a little more new stuff coming in the door.  The lower number also is reasonable if you exclude salaries and actual business development costs, assuming these are out of different budgets.

Creative marketing: The hidden opportunities beckon

On Friday afternoon, I listened to the marketing challenges of one of my Construction Marketing Ideas book‘s readers.  (I offered individuals who ordered the book from my website ahead of publication two hours free consulting.  The reader asked for one of the hours Friday and I granted it.)

The reader said he had moved to a new city and tried a flier campaign, without success.  I explored his background and circumstances (which I won’t report here because the reader certainly has a right to confidentiality.)  I then probed into his ideal client.  He said the homeowners he had the most luck with were upper-scale.  They thought his prices reasonable and weren’t nickel and diming him.  He then added an interesting additional remark.  “One common denominator among my best (former) clients at the other location is they all drove used Mercedes.”

Time for my creative lightbulb.

“Why don’t you connect with these Mercedes dealers, with letters and testimonials from your clients at the other location if possible, and offer them a co-marketing deal.  Every time they provide a service, they would invite their clients to receive two hours free handyman service at their homes or some other simple free service.  No obligation.  This would add value to their client experience and could get your foot in the doors you really want to enter.”

I’m not sure if the reader will follow this advice because it seems unconventional and is not a magic big solution.  You won’t find it in the textbooks and of course I’m not sure if the idea will work.  (The Mercedes repair shops may not be interested and/or the clients take the free service and run — meaning you’ve worked for nothing.)  But I like this kind of thinking because it responds to my Construction Marketing 401 (advanced marketing) Smell Test.

Qualities for passing the test:

• The idea must be inexpensive, especially in cash (sure some time and effort is required but virtually no cash is needed).
• It must be something your competitors are unlikely to emulate or copy quickly.  (Yes, I’ve “announced” it here, but how many contractors in how many cities are likely to even try this?
• It is individualized based on your own proprietary market research and data.  The contractor knows he has had success, for some reason, in working with used Mercedes owners.  There are plenty of used Mercedes owners in most significant cities, and specialized private repair shops to serve the market.  They also, are not constrained by the bureaucracies and brand codes of the formal dealership system, so can be relatively easy to access.

This idea also shows that marketing, to me, does not need to be big or flashy.  In fact, stealth approaches where you carve a small space of the universe and do it very well are often far more effective than big and expensive traditional campaigns.  Think creatively and you will likely succeed.

Salary vs commissions: Another look at the issues

Recently, on the internal Society for Marketing Professional Services listserve, a well-established (and highly successful) engineering practice marketer asked this question:

Forgive me in advance if this topic has been posted before.

Would you be willing to share whether or not you have personally worked within or your company has established a commission-based sales environment? I know it’s rare in the A/E/C industry but I wonder if there is a successful example of this. The thought is that it will separate the real rainmakers from those who cannot sell at all. There are a lot of variables and models to choose from. I’m not necessarily for or against it. I just want to have all the facts and potential pitfalls.

Thanks for your feedback.

Several responses echoed my own.

Although obviously I am not in the AEC industry directly, I have worked on the commission vs salary issue for many years in the publishing business and also have studied where the different formats work and where  they don’t.

In general I believe commission sales is problematic for professional AEC practices especially for business development on long cycle projects (which most ICI stuff is, of course).  Where commission is the norm is within the retail/consumer marketplace — the classic “Tin Man” selling siding, driveway paving and the like.  AEC practitioners, especially seller/doers will likely rebel against models where they must live on commission UNLESS they are true owner/partners and assume total responsibility for operating the business.  (After all, in a start-up situation, the owner/doer essentially is working on 100 per cent commission because everything is his/her responsibility and there is no income unless sales come in.)

The publishing world where I inhabit lives in two places.  Many publishers recruit and pay on a commission-only basis but I’ve moved away from that model because I believe it invites an environment where the reps focus purely on short-term sales and don’t work on developing long-term relationships.  However, I do my best to set hiring criteria/standards so that the reps would only be hired if they could actually perform on a commission basis.  In fact, we have two tracks, the commission and the salary, and when the sales rep achieves quota effectively he/she is working on commission.  At that point, the rep is “free” to set working hours and conditions but (and this is the good thing) the commission-earning rep has the discipline and habits of a regular employee so attends meeting, follows procedures and generally contributes to the business as a team member rather than someone out for the quick buck.

