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Tom Swartz |
Once you've been in the business for a while, a lot of your clients can be referrals. Does your marketing plan change to attract those referrals?
Tom: Today's subject is "Marketing for Referrals." Jeff, in your terms, how would you define marketing in and of itself?
Jeff: I would consider marketing as what our image is in our community. Being remodelers and the fact that much of our business is based on referrals and our reputation, our image in the community is extremely important. It is also what drives clients to us. We look, obviously, for cultivating the current clients we have to come back to us. That's our main thrust. We also need to go out and look for new blood and have new people calling us and searching out our services.
Tom: Amy, how would you define marketing?
Amy: Marketing is putting your company's best foot forward by maintaining contact with past clients in order to generate referrals. Another thing is to present a good image in the community. We can see that through consistent advertising, outreaches, etc.
Tom: If you take a look at marketing, some have said that it is used for one of two reasons or both — mainly, for top-of-mind awareness, similar to what you're saying. The image in the community is important, so top-of-mind awareness of your company is good. The second one is for lead generation. Would you agree with that, and what are you expecting most out of your marketing?
Jeff: I agree with that 100 percent. It's almost to the word of how I described it as far as attracting lead generation, attracting new blood, and cultivating community awareness and top of mind, as you say. Our vision is to become the best known, most respected and truly integrated design/build company in our county, which is Fairfield County. That's the image that we want to put out there.
Tom: Define "truly integrated."
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Jeff Titus, Owner |
Jeff: Being a design/build company, there are different roles to that. What I feel is our model and how I want to put ourselves out there is really promoting the convenience of working with one company: calling one company and having that company accountable for delivering a fantastic product. When someone calls us with a problem or an issue or something they need to resolve, in other words, they need more space or need to reorganize their space. They can call one company and we want our name in our community to be the first and only name, hopefully, that they think about. They call one company. "Truly integrated" means we can design; we can do all the product selection, custom cabinetry design and fabrication; we can do all the construction. It's really a soup-to-nuts kind of approach. Again, I use the word convenience because that's what it is for a high-pace community where they don't have a lot of time.
Tom: Amy, would you agree with that and what would you be expecting most out of your marketing?
Amy: Our top goal is to generate 30 leads per month. We both do 50 percent sales calls so we can maintain that. Fifteen good qualified calls a month. A good number of those turn into jobs, and we stay on target for making our budget every year.
Tom: Your primary goal is a quantified and measurable amount of 30 new leads per month, one a day, and of those 30, 15 would result in sales calls. Correct?
Amy: Correct.
Tom: Jeff, how is your marketing budget as a percent of your total volume, how do you budget within your marketing plan, and for what target? You're going to say, "I'm going to set a budget for this year's marketing." How do you do that within a percentage of your sales, and who do you target with that?
Jeff: We start with a percentage of about 2 percent of our projected revenue. That's the target; for our business, that seems to work. Certainly, other companies have different structures or services and they need to put in a different percentage. Our target is at 2 percent and I can see that growing in the next couple of years to maybe 3 percent. How we budget it and target is obviously you want to get the biggest bang for your buck; you want the highest return on the money you spend. I feel the highest return is really cultivating the clients that we have in hand and making it the most positive remodeling experience that we can give them. That may include "nights out" for the family while their kitchen is under construction. It may involve housewarming gifts after the job and things like that. But it's also in our image; our clothing, our vehicles and trucks. That's not making the phone ring, but it's insuring that we're going to get the best possibility of getting a positive referral from this client: that we're professional, that we did little extra things for them. Hopefully, they'll remember. Some of the things we do to make it fun for the family may not seem like marketing. We do a time capsule for the kids, have them put in pictures of the family, newspaper clippings and things in these capsules, and we'll bury them somewhere behind a wall. So, somewhere down the road maybe someone will remodel and find that. It's a fun thing and not expensive but it's an idea of what we do to, as our slogan says, "build a client for life," and get the whole family involved and make it a memorable experience.
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Amy O'Brien, Marketing Director |
Amy: Our marketing budget: I know that Remodelers Advantage Roundtable is a highly respected group of top remodelers, and they suggest a marketing budget of 2 percent a year.
