Exterior/Replacement Business: Lessons from marketing mistakes

February 08, 2011

When something goes wrong, our egos’ first defense is to blame somebody or something else for the failure. The same is true in business and in marketing. When something goes wrong, the tendency is to blame, and nine times out of ten, we tend to blame the wrong person or thing.
Here, in no particular order are the top 10 things you might wrongly blame for some of the most common marketing failures.

What You Think Went Wrong: There are too many competitors. We can’t stand out.
The Truth: Your company is unremarkable and boring and deserves average results.

Explanation: There’s a reason Six Flags is in bankruptcy and Disneyworld makes a billion dollars a second. It’s because Six Flags can be dirty, smelly, and worn out and Disneyworld is great. When was the last time you were truly “wowed” by a company? When you were so impressed that you just had to tell somebody? Let’s flip this around now—when was the last time somebody did business with you and was ‘wowed’ and just had to go tell somebody about it? If there’s nothing unique, nothing distinguishing, nothing above average, nothing worth talking about in your business, then guess what? You deserve average results and average sales and average profit. Quit thinking the problem is the marketplace or the customers or the economy—until you can truly offer a truly unique and truly outstanding experience, you’re going to be stuck with crummy results. You’ve got to innovate and make your business worthy of the lion’s share of the dollars in your industry.

What You Think Went Wrong: There are too many competitors, we can’t stand out (part 2).
The Truth: Your marketing looks exactly like everyone else’s.

Explanation: Two years ago I put my home up for sale, and as a result, the home was listed on the MLS. You know what this means, right? Every single moving company on the planet now sends me a postcard because they know that people who are moving are probably good prospects for moving. That’s pretty smart thinking. Except that yesterday, I literally received five postcards from five companies, and that’s on top of the four I got the day before, the six I got the day before that, and the 25 I’ll be getting in the next week. Every single one of them reads approximately the same: Free Estimates, local & long distance, in business for 90 years, etc. Guess what? It’s not just movers, it’s you too. All window ads look basically the same. All siding contractors use essentially the same ad. Ditto for kitchen remodelers. If your marketing looks like everyone else’s then you’re going to get a tiny fraction of the business. Writing better marketing and winning is so easy and so predictable when you use the correct formulas.

What You Think Went Wrong: The economy is hurting my business.
The Truth: Your crummy thinking is hurting your business.

Explanation: It’s true that the bad economy has shrunk budgets and lowered the amount of money being spent in the marketplace. But that’s really not an excuse for your business to be down, especially when you consider that there’s still plenty of stuff being bought out there, and three-quarters of your competitors have no clue how to market their businesses properly.
Just ask Rudy Rodriguez, a principle of Castro Roofing in Dallas. They specialize in commercial jobs, and in particular, they rely heavily on schools and other government buildings. Pick up the paper—you’ll see that all the municipalities and school districts are getting killed because their tax bases are down. And then there’s Castro Roofing, adding new jobs, building new office space, buying new trucks, and setting sales records. Why? Because Rudy figured out a long time ago that he could destroy his competitors with superior marketing. Of course your business is different. You’re not a roofer, and this story doesn’t apply to you. How about negative thinking? Does that apply to you? Then get out there and freaking win. Forget the down economy already

What You Think Went Wrong: Radio, newspaper, Yellow Pages, direct mail, etc. just don’t work.
The Truth: Maybe your ad blows.

Explanation: The Great Western Closet Company designs and installs custom closet organizers in upscale homes in a medium-sized city in the west. In consulting with the owner, Mike, I was convinced that direct mail could be a profitable advertising medium. Mike, however, was opposed. “We mailed over 30,000 pieces last spring, but only got six jobs from it. I lost almost $1,500 on the deal. Home improvement shows are the only reliable source of leads for this kind of company.”
Their first problem was that they didn’t send out their own mailer. Their ad was a four-color, 8½ x 11 sheet printed on the back of a boot store’s ad. The ad was sent out with several others in a ValPak-type mailer. Mike wasn’t sure which geographic areas had actually received his advertisement, and he couldn’t verify that 30,000 pieces had gone out. As for the ad itself, it contained no headline, made no compelling case for their product, and made no specific offer. There was nothing telling why their product was great, what advantages it held over the competition and the alternatives, or what benefits would come from using the product -- it just said “Here it is, buy it from us for no justifiable, rational reason.”
Really, it just doesn’t work in your industry? Naturally some types of media are more suited for some industries than others. But more often than not, when I look at the ad that was actually run, more times than not, it was poorly conceived and executed. Did you realize that by running a crummy ad and then drawing a conclusion that the media was at fault you could be costing your company substantial amounts of money in the future?

