TG&E staff celebrate Halloween

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.

Tom Green

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.

In fact, his emails are among the most effective marketing resources I’ve ever seen because he strategically plants really strong and verifiable testimonials right below his email signature lines.

Can you do the same thing for your business?

Yesterday, I spent hours listening to speeches, panel discussions and presentations on architectural, engineering and construction marketing at the SMPS Build Business National Conference in Boston.  I can’t say it turned out to be the most enjoyable day of my life.  I felt alone, and was, much of the time, even though there were (brief) opportunities to renew acquaintances, connect with some new people and meet in person some people the first time I knew only online.

Unlike my first visit to a SMPS conference two years ago in Denver, where I enjoyed a fair amount of “wow” sensations — and truly felt like I belonged — today, the ugly pain of my social skills limitations returned to the fore.  It proved to be a humbling experience.  (And the one picture I had someone take of me didn’t reveal a terribly flattering image.  It looks like I really need to watch my diet — the stomach is getting a little larger than it should be.)

There are several reasons for this disconnect.  One is that I have never been terribly comfortable in public social circumstances.  In rare cases, just the right mix of new and old allow me to feel comfortable and natural; capable of mingling and yet feeling close enough to belong.  Most of the time, even though I should belong, I feel “outside”.  These weaknesses are offset by my own family’s love and my (fortunate) writing skills.  I can communicate well.

Can I cure these problems?  Certainly, to some extent, I know the basics:  Be genuinely interested in the people around you (in networking events especially) and do all you can to help and assist rather than sell and take.  This attitude has always underlined my relationship within SMPS — I certainly don’t try to push any product, service or idea on others here.

But that positive doesn’t offset my awkwardness and humility.  I can (and should) do better.

I’ll cover specific topics from the various SMPS sessions in the next few weeks. In the meantime, I have another 2/3 day at the conference, before returning to the hotel to reconnect with Vivian and Eric, have a dinner out, and then (with Eric) head out to a Red Sox game.

I’m writing this posting in a dark hotel room early morning, so can’t review notes and other details.  This rather significant limitation is offset by my clear memories of the general trends of discussion:  The challenge of drawing out and developing worthy long-term relationships in areas of market priority, so when RFP and bidding opportunities arise, you are on the inside track to winning these bids.  Members generally acknowledge that you are wasting your time bidding in open competitions if you don’t already have a relationship with the decision-makers in the selection boards.  This relationship-success is extremely important, especially in the current highly competitive environment where dozens of purportedly qualified bidders can compete for even a single small job; and where (if price competition rules the day) you have a faint chance of making any kind of profit by winning a “low price wins the job” competition, especially if it is relatively small.

The next challenge is building and developing the relationships and seeing the opportunities under our noses.  This is especially apparent when practices have multiple disciplines and decision-makers, where cross-selling and information sharing opportunities “should” exist but for one reason or another, they aren’t developed.  Can current clients also tell us where to head in the future:  What if a current client wants or could use a service you don’t currently offer, but could develop on demand?

Finally, how do you measure success and evaluate progress in these initiatives, which involve sometimes extremely long sales cycles, diverse connections and changing personalities?  Worse, how do you implement effective strategies when in a downsizing environment, your resources are curtailed and you must do more with less, as panicked executives and ill-informed project managers push you to crank out multiple RFPs and proposals on the faint hope that they could succeed, even if your “go/no go” analysis suggests this is wasted effort.

Problems, problems, problems.  Is there hope in this chaos?  This is where groups like SMPS play such an important role.  Besides knowing you are not alone in dealing with these challenges, you can find support, guidance and (yes) practical relationships to help you succeed.  (The latter is especially the case when you are combining local connections with a specialized discipline, where a national or international player might work best with a qualified partner with appropriate local connections.)

Today is the conference’s main day.  Hours of speakers, presentations, and a formal awards dinner.  No free WIFI in the convention center, so I won’t be able to write and blog as freely as I’d like.  But I’ll still learn much and have stories to share in the weeks ahead.

If you are in Boston and wish to share a connection or two, you can email me at buckshon@cnrgp.com.

Craig Park

Craig Park’s most recent blog posting, “Seven Steps to Reconnect” addresses the challenges of rebuilding and re-establishing potentially long-lost relationships.

This can be hard work, but is certainly easier than cold calling (assuming of course your relationships were positive and concluded well).  Still it takes discipline and organization to achieve the results you are seeking.

I hope I’m not stealing his thunder (and copyright) by giving away the final three steps.  (You can learn the others, of course, and their context, by reading his blog).

Step #5: What’s new and what’s changed?—exploring their current situation is critical—roles, focus, and even the “economic reality” (a nice way to say “how is this recession impacting you and your business?”) because learning their challenges is the critical to moving the business-to-business business to the next step.

Step #6: Book a meeting from a meeting—after all we’re both in this for “business” notwithstanding the professional friendship that comes from shared project experience—because unless we commit to building the relationship (“How can I help you?”), and the best way to reconnect is face-to-face. So don’t leave the call without a definite, time-defined, agreement to meet. Apply same strategy to that meeting as well.

Step #7: Share information willingly and freely—nothing builds trust better than helping a client win more work—whether “relevant” technical information (good), news in their market (better), or leads for opportunities (best). Helping clients succeed is the brand of the best consultants.

Step #7 should not be underestimated.  The difference between a pushy, irritating sales representative and an effective business-building consultant is whether your communications have giving and sharing at root.  If you are just using rote techniques to pitch your services you might-as-well apply for a minimum wage telemarketing job (and never call me!)

Milo

Paul Lesieur provides a different answer in this blog posting on the Remodelcrazy.com site.  It touches close to home as Kashi, our year-old Golden Doodle, sits next to me keeping the sofa warm as she waits for her morning walk.

