Most contractors I talk to believe that sales in their neck of the woods is different. They believe their potential clients are more difficult to sell to than anywhere else in the country. This is seldom the case.
Many of them fall into the trap of letting the potential client qualify them. Instead, they should be qualifying the client.
When the potential client is qualifying you, they are asking the questions. They perceive you as being one of a group of people who can all do the same job, so their goal is to ask questions to find out if your price is the lowest. If you have not distinguished yourself from all the other companies they have called in, then they will naturally base their decision on price. It’s what anyone of us would do.
If you are on top of your sales game, you qualify the clients. You are soft and gentle about it but you ask the questions. You direct the customer through a series of steps to get the four basic questions answered. You show the customer at each step the difference between you and your company and the rest of the shade tree mechanics that might show up. You are not part of a group of people who can all do the same job – you become their contractor of choice. You set yourself as the standard that your potential client compares everyone else to. I cover this in our book, “Profitable Sales, A Contractor’s Guide“.
Want to know whether you are qualifying your clients or if they are qualifying you? The next time you leave a sales call, ask yourself, “Who asked the questions?” If they asked me a question, did I answer it or did I have a corresponding question that I asked them?
Over the past couple years, the topic I’ve been asked to speak on most often is how to generate leads. Contractors want leads – without leads, you can’t make a sale. Some think there is a magic elixir that will get leads in the door. Gang, that potion does not exist. It takes a focused, concentrated, long-term effort on your part to receive consistent leads for your company.
So I’m going to discuss the two flaws I see in most advertising for construction businesses. You’ve heard these before from me, but I’m going to cover them again, and maybe from a different point of view.
The first advertising flaw is not making it easy for potential clients to call. Your phone number should be big, bright and beautiful on all advertising. Your phone number is the address your prospective clients need. I’ll argue it’s the most important number in your business life, even more important than the number that shows up on the last page, last line, far right corner of your P & L. If prospective customers can’t find your phone number easily, they will move on to the next company.
Now some (many?) contractors believe that having a contact form on their website, or prominently listing an email address, is all a prospective client needs. And frankly, many contractors would rather deal with an email than a phone call anyway. Let me explain why that’s not smart. While some potential clients might prefer to send an email or fill out a form, others want to talk on the phone and you should make it possible.
They have a question and they want an answer, now. If they are thinking about building a deck or replacing their cabinets, they don’t want to fill out a form and wonder if they’ll hear back in 30 minutes or 2 days. They know their questions now, and they want their answers now. In 30 minutes they will have moved on, and your returned phone call or email answer is old business.
I know you might be thinking that some phone calls you really don’t want, they are a waste of your time. Or maybe you’d rather they not call because you’re afraid you will fumble the call and lose the lead – it’s better if they send an email. Let me suggest how you might handle this.
Answer their questions but softly move into asking your own questions. What kind of job do you want done? When do you want to get started or when do you want the job completed? Have you had plans drawn up yet? Have you talked with any other companies? Have you made selections yet? Do you understand the permit process? Has anyone created a job schedule? Have you had an energy audit of your home yet? Were you planning on living in your home while the work is being done? You need questions, of course, that pertain to your specialty and to the work being done, but be prepared to ask questions. Questions that make them think about the job and begin making decisions. When they make decisions, they start committing to you.
When you get them thinking about these things, they begin to realize they are going to have to be careful who they pick to do the job. These questions show you care about them and the job, and help establish you as the contractor of choice. I talk about this in the book, “Profitable Sales, A Contractor’s Guide“. You can’t do this with an email. You can do it on the phone.
I receive many newsletters from construction businesses across the country, and I’m pleased that many of you include us on your mailing list. But folks, without your phone number prominently listed, you are losing an opportunity. Someone recently pointed out a company on the east coast that is providing a newsletter outline for contractors. The newsletters are okay, but I have yet to see one with the company phone number on the front page.
Your phone number should be at the top of every page on your web site, right under your company name. Your phone number should be in a font that is at least 2/3 the size of the font used for your company name. Unless you put your phone number at the top of your advertising, you will never know how many calls you are missing. Make it easy for your customers to call and buy from you. Put your phone number where they can find it.