What You Think Went Wrong: The Yellow Pages only delivers cheapskate price shoppers.
The Truth: You inadvertently trained your prospects to ask for the lowest price.

Explanation: I’ve heard it from hundreds of business owners in dozens of different industries. They refuse to advertise in yellow pages because, in their experience, the people who use the yellow pages are all broke people who just want the lowest price. They have lots of proof to back it up, too. The most common question they get when people call in, they’ll tell you, is “how much is it going to cost.” See that proves it—all they care about is getting the lowest price.
The reason people call in from the yellow pages and ask how much it costs is because they have no idea what else to ask! Let’s go back to the movers, if you were moving across town and went to the YP looking for a company to do the job, what would you ask when you called them on the phone? When they answered the phone, you’d probably say something like “I’m moving across town and I wanted to find out how much it will cost.”
The real issue is that the ads themselves don’t educate prospects on what they really ought to be looking for when hiring a mover or whatever you sell. Remember, they’re looking in the phone book because they don’t know who to call. Think about that for a second. They don’t know who to call because, ostensibly, they don’t buy what you sell very often. Ergo, they don’t know what to look for, what to look out for, what questions to ask, or what issues might be problematic. They just don’t know. Then you start with the whole “been in business since 1431 BC routine” and they see your ad and ask you “how much.”
Bottom line: When people call you (from YP or anywhere else) and the only thing they care about is price, that means that you haven’t trained them what to look for and how to evaluate the competitors. So your margins get cut, you get mad, you make less money, and it’s all 100 percent your fault. Learn how to fix it.

What You Think Went Wrong: We just wasted $60,000 on a campaign that didn’t work.
The Truth: You never tested your ads first.

Explanation: I once knew a man who sold lower-end jewelry and collectibles on a nationwide basis using newspaper advertisements. He would place advertisements in newspapers which looked exactly like the Franklin Mint’s. The only thing different would be his company’s name and address at the bottom of the ad.
He sharpened his pencil and figured that if his ads could pull a mere six responses out of every 10,000 placed, net profits would triple the ad cost. He raised over $200,000 from local investors to launch the first product, a gemstone ring. The initial ad cost over $60,000 for complete coverage in the Los Angeles Times’ Parade Magazine. The product bombed. He tried a different product the second time, and still another the next time. Finally, after all of his capital was depleted, he was forced to quit. His investors were not happy. How could this have happened? All he needed was six responses out of 10,000.
Instead of blowing the whole budget on a couple of unproven ideas, he should have taken the time to run some tests in similar magazines with smaller circulations. These relatively inexpensive tests would have told him which ad concepts worked, which prices pulled the most orders, what kinds of terms his customers found most convenient, or anything else he needed to know before rolling out a huge, expensive campaign. Moral to this story: Testing will ensure you never make a major marketing mistake again.

What You Think Went Wrong: Our new marketing idea is too hard to execute or won’t work.
The Truth: You’re too lazy.