Tom: Two percent of sales?
Amy: Two percent of sales per year. At our company, we budget about 1 percent. My salary, I'm part-time and work about 35 hours a week, and that of my associate who works with me and she probably works 30 hours a week, is not in that marketing budget.
Tom: That's in another line item of salaries or wages, and it's an expense. You and the person who helps you are over in that area. So you have 1 percent which is set up. What do you see in that 1 percent? I guess I'm going with $2 million is sales and 1 percent is budget. You're going to spend about x-amount of dollars, 1 percent or maybe up to 2 percent of your sales. Half of your business is high-end remodeling and what's the other half?
Amy: Custom new homes.
Tom: Yes. I've always said a custom new-home builder is actually a remodeler, you just have to put a foundation in. He still has to deal with high-end material and matching what the customer wants. It's different than matching what's existing, but there is a lot of similarity in that. Do you know approximately what percentage of your business is repeat and "repeat and referral," I would call it.
Amy: I would say it's not as high as we'd like; it's about 30 percent of our business.
Tom: Thirty percent is past customers. But the referral business, it sounds to me like you work on referrals in generating those 30 leads a month. You rely on referrals. What percentage do you think that would be or would that be part of the 30 percent?
Amy: I would say that if I put the two together, that between the two — and it varies month to month — probably about 38 percent.
Tom: Jeff, what percentage of your business approximately, is repeat and past customers?
Jeff: I don't have an exact number but would say between those two it's probably 80 percent. Most of it is referral and past clients behind that.
Tom: Do you track leads to see what marketing techniques are working?
Jeff: Absolutely. We track every single phone call, even if it's a "nothing" call. We track it, and the first question we ask is, "Where did you hear about us?" We want to know where people are getting our name from or where they saw us. Even if it's a bad lead, we still get some information as far as where they got our name, and can track it by category.
Tom: The categories. The phone rings and you ask, "Would you please tell me how you came to call us?" and they might repeat about eight or nine things. Tell me about some of the areas that you track.
Jeff: Repeat and referral are obviously the big ones. We have job signs and vehicle signs. We don't do the Yellow Pages or things like that. We find that, for our business, we get unqualified leads and end up wasting too much time.
Tom: A side note about the Yellow Pages. Are you in the Yellow Pages?
Jeff: We are just as a regular listing, just the phone number.
Tom: Amy, do you track your leads?
Amy: We do track our leads in Act. We probably don't do as good a job as some other companies.
Tom: You probably do a lot better than most companies, Amy. If you track them in Act, you're probably ahead of about 75 percent of the remodeling companies in the U.S. anyway.
Amy: We track where they're coming from. I think we've been good trying to define, like on the referrals if it's a real estate agent, customer, architect, co-worker, decorator, whatever. We have Internet and Yellowpages.com, Realtor.com. We try to go beyond, "Did you find out about us on the Internet? Were you looking at a realtor Web site?" We try to dig deeper. Where we probably haven't done well though is to be tracking per community. How many leads are coming in from Webster, Kirkwood, Glendale? We have an Act guy coming in on Thursday to set up tracking per community. We can target those areas more specifically.
Tom: Do you also ask the customer why they came to you or came to call you? Do you give them a list of certain things? You mentioned they come to you by Internet, which could be four or five sources. Do you ask them why they called you?
Amy: Yes. In our company, we do the marketing — all the leads are turned over to our design consultants. They are the ones who actually call the customer back or the potential client back and go through a series of questions. That would generate more specifically how those people got to us. There is a form that they fill out.
Tom: Would the owner of the company be one of those design consultants?
Amy: He was in the earlier days. Not any more.
Tom: How many design consultants? The design consultant is also a very defining name for what some might call a sales person. Is that correct?
Amy: Yes. Our design consultants are salesmen, but they have that capability. One of them has been at it for 11 years and is very good at it — what might work on a project, or an addition — "guesstimate" what it will cost. The other is very proficient. She's an architect.
Tom: Do you advertise in the Yellow Pages?
