From the Remodeling Magazine Blog

Many times in sales meetings, a salesperson will say to me, “Teach me how to close.” He’ll tell me, “I couldn’t overcome that objection and I keep hearing the same objection over and over again.” Going over a strategy that will help the salesperson handle that objection and working through a solution is always a good idea, but did you ever think about the possibility of overcoming it before it even arises? That is the true solution. How do you do that? Here are a few points to consider:

No one likes to be sold. Everyone likes to buy. In today’s remodeling and home improvement market, it is more important than ever to understand that the moment a customer says “you’re hired” and becomes a client is based on emotion. The prospect makes the decision to become a client based on knowing, liking, and trusting you.

An educational sales process. An educational process that answers questions before they arise is ultimately the best path to reach your customer on an emotional level. When you make an effort to educate the client, you reach them before the objections have time to dwell in their minds. That translates to less effort and time on your part to convince them you are right for the job. If you try to convince a prospect towards the end of the sales process, their uncertainty at your closing will erode any “like and trust” they had in you.

Effective marketing increases your sales conversion ratio. Today’s marketing requires lots of content, lots of education, and lots of trust-building via sharing your expertise. Too many marketing messages focus on the company rather than the customer. So as you craft your marketing strategy and materials, keep the customer top of mind.

How do you do that? Most homeowners view remodeling as a commodity and feel that one company can provide the same results as another. To compound the situation, most remodeling businesses do not have a marketing plan or marketing materials that counteract that perception.

Some marketing phrases I’ve heard include: “You should buy from us, because we have quality and service”; “Buy from us as we have been in business for 25 years and are reliable”; “We are built from trust.” None of these statements give you a green light or a sales advantage.

These are all expectations and not a point of differentiation. How do you communicate to your community and prospective buyers that your business is different and can solve their problems or fulfill their needs? You need to focus on your unique selling point by communicating the answers to these questions:

• What do you do that is unique and different than your competitors?
• How will your clients feel and what will their story be when the project is complete?
• What guarantee’s do you offer that is unique in your community?
• What benefits do your clients experience that is important to them?

Once you identify your unique selling point, use it in all of your marketing materials, sales presentations, and community outreach. If you convince the prospect that your company’s work is not a commodity, you’ll educate him or her into being a client.

Learn how to grow your remodeling business through construction education, remodeling classes and exhibit hall activities. Don’t miss your once-a-year opportunity to learn about new building products and build connections within the remodeling community. The Remodeling Show is sponsored by the National Association of Home Builders (NAHB), NAHB Remodelers and Remodeling Magazine.

I would love to see you at the Remodeling Show for My Marketing class on September 14th, at 4:00 p.m. You can register for the Remodel Buddy’s Marketing class HERE.

Frustrated with the same old marketing approach and not getting results? No leads are coming in and you’re competing on price. Learn to separate yourself from your competitors! Differentiate and Dominate! Stop competing on Price! Learn new strategy that you can implement today!

• Differentiate your business from your competitors.
• Work with your Ideal Client and be more profitable.
• Establish a consistent lead generation system.
• Stop competing on price.

From the Remodeling Magazine Blog

I was talking with the owners and staff of a remodeling business who told me they felt they didn’t have an effective marketing message or marketing materials that identified the company’s business. Holy mistaken identity, Batman. I asked them to specify the three elements that separate their company from its competitors. Their answer: quality, products and service. Sound familiar? I reviewed other local remodelers, and saw that 11 of 13 sang the same tune of quality, products and service. With this repetitive message, your potential clients cannot tell you apart from your competitors. Maybe if you spent hundreds of thousands of dollars in advertising, potential clients might be able to differentiate your company. But what remodeling company has that kind of marketing budget?

I have mentioned this before, but it is worth repeating, , A favorite Quote if mine from John Jantsch, “if a potential client cannot tell you apart from your competitors, they will use price as a differentiator.” That is not a good way to compete, because someone else is always willing to go out of business before you are. You must identify your target clients and what makes your business unique and base your core marketing message on those two things. Let me give you an example of a company that did this successfully.