Explanation: In life, everyone will always try to take the path of least resistance. Okay, maybe not every single time, but darn near it. And that’s a shame in marketing because a lot of the things that will probably work the best for you are a harder
to execute.
One of my former clients sold sunrooms, and his most successful marketing activity was holding “sunroom tours” where he’d gather 100 prospects, divide them into groups of four or five, and then have employees guide them on a tour of several of his customers’ homes for snacks, drinks, and a chance to see his handywork. The tours took a tremendous amount of preparation—cleaning the sunrooms, arranging the food & beverages, organizing a starting place, using marketing to find the 100 people, etc. But it always brought in 25 to 40 appointments and a high closing ratio. Guess how many other sunroom companies I worked with (and there were a lot) were willing to put that kind of effort into a tour? Zero. It’s too hard, and it won’t work they told me.
Then there’s Derrek Holland, owner of The Closet Doctor in Sacramento. He’s done a lot of the “easy” stuff for the last few years—money mailers, val packs, etc. and was looking for ideas of how to expand his lead base. Lately, he’s executed on, or is in the process of executing the following hard but effective ideas: A video of his entire process start to finish, a joint venture with his local dry cleaner, a mailing program to an area called Sun City, a plan to take before-and-after photos of every job and post on his website, and a door-knocking program to compliment his new move-in mailing program. Some of this will not be a home run. Just getting out there is 98 percent of the battle. No doubt in my mind that Derrek’s on the road to success.

What You Think Went Wrong: We can’t generate enough leads.
The Truth: You’re not spending enough money to buy your leads.

Explanation: One home-improvement franchise company was using telemarketing to generate leads, and were frustrated with their inability to get enough leads to keep their sales people busy. Upon closer inspection, it turned out that they were having their sales people cold call to generate their own leads and therefore were spending about 85 percent of their time prospecting and only 15 percent following up and closing.
Simple solution: Get out the checkbook. We started running radio campaigns and hired an outside telemarketing company to do the grunt work for them. Within a couple of weeks they had enough lead flow to keep all the sales people busy, which allowed them to discover that about half of their sales people were lousy. But what started as a “we don’t have enough leads’ problem actually turned out to be a “you’re not spending enough money to get enough leads problem.”
The most important tool in your marketing toolkit is your calculator—bar none. Have you sat down and figured out how much it’s going to cost to generate the leads you need to convert to the number of sales you need to hit your goals? Sometimes the solution is as easy as getting out the checkbook and getting to work.

What You Think Went Wrong: My Web site isn’t generating any business for me.
The Truth: Your Web site has boring, worthless content.

Explanation: I love this whole Social Media revolution. It’s highlights that to truly connect with prospects and customers, you’ve got to have real, worthwhile content that’s important and relevant to your target. If you don’t believe me, try sending out five tweets in a row telling people about your next sale and see how many people quit following you. Up until now, 90 percent of companies have assumed that their Web site existed to “tell people about the crap we sell,” when in reality, the entire time, the Web site has existed to help prospects become convinced that they can trust you, that you understand their needs, and that you’re interested in a lot more than just getting your grubby little hands on their cash. Think about your company and your Web site, and see if your passion comes through. If it doesn’t, you’re dead meat.

What You Think Went Wrong: My Web site isn’t generating any business for me (part 2).
The Truth: Nobody even knows that it exists.

Explanation: Okay, so your Web site now has passion and relevance and makes John Smith believe that he can trust you with his family, his money, and his secrets. Wonderful. Is anyone looking at this great Web site? If not, what a shame. You should be writing articles or blog entries at least once or twice a week (see previous section about good content). Google consumes blogs and articles like I eat Good N’ Plenty, like they are going out of style.
 
What You Think Went Wrong: This Mailing Campaign Isn’t Working
The Truth: You Only Sent it Out Once!

Explanation: “Saying it often” is an extremely important part of winning in marketing, especially if you’re an unknown company, if you’re selling to huge customers, and if you want to succeed long term. The remedy is to figure out your ROI and spend money accordingly. Let’s say his 1,500 mailers are going to 500 different companies (multiple contacts per company), and the average contract is worth $500,000 in GROSS profits per year. If the mailers were to cost $750 per send, it would cost about $60,000 a year to send one postcard per WEEK. Assuming the postcards were good, they would defiantly be effective after a while—but only IF the cards actually kept going out. Don’t be so quick to quit—hang in there a bit!

Richard C. Harshaw is the author and creator of the Monopolize Your Marketplace system, and CEO of the company of the same name.

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