MBA 640 Marketing strategy

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M arketing can be a tricky thing. Remember when Oldsmobile marketed its cars with the slogan, “not your father’s Oldsmobile”?

The campaign would have to be judged a flop because the only Oldsmobiles you see on the road today last rolled off the assem- bly line in 2004. In contrast, the expression “not your father’s [insert term here] … ” has become a pop-culture catch phrase that has outlasted the product it was coined to promote.

Likewise, in making marketing decisions, remodelers face some tough choices in an uncertain market. What works? Tried-and- true methods or new strategies? Taking a lesson from Oldsmobile, catch slogans would seem a less winning strategy than a truly appealing product.

Judging from the response to a recent Qualified Remodeler reader survey, 60 per- cent of respondents favor the tried and true: repeat and referral business. Other market- ing strategies show very small percentages by comparison.

One can argue remodelers rely on repeat business and referrals for a very good reason: It worked in the past and it works now. Or, one may contend they’re missing significant marketing opportunities and putting their businesses at risk by not expanding their marketing horizons. As is often the case, the truth likely lies somewhere between the two extremes.

“I would love to be able to ask my friends in the industry if [repeat business and referrals] are important to them, but, unfortunately, that’s exactly what they relied on, and they’re no longer here,” says Todd Jackson, CAPS, chief executive officer of Jackson Design and Remodeling, San Diego. Business shrank by 50 to 70 percent

for those who relied heavily on repeat and referral business, he adds.

“To get a referral, you have to have a new client,” adds CoCo Harper, Jackson Design and Remodeling’s marketing director.

Part of the problem some remodelers encounter is not committing to a marketing plan, Jackson says. “I have friends who say they’re committed to spending a certain amount of dollars on marketing, and at the end of the year, they’ve only spent half of it.”

Marketing is more than setting aside a budget; it’s looking at your tactics in advance and having a plan. “By September or October [of the preceding year] , we know pretty much month to month what our plan is,” Jackson

explains. “We list every tactic; we could prob- ably have 30 headline tactics and under each of those there may be eight strategies. We plan that out month by month, how much are we going to spend and what week are we going to do it in.”

Planning ahead can have its advantages, Jackson says, relating how he negotiated a 50 percent discount on 2012 TV advertising by paying for it (and writing it off) in 2011. “We knew we were going to spend it anyway in the next six months,” he explains.

Marketing 101 Marketing starts with the basics, Harper explains. “You have to have a good product

Not Your Father’s Marketing Plan By Kenneth W. Betz

Relying Uncritically on What Used to Work Can Lead to Misfortune—but Don’t Reject It Unthinkingly

What marketing media did you use in the past 12 months (check all that apply)?

7.2% Newspapers/Magazines

6.0% Home Shows

7.2% Direct Mail

14.8% Repeat Business

2.9% Radio Advertising

11.4% Internet Marketing

9.5% Social Media

0.7% Billboards

14.8% Referrals

1.6% TV Advertising

5.4% Yellow Pages

3.3% Canvassing

13.2% Company Signage

1.9% Other

26 May 2012 QR ForResidentialPros.com

REMODELER SURVEY SERIES

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to market. You have to have a business that has integrity and does good work. That is mar- keting 101.”

Beyond that, she asks, “What makes you different? What will break you away from your competitors? Who really is your client? Are they men, 50 years old? In what part of town? What are the geographics, demographics and psychographics of your clients? What is your budget for the year? Plan that. It should be a percentage of your sales. What are your goals? How many leads do you want? Set some solid goals and opportunities for your- self and then work on a plan that is detailed and involved.

“Have a consistent message, and then move forward,” Harper says. “Marketing for a remodeling company is a moving and fast-paced job.

“Our goal has always been to be the leader in what we do; that’s where I like to be, so I’m very motivated. When I first came on, everyone [in the industry] was doing the same thing, and you [as an individual remod- eler] become vanilla when you were not vanilla. Clearly, you have a lot more to offer.”

“Why did our business increase 50 per- cent last year, and why are we on target to hit $10 million this year?” Jackson asks. “It’s because our brand has finally arrived.” Harper agrees, noting that developing a brand can take at least three years.

Marketing isn’t just about buying shiny ads, Jackson notes. People forget about opportunities, such as public relations. “There are many opportunities to be written about if you communicate with the people who are looking for stories,” he says. “If you find those outlets—newspaper, magazine or whatever—and present those people with a

very tight concise story with photos and ver- biage, you make that publication’s job easier; they’re going to call you, but you have to be

proactive.” Another way Jackson

stretches his marketing budget is co-op advertis- ing agreements with appliance dealers, cabi- net suppliers and other vendors with whom the company does business. “Twenty percent of our marketing budget was paid by co-op dollars in 2011, and this year it will

probably be more,” he says. “It’s a formalized partnership,” he adds,

“It’s not just a handshake deal. We follow it up with a two-page signed agreement that says what we’re going to do, what the goal is, when we get paid and how we track it. It takes the mystery out of it, and then we commit to it.

