David Steinberg

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.

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.

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.

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 (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.

Liz Kupcha

But who said a business start-up is easy, especially in a recession environment.  So, she reports in her blog, she picked up the phone and sought some business.  I’m not sure if the calls she made were truly cold or were reconnections with existing clients, but the excuses for “not interested” still tell us a lot about the state of marketing in the AEC community.

• “We only work for the State.” Heellloooo…have you read a paper lately? The State doesn’t have any money.
• “We don’t do any marketing.” How do you get work?
• “We’re a small firm.” Yeah and…how do you pay your employees?
• “The economy is bad so we’re not doing much marketing.” Maybe I’m the victim of misinformation but I was taught that when things are slow, that’s the time to step up the marketing efforts.
• “The phone just rings for us.” What happens when it stops? What will you do then?

Kupcha writes:

I learned that companies have their respective thoughts (as misguided as I might find them) about the “necessity” for marketing or what constitutes “marketing.” I was trained that marketing consists of various activities that are conducive to a firm securing work. Some firms will openly embrace an assortment of items within a “marketing mix” while others will focus on one or two activities and be dismissive of the rest.

I’m not going to call folks out and say they’re wrong and I’m right but quite frankly, I fear for the futures of firms that keep all of their eggs in one basket.

I agree with Liz.  The paradox I’ve observed (and I’m sure she will also see) is that the people who need our marketing/consulting services the least are the ones most likely to be willing to pay for them.  In other words, they already “get it” and are looking for incremental rather than fundamental change in their approaches, and see our advice as worthwhile.

I also hope that Liz, in developing her business, is focusing her own marketing efforts close to home with respect for existing relationships and connections.  Going out in the wild cold world is tough especially in the AEC community’s relationship-focused world.

I’ve added her worthy blog to the Construction Blogs listings.  If you are in New York, you may also find value in attending her upcoming seminars/programs, referenced here.

Lets start at the beginning.  Design and Construction Network founder Tim Klabunde called me after I sent him a free review copy of my book, Construction Marketing Ideas: Practical strategies and resources to attract and retain clients for your architectural, engineering or construction business.

Without promoting, he wrote an enthusiastic review on Amazon.com and he suggested that we host a Webinar for members of the Design and Construction Network based on the ideas in the book.

Paul Lesieur, who co-ordinates the highly effective  Rendelcrazy.com site/forum also connected with me after receiving his free review copy.  He posted an enthisastic review on Remodelcrazy.com and his own Amazon.com review.  A few days ago, he asked if I could “comp” someone to the Webinar.  The person he recommended responded enthusiastically after the event with indications of more positive business dealings.

Finally, a local contractor who had advertised with us many years ago, connected with me and asked if he could attend for free based on his previous client relationship.  It took me all of one second to throw away the rule book (advertisers are supposed to have dealt with us within the past year for the free service) and invite him to attend without charge.  Not surprisingly, he, too, is interested in developing further relationships.

Free seems to be working really well here.  I give some stuff away and get  much more in return.

But there has to be some limit to this generosity, you rightfully should be saying now.  After all, if we give everything away from free who will pay for anything.  The individuals who attended the Webinar for free certainly knew the majority were paying full price to attend. As far as I can tell, we delivered genuine value to everyone who paid the registration fee.  The late Sonny Lykos, one of my best (if alas briefest) marketing mentors, advocated that most residential contractors ditch the “Free Estimates” offer because all it does is invite price-shopping, time wasting and the giving away of your valuable services.  And there are plenty of people out there who will clear your trade show booth and your time of every bit of value, delivering absolutely nothing in return but wasted effort.

The best answer I can give to the question of Free or Fee is in two parts.

1. “Does your Free have powerful leveraging opportunities?”
2. “Is your Free based on genuine generosity or simply an excuse for marketing laziness?”

In the most recent circumstance, I write this blog and invite everyone to read it for free — along with the weekly Construction Marketing Ideas newsletter — because the time it takes and the amount of people the initiatives reach make the entire effort worthwhile.  The writing also can be leveraged and recycled.

I don’t give the book away for free to most people, however.  I sent free review copies to people I know well who could influence others and/or who have helped me out in the past.  (I also give it free to our paying advertising clients who request it, based on the principle of value added services, a fundamental client relationship and branding principle.)

I’ll certainly also speak or email briefly with anyone who connects and give them some snapshot insights into my perception of their situation.  This free advice can be truly useful:  It will be an outsider’s first impression observation and may tell you where you need to head.  Don’t worry.  I never push a “sales pitch” for any of my paid services in these conversations or emails unless in rare cases I can offer more free resources which are far greater than the selling message.

This free stuff is strategic:  It generally combines truly limited time and effort (the book is written, it costs just a few seconds to send the letter with the review copy) and it usually has powerful leveraging or payback opportunities.  It isn’t a blind and blanket invitation for abuse or brain-picking.  (The one exception is if a community or non-profit charity connects with me and seeks support.  I put away all commercial considerations and figure out how I can help.)