Pinnacle Renovations has grown over the years. In the last year, owner Paul Klassen says his business revenue from renovation projects has increased almost 50%. He has an extremely talented business staff, creates a great customers experience, and receives excellent feedback. He is harnessing his passion for success by working with a team of business coaches. As Pinnacle’s business has grown, however, his ideal client has changed. Though the company continues to grow, instead of using its original marketing message, the remodeling firm is in the process of updating its marketing and materials to appeal more to its new ideal client and a more targeted demographic.

Pinnacle is adapting to its success by narrowing its focus to a specific type of client. The company had a reputation for being able to engage in larger projects and accomplish custom renovations with a true focus on enhancing their client’s experience. The company’s ability to create an experience has caught the attention of many affluent residents. The company enhanced it’s tagline to “Creating Homes for Life, Making Home Your Favorite Place to be.” Knowing that the company’s ideal client appreciates the customer experience, Pinnacle creates an exciting welcome on the move-in date–similar to those on home makeover television shows—and showcasing the new renovation project by hosting events at the house which ultimately target the next set of potential clients in the ideal demographic.

Lets not forget that what Pinnacle has isn’t easy to duplicate; This is something that is made possible, due to Pinnacle’s unparalleled client focus and attention to detail that makes them stand out in their community. Pinnacle’s referral ratio is extremely high and this definitely the best marketing advantage of all.

I suggest an annual evaluation of your ideal client. Make it part of your yearly business forecasting so you don’t forget. Start by interviewing your existing ideal customers. These are the projects that you wish you could clone. Make sure you speak to the customers that have recommended your company. Find out how these customers found you, why they chose your business, and how they would explain their experience to their friends and family. Ask them what makes you unique and what your company did that sets it apart from past remodeling experiences. Connecting with your ideal clients and understanding how they view your business will help you appeal more of the right clients.

Be sure to read next week’s blog on how to create marketing materials that appeal to you

I have had the pleasure of talking with Mark Buckshon, author of “Construction Marketing Ideas,” about his new book. I have a few friends in the industry that have read it and have told me it is  full of great & useful information. I am in the process of reading this myself, but I am not finished with it. I have asked Mark to discuss this book and give us some insight. If you have read this please feel free to comment on it and let me know your thoughts.

Author Mark Buckshon's Book

From Mark Buckshon:

Tim has invited me to contribute an entry for this blog related to my new book: Construction Marketing Ideas: Practical strategies and resources to attract and retain clients for your architectural, engineering or construction business. Boiling a 192-page book (and the years of research behind it) down to a brief posting here is a challenge. However, I’ll practice what I preach in keeping things simple. If you are relying on repeat and referral business to succeed, you are three-quarters of the way to success in marketing and building a profitable contracting business.

You simply need to think beyond passive reliance on repeat and referral business to active processes to encourage and develop more satisfied clients. This is the untypical marketing-guru advice and may seem to be heretical since my business earns 95 per cent of its revenue by selling advertising primarily to contractors and sub-trades.

However, if you have been successful enough to satisfy enough clients that they call you for repeat and referral work, you have the first part of the marketing equation right: You are delivering a service that your clients find valuable and worthy of respect. So small investments to encourage, enhance and expand the referral and repeat business process will disproportionately help your business grow in good times and survive in hard times. The challenge is you must be organized, not passive, in your marketing for this business – and you should expect to spend about five per cent of your overall sales volume to achieve the results you are seeking. You can use these funds in a variety of manners: Enhancing your client ex

perience, developing organized follow-up service call processes, engaging with community groups and associations, improving your website and responsiveness to inbound inquriies and so on. I outline several practical ideas in the book. The book has been suc

cessful since its publication in April. You can read the enthusiastic reviews at Amazon.com and elsewhere. I’m preparing a special Webinar on Construction Marketing Ideas for Renovators/Remodellerss on Sept. 23 and if you register with this special promo code (not available outside of Remodelbuddy.com) you can save 10 per cent on the registration investment and receive a free copy of the book (value $39.95). http://renovators.eventbrite.com/?discount=remodelbuddy.