This issue is debated back and forth, but I think unless you are ready to give true and total ownership, commission won’t fly in professional practices.

Related to this point, however, is a question:  If commission won’t work in professional practices, and there is plenty of evidence that the most important element in repeat business is the relationship between project managers and staff and the client (in other words, the technical rather than sales staff), how do we (a) hire people with strong business development and rainmaking capacities and (b) how do we “motivate” technical staff to take charge of business development when opportnities stare in their face.

For the former, I can recommend Ford Harding‘s resources.  His organization specializes in developing rainmakers and in helping companies in the recruitment a special kind of sales representative:  The person with professional practice designation who is also great at selling.

Other resources include personality testing (I like salestestonline.com), an employee-ownership and open-book management business culture and possibly some staff training and internal bonuses/referral gifts for non-sales employees.  (Small amounts of money can work wonders in this regard. For example, we have a line in our office for accounts receivable which is only staffed part-time.  Rather than allowing the calls to go into voice mail, I bribe employees with a $5.00 phone answering bonus.  I could have been “efficient” and simply routed the line to the administrative desk, but this solution engages all the employees in the office with the account collection/client service function.  It has radically improved client service and our ability to pull in cash from people wanting to pay their bills by credit card over the phone.)

Twitter, LinkedIn, Zynga on future of ads — a Fortune magazine video

This video from Fortune provides some intriguing and useful insights into the adaptation and trends of social media for advertising.  The focus here in the discussion with Executives from top social media websites explain how they will make money from new types of innovative advertising is in the business-to-consumer side of the marketplace, but it tells us where things are heading and some of the challenges in adapting Social Media to brand and business development.

QR and Bluetooth Proximity Marketing: A new era for construction marketing?

An intriguing article in the undated “Trends 2010″ issue of Ontario Home Builder Magazine reports on QR (Quick Response) Code and Bluetooth Proximity Marketing as potentially exciting options for builders hoping to catch the next media marketing wave.

QR (Quick Response) Code marketing involves the application of a bar code to print media (it can be fliers, magazine ads, or signage) which can be scanned by your mobile device and link the reader directly to your website for more advanced interaction.  Bluetooth Proximity Marketing sends an advertising message to your mobile device when you are near the relevant location; say you are at a particular transit station or maybe new homes site.

The article reports on some builders trying these media out.

“Mason Homes successfully employed QR technology in Barrie (Ontario) in its JUST 4U marketing campaign,” the magazine story reports.  “We integrated QR code on Mason’s print ads and on a sign mounted by the sales office.  People were able to have all the information on JUST 4U even when the sales office was closed.  By simply scanning a smartphone over the sign outside, the information is automatically saved,” the article quoted Vanessa Desloor, Social Marketing Co-ordinator for BAM Advertising and Marketing as saying.

Meanwhile the article reported that Gerry Ryan of Ryan Design used the Bluetooth Proximity Marketing by setting up a transmitter in the parking lot of a GO (transit train) station in Brampton ON that broadcasted a message about a nearby condominium development.  “Commuters were the prime audience and they got a message on their Blootooth-enabled cellphones as soon as they arrived and when they left at the end of the day,” the article reported.

“As they were leaving, we might invite them to drop in on the condo on their way home for an open house that includes refreshments and hors d’oeuvres,” the magazine quoted Ryan as saying.  “Mobile communications is the future,” Ryan told the magazine.  “Since Blackberry and the iPhone, everything is done on the phone today.  Small screen marketing is where it’s at.  If you’re not thinking small, you’re missing opportunities.”

Of course being first to market with these innovations in your area/community gives you some “wow” factor and some opportunities for additional media publicity (which certainly cannot hurt).  Will these resources, however, change the way we do things and provide measurable results and benefits for your business?  If you want to be a pioneer, go for it.

Some thoughts about networking

This blog is associated with the Construction Marketing Ideas newsletter (which you can subscribe to using the link at the top of of the page.)  Yesterday, I posted a newsletter entry which touches on the challenges — and opportunities — of networking.  In return, I received some gratifying comments and emails.

Here is the original newsletter:

Is there a right and effective way to network, and if there is, where does networking fit in environment of construction marketing and sales?