Free Estimates doesn’t say much other than that you don’t value your estimating time.  You want your clients to appreciate this is a real cost of business and that if they are simply looking for a price-shopping estimate they should pay a design fee (offset by a rebate if they go ahead with the work with you).  This doesn’t mean you can’t give a brief ballpark estimate to avoid time wasting all around or you can elect to provide a free estimate for smaller projects or where you have an existing, solid relationship.  But generally, you want your potential clients to connect with you for reasons other than the Free Estimate.  You need your brand, reputation, and reliability to be well-established to achieve these results.

Free works from a marketing perspective, indeed.  Just learn how to use the word and concept strategically.  You are of course free to comment and connect with me by  emailing buckshon@cnrgp.com.

But there is a deeper and more important message underneath this headline.  My biggest marketing mistakes have occurred when I looked gift horses in the mouth and dissed them.  Perhaps I saw them as competitors.

Now that is dumb.

Real success in marketing occurs from real trust, and when you leverage that among people who can help you develop leads and sales — especially if they have relevant skills and work in your marketing space — you gain a combination of soft (but powerful) branding along with high powered leads.

I’m sharing one example in the SMPS Marketer article currently planned for publication in the upcoming issue.  (I’ll save the specific details until the article is published).  In this case, the marketer for an architectural practice calls and shares leads/intelligence with her counterparts at engineering practices who, in some cases, might compete with her practice for bidding opportunities.  She naturally doesn’t share those sorts of leads — instead focusing on projects where the main element of the planned project requires engineering rather than architectural abilities.  The trade-off.  The engineering practices also share leads relevant to her, and of course virtually all projects need both engineers and architects, so who is more likely to be working with each other on joint submissions or invited to participate in “won” jobs?

Similar practices apply in the marketing space.  Mike Jeffries is working with me on a marketing initiative on recommendation from Michael Stone.  Stone, Jeffries and I all offer construction marketing consulting services.   But you can’t really cal us competitors:  We have our own specialties and niches.  Most of my business, for example, is from the business-to-business rather than business-to-consumer marketplace.  The marketing needs of contractors serving the general public are different than the needs of contractors whose primary clients are other business owners.  Jeffries and Stone work primarily in the business-to-consumer (residential) space, but within different aspects.  Sure there are areas of overlap.  I often advocate intelligent cross fertilization between business and residential markets, and my book provides practical suggestions and recommendations for business-to-consumer marketers.  But I’m not the best person to offer specific advice to you, even though I receive between one and five leads a day from contractors looking for just that information.  Should I not refer these people to someone who can really help and will I receive something in return?  Absolutely.

In other words, the advice here is to think beyond the obvious and realize your best relationships may be among people who you think initially are your competitors.  And be very careful about dissing anyone.  You may be dropping a hot opportunity like a lead potato.  (I made that type of mistake last week.  Ouch.)

Here is a useful Wikipedia article on Marketing Co-operation.

Copyright: We Shoot (http://www.weshoot.com)

As I sit here, an old friend comes to mind.  A camera repairman in Los Angeles.  Whenever I had any trouble with a camera, I’d go to Marvin.  He may have been around fixing cameras for Ansel Adams back in the day, as far as I know.  He knew everything – and I mean everything – about cameras and their operation.  I often think of how great he was at his job in his off-the-beaten-path repair shop, and how so many people weren’t aware of his business, and didn’t know of his talent.

I knew another talented professional – an auto repairman – who got lost in the shuffle because of his far-out location.  His customers relied upon him every time they needed a repair.  On occasion, they’d mention him to a friend, but in this busy world many of us neglect to talk of such things to others and, like so many professionals, this repairman had days when no business came in, as was the case with my camera repairman.

One day, I got a call from the auto repairman requesting I take a photograph of him to accompany a newspaper ad about his business.  I suggested an image of him working over a car engine, and even though many newspaper ads don’t work, this one did.  People shuffle through their paper and flip through their magazines.  They barely take notice of their trade periodicals, oftentimes not even noticing the articles, let alone the ads.  Why did this one work?  I’d like to think it was because of this picture, and maybe it was.  New customers responding to the ad would mention it when they called for an appointment or when they came in to see him.  “What a cool picture!”  And as they got to know him, they’d say, “watching you work on my car reminds me of that newspaper photograph.”  Apparently the image seemed to say to them, “I care about what I’m doing.  I care about doing a good job.”

In the case of this wonderful automotive technician, they were right.  This mechanic cared, just like my camera mechanic cared.  Did the photo say that to the people who responded to the ad?  Apparently so.  Looking at it from that viewpoint, it’s not necessarily advertising that brings in the work, but the kind of advertising.  In this case, advertising with photography.  (An interesting anecdote:  no customer seemed to recall that the photograph was accompanied by an ad, even though it obviously was since it brought the new customer to his business, but the picture was what stood out.)

