GETTING YOUR PHONE TO RING, PART 4 - WRAPPING IT UP

 

Michael Stone of Construction Programs & Results (www.markupandprofit.com) is a popular speaker, business coach and consultant dedicated to helping construction-related contractors survive and thrive. He is the author of "Markup & Profit; A Contractor's Guide" and his newest book, "Profitable Sales, A Contractor's Guide", and can be reached by email michael@markupandprofit.com by phone (1-888-944-0044), or visit his website (www.markupandprofit.com).

 

We have been reprinting from his newsletter his latest series on "Getting Your Phone to Ring".

 

If you missed any of the previous parts click on the following links to access them now:

Getting Your Phone to Ring, Part 1

Getting Your Phone to Ring, Part 2

Getting Your Phone to Ring, Part 3

 

From the feedback we are getting, we know that some of you are trying or have tried our suggestions, and they are working.

Remember as you develop new ad campaigns or adjust your web page you must always address your customer's three fears. Your customers ask themselves the same three questions you do.

1) Will this company do what I want them to do?
2) Will they do my job in a timely manner?
3) Will they do my job at a fair price?

If you don't answer those questions in your advertising, they simply won't call. If you will go back and look at some of the web sites I posted in our last newsletter, you will find that most of them address those issues, some on each page. We addressed this in our first newsletter on this series.

Today we're going to wrap this series up.
One of our coaching clients recently reminded me of an idea I gave him several years ago.

Unfortunately, anytime we have a market adjustment construction related companies go out of business. Watch other companies and when you hear about a larger or well-known company that fails, offer to buy their phone numbers. The numbers are not worth thousands or your firstborn. They are maybe worth $50 to $500, depending on how well known the company is and how badly you want the number. You may have to negotiate with the phone company as well.

The upside is that you are getting calls in for the company. That includes leads for potential sales. The downside is that you get the negative calls from bill collectors, irate home or building owners, people with warranty issues. Hey, for the business that can come, take it on. You can defray the creditors by telling them that you have nothing to do with the old company and give them a number to call.

If it is warranty work, explain you will be glad to come out and look at the problem and help them get if fixed. Also tell them that you are not responsible for the problem and that you must charge for that service. There is the potential of generating goodwill by helping folks, and you can always ask if they have other work that needs to be done while you're there. Be sure that you tell the folks that you are not responsible for the other company's work or warranties and make double sure you have language that addresses that in your contracts.

Once you get in front of folks, treat them right and the business is yours. This could be a tremendous opportunity to pick up new business.

Be smart. Don't cut your prices to get the work. The customer has already seen what dealing with a contractor who cut his/her prices will get them. Focus on doing a good job, on time, and helping them get back to living their lives the way they want. Charge a fair price and do what you agree to do.

Change of subject. There is an unusual program from the US Department of Agriculture that some of our clients have been involved with, and they tell me it works great. It is called Section 504 Loan and Grant Programs.

The Section 504 Loan and Grant Program allows elderly people with very low incomes to maintain their independence by allowing them to remain in their own homes. The loan program is available to any rural person with a very low income, but most program beneficiaries are elderly. The 504 Loan Program helps qualifying applicants repair, improve, and/or modernize a home, make it safe and sanitary, or remove health and safety hazards.

The 504 Grant Program is available exclusively to very low-income rural seniors aged 62 or older. The program provides funds to make such major repairs or renovations as removing electrical and fire hazards, replacing roofing, installing or improving water and wastewater disposal systems, and installing insulation and heating and cooling systems. If you are smart, you will partner with a local remodeling company so that you get in on all the jobs being done, not just those that are exclusively electrical work.

While this program may not fit those that work in the big cities, it will work for many of our readers. Regardless of where you live or your work area, check it out. One of our coaching clients told me that the person in charge of the local USDA office told him they have more money than they have applications. No one seems to know about the program.