I thought about these points as I suffered, somewhat painfully, in my tuxedo at the networking reception at the Society for Marketing Professional Services (SMPS) convention in Boston last week.

Few situations, frankly, make me more uncomfortable than standing in a crowd of hundreds, where the purpose is to make connections, renew acquaintances and “network”.  At times like these, I simply like to head away to a quiet corner or (better) back to my hotel room.  I’m utterly uncomfortable in this sort of social situation.

The next day things turned out much better when I reached out to someone with whom I initially networked through my writing and journalism skills.  I proposed to him that a book may be lurking beneath the surface and told him I had recently discovered how to successfully publish books as well as newspapers (and blogs!)

He responded enthusiastically.  I can’t name the person right now, nor describe the book topic, but it is certainly relevant to this e-letter.  It turns out that despite my lack of social functioning skills and ability to “work the room” I am actually quite a good networker.

My initial connection with the SMPS colleague occurred within the frame of reference of “what can I do for you”, not “what can you do for me.”  It turns out that I could make a contribution to his business and relationships right away.  It didn’t take him long to offer to reciprocate. This attitude earned true networking business points.  I frankly and truthfully told him that he could do absolutely nothing for me right then because the markets where I offer services didn’t correlate with his own network, but I still offered to help out as much as I can (and did.)

Over the next couple of years, we’ve found ways to do business with each other, and help even more people in the process.  These initiatives have proven to be selfless in the extreme, but equally self-serving, if only as a byproduct of our friendship rather than a direct business relationship.  I’m sure if we approached our relationship with the attitude:  “He’s scratching my back so I had better scratch his” the whole thing wouldn’t work.  We are simply taking genuine interest in each other and showing mutual respect.

I certainly can still work on improving my social event skills.  They are the pits.  But these basic networking rules still apply for anyone.

• Don’t worry about what you can get; focus on what you can give.  Your success in networking is defined by how much you can help others more than how much you can help yourself.

• Where possible, focus your networking in areas where you enjoy the environment and initiative.  While I am extremely uncomfortable in social/crowd situations, I don’t find it difficult to interview and write for association newsletters and magazines.  This skill opens me to many practical networking opportunities.

• Remember, effective networking leads to relationships, and relationships are the effective junction between marketing and sales in the AEC community.  Reaching out, even if you are initially uncomfortable, into an environment where you can meet and connect with others will ultimately lead to useful clients and business opportunities.

Still, I hate standing alone in a crowd.

Here are two responses I received (I certainly won’t name the people here becasue, if you met them publicly, you would be amazed to think they found networking and meeting people anything but easy).

I just read your most recent CMI newsletter, and I couldn’t agree with you more.

Through my involvement in (association name removed) at various levels, I have become known to many as (what they think) a great networker, but in reality, I feel exactly the same way you do.  I feel more alone in a crowded room than anywhere else.  I have managed to maintain the facade of somebody who can work a room, when in actual fact, I only work the room as a means of finding the exit.  Like you, I would rather be in a corner or as you say, “better back in my hotel room”.

Like all of us, I can talk when I have to, but I have great difficulty opening a conversation with strangers or even those folks whom I know, but only see once a year.  Once I get past the “Hi, I haven’t seen you in ages. How’s the family. How’s business.” I am usually at the point of trying to figure out how to extricate myself from the situation without insulting anyone.

I’ve attended various seminars telling me what to say in these situations, but quite frankly, I feel foolish following through on the advice that I get.

I have built my business from my network, and in all honesty have never seriously tried to market myself or my business.  I have always tried to market myself by letting my deeds do the talking.  At this point I am still doing O.K.

I just thought that I would let you know that you are not alone in your feelings of crowded rooms of people you are supposed to be able to talk to.

Another person (again, well-placed and highly successful within the industry) also reported to me:

I too along with most people was never comfortable in a crowd, I tell my kids that there was a time when I was extremely shy, and they look at me with extreme disbelief!

Like most things it is only through practice and determination can you overcome the “uncomfortable in a crowd”.

I am working on an initiative to provide a resource for people who find the “crowd” difficult.  Undoubtedly, the best networkers may be those who find the experience particularly challenging.  However, by considering the needs of the others first and using our natural talents and abilities — and some hard practice — we can overcome these challenges.

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