The Story
I see many remodeling businesses searching for the magic solution on how to generate more leads, more revenue, and higher profits. What is the solution? One remodeling company chose to focus on increasing profitability before planning to grow. Magically, when this happened, the growth came along with the targeted profit increase. 
This company has provided bath and kitchen remodels, additions, windows, roofing, siding and sunroom services in the western Pennsylvania area for 31 years and had a solid reputation. The company was profitable and the owner was earning an income, but he knew he needed to improve profitability to sustain the long-term business that he needed for his retirement. He began by establishing a more accurate financial statement in Quick Books to give him better information to assess his profitability on the range of remodeling projects, as well as provide a snapshot of overhead and expenses.

Breakdown of Profit
I worked with him to review the profit margins from the financial statement. We discovered that the larger remodeling projects were time consuming and had a minimal profit that ranged from zero to 5%. The project’s original sale looked great on paper. A $30,000 sale is exciting, but true test of success is the profit margin at the end of the project—a margin that should be set at the beginning. Dedicating a month to a large project with zero or minimal profit is not worth those 30 days.
The revenue from home improvement projects such as windows, siding, roofing and sunrooms, were more profitable and easier to accomplish, but they were not the focus of the business. The company’s employees spent the majority of their time on the large projects.

The Dilemma
The owner knew he had to make a decision about the future direction of the business and place profitability before growth. Could he survive without the revenue from the larger projects? Removing the unprofitable projects and focusing on the ideal projects, or sweet spot of the businesses target projects instead, may mean loosing revenue, but removing the projects that are causing lost time, energy and profit dollars, means more time focusing on the ideal projects and what makes the most profit. The answer may have seemed clearer in the financial statement because it provided more accurate information. If 70% of your projects have a net profit of 15% to 25%, and the other 30% revenue is at 0-5% profit, losing or dropping the unprofitable 30% will result in lost revenue or a decrease in sales. Is that a bad situation? No! Now, the personnel can be more focused, maybe overhead will lower and your business will be more productive to produce the profitable projects.

The Decision
The owner decided to narrow the company’s focus to its most profitable projects—the home improvement work. Not only were the projects more profitable, the staff was better able to create a positive experience for customers, which is another positive outcome. The team updated the pricing on these projects to increase the profit margin by 3%. With this focus on home improvements, the company’s marketing message also became clearer and it was able to target ideal clients and enhance the experience of these ideal clients.

The Future
The owner discovered that he could increase profitability without initially increasing sales. However, in the six months since the change, the company has seen an increase in both sales revenue and profit. The business now accepts smaller and more selective remodeling projects. With the increase in profit percentages and a clearer approach, the company does not waste time on sales that don’t lead to profit.

I wanted to post this here on my personal blog to see if anyone had any questions they wanted to submit. Here is the link to the article

Open Book Management

I hear people discuss open book management (OBM) and feel that business owners are absolutely too hesitant to dive into this. What is the fear of using OBM? Some reasons include not wanting employees to know their income, or not knowing how to use the information to build a team spirit, or that the owners don’t understand a financial statement.

In addressing the last point, I feel it is imperative that business owners understand their financials. You cannot earn a consistent profit without understanding how every movement affects the bottom line. Financials provide a strategic map that outlines where you have been, where you are, and where you are headed. In turn, OBM provides a way to use financial information to get your team focused on being profitable. This isn’t a “buy-in” per se’, it’s a necessity to developing a team that is focused on becoming a well-oiled machine.

I can review any financial information and in a matter of minutes know both what is functioning very well and what problems a business might experience. Financials, when set up properly, with the right chart of accounts, following a percentage of completion philosophy, and using an annual comparative, enable business owners to have the right information to make the right decisions.

Understanding the numbers will let you know what areas of your business need improvement. You might have a high sales volume, but if you don’t understand your profit margins, you might be under-selling projects without realizing it. Your company might be most efficient at building additions, but often accept bath and kitchen projects that may not obtain your required profit margins. Your financial statements might reveal that your overhead is too high.

By itemizing the entire general and administrative accounts, you will have a more systematic and analytical look at the proper numbers, which gives you the opportunity to streamline your operations. If you see each line item on a monthly basis, you’ll quickly see where you are  spending your money and be able to make decisions on what expenses are increasing or decreasing and why. You can ask yourself, “can I save money on my phone service?” or “can I afford another vehicle?’ or “what can I do to reduce my insurance?” When you look at the numbers systematically, every month, you become more analytical and savvy in how you spend money.