Here is the link: http://www.rurdev.usda.gov/rd/pubs/pa1662.htm

As long as we are talking about government programs, here is another site you should take a look at. http://www.hud.gov  This is the U.S. Department of Housing and Urban Development. They have a number of programs that might help your customers if you connect the two. Other links to get you started are:
http://www.hud.gov/improvements/
http://www.hud.gov/buying/localbuying.cfm
http://www.hud.gov/offices/cpd/affordablehousing/programs/home/addi/

To wrap up our series, "Getting Your Phone to Ring", we interviewed Gordon Clotworthy, CEO and President of The Information Refinery in Mahwah, NJ. The Information Refinery (www.ConstructionLists.com) has been in the direct marketing business for over 23 years, and is the #1 source in the world for construction-related marketing lists.

CPR - It's great to talk with someone who understands direct marketing and construction. Can you give us the rundown on direct marketing options for contractors?

Gordon -  There are 4 basic approaches to direct marketing - postal (or snail mail), email, telemarketing and faxing.

Direct mail is by far the best method of direct marketing. It's affordable and, with a well-designed mail piece and a well-defined list, it can prove to be the most economical and effective method for both immediate sales and future sales.

CPR - Where do you get your lists from?

Gordon - We manage over 100 construction related response lists which for all intents and purposes cover the entire marketplace. We also have strategic partnerships that provide us direct access to all of the consumer and general business-to-business lists and data bases available. Due to the high volume we purchase on a daily basis, we are able to obtain lists at the lowest possible price and pass the savings on to our customers and clients. We also have the ability to merge various lists together and append data in order to build a list that meets the best meets the target audience.
 
CPR - How many ways can you define a mailing list?

Gordon - There is a great deal of information that can be selected to develop the best possible mailing list. For example, you can select homeowners based on their income range, age of their home, time they've lived in the home, whether or not they have children, the ages of their children, the value of the home, single parent or married, handicapped . . . the options go on and on.

For example, if you specialize in bathroom remodels, you may want a list of homeowners within a certain area with an income over $100k living in a home that's over 20 years old. If you build new homes, we can provide a mailing list of apartment dwellers, with 2 or more kids and with whatever income level that suits your project.

CPR - How expensive is a mailing list?

Gordon -   You can get a decent consumer list, sliced and diced to meet your target market, for about $65-$70 per 1,000 names, minimum of 3,000 names. For a few dollars more you can use the names over and over - in a year, for a very nominal fee, we will clean and refresh it for you.  For $10 more per thousand, we'll include phone numbers in case you want to follow up on your mailings with a telemarketing program.

Ask your mail list provider how deliverable the list you plan on purchasing is - will they guarantee deliverability? When was the last time the list was "cleaned" by the post office? (On average, one third of all businesses and consumers move or make a change to their address each year.) If a mailing list isn't kept current you'll end up wasting up to 1/3 of the total cost of your mailing and more importantly your response rate drops through the floor. We guarantee our lists to be at least 93 percent deliverable - some lists are guaranteed 100 percent deliverable.

CPR - What about commercial names?

Gordon - We have a database of over 13 million businesses. If you want to know owners of strip malls in your city, we can provide it. Facility managers, property managers, owners, we have it. Decide what kind of commercial construction you want to do and we'll match it to the prospects most interested in what you have to offer. Think out of the box. If you can pick up work from strip mall owners there will always be work to do. If you are a painting contractor and gain the business of a few good sized apartment complexes you know that the end of the month and the beginning of the month will be booked solid.

One of the great things about direct marketing is that when you start the process, you begin to expand your thinking and realize other ways to tie your ongoing search for new business together. You develop plans. And plans always work better than just throwing precious money here and there because "it sounded like it would work".

CPR - What makes your business different from others?

