Balance and change

Construction marketing, I believe, is both a science and an art. You defy all probabilities of success if you fail to observe some basic rules (or laws), but if you think that just following the rules will solve your marketing challenge, you will most likely be disappointed.

Consider, for example, the challenge in stretching or ignoring industry norms. In the non-residential community, general contractors will rarely select their subtrades without inviting competitive bids. You might be lucky (or experienced) enough to be consistently invited to be a member of a reasonably small short list, but, even then, if you wish the job, you have to have sharp pencils. But if you are not on the "inside", how do you win your place on the short list?

Government work, meanwhile, is supposed to be fair and open, at least for larger projects. (For smaller projects, at least in Canada, the work is subbed out to a large private organization and you need to pay their game.) Then you run smack in the U.S. into the Brooks Act -- which allows bureaucrats to use qualitative criteria to keep their friends and previous suppliers in business regardless of price.

The residential (homeowner) space observes more traditional marketing principals, meaning if you play the game right, you can follow the rules, advertise, develop simple strategies and measure your results. I won't easily forget my meeting with Mike Feazel at Feazel Roofing in Columbus just before Thanksgiving, when he said he stays away from most non-residential work because price competition makes the potential profit for work in the non-retail marketplace hardly worth the risk.

But you can't just jump from the commercial (or residential wholesale, business-to-business) market to the consumer market at the drop of a hat. Your business operating systems, pricing, and strategies simply won't match. You'll flounder.

I share these points because most likely you feel a need to change your market, practices, or systems when things aren't working quite right. In some degree of desperation, you cast about for a quick fix -- only to find you've dug yourself into deeper problems. Or you might try doing more of the same, to more dismal results.

For example, a contractor in the U.S. called me last week to ask whether he should sign up for Dodge (McGraw-Hill). I told him it wouldn't hurt, and Dodge is a reputable leads service, but to be wary of chasing bids for jobs where he doesn't have a previous relationship. I referred him to a posting in Bobby Darnell's Building New Business Blog (November, 2008):

If you subscribe to F.W. Dodge, Reed Construction Data, DEC International, CDC News or any of the other construction lead services you need to make sure you milk each lead for useful information. Remember, you are not the only company purchasing those leads so you have to know how to leverage each one beyond its primary purpose.

One of the profound incidences that led to me this business is when I was working at Construction Market Data (Now called Reed Construction Data) and would see companies paying up to hundreds of thousands of dollars for leads and using the information to just a small degree of their worth. My analogy is they were purchasing a new set of woods and irons (golf clubs for the non-golfers out there) and when it was time to play; they would grab just three clubs and leave the rest in the bag.

In essence, Darnell is saying the value of the leads service is not so much in the ability to bid on (and hopefully win) current jobs, but in the market intelligence you can uncover to develop relationships for future work.

Fair enough. Where is the balance, and when should you change? Here are three clues:

1. Your current and previous satisfied clients are your most valuable marketing resource. You'll win the greatest marketing points by doing something extra for them without expecting anything in return.
2. Your greatest potential new markets are in places where clients can connect, appreciate and refer back to your current clients. That in part is why I like associations so much for non-residential marketing. You are putting yourself in the perfect environment to work within and in support these relationships.
3. If you move into the residential (non commercial) space you can practice a whole stack of advanced marketing principals which will work wonderfully, if you dare, because only a few contractors use these methods.
   

However, should you jump between residential and commercial, or between traditional and new practices? Remember, sometimes you need to dive off the deep end but also remember you must be balanced in your understanding and awareness as you take the leap.

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Business balance: Learning the lessons

Recent experiences have taught me some important new (but fundamental) business lessons.

In the past two months, with the advice of a knowledgeable and highly experienced consultant who hasn't charged us for his time or services, we've learned much about the basics of financial reporting, accountability, and the separation of personal and business interests.

Most of this stuff is common sense, in hindsight, but frankly it took a good few "whaps" and a decent-sized business crisis to drill some of the basics into my thick skull.

But there is an irony here. If our most recent consultant hadn't been countervailed both in presence and experience by our primary business consultants, Bill Caswell and Upkar Bkihu of Caswell Corporate Coaching, the business, I think would have spiralled out of control into self-destruction, mistrust and hostility.

The reason: the new consultant, while highly skilled in pulling together the business financial requirements (and meaning well 100 per cent), managed, in a few weeks, to break many of the rules we had learned from Caswell and Bikhu about respect and mutual understanding.

Our new consultant considers this stuff to be airy-fairy, touchy freely and meaningless puff, at least in the context of a business in financial stress, and he has plenty of "war stories" of businesses which may have been superficially fun places to work but, without the necessary financial and management discipline, would face ultimate destruction at the hands of black-suited bankers and bankruptcy trustees.

(Caswell and Bikhu, conversely, certainly agree that financial projectons, cash flow management and business discipline are vital for success but you need to temper these qualities with human respect and interaction. The challenge is: When do you need to get tough on under performers?)

But there is a third element to this balance: The essential purpose and reason for the business itself. You may have the most wonderful and respectful business culture, where employees feel wanted and accepted and as full partners and participants. And you may have the best financial discipline, accounting, record keeping and rule book around. But neither of these mean much if no one is buying your product or service. In other words, without clients willing to pay you enough to earn you a profit, you are gone.

Marketing, of course, is one piece of the puzzle of attracting and retaining profitable clients for your architectural, engineering or construction business. You must have something they need and desire, and you need to let them know you are around and are available to provide the service.

And, of course, you need your current clients to be happy enough to return for more, buy new stuff (or services) and speak well about your business to their friends and colleagues.

But you won't be in business long, even if your product and service are in high demand and clients love you, if you lack the financial discipline to ensure profitability, and you lack the culture of respect and recognition of clients and employees alike.

You need balance to succeed in business. Keep everything in perspective.

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