Amy: We did until this year. Now we advertise on Yellowpages.com. It's through Yellow Pages but it's online, not in the actual phone book.
Tom: If I pick up a St. Louis area phone book, I won't be able to find your name in it in the Yellow Pages? In our case, we used to advertise very heavily in the Yellow Pages, with big color ads. What we found was without research — and that's basically asking the people how they called us — a real small percentage ever said Yellow Pages! We found that the people who did say Yellow Pages actually were going to call us anyway and went to the Yellow Pages to find our phone number. We don't get many calls; we're a little high-end too. But we found that they didn't go to the Yellow Pages to go in search of the "best one to call." We found out that usually those people are saying which is the best one to call. I sense with you and the same with us, we don't have very many cheap prices.
Amy: Yes, I would agree with you on that.
Tom: What about home shows? Jeff?
Jeff: We do not do home shows. Again, we find that we get more "tire kicker" type things where it's not a real qualified strong referral where someone knows who we are and what we do. Certainly, you could get some leads from there, but it's much more work, and I think your cost per lead is higher on things like that for us.
Tom: Amy, what about home shows?
Amy: We did in 2005. In 2006, we made a decision not to do any more home shows. We found that none of the leads we got from that turned into jobs. It was a fun activity, and we gave out a lot of Agape pencils and pens, but we just didn't find it was cost effective. For today, we've got enough leads.
Tom: What about magazine ads, newspapers and other forms of advertising?
Amy: You're only interested in remodeling, right?
Tom: I don't know. I'm not so sure that I'm totally interested because I think you're not unique, and I think that it's not unusual to have an integration of high-end remodeling and custom new homes. I guess I'm interested in both.
Amy: Yes, we run a magazine campaign. For custom new homes, it was a lot bigger last year when we had a couple, we were doing a big showcase home for a project. We were trying to market some custom new homes on the piece of property that we owned — 10 building lots. We were a lot busier in the magazine side. We did it through a couple of local venues, one called New Homes Guide. Another was Buying New Homes Magazine. We use both of those on a regular monthly basis. On the remodeling side, we consistently advertise in the local newspaper that a lot of people read, the Webster-Kirkwood Times. This year, we're doing a $3,100 newspaper ad campaign and we're changing it quarterly. It will run once a month and for three months it will be geared toward custom new homes, three months geared toward remodeling second story additions, and then three months geared toward teardowns and new homes. The last three months will be back toward remodeling.
Tom: That works out good. And you get that off of the $3,100 because it's not in the big St. Louis paper, it's in the local Kirkwood.
Amy: Yes, we've found the Webster-Kirkwood Times to be much more effective.
Tom: That's really your target area, isn't it?
Amy: Right. Everyone reads that paper. We get calls from people saying they've seen it in the Webster-Kirkwood.
Tom: Jeff, do you do any magazine ads, newspaper ads and other forms of advertising?
Jeff: We do high-end glossy photo magazines. Local magazines. There's not so much of an instant phone call, but it's just general awareness. Some people can't tell us how they know of us, which is frustrating, but I'm glad they do know about us. Something's working, whether they see a truck or a job sign or see us in a magazine. Another category would be press releases. We do our own promotion to try to get our name out there in any way we can.
Tom: If you did 2 percent of $3 million, or approximately $50,000–60,000 of advertising/marketing, I find it interesting that you are thinking very uniquely, frankly. As your sales increase, some would say your percentage of advertising/marketing would decrease. Titus Builders says we're looking for that to increase; increase your revenue and increase your percentage, which I applaud. I think it's a great move, and a move which is sometimes not looked at. Is there a difference between marketing and advertising?
Jeff: Advertising, to me, is a component of marketing.
Tom: Advertising, to us, is the "warm fuzzy feeling." And by that, I think marketing is harder. Advertising is easy: you just put a big ad in the paper on Sunday, and Sunday morning when you see the ad and say, "Look, I'm doing everything I can marketing-wise because here's the ad." When, in fact, maybe that's not really true.