Once you understand your financials, you can share them with your employees and help them understand what the numbers on a report mean. Open book management can build a culture of success. Having an accurate financial can help the team analyze a situation more thoroughly and present the decision makers with accurate information to make an educated and better decision. If an employee requests a raise, you can use the time to share information with him including material rates on his projects, labor rates, and profit goals. That very same employee might not ask for a raise if they knew the business missed profit goals by 10% or that the projects the employee was responsible for didn’t meet the desired profit margins.

There are so many ways to involve the team and team build. In my upcoming blogs, I’m going to take an in-depth look at OBM and will include a series of many true life examples and scenarios and answer questions to ensure that OBM is part of your growth. Submit your questions about open book management to me at tim@remodelbuddy.com.

Many business owners are more focused than ever on their marketing efforts. I have mentioned before that the definition of marketing that should be adopted today is about getting someone who has a need, to “know, like and trust” you. There is no better marketing plan than having the owner of a business visit his or her clients at their home and being involved in the project. So get out from behind your desk and be your biggest marketing asset.

When a customer hires you they expect that there will be consistent progress and quality workmanship to complete the project. These are their basic expectations and not anything they consider astonishing. What is astonishing? Astonishing is doing something no one else can do. When the owner of the company visits the homeowners and makes a concentrated effort to talk with them about the project and focuses on making their personal experience remarkable, then you are on your way to creating an astonishing experience.

If you want to learn something about your customers and the pulse of your business, visit one of your projects. Talk to your customers. Not only will you earn that “know, like and trust,” but you will learn more about your business, get to know neighbors, and develop relationships with your tradesman and employees. When your workers know you may be around the corner or on your way to their project, their efficiency and craftsmanship will reach their highest levels.

When I was operating my business, I would make daily visits to projects. I would review jobsite cleanliness and quality control, observe our workmanship and talk with the customers. When I visited the project and the customer was not home, I would leave a note that I was there and make written observations and leave them on the communications board. My clients knew from our first meeting that I would be very involved in their project. This was also part of my sales process. I wanted them to feel they had our team’s personal attention. I knew if I put forth this kind of effort that everyone on my team would and could be expected to do the same.

With regular visits to projects, I found that the quality of work, job staging and cleanliness of tradesmen improved. The most beneficial aspect of getting out from behind the desk was that our business was more “refer-able,” a key to success in today’s economy.

Having the ability to step on the gas to create revenue or ease off the gas when needed for your remodeling business can be a valuable vehicle, if the strategy is,…. and tactics are… done right. I do highly recommend using an experienced marketing agent to strategize, develop and implement your campaign, as trial and error can be costly.

Not only can trail and error be costly, but the money and time lost can stop you from venturing down this road again and ultimately prevent you from advertising, which can be the loss of a great vehicle for the right company to take advantage of to grow their business, when your budget allows. Also, the experience of negotiating for the proper rates can be a savings in itself and get the greatest value for your money, dollars and budget. The professional experience is negotiating is priceless.

Direct Mail Pieces

Val Pak

I would just like to give you general information and a description of Valpak, so you can understand how it is used. Personally, I have had extensive experience with Valpak in numerous metro markets throughout the U.S. For customized advice, please contact Remodel Buddy to arrange a plan for you business. Valpak’s PDF media-kit can be downloaded here;

What is Val Pak?

The Valpak sealed envelope contains a mix of ads from national, regional and local advertisers, delivered via mail in a sealed blue envelope. Remodel Buddy’s take: Valpak’s business advertisers the majority of the time, advertise with discounts on their ads or use coupons, as the Valpak audience likes to open and review the blue envelope looking for local specials. Depending on the marketplace, this can be a vehicle that will have more than one competitor in each Remodeling/Home Improvement field.

Val Pak describes itself as the following;

From savings alerts, special discounts and offers, to menus and more, consumers look to Valpak each month to deliver rewarding, relevant and reliable ads from neighborhood businesses and national brands. Advertisers can select from a full range of professional marketing services including campaign concept, design, printing, list acquisition and in-home distribution.