The second flaw. Almost all ads from the construction industry look, feel and smell the same. If you doubt that, open the phone book and look at the yellow pages. Google “Construction Companies” and look at the web sites that turn up. Is there anything that you are saying about your business that is different than any other construction company? Are you giving them a compelling reason to call?
From a client’s perspective, if all construction companies say the same thing, how do I decide who to hire for my job? Real simple. I will go with the cheapest price. Your clients are not in construction. They don’t know what to look for or what to look out for. Very, very few of them know how to find a good, reliable company.
Mike Jeffries, principal at Rivers of Revenue, LLC, has held webinars for us in the past on generating profitable leads. In one of his webinars, posted on our website, Mike says:
“Ask yourself these questions about your competitor’s marketing (or advertising pieces):
1) Do I expect my competitors to make those claims?
2) Are any other competitors making the same claims?
3) Is there anything really unique about any marketing piece from my competitors?
And most importantly,
4) How do my own advertising materials stack up?”
Take the time to watch this webinar. It’s worth your time. His second webinar with us is also available on our website.
Bottom line:
1. You must advertise 24/7/365.
2. Your ads need to be new and original, and enough different than everyone else’s so that you at least get a second look from the prospective client.
3. Your ads must make it easy for them to contact you – that includes having a prominent, easy to find phone number.
Getting busy and learning the basics of promoting your business will help you build up a good clientele that calls on a regular basis and that happily refers you to their friends and acquaintances. It’s a requirement if you want to staying in business.
NOTE: This article was originally published in our August 2 newsletter. To receive our newsletter, sign up near the top of this page in the right column (”Subscribe to our Newsletter”). Mike Jeffries also has a newsletter with weekly tips for your business. You can sign up here: http://www.closingsuccesssystem.com/referral
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During the month of July, my travels took me to 9 different states. Talking to people, I found that most everyone will tell you that their locality is “different”, that they are harder hit than anyone else and that there are all kinds of flakes out there giving their work away.
For everything being “different” in each part of the country, it is amazing how similar the stories are. Gang, yes, the economy is little different in your town than it is anywhere else. But we are all in the same boat. People are giving their work away everywhere. Someone is always going to give a quote that is less than your cost to do a given job.
Let’s put it in perspective. My grandfather told me of guys giving lowball quotes on jobs he was bidding during the 1915 to 1930 time frame. They gave their work away back then, too. My dad told me similar stories about jobs he bid during the 1948 to 1960 era.
You have no control over what other people do, you are not going to change the way they do business. Stay focused on those things you can and should control. Polish your sales skills and ask the right questions. Quit fussing and worrying about the other guy. Focus your time and attention on you. Be the best you can be, providing a good service to your customers and make a profit doing it.
Do you agree or disagree?
Recently I received two marketing emails the same morning. One was a newsletter and the other was an advertisement asking if we wanted to “Receive A Free Window Replacement Estimate Today?”
These contractors are advertising, schmoozing, getting the word out – good work! Well, except . . . the newsletter did not have a phone number on the first page you see when you open the newsletter. If they wanted me to call after looking at that page, they would have a long wait. The phone number is on subsequent pages in the newsletter, but it is small and hard to read.
The window ad initially got an A for effort, until I ran into the word FREE. And there was no phone number anywhere. In my book, that ad went from an A to an F real quick.
It’s not enough to have an email address or a form to fill out. Some people really prefer to talk on the phone. Think about it – some of us don’t even like leaving phone messages because when we have a question, we want it answered now. Why are you so sure your potential clients want to fill out a form and provide their contact info just to get a question answered?
Make it easy for them to call. Put your phone number in big bold letters at the top of all advertising, don’t make them hunt for it. Make it easy for your customers to buy.
How do you grow from a small, one-man firm to a larger firm? That was a question asked by a respondent to our recent survey.
The best advice I can give anyone that wants grow his or her company is to write a plan. It isn’t easy, but when you put in writing what you want to do, where you want to be, and are forced to look at all the details involved in getting there (increased marketing resulting in higher sales, etc.), you can make it happen.
Whatever your goals, you need a plan. We use Business Plan Software for business planning (Click here to look at the software). This program will take you step by step through the process of deciding exactly what kind of business you want, how large, how many employees and what each will do. This program covers just about anything else that you can think of that pertains to planning and running a business.
