How To Invest and Then Spend Less on Marketing
authors Shawn McCadden | February 14, 2018
Too many remodelers think they get enough work to avoid investing in marketing. I would agree if you always have more leads to choose from than you need, and you are selling at a margin that generates a 10 percent net profit or more. There are also a lot of remodelers who spend money on marketing so they can say they did it; you know, so they can check off the marketing box on their to-do list. Unfortunately, many of these “I do marketing too” remodelers aren’t getting the qualified leads they need to sell at a 40 margin or better. If you are happy with your leads, job types, customers and profits, keep doing what you have been doing. If not, consider these three marketing strategies as you decide your marketing plan and budget for 2018 and beyond. With the bright economic predictions for the remodeling industry, now is the time to invest in marketing so you can ride the top of the wave, boost profits and establish a brand for being expensive but well worth it. Then if things soften you will still be on top of the wave, even though the pool might be smaller.
The Flywheel Concept
One overarching strategy for your marketing should be to plan and invest in ways that get your marketing flywheel spinning, such that it gains enough momentum to almost run on its own. First, recognize it takes a lot of work and effort to get a flywheel up to optimum speed. This will require a significant investment of time, thought and money, particularly if you are pretty much starting your flywheel from scratch. For full-service remodelers, this could mean spending 4 percent or more of your anticipated revenue on marketing. But remember, the upfront investments—if done well—will get that flywheel going. Then, as long as you keep giving it the right little pushes, it can maintain its momentum, and your yearly investment can come down in subsequent years. With the right marketing already in place and working for a few years, maintaining your flywheel may only require 1 to 2 percent of revenue.
What Are you Really Selling
Before you invest money on marketing, you will need to decide what your business is selling. Get out of your box here—don’t even begin to think you are selling remodeling. If you want to command a higher price than the “commodity remodelers,” you have to sell something different. For example, can or does your 3-D rendered design process help your customers make confident decisions? Can or do your production methods and equipment keep the jobsite and your customers’ homes safe, clean and healthy during construction? Is or can your company be the recognized local market expert when it comes to aging-in-place, historic restoration, deconstruction or complex local zoning regulations? Unless you stand out as different in the marketplace and the marketplace already knows that difference, assume you will be starting your flywheel from its resting position.
Once you have decided what you will be selling, you can create the marketing plan needed to make it happen. But don’t write and describe your marketing plan for the people who already know what you plan to accomplish and why. Instead, write your plan so someone with little or no experience with remodeling will understand what you are expecting to accomplish. You need to do this because it is more likely than not you will be delegating most marketing activities to people outside your business. If you want to hold them accountable for their contributions, you and they will need to know why you are doing marketing, as well as the desired outcomes.
Measure, Cut and Enhance
In my opinion, marketing is an expense if you don’t measure it, but an investment if you do. My premise here is that if you establish measurable marketing goals and ways to measure effectiveness of your tactics, you will either fix, constantly improve and/or eliminate the marketing tactics you use. To accomplish this requires someone at your business be responsible for marketing results, not just for doing the marketing. Just as many remodelers are good at value-engineering the building methods and products that go into a customer’s remodeling project to control budget and better meet the customer’s purposes for remodeling, smart remodeling business owners need to continuously value-engineer their marketing methods and tactics. And just as keeping up with new products and product advancements is important to your customers, keeping up with new and ever-evolving marketing methods and tactics is important for keeping your marketing flywheel operating at optimal speed, at the lowest cost.
With measurable outcomes you can do business with people who will agree to be paid based on outcome, rather than simply effort alone. This clicked for a web designer one of my coaching clients and I were interviewing. After telling us he could increase the number of leads coming from my client’s website, we showed him the written plan indicated we actually wanted fewer but better qualified leads by doing marketing that would proactively prevent certain customer types from wanting to contact the company. So rather than measure his efforts by the number of leads as he had assumed, we will instead be measuring by the desired close ratio on those leads. |QR