“During good times, no one wanted to give you any kind of co-op deal,” Jackson says. “Now they’re saying, ‘What do we have to do to earn your business?’ We’re supple- menting our dollars. I think if vendors see you’re spending money on marketing, and it’s going to give them more business, they’re willing to invest in your business.”

Do you expect social media to have a significant impact on how you market in the future?

Yes

63.2%

36.8%

Has your marketing message changed?

Yes

43.2% No

56.8%

“For most businesses, it still makes sense to have a business card to hand to existing customers and new prospects,” says Jay Fayloga, director of product management for Thousand Oaks, Calif.-based Egency, a Web-to-print service pro- viding customizable mar- keting solutions, including business cards.

“So little attention is paid to business card marketing that, when done right, it can help you suc- ceed over your competi- tors. In a tough economy, the little things help you stand out—sometimes as little as 2 by 3 1/2 inches,” Fayloga adds.

The company took issue with a recent Los Angeles Times article suggesting in today’s digital economy the business card is dead. “We have found strategic use of business cards, from the quality of the design to the type of paper you use, is just as important as how you present the card in business situations,” he states. “Not everyone lives and works in an online world.”

Egency offers the follow-

ing business-card tips: Go for Quality and Functionality

The biggest mistake you can make is to ignore qual- ity and functionality. Find a high-quality design that will stand out from the boring white cards everyone else gives away. Get a thick, firm card stock so the recipient can immediately feel you are important. And make your business card functional. For example, the back of a business card should be able to be used as a place to write down an appointment reminder for the recipient. Promote Your Brand

Not a day goes by where news outlets do not have an article about how a company is promoting its brand. Business cards give you that same power. When you hand a business card to someone, he or she is experiencing your brand and now has a tangible rep- resentation of your brand to remember you by. Write on the Card

Successful businesses can grow by developing relationships with their cus- tomers. When handing out

a business card, give the recipient an extra reason to refer back to the card—a personal touch. Consider writing down a personal email address or handwriting your product or service as a reminder. Free Business Marketing

It has never been more important to get qual- ity business cards because you never know who will eventually end up with the card. Give out an extra one to business partners. Also, don’t be shy about approaching others and giv- ing them a copy. Accept Business Cards

Being a good business- card recipient also is critical for your business. When you receive a business card, take a moment to read it. Write on the card in front of the person who handed it to you. It could be anything, such as where you met them. Showing how you appreciate this opportunity to do busi- ness can give the person who handed you the card the feel- ing that you can be trusted.

For more information, visit Egency.com.

ARE BUSINESS CARDS PASSÉ?

ForResidentialPros.com QR May 2012 27

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Asked if remodelers should keep their marketing operations in-house or hire an outside firm, Jackson replies: “I’m probably more of a control nut, but I’ve done it both ways. I had an outside person who, at the time, I thought was my marketing person, but all he did was buy media. Today, I have a project manager on staff to run my jobs, I have designers on staff to design, and I have a marketing director to market. The latter position is as important a position in my com- pany as my accountant or my controller.”

Casting a Wider Net For another California remodeler, marketing is a mix of old and new tactics. “Speaking for our company, we certainly still do a lot of busi- ness from referrals and repeat customers, but I think part of the reason we’re seeing increas- es in our business is we’ve made the commit- ment to cast a wider net via the Internet,” says Jim Tibbs, vice president and creative director of HDR Remodeling, Berkeley, Calif.

“More and more clients are finding us every month through Internet searches or because they happen upon an article or a blog where we’re mentioned. The number of those is increasing, and I’m confident that’s contributing to our double-digit growth at a time when the industry is not growing at the same pace,” he says.

Nevertheless, Tibbs is not about to aban- don what has worked in the past. “We still invest a pretty significant amount of time and

resources in keeping in contact with our cur- rent client base. We send out an email news- letter on average every six weeks. We’re stay- ing in contact with our top customers and keeping our name in front of the people who have been very loyal. We certainly don’t want to let them slip out of the mix,” he explains.

Tibbs does not discount social media, but cautions remodelers about expecting more than it may currently deliver. “I think the age group we’re appealing to [as poten- tial clients] is between 40 and 70, which isn’t necessarily the core social media group. The social media outreach we’ve used is a great supplement in terms of giving clients or potential clients access to more informa- tion in very user-friendly ways. I don’t neces- sarily think it’s effective in terms of making the initial contact or attracting customers

who are maybe only just hearing about your company,” he adds.