So what do dog stories have to do with remodeling, or for that matter, construction marketing, you may wonder?

The issue comes down to humanizing (canineizing?) your business, creating connection and respect by sharing stories that put ourselves in a less-than-perfect place.  Clients don’t expect us to be perfect; they want to see we have human frailties, they enjoy revelling in our stories of weaknesses, but equally they want to see we get the job done.  Paul’s story, after all, finishes with the job completed and payment received (and a contented dog).

Clearly, you need to use some common sense in sharing your stories.  If you know your client is allergic to dogs, probably you wouldn’t want to bring the animal on a job site (or for that matter, bring a pet anywhere near a site where safety regulators would frown on such initiatives).  But the story here is about marketing, not perfection.  It is always good to show we don’t own the world.  Sometimes it makes sense to brag; sometimes it makes sense to be humble, but always it makes sense to be ourselves.  You’ll understand when you put the marketing cliches away and take the dog for a walk.

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.

These skills can be learned and are ingrained in some of the fundamental practices of successful marketers, such as the principal of reciprocity.  If you are generous and respectful of the people around you, they are generally generous and respectful in return, although the economic value of the generosity and respect don’t necessarily correlate.  Sometimes by “giving” a dollar, you receive $100 in return.

Since we are also all emotional beings, our own reactions and feelings — and prejudices — influence and affect our marketing decisions.  We write off some potential opportunities far too quickly, and battle for others far too long.  Sometimes these traits result in quite surprising results.  In one case I know, joint venture partners from a marketing business went through hoops to “change” the business plan in response to an inbound inquiry in part because inbound inquiries are so rare in their type of business.  Fortunately, they drew the line in getting to desperate to complete the circle of the initial inquiry — which was just that.  Throwing the existing business model out because of one friendly call might seem dumb, but I’m sure this type of thing happens more often than we might expect.

I believe effective construction marketing occurs when you can control your own emotions while appealing to the emotional “hot buttons” of your potential clients.  This applies both in the consumer and business-to-business markets.  We don’t need to be cynical nor should we lose touch with our own humanity here.  (People can smell insincerity and manipulation miles away.)  Frankly, if we have fun and enjoy the marketing experience, our potential clients will enjoy working with us even more.  When you think of it more deeply, this means that your success in applying the reciprocity principal starts at the beginning:  If you have fun in your marketing and enjoy it, then your clients will want to do business with you.  So if you really enjoy things like canvassing and cold calling, or rushing out countless unqualified responses to RFP proposals, go for it.  You will likely succeed.  You will also be part of a very small minority of successful construction marketers doing things they love that most others distaste.

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.

In the first, two building suppliers teamed up with the local hospital to develop an extensive fund-raising bike ride.  The initiative of Robert Merkley (Merkley Supply) and Claude Des Rosiers (Boone Plumbing and Heating) to develop “Ride the Rideau”. The idea is copied from a similar initiative in Toronto, and has attracted support from many participants in the local construction and development communities.

At the same time, the local Habitat for Humanity branch received an unexpected donation and posted this note on its website:

Recently, Habitat for Humanity-NCR received the biggest donation in our history; a nice home in a great neighbourhood. Our plan is to turn this gift into a major marketing campaign and capital funding drive. We plan to renovate the home (it has been untouched since it was built in the 60’s) using our very talented volunteer design pool in the Nation’s Capital. In the early summer, we will have open houses (over the course of four weekends) for public viewing, before we sell the home. It is our hope that, with the sale of this home, the special events and the Capital Campaign, we will raise $1,000,000. That translates into the ability for Habitat for Humanity-NCR to house 10 new, low-income working families.

Habitat for Humanity National Capital Region pulled together a special committee represented by high-end designers, renovators and suppliers to update and modernize the house — and then market it to a demographic who could afford to pay for the equivalent of 10 “real” Habitat homes.

Consider the special characteristics of these two initiatives:

They are new (at least in the local market). Sure, the Ride the Rideau cancer fund-raiser is built on a similar initiative in Toronto, but people here don’t know or care much about that.  Your best ideas can come from other communities and markets.  If they are new in your own community you gain the “first one in, wins” advantage.

They combine intriguing combinations of personal interest, satisfaction, and unconventional resource allocation and adaptation to achieve higher results. Physical exercise and what will be a luxury bike ride (on a day, September 11, known for much sadder things) brings out many elements of good-will and community involvement.  Habitat for Humanity, meanwhile, traditionally relies on contractors and contributors to help build modest homes for low-income people.  the idea of completing a luxury renovation in Habitat’s name would normally be seen as off-base — except for its obvious fund-raising potential and the ability to engage renovators and designers who would otherwise not be able to do much for the organization.

Finally, the charity has intriguing and pwoerful spin-off advantages. Free publicity certainly is one of them.  But the others are relationships among the participants and extended community.  When you do good deeds, you have natural points of community with the supporters and peers involved.  Your selflessness translates to recognition that your business dealings will be on a higher level.  You achieve branding success, relationships and marketing power far more effective than conventional advertising.

In making these observations, I must add that if you think of your charity in a marketing rather than charitable framework, you will probably fail.  In the recent Habitat project, the local Habitat executive director called me concerned that one company planned to use the luxury build as a major part of its own marketing material.  She didn’t want that to happen — as it would put undue spotlight on a single contractor and not reflect the overall community.  I reassured her we weren’t planning to play up the single builder.

If you cynically think that a modest in-kind or cash contribution earns you the right to big publicity, recognition and respect, you simply don’t get it.  You’ll need to work as hard at the creativity and charitable support as you would your most challenging business projects for you to win real recognition and results from your initiative.  In other words, if you achieve marketing results it should be a by-product not cause of your charitable support.  But your rewards will be real and tangible as you contribute to your community.