How Valpak is traditionally distributed.

The distribution of Valpak is through the mail, directly to the homeowners and or commercial businesses. When mailing your ad to the local area, here a a couple options.

Saturated List-

Each Valpak distributor is a franchise and will have a certain geographic area it targets for the mailing of the blue envelope with all the ads & coupons. For example, if someone is operating a remodeling business in Washington, DC., and wants to do a saturated mailing, the mailing will go out to everyone that is located in the zip codes that the Valpak franchise mails to. If you are in DC, the ad will go to everyone in the DC metro area and the list of zip codes they distribute to 100% coverage. Saturated lists are less expensive on a cost of per thousand mailed, per thousand reached( which is a common evaluating term for pricing -cost per thousand -cpm)

Targeted List-

this is exactly as it sounds, a specific demographic, income range, home owners, occupation, targeted zip codes only and can be used to focus on more of an ideal client. It is important to know your ideal client and their demographics anyway, when advertising as if you are reaching your targeted customer, you are more apt to achieve better results. Targeted mailings with Valpak have higher response rates, leads, inquiries etc, but also cost more per thousand.

Remodel Buddy’s take:

When choosing a direct mail piece there are quite a few things to consider when trying to capitalizing on the vehicles potential. First, consider the reason for the advertising purpose. Is this for generating leads for an event? The event could be an open house, a sale or special offer. Is this for branding? Some Remodeling organizations set aside a certain amount of their advertising for brand awareness, to get the name out and reach people they may not otherwise reach by, by using saturated mailings to a wider audience- everyone. A more focused approach for ideal clients and a better opportunity to earn business on each customer contacting you would be the targeted mailing. Even though the cost per thousand mailed is higher, the overall cost will be less on the budget, since less will be mailed.

Remodel Buddy’s Summary

We analyze the marketplace and review all the possible vehicles for direct mail advertising. Direct mail pieces more than likely come with a few or more competitors advertising in the same mailing on group pieces. Valpak is no exception. A good sales approach will be necessary to close these leads and make the cost effective. This is always a consideration when choosing what ads to run, when and gauging the response expected. Knowing your ideal client and their demographics etc,etc is a process Remodel Buddy can go through with you and will be necessary to maximizing success & making an effective advertising campaign. The message and content in the ad along with the creative artwork itself is just as important as every other step.

One element of doing all the little things properly is staying in front of people. Top of Mind Awareness!

If you look at advertising and marketing today, you can see that traditional methods of reaching people are changing. TV isn’t as effective as it used to be and unless you have a big advertising budget, may not even be an option. My wife and I TiVo shows to watch later and fast forward through the commercials. How about radio? I have satellite radio and avoid commercials as do many people. When I’m in my car, I want to hear music, so if a commercial comes on I flip the station. I am not saying TV or radio cannot work, but not as well as it used to. I am always looking for effective and affordable means to market and so are many remodeling businesses.

In today’s world, e-mail has become a standard practice for communicating and is now an acceptable and convenient way to stay in touch with your clients. Part of marketing effectively is being in front of people and doing so consistently—you want to be in front of people when they are ready to buy. E-mail newsletters are a very effective way to reach people, stay in front of them consistently and do so very affordably.

To create an effective e-mail newsletter, you should send them on a consistent cycle, build a good list of recipients, and provide great content. Think beyond the topic of remodeling and have fun with the publication

Send them on a consistent cycle. Consider sending out a monthly newsletter and send it every month. The best practice is to send out your newsletter at a time of the day and week of the month that you feel gives the best opportunity to be opened and read. I personally like Sunday evenings and have had a good open rate with that time.

People are usually busy on Mondays and are inundated with e-mails, catching up with communication and may present a poor opportunity to be read. Most newsletter providers, such as Constant Contact or MailChimp, include open rate analytics, and allow you to view who has opened them and who has not.

It is a good practice to have people confirm they want to receive the e-mail and provide an unsubscribe option as well. This practice ensures the people that want to receive your newsletter will. Look at your statistics, track the results, and make adjustments as needed.