Jeff: If you advertise without having a marketing plan, you don't know what message you're trying to send and have a cohesive tie to your other marketing and your image. With one stand-alone piece you might get some call from it, but over time you're not sending a consistent message or sending the message that you really want to send and may not be getting the people back that you really want to get back.
The discussion continues...
Tom: And, for that, you're one of the few and you're tracking it. I just want to reiterate on your tracking. Tell us how you actually track that and what you do with the information that you gather when you track it.
Jeff: We use a manual spreadsheet. There are things out there like Act, which we also have but we don't use for this. It's a custom spreadsheet, and every call that comes in gets written down on a piece of paper, and the sheet of paper gets put into the spreadsheet. It gets numbered as far as what lead it is for the year or for the quarter, their name address and other information as well. If it's a qualified lead or unqualified lead, that's a major difference for us. It's a trend to track. Obviously, you're going to have a higher close ratio on qualified leads that came from strong referrals from past clients. We try to analyze as the call comes in if we think it's a qualified or unqualified lead. It's not super scientific, but it helps.
Tom: Amy, is there a difference between marketing and advertising? Or, is one just a component of the other?
Amy: I would view advertising as a component of marketing.
Tom: As one of the areas, and advertising would be the feel-good type thing where you look at it in the Sunday paper and say, "I've got to be doing good because I see an ad that we have." The percentage that you're spending is about 1 percent, is that correct?
Amy: Yes.
Tom: Which is about $20,000–25,000, if you do the math and take it on your whole volume of $2 million. You said your referral and repeat referral was approximately 38–40 percent. Would it also be true that you would spend about 40 percent of your advertising to go toward the repeat and referral business, or does that even play a part in the equation? Out of the amount that you spend, $20,000–25,000, how much of that goes toward the main targeted people that you're looking for?
Amy: Let me make a correction here. Our budget was $39,000.
Tom: So, 2 percent. Two percent of $2 million is $40,000.
Amy: But we do $2 million in business a year, just in remodeling. Between remodeling and new custom homes it's about $5.5 million.
Tom: And of that, how much is just remodeling?
Amy: $2.8 million last year. This year, our projection is almost equal: $3 million in new homes and about $3 million in remodeling.
Tom: And in your budget, how much do you normally spend for marketing, not including salaries? $39,000 your saying?
Amy: Yes.
Tom: But the $40,000 that you're spending in marketing is for custom new homes and remodeling, is that right?
Amy: Yes.
Tom: So, you're really spending a little less than 1 percent?
Amy: Yes.
Tom: Jeff, you mentioned there's a high degree — I believe you mentioned 80 percent, is referral from customers and past customers. Put in perspective, you're spending around 2 percent or so, $50,000–$60,000 — I'm taking those numbers and rounding off. Tell me what percentage that you spend as a percentage of your customers that you know. In other words, a little more than $2 million comes from referral of customers and repeat customers. Can you identify how much of the money that you're spending, the $50,000–$60,000 percentage-wise goes toward marketing for those particular folks?
Jeff: This really is a guess, because advertising is much more expensive than any other category. I have a very strong feeling that the advertising, in other words, is going out and trying to attract new calls and generating community awareness. Targeting to new people, as a percentage is probably a bit more than what we spend on the other items that I mentioned. That's an interesting way to look at it.
Tom: I was really curious. If you really think about it, from a mathematical standpoint. What I found when we looked within our company is this. We do about $4–4.5 million. We don't spend quite the percentage you do. It's about 1½ percent. What we found was an inverted amount. Eighty percent of ours also, give or take a few points, comes from repeat and referral business. Yet we were only spending 20 percent of our advertising and marketing budgets on those repeat and referrals. We were spending 80 percent on what we were saying generating new leads. Isn't it funny that we find that 80 percent of our business comes through that but yet we recognize that. Yours probably would not be that dramatic, would it?
Jeff: It's really an interesting way to think about it. But it goes to show you that you can market to your existing client data base much more effectively and economically than going out to the general public and putting up a billboard or something. You're spending a lot more, and you're not getting as good a return on that.
Tom: What would you say is your most expensive marketing tool?
Jeff: I think it is the advertising as a line item on a budget.