Gordon - I come from the same background as Michael - building my business from the ground up. In my case I've had my share of trying to meet payrolls and working 16 hour days 7 days a week. Those experiences helped me develop our corporate philosophy.
We actually consult with our prospects and clients. We let them know all of their options and guide them into making the right decisions.  If someone wants to do something that we think might be a mistake, we let them know. We're the furthest thing from "yes" people you'll find. Our goal is to serve our clients best needs. Not to sit back and let a customer buy the wrong list just so we can make a sale. It's what separates us from our competitors.

Every client matters to us, that's simply the way we like to do business.

CPR - What about the other avenues of direct marketing?

Gordon - Everyone thinks email is the greatest thing since sliced pizza, but it's not a great marketing approach. It can be dangerous - if you do it yourself and get complaints, there is the risk you'll have your website shut down. If someone offers to sell you email addresses, those are spam addresses. You can't buy or sell an email address, because they are owned by the person who holds them.

Currently we are discouraging our clients who wish to do email marketing. It's just not effective anymore and although everyone is under the misconception that it doesn't cost nearly as much as a postal campaign they are dead wrong. Here's why, the vast majority of the emails sent aren't read because they end up directly in a spam folder. Because of viruses and scams people just don't want to risk opening emails from someone or some company they do not know. When you sit down and actually calculate the costs and the sales derived, you'll find that your cost per sale compared to a postal campaign are off the chart.

However, if someone is hell bent on doing it we'll grudgingly oblige. We take their message and do the email broadcast for them. Our email lists are from those who've agreed to receive advertising, and we follow all the laws. But, as I said before, it's not effective and you won't be happy with the results.

CPR - Do any contractors actually do telemarketing?

Gordon - Yes, usually large companies who've been in business for a long time. They realize the need to use all avenues available. Companies will buy a list of people in a neighborhood around a job they are working or a list in their service area and put their telemarketers to work. Our lists are cleaned through the "Do Not Call" database so they comply to the laws, but the telemarketers still have to follow federal guidelines.

CPR - What about faxing?

Gordon - Don't do it. Unless you have prior agreement from the party you are faxing you are breaking the law. You can get a $500 fine for each fax complaint. There are lawyers who advertise hoping to reach people and companies who've received junk faxes so they can go after the company involved.

CPR - How about lead suppliers, companies that promise to send you qualified leads?

Gordon - I'm not impressed with them. If you want to know more about them, we have a number of those businesses listed on our website www.AECSalesLeads.com.

Unless you are getting a 1 on 1 lead - a lead that is given to you or at most 2 others - it just doesn't make sense. If the lead provider is selling it to a slew of other contractors in the area, by the time you call that lead, they are sick of hearing from contractors. You might be the 20th contractor who's called them that day and you can be sure they don't want to talk to you. But you still have to pay for the lead.

That being said, I see a glimmer of hope on the horizon. A new site has just started and they will be working on the premise of providing leads on an exclusive basis. And get this, the leads are free. It's based on a reciprocal concept. The site is in beta format but you can find details here: www.LeadPatch.com

If you spend the money you'd spend on a lead supplier on direct mail instead, you'll get better leads. Your potential customers will know who you are when you call. You aren't just another contractor; you're that guy on the postcard who builds beautiful jobs.

When a lead comes in, be sure to ask how they heard about you. Keycode your direct mail pieces so you know which are effective and which aren't. You want people to hear your name from a number of sources. And remember to use testimonials. When you can say, "We do great work - but don't ask us, listen to what Susie said", you'll go much farther.

The bottom line is that there are a lot of avenues for advertising, and the successful company does a mix of all of them. 

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This concludes our four-week series on "Getting Your Phone to Ring". Now it is up to you. If you take some or all of these ideas, get out into the market place and get after that business, you will do well. They've worked for others and could work for you.

Keep us posted on how you are doing and if you find something new that works, let us know. We will post it in an upcoming newsletter and all of your fellow readers can share.

To all of you who have helped out by sharing your ideas, thank you for joining us and "We like to see the good guys win!"