Originally posted 2010-07-09 09:00:40.
For this week’s Guest Post Friday, Musings welcomes Johanna Hoffmann. Johanna is a marketing and management consultant to construction professionals, architects and interior designers. Her company, Oomph Group Inc. delivers workshops and webinars in the areas of marketing and sales, human resources, general business and financial management. Oomph programs are accredited for continuing education by leading professional and regulatory organizations. Her newsletter and blog are jam-packed with great business tips and resources and you can follow Johanna on Twitter.
2010 is just getting going and it looks as if the long-awaited recovery is finally beginning to take hold. This is good news for everyone, but especially so for the construction industry, which has been so affected by the collapse of the housing and mortgage markets.
Recessions are incredibly and difficult to navigate, but for companies on solid footing, business downturns provide the extra time needed to take stock and refine or restructure the company’s direction, services and management systems. “The first step is to define your value proposition,” says Gabriel Draven, co-founder of Village Technologies Inc, a Toronto-based leader in the design and installation of energy conservation and recovery systems. “Ask yourself: what problem are we solving for our clients or, what do our clients value most about our service? This is critical because, as Mr. Draven says, “If you can’t answer this question and you are not able to describe your value effectively to potential clients, then you are left having to compete on price alone.”
Indeed, if you describe what you offer as ‘drywall installation’ or ‘roof replacement’ you are selling a generic service people will buy at the lowest possible price. But, if considering the way how to market a roofing company you present your services as a powerful solution to clients’ problems, you will be more able to justify your fees because clients will perceive what you provide as a valuable benefit.
“The question of value changes over time,” explains Mr. Draven, “so you need to be aware of the larger trends in the market place and position your business and services accordingly. Right now people are starting to value energy efficiency. Soon, an aging population will need homes that will remain affordable and comfortable, so demand for energy efficiency will continue to grow as will the need for barrier free designs and retrofits”.
To tap and incorporate market trends into your value proposition you need to research the areas you are interested in and become an expert in all related technology and construction systems. As well, knowledge of government financing programs and other pertinent data will enable you to provide extra information that can help reposition you from a ‘hammer and nail guy’ to a valued counselor or consultant.
In addition to providing a way of differentiating yourself from the competition, being ‘on trend’ enables you to ‘package’ services that tap market demand and drive sales in times when people aren’t embarking on large-scale building projects. Current examples include energy audits and long-term home maintenance and renovation plans, which are precursors to actual building projects.
Another value-driven option is the packaging of services aimed at specific market segments. Women and elderly home owners often need help with seasonal home maintenance tune-ups, like the installation and removal of storm windows and the cleaning of eaves troughs. While not significant from a building point of view, these types of services are great for establishing long-term relationships and for generating ongoing bread-and-butter business to help weather economic downturns.
Teaming up with a specialist and combining forces to sell a service to existing and past clients is yet another option. “The growing need for energy management, conservation and recovery systems and the wide range of government funding and rebate programs provide an excellent opportunity for driving sales right now,” states Mr. Draven. “We are teaming up with contractors who don’t have our expertise in this area but who do have an extensive Rolodex. We encourage them to review their current and past client list, to identify prospects for energy system upgrades and we help them pitch and procure this type or work.”
Tapping clients to ‘up sell’ is only effective if you have diligently provided good service, otherwise they may not want to see you again. Using the slowdown to review and revamp your client and project management procedures is another valuable strategy for driving future sales. In an industry that has often been plagued with poor service, haphazard project management and shoddy business practices, a firm that can guarantee satisfaction, outstanding client service and impeccable project management will always find clients willing to pay for top quality service and who are happy to tell their friends about it.
Resources:
● Visit DSIRE – Database of State Incentives for Renewables and Efficiency for information on Virginia programs including:
● Arlington County Green Building Incentive Program
● Energy Efficiency Rebate Program – Residential
● Energy Efficiency Rebate Program – Commercial
● Renewable Energy Rebate Program – Residential
● Renewable Energy Rebate Program – Commercia
● TVA Partner Utilities – Energy Right Water Heater Rebate Program
Virginia Natural Gas – Residential Energy Efficiency Rebate Program
As always, we welcome your comments below. Also, please subscribe to keep up with this and other Guest Post Fridays here at Construction Law Musings.
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Great post Johanna – I think you hit the nail on the head about efficiency upgrades and the difficulty in marketing cautiously.
In the NW, this is a popular business. There are many great outfits that can provide a cost-effective upgrade, but we always caution them to approach homeowners with pause.
You mentioned:
“Tapping clients to ‘up sell’ is only effective if you have diligently provided good service, otherwise they may not want to see you again. Using the slowdown to review and revamp your client and project management procedures is another valuable strategy for driving future sales.”
Slowing down and cautiously publicizing services is the right way to work your marketing. There are penalties in Washington for roofing and siding contractors who “solicit” work and do not comply with strict statutory consumer protections. Check out RCW 19.186.150.
Failing to be cautious in your marketing and customer procurement methods can result in Consumer Protection Act violations and damages. So, Johanna is very right to market clearly and use a soft approach. But, you should also ensure that you have a good clear contract, great communication skills, and a schedule which permits consumer financing timelines.
Thanks for the great comment Doug!
Doug,
Thank you for the great comment! You are absolutely right – innovative positioning can boost your competitiveness but if you don’t deliver properly it’s all wasted – and worse.
Clear contracts manage expectations and prevent misunderstandings. Top-notch project management processes help you deliver on all promises & contractual obligations – on time and on budget and will go a long way to preventing CPA violations and complaints.
Thanks for the great conversation Doug and Johanna
.-= Christopher G. Hill´s last blog post .. Chinese Drywall Checklist For Builders =-.
“In an industry that has often been plagued with poor service, haphazard project management and shoddy business practices, a firm that can guarantee satisfaction, outstanding client service and impeccable project management will always find clients willing to pay for top quality service and who are happy to tell their friends about it.”
Having worked as a commercial developer for a number of years, the above comment presents an opportunity for contractors willing to deliver excellent service at reasonable prices. The lowest price quote is not always the best option. With low quality work that needs to be redone, and contractors that show up late, it is always better to go with a reputable company that you can trust.
The partners of my firm learned this the hard way when building condos in San Diego. Also, when contractors don’t deliver quality work, you open up yourself to possible legal action if you are a developer.
The roofing companies in my area do a wonderful job, as long as you can get them to show up.