Tom: Specifically for what kind of advertising?
Jeff: I think I mentioned it's purely high-end glossy magazines, locals. Basically, each town has a very glossy upscale magazine.
Tom: Really?
Jeff: Yes, it's kind of unique.
Tom: Not many newspapers?
Jeff: No, that wouldn't be right for us.
Tom: Would you think that, just in your market, your single line highly competitive window siding remodeling contractor would use a newspaper more than a high-end magazine?
Jeff: Yes, that's what you typically see in the area; roofers, siding guys, a mason ...
Tom: Pricing is really the dictating portion of their advertising, isn't it?
Jeff: Yes, exactly.
Tom: We know the expensive one is the high-end magazine. What is your most effective marketing tool that gets you the most business out of the marketing dollars? You mentioned earlier that you had job signs, vehicle signs, repeat referral, Yellow Pages, press releases. Where do you say, "That's where I get a lot of my business"?
Jeff: I'm searching for the one that makes the phone ring off the hook. But that's not really how it works. It's coming through this whole referral network, and it's a combination of a couple things. It's spending money on our high-end photography so that whatever pieces we do create, whether it be our newsletter or Web site, whatever we're putting out there is of the highest quality. I mentioned our client programs, the "night out on us," or end of job gift. Also, it's spending money on tracking our customer satisfaction rate. We've done that in-house and are about to go outsource that and get a much more objective way to do it. It's a marketing thing to me; we want objective feedback from our clients on how we're doing. If we can improve that, they're going to keep telling the rest of their friends. That is a huge marketing tool that I see, especially upcoming as we go to an outsource situation.
Tom: You're going to outsource the customer satisfaction survey?
Jeff: Yes. We may do one in the middle of the job and may do one at the end.
Tom: That's interesting. We still do in-house customer service. But we make up the questions and we have a person who either calls them or we ask them to send it back with a stamped envelope. What we've found, a good friend of ours, Ken Klein from Tulsa, Oklahoma, uses an out-side source and finds it to be much more accurate and much more painful also.
Jeff: If you don't want to hear the truth, you might as well just keep your ears closed.
Tom: Amy, what is the most expensive marketing tool that you use? It might be that the most expensive one is the $3,100 for the newspaper ads.
Amy: That would be what we call advertising/marketing. In that, we do Chamber advertising, Craine's criss-cross directory, Yellow Pages ads, and some lead generation services. It's all lumped together in what we call advertising/marketing.
Tom: That would also include the $3,100 Kirkwood ad?
Amy: No, we put that down in brochure and print advertising. We do print advertising separately.
Tom: What is the most effective one for the money?
Amy: I would have to say, and this is taking a bit of a guess, would be either our Web site services; our webmaster works on it quite a bit. And, we just got going on getting leads from Yahoo!, MSN and Google and getting totally optimized with Web site services along with Internet advertising and e-media services. I think this year we've continued to increase the number of leads we get from the Web site and various forms.
Tom: That's great and good to hear. That's a little change, I bet, incidentally.
Amy: Absolutely.
Tom: I've been doing this for three or four years and have been waiting for the breakthrough when everyone says, "let technology serve you," and up until your comment, I'm not sure I've found very many people who are letting technology serve them in the way that you're starting to here.
Amy: We're currently designing project pages. We write a quarterly newsletter; in that, I'd say three-quarters of the articles direct people to go to the Web site. What do we get the most bang for our buck from? I can't specifically prove that this is true. Everyone knows how important it is to market to your past clients to generate referrals. We do several things to enhance that. We have a quarterly newsletter in which we have a little section titled, "Recent, Returning, New and Current Clients." We call everyone that we've recently done doing business with or are working with currently and ask their permission if we can print their names in there. That gives us a really great feedback.
Tom: Then, do you put that in the paper?
Amy: Yes. Their names are listed in the box on the front page of our quarterly newsletter. It's a great opportunity for feedback.
Tom: It has more than one purpose, then. Who calls those people?
Amy: Either I do or my associate who works here does.
Tom: The design/consultant who works with them doesn't, so it's a second party.