What made the image work?  Was it the sparkle in his eye – made even more luminous by our professional strobes?  Was it the highlight on his wrench – made even more powerful with my assistant’s precise positioning of the mechanic’s hand?  Whatever it was, without the picture, the ad in this case may not have even been noticed.

There are many professionals like these two mechanics.  Do you know of some?  If so, reach out to them.  Tell everyone about them.  Hey, even better.  Take his or her picture.  A good one . . . shot with care. “

Benson makes a point.  If you have passion for your work, your chances of excelling are great.  If you can show others your passion, you will soar in marketing.  And if you can work with someone (or a team) who have a passion (and ability) to show your passion, you achieve a marketing home run.

I’ve added We Shoot to this blog’s AEC blog listings.

I advertise extensively.

You spend a significant amount of money each month to promote your business with paid advertising in magazines, newspapers, the Web and perhaps television and radio.  You measure the effectiveness of your media, but you aren’t worried about immediate results — single ads don’t usually work on their own; the process is cumulative.  Your marketing budget is perhaps in the 10s of thousands of dollars each month.  Media sales reps love you because you’ll try new things and not be fearful to sign ongoing advertising contracts.

I market strategically, with a real budget, but focus on relationship development and the client experience,

You might spend as much money (as a portion of your overall business revenue) on marketing as the first group of advertising-focused marketers, but the process to an outsider is more subtle:  ‘Thank you’ programs for existing clients, hired public relations and communication specialists; planned community and charitable projects and association membership and support, and investment in CRM (Client Relations Management) systems and staff training to create “wow” client experiences.

I rely on word of mouth, repeat business, and open bid competitions (in other words, I don’t really market).

You might buy the occasional ad because a salesperson calls and suggests you support a charity or existing client and you may spend a little money haphazardly here and there on marketing because you have to or are desperate.  Advertising, you think, is a waste of money, and it usually is when you spend it the way you do.  Marketing, you believe if BS — just do a good job at a fair price and you’ll have enough business.

Since my business earns 95 per cent of its revenue from advertising, you might think that I advocate that you should go to the first model.  Ironically, most of our clients are in the third:  They are haphazard and not very smart about how they spend money on marketing and advertising.  I started this blog and wrote my book to help them but few get it.  (When I communicate directly with clients offering additional support and resources — making clear I am not simply trying to sell them more advertising — the only ones who respond are generally in the first and/or second categories.  They don’t need the services/support but understand its reasoning and value.)

In fact, I think the second approach, a thoughtful, client-centred but but budgeted approach to marketing, is truly the wisest approach.  Paid advertising can certainly be part of the picture, especially if you wish to connect with consumers rather than other businesses, but other approaches to marketing focusing on extending and expanding existing client relationships asre probably much more cost-effective and can be a lot more enjoyable.  Best of all, this approach works beneath the surface of your competitors’ radar, giving you incredible control and power in developing your “stealth” and pinpoint effectiveness.  The potential clients who you really want to serve know you are the best, but others you don’t care to have any business with don’t even know you are there.

The challenge is the second approach is probably the hardest to execute if you don’t know what you are doing.  Advertising sales representatives and marketing consultants who work for “free” but collect their fees from media commissions or other third party-sources are unlikely to be too helpful in the broader approach.  Your competitors who practice these principals won’t exactly broadcast their secrets.  And you still must face the fact that this is not a route based on instant gratification:  You can’t simply pick up the phone, buy the adverting, and then wait for the leads and clients to emerge. It takes work and time which you will rationally justify takes you away from billable work and immediate revenue.

You can get there by reading, learning, connecting with non-competitive peers, and doing it yourself (with a clear budget).  This approach, in fact, is the wisest route if you are just starting out in business.  Or you can contract with consultants or specialized employees who will do the heavy lifting for you.  Here, you need to know enough to know who to hire/contract and who is stringing you along with BS (telling you what you want to hear, and delivering what you say you want, even though it isn’t really what you really need.)

In my business, I know only of two or three people who practice the first version of marketing effectively and perhaps a small handful who succeed at the second approach.  Most of these businesses are successful and have lasted through several recession ups and downs.  (A few in the first category have flamed out; they were pouring huge amounts into advertising and marketing but weren’t playing by the rules:  Scratch the surface, and you would find a hollow or unethical underbelly.  I recall visiting one of these big advertisers/marketers in prison, confirming from that meeting that he belonged there.)

If you are like most in the architectural, engineering and construction industry, you probably fall into the third category.  I suppose if your approach “works” nothing I suggest will cause you to rush to change.  But you can move into the second category, which I believe takes you further along the path of success than any alternative with some thought, a reasonable budget and a commitment to combine patience, persistence and measuring (metrics) to achieve results.  I show you how in my book and will describe the process in greater detail at the July 8 Webinar.  (Early-bird discount ends tomorrow.)