“Young people who are getting into their first homes [and who are more likely involved with social media] probably aren’t going to be using our company to do work on that first home. They’re going to look for more cost-efficient ways of doing it or doing part of it themselves,” Tibbs says, acknowl- edging that 20 years from now, the Facebook demographic will have changed

Of the marketing means you used, what was your No. 1 source of leads in the past 12 months (pick one)?

1.7% Newspapers/Magazines

6.7% Home Shows

2.8% Direct Mail

23.9% Repeat Business

2.2% Radio Advertising

10.6% Internet Marketing

1.1% Social Media

0.6% Billboards

36.7% Referrals

0.6% TV Advertising

1.1% Yellow Pages

1.7% Canvassing

2.8% Company Signage

7.8% Other Is your marketing conducted in-house or by an outside marketer?

73.6% In-house

23.6% A combination

of the two

Outside marketer

2.9%

What social media venues do you participate in?

28.9% Facebook

26.4% LinkedIn

9.9% Twitter

6.4% Google Plus

8.6% YouTube

8.1% Blogs

8.6% None

3.1% Other

28 May 2012 QR ForResidentialPros.com

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or have been replaced by something else. For now, Facebook is “another avenue to

get current information out, whether it’s pho- tos from a job in progress or a little blurb about something that may be happening in the company. Website updates can be cost- ly and time-consuming if you do them right. We used Facebook because it’s user-friend- ly—anybody in the office can do it. Of course Facebook is going to evolve, and our strat- egy will evolve with it.”

Don’t Overlook the Costs One perception Tibbs advises remodelers to guard against is the notion that Internet and social media don’t have a substantial market- ing cost. “I think we all have tended to overlook the amount of time it takes. For a while, I wasn’t charging the hours I was spending blogging and doing newsletters to the marketing account. It was kind of living in overhead, and we really didn’t have a handle on what our marketing costs were. If you go to the effort of capturing those hours and charging them

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Detail

2 A

For more information circle 44

By Jim Tibbs The first thing to do when creating a

distinctive brand is to understand a brand proposition is defined by how your custom- ers or clients see you, not necessarily by how people within the company perceive the brand. It’s critical you have a clear under- standing of who your target consumer is and their values, priorities and needs because it’s that value system by which your brand is going to be judged.

When developing a branding component, such as a brand name, logo and a tagline, it’s always a great idea to keep things simple, understandable and easy to read because you only have a few seconds in which to convey your message. The message must be memorable, so finding some unique spin also is key.

One mistake companies make is focus- ing only on the rational benefits they are selling—the services and products—and not also selling the emotional benefits. For

example, how are clients going to experience the space you remodel for them, and how will they experience working with your company? It’s really that emotional connection people remember and the aspect of branding that is truly unique and distinctive about your company.

Finally, make sure you’re consistent. Create a pleasant and consistent brand experience for your customers starting with the first phone call. Any means by which the customer comes in contact with your brand should be a consistent experience.

Jim Tibbs is vice president and creative director of HDR Remodeling, a Honey-Do Repair com- pany in Berkeley, Calif. He also is a member of Remodelers Advantage Roundtables Peer Groups, a community of remodeling company owners who work together to maximize com- pany results. To listen to a podcast with Jim Tibbs from which these guidelines are excerpt- ed, visit ForResidentialPros.com/10654621.

CREATING A DISTINCTIVE BRAND PROPOSITION

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in the right place on the profit and loss state- ment, it does really add up.”

Tibbs likes to keep a balance between evolving digital marketing strategies and what has always worked.

“I see again and again the thing that cements a relationship and will really nail a sale is the face-to-face interaction between two people with a business card exchanged. It does go back to the basics at some point,”

he says. (For more information about effec- tive business cards, see page 27.)

“The way you attract people and get your name out to them is certainly evolving and changing,” Tibbs concedes, “but when it comes to those first couple of meetings after the dialogue has started, quite honestly, it does go back to the basics and to some degree the tried and true.

“I would add, this is a time when success- ful companies should be taking some calcu- lated risks, trying new things and learning from their failures. I know budgets are tight, but if you become paralyzed about trying something new, you’re really going to miss a lot of opportunities.”

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Have you increased or decreased your marketing activity in 2012?

-26.7%

+73.3%

Do you plan to increase or decrease your marketing activity in 2013?

-17.4%

+82.6%

-22.5%

+50.6%

Has the percentage of gross revenue you spent (or intend to spend) on marketing increased or decreased in 2012 (over 2011)?

26.9% Same

30 May 2012 QR ForResidentialPros.com

REMODELER SURVEY SERIES

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