Amy: Yes, it's a second party. Very often, when they hear the name, O'Brien, and know I'm related to the owner of the company. I talked to one client last night for 30 minutes. She said she really liked this they are doing a great job, but that the kids down the street are causing issues. I said we'd let all the carpenters know there's an issue with kids on the street skateboarding, and if they see them they could roll down their truck windows. It's being in touch with the client. Another thing we do is make warranty calls to our past customers at 30 days post job, 10 months, 17 months after the job is complete to get issues we could follow up with.
Tom: Is that a call or a letter?
Amy: It's a personal call. That is passed on to our warranty guy and that's made by us here in the marketing department. Your question was: where is our money best spent? It's marketing to our current and past clients. From current clients, we've gotten a lot of positive feedback by sending out courtesy letters before the start of the job to the neighborhoods so the neighbors know what's going on. Our guys are encouraged to make a big effort to help; if they see an old lady across the street struggling with the trash, they'll walk over and help to make a good impression on the neighborhood. In the middle of the job, when we think the customer is at their "highest pain level," — particularly in the kitchen jobs, they're sick of the whole thing, etc. — at that point, our project managers will let us know and we go get them a dinner gift certificate signed by the manager and the people in the company who work with them. We sympathize with the pain they're going through. We also do personalized gift baskets at the end. We don't just order them from somewhere; they're personalized. If the family has young kids, and they have a rec room and the dad collects beer, there is going to be bottled beers in there and a game for the computer or a toy for the dog along with, of course, Agape mugs!
Tom: Those are all good and very specific responses.
Amy: Another thing we do that I think is kind of neat is that, from three to six months after we complete a job, we do a photo shoot. Before the project begins we'll take some before photos. Then as a thank you gift, we give them 1–2 nicely framed pictures of their completed project. People really get a kick out of that and it gets us back into the client's home.
Tom: Do you have a professional photographer or does someone in your office know photography?
Amy: In general, it's just us in the office with a good camera. We have used a professional photographer a couple of times recently because we're submitting these for awards.
Tom: We've seen a downturn in certain areas in the last 12–24 months. Have either of you experienced any kind of downturn in that period of time? The old myth that when housing goes down, remodeling goes up, is truly, I think, a myth. When housing goes down, home building goes down and all housing goes down. I think now there are pockets out there that are experiencing a downturn in business. Jeff, do you have any experience with any kind of downturn within the last year?
Jeff: Since a year ago, I would say no. We're in a very sheltered area, a very affluent area. We've been in business for 12 years and have not encountered that. In the beginning of 2006, even as early as late as 2005, we were experiencing a slow down. Because we do design, it's really on the front end. Where's our next design job? That keeps the pipeline all the way through construction. We anticipated it and tried to make some moves to improve our situation. The first two quarters of 2006 were very bad for us. There were calls, but people were very hesitant. They weren't qualified or were not willing to make the commitment. In the fall of 2006, that did change things.
Tom: Then it picked back up. There are areas, even right now, that have had downturns. Have these changed your approach on marketing to the past clients? How do you affect the leads if there is a little downturn?
Jeff: It's caused me to really refocus a little and think about what is most important. And again, to me, it's cultivating the existing clients we have and making it the most positive experience for them. It's so much more effective to work with people who have some sense of who you are.
Tom: You make a good point. In a downturn time, when things go bad you panic first, like we all do, but then you take a look: "Where is my whole foundation for my company?" It's with my current customers and their referrals, and you start working on them. I look back and still find the introverted percentage of 80 percent go to finding new clients and 20 percent go to working with existing was. I'm not so sure it shouldn't be the other way around. Have you seen or experienced any unusual marketing technique that has worked or not worked?
Jeff: Not worked? Again, this is so company specific. There are so many aspects of remodeling and so many different models. I can only speak from my point of view. I think a good idea is — we haven't done this — hiring a chef at the end of a project to come in and cook a meal on the clients' new appliances. Obviously, it's at their house, so they'd have to be willing to do that! But invite a past client and maybe a perspective client. Or invite several of their friends who might be interested in remodeling. Keep it low key, a get together where you're in the project you just built, using their appliances and having a nice chef-prepared meal. We're seriously considering that.