But be forewarned. Writing a business plan is hard work. You will not get it done in a day or even a week in most cases. You will have long hours of thinking and planning ahead of you. Your financial books should be up to date so that you can include accurate financial information. Writing a business plan also forces you to be completely honest with yourself about your past, present and what’s reasonable to expect in the future. This is one place that Hoo-Rah and BS will not get you through.
Once done, all you have to do is follow the plan. You’ll have to make adjustments, of course, because real life never goes according to plan, but as you swerve here and there, you’ll still have a goal defined and can see the path to follow to reach it.
Please post your thoughts below...
I read an article recently about a ruling by the Arizona Supreme Court regarding what the owners of a residence are able to recover from an unlicensed contractor. The old law said that the owner could recover 100% of the money they had paid a contractor if it was found that the contractor did not have a valid license.
The Arizona court changed that ruling – they said that the court having jurisdiction in such a case must measure the amount of value and benefit the owner received from the work, regardless of whether or not the contractor was licensed. That amount would then be deducted from the amount the owner would be trying to recover. Hurray for who?
I can see both sides of the argument. In this particular case, the contractor subbed out most of the job to licensed contractors, and he’d paid those licensed subs for their work. I tend to believe it’s better to make the unlicensed contractor give all the money back. If a license is required, it’s usually against the law to operate without a license. If they break the law, make them pay – that is the only language some knotheads understand. And it protects the public. On the other hand, what happens if the contractor’s license has expired through an error or inattention from a staff person that works for him? Always two sides to the story.
Watch your paperwork. It matters.
A contractor friend called the other day. He just went through an IRS audit – the auditor, after going through all his records and asking a ton of questions, some of them going back four or five years, announced, “In my opinion, you owe us $22,000.”
He called and asked what he should do. He described (not my words) the auditor as an arrogant, snot nosed kid with less than two months in the chair as an IRS auditor. I suggested he call a good tax attorney and respond to the auditor’s claim immediately.
There is a warning here. Many of these audits (see this blog post) are going to target contractors and we hope you have your taxes and bookkeeping in order. If you do, you don’t have anything to worry about, but if you have been paying other people or contractors under the table, if you have not paid your taxes (the right amount or on time) as required, if your record keeping has not been very good, be prepared. An audit could well turn up this kind of result. Companies that operate this way are prime targets for the government auditors.
Taxes are the price we pay for doing business. If you don’t want to pay taxes, then you might want to move to a country without taxes. Play the game according to the rules. No one likes them – I certainly don’t – but that’s just the way it is. And it’s better than a $22,000 tax bill.
Michael,
I want to thank you sincerely for putting together such a great book on running a successful construction business. Before reading “Markup & Profit” I was a hammer swinger with a contractors license. Now, after having read and reviewed M&P several times I feel that I am on the right path to becoming a successful contractor and business man. Here are just a few things that you inspired me to do: I re-wrote and organized my contract template, have change order forms ready to fill out at a moments notice (no more of the “oh, we’ll just throw that in…since you’re such a nice customer and all”), created a great website (yes, people, websites do work!), taught myself how to use excel spreadsheets and can now track all of my deposits, expenses and overhead costs (all of it!)…AND, most importantly, I know my markup and I apply it to each and every job.
The one thing that has really taken me by surprise is the response of my clients to my new approach. Like you mentioned in your book, I too thought that nobody would buy construction services from me with the markup I needed to charge to…and I quote…”pay for my job costs, the overhead of running my business and a reasonable profit”. Once I began implementing your ideas…ie: being professional, dressing appropriately for meetings, promptly returning phone calls, marketing to a specific audience and presenting a thorough and specific contract…I have been winning roughly 4 out of 5 bids presented! We are on track to beat our best year ever as far as total sales (I’ve already hit my sales goal for the year and it’s only June 16th!), my bad debts are getting paid off at a record pace and I am beginning to see my company make that next step that will separate us from the rest of the herd.
So, Michael, thanks again for taking time to help all of us hammer swingers out. The book is great, the newsletters are very informative and please, keep up the good work!
Dustin Cunningham, President and ex-hammer swinger
Cunningham Construction and Development, INC
It can be done. Thank you for writing, Dustin!