Build your list. Who should you send newsletters too? Send them to everyone! The more people on your list, the more people you reach.

If a client that didn’t choose your business for one product and gets your newsletter consistently, maybe they will get to know, like, and trust you for a later remodeling project. For companies that offer a handyman service and work with a client on a small project, if that client receives newsletters, they may see the range of projects you can do and call you when they are ready for a larger kitchen project.

Provide great content. Make sure the content in your newsletter is interesting and covers a variety of topics. Ned Overton, FW&D Remodeling in the DC metro, steps outside the topic of remodeling and writes about his favorite place to eat and selects new restaurants each month.

Ned writes a review, what he ordered, talks about the service and takes pictures of the server (with their permission), the outside view with the sign and sometimes the chef. Want to make it even more fun? Let them know you have a blog and are going to review their place and put it in your newsletter. Let them know you have a good following and ask if you can offer your clients a 10% off coupon if they print it and bring it in. Have fun with it.

Maybe you will bring them new business and maybe they will bring new business to you, too. WIN/WIN!  What a great way to connect with more people. Let your employees participate in the fun too. Need more content? Review a movie. Be the first one to see it. Choose a movie which is likely to appeal to your ideal customer.

Take the kids to see “Alice in Wonderland.” Did you get the tickets online to save time? Advise your readers on when to go, how it was and what your kids thought of it. Take pictures of the theatre or your kids eating popcorn with 3D glasses on. Ask your family and employees for their help. Write about or highlight local events. Did you attend one? Did your employees attend one? Maybe make a note that you will be at a certain event and would like to catch up with clients at the event.

Think beyond the topic of remodeling and have fun with the publication. Include a link to Facebook page and encourage your clients to “Like” your company page. Grow your readership as if your newsletter were an entertainment guide. Check the analytics of the open rate for the newsletter and try to improve it.

I have heard this term used a few too many times and am not sure what it really means. I think a better term to use is, Getting back to understanding what marketing really is by learning marketing in any economy, or Marketing effectively for consistent results makes more sense to me.

I like the phrase that describes marketing as, “Getting someone who has a need to know, like and trust you.” A future client needs to know, like and trust you, before they will ever buy from you, and ultimately refer you, and do repeat business with you.

Marketing in the remodeling and construction industry isn’t for the light hearted, as it takes a consistent, effective, a well planned system to get results. Most remodelers I talk with and work with are very busy in their business building, training employees and with production, so the marketing gets the last bit of energy…if any. This approach isn’t bringing results and the ones that have ignored marketing are feeling the effects. Negative effects. Just like anything that gets neglected, it definitely doesn’t do well…let alone thrive and bring positive results. This is what has changed…the need to pay attention to marketing. The growing companies, profitable ones and stable companies are making marketing as important as sales and production.

Also, I don’t think its todays economy has changed the look of marketing as much as just the way people are communicating and people’s expectations have changed. I don’t look at marketing as a newsletter and bam, my business is doing great now. Far from it.

I look at long time Remodel Buddy member, Paul Klassen of Pinnacle Renovations. He is changing his culture, becoming effective with every move and enhancing his customers experience in a very systematic and consistent way. He is focused on his ideal client. An ideal client is one that is profitable for one. A profitable project that you tell yourself,”if I had 5-10 more of these, life would be good.” The first element of an ideal client is they are profitable projects and the second is that they referred you.  Identify these people and find more of them. Develop your core marketing message to reach out and connect with them.

Building an effective marketing plan is about doing many, many little things properly on top of a solid foundation. There isn’t one silver bullet that makes everything click, but there is one element that makes it all possible….an effective strategy with consistent effort. Neglecting marketing is a death spiral in the long run.

The difference between cost and value has narrowed in customers minds, so the need to establish yourself as the “go to company,” “the expert in the industry,” and a remarkable process for delivering the entire project from A-Z ……will be the difference. Educate everyone with your marketing. Marketing that is unique & powerful, plus the ability to differentiate yourself from everyone else is the foundation that is needed to market in any economy. The only thing this economy has taught businesses is the realization that marketing cannot be the part of the business that is neglected anymore.