Tom: To follow through with that, a logical person to be there would be the person who gave the referral to the client. There might be another couple that they would choose to be there, friends who may or may not want some remodeling. You pay for the chef, food, etc. I like it!
Jeff: Yes, it's networking in general. Any time you can deal with a group of people and establish a real relationship at some level instead of having it be a "sale" or something like that. Any time you can develop a relationship, you're much better off for many, many reasons other than getting a remodeling project.
Tom: Amy, have you experienced any kind of downturn in that period of time? I'm not sure of Kirkwood; this may be a moot question.
Amy: No, we haven't.
Tom: Do you do your marketing any differently in a downturn or slower period of time?
Amy: We were very aggressive. Definitely new house starts and new home construction was down last year. We experienced it because we had a small subdivision that we were trying to market. We did a huge Showcase Home tour in cooperation with Channel 4 and the March of Dimes. We had people view our two homes in a couple months. We had a lot of PR going on. Even so, it was hard to sell those homes. Ask me that question one more time?
Tom: In a slower period of time, and I bring it up because there have been certain pockets that have been adversely affected by the slowdown in housing especially. Usually, when there's a slowdown in housing there's a slowdown in remodeling. It's just the nature of the business. Do you change your marketing approach in slower times? Do you increase them? Do you cut expenses? Is there anything that you do differently in slower times than in regular times when things are going good and booming?
Amy: What we do differently is that we don't cut back on the marketing, we increase it. That's what we've learned from Remodelers Advantage. It's one area you shouldn't cut back on. For example, marketing these new homes, we were on a weekly sign campaign where every single weekend we'd have directional signs pointing to the property. We'll have more open houses.
We used a couple extra magazines periodically for different ads, business journals. We ramped up the marketing. That's not an area we cut back on.
Tom: This brings us to a topic of using past customers and calling on that customer to become part of your sales team. Have you ever done anything like that, Jeff?
Jeff: We do. It's more of a low key thing, in conversation usually. "Do you know of any friend that's thinking about remodeling?" Any time someone does refer us, we will either send a card out and I'll call them and thank them. If they send several, or we get several jobs from that, I'll thank people profusely and send a gift.
Tom: Have you ever had a situation where you're going to do a room addition or high-end kitchen for a client that is very similar to another customer of yours? They might not even know each other. You call on the customer of yours who you've done work for and they're very happy for it. Then you ask the perspective client to go with you to see what you've done. Have you ever done anything like that?
Jeff: Yes, definitely.
Tom: What happened? You're going to your past customers house. What happened?
Jeff: We want to make sure that it's far enough down the road before we bother our existing client. We really want to protect them from extraneous unnecessary meetings and probing of their house.
Tom: Absolutely. But you've done a great job, and they don't know how to thank you. You've already had a prior agreement with them?
Jeff: Yes. We'll tell the prospective client that we have a project similar to this in the same style that I think they'd like to see. We'll all up our past client and make sure that it's OK with them. They may be there or choose not to be there. We'll walk through the project to point out how it transitioned and point out important or interesting facts about the project. We'll talk about time frames, quality and product features.
Tom: We've done that a little bit. A remodeling contractor out in Tulsa has actually done that where they take them to the customer, they don't know each other. What happened was the customer they had done the work for actually took over the sales process.
Jeff: Yes. When the client is there, they usually end up waving and glowing and just giving great comments — to the point where it's embarrassing! Like, "Wait, how much are you paying this person?" as a joke.
Tom: Let's switch gears a little bit, bringing us to the topic of using past customers. Calling on that customer to be part of your "sales team" if you will. Have you ever done anything like that? In other words, you've done jobs for a customer, and you ask them after 30 or 60 days if you can take a photo shoot of it, and they liked that. Have you ever done anything as far as asking the customer if you can bring a potential customer over while they're there and actually have them help you sell? Have you ever done anything like that?
Amy: We've definitely taken clients into past customer's homes. I'm not involved when that happens. The past client knows, of course, that we're going to be bringing someone over. The design consultant/salesman encourages conversation and obviously we wouldn't bring them there if they weren't happy cusotmers.
Tom: That's probably true, and good advice in and of itself. Do you experience anything different as far as a customer pitching in and actually help in the sales process?
Amy: Absolutely — someone who is a local person, and they're showing the house off, they enjoyed this. This fall, we got an award for something and we decided to do a warehouse barbeque in the back of our office building. We invited several of our current clients and a couple of our past clients that we knew would enjoy seeing the guys again. They're comment was, "It was really neat meeting people who also had a house built by your guys. That was really cool!"
Tom: To conclude here. You're part of a peer group so what advice would you have for a remodeling company that is not struggling but trying to get a grip on what true marketing for referrals are? They don't know where to turn. They see an article like this and say, "This is a successful company that does design/build and I do design/build." What advice would you have for that remodeling contractor who says they understand what marketing is but need some advice from someone who is successful and has done a good job. What would you tell them?
Amy: The first thing I would say is that most of them are not going to have a marketing person on staff. I would encourage them to get a yard sign with the mailbox that contains colorful flyers directing people to their phone number, Web site or whatever with a couple pictures on the flyer. We've gotten a lot of good feedback from that. Have signage on their truck. We do a quarterly newsletter. It's personalized and it highlights jobs. It takes a lot of time and energy. You can go to a newsletter service, several people in Remodelers Advantage use these and they give you a template for the newsletter and you just use your name. A quarterly newsletter produced by another company, I would encourage them to do something like that. A friend of ours owns Fisher Construction in Atlanta. He runs a good operation. He hires a marketing consultant. She puts together a newsletter for him, and she helps him with the ad campaigns. If you hire a marketing person that could help you, I don't think those things take a ton of extra time. First thing I'd say is great yard signs with the mailbox on top. Job signage and newspapers, too. They will help you run an ad campaign; give them the information, and they'll put it in the format.
Tom: It sounds to me that for the people who are in bigger metropolitan areas, your advice would be probably to look at the more local papers.
Amy: Yes absolutely. Today, of course, it would make sense for any company to have a Web site, because people are so internet driven.
Tom: There have been a number of things that you have brought up very clearly to the message today. You've been very specific and I've enjoyed and learned from the way you've done it. Any last comments?
Amy: There were two things we did specifically recently that I think were really effective. One was in our newsletter where we ran a contest, entitled "Win an Agape carpenter for a day." All folks had to do was log on to our newly optimized Web site and fill in a form. We got 16 responses, three who became qualified leads. It's easy advertising, and it's fun for people. The other thing that we did recently, which I think is a neat idea ... we did a ribbon cutting and an open house recently at a completed addition, and they invited 40 of their closest friends. There were people poking around looking interested. We provided sandwiches and champagne, and it was on the front cover of our newsletter.
Tom: Those are all great ideas of things that can be useful almost at every level. I appreciate, Amy, that we got together. Just out of curiosity. Agape — what does that mean?
Amy: Agape is a Greek word for love. The kind of love that God has for us. My husband wanted to hold himself to a higher standard of integrity and workmanship. He chose a name that would remind him of his Christian heritage.
Tom: Great! I like it. Jeff, do you have any advice to give a remodeling contractor who would ask for your help with some marketing ideas to get some referrals?
Jeff: For an established company, they're already doing something. The single most important thing to do is to step back. Think about what message you're trying to send, knowing that whatever experiences the client has or thoughts they have about your company are going to flow from their experience with you. Your message needs to be consistent with how you deliver that product.
Any single marketing activity, whether an ad, a Yellow Page ad or a job site, yes, you might get calls on that, but to me start at the beginning and step back. Read a marketing plan book, hire a consultant or whatever you might do. Think about what you're providing for your client and the steps you're going to do to attract the people who you want to attract. Deliver a consistent massage all the way through to the end of the project and afterwards. To me, it's the big picture thing, but it's the most important. You could do 20 other single activities, but if you don't have a consistent message and a consistent way to get the people that you want calling you, that's just spinning wheels to me.
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Do you market differently to target referrals?