Marketing can be a tricky thing. Remember when Oldsmobile marketed its cars with the slogan, “not your father’s Oldsmobile”? The campaign would have to be judged a flop because the only Oldsmobiles you see on the road today last rolled off the assembly line in 2004. In contrast, the expression “not your father’s [insert term here] … ” has become a pop-culture catch phrase that has outlasted the product it was coined to promote.
Likewise, in making marketing decisions, remodelers face some tough choices in an uncertain market. What works? Tried-and-true methods or new strategies? Taking a lesson from Oldsmobile, catch slogans would seem a less winning strategy than a truly appealing product.
Judging from the response to a recent Qualified Remodeler reader survey, 60 percent of respondents favor the tried and true: repeat and referral business. Other marketing strategies show very small percentages by comparison.
One can argue remodelers rely on repeat business and referrals for a very good reason: It worked in the past and it works now. Or, one may contend they’re missing significant marketing opportunities and putting their businesses at risk by not expanding their marketing horizons. As is often the case, the truth likely lies somewhere between the two extremes.
“I would love to be able to ask my friends in the industry if [repeat business and referrals] are important to them, but, unfortunately, that’s exactly what they relied on, and they’re no longer here,” says Todd Jackson, CAPS, chief executive officer of Jackson Design and Remodeling, San Diego. Business shrank by 50 to 70 percent for those who relied heavily on repeat and referral business, he adds.
“To get a referral, you have to have a new client,” adds CoCo Harper, Jackson Design and Remodeling’s marketing director.
Part of the problem some remodelers encounter is not committing to a marketing plan, Jackson says. “I have friends who say they’re committed to spending a certain amount of dollars on marketing, and at the end of the year, they’ve only spent half of it.”
Marketing is more than setting aside a budget; it’s looking at your tactics in advance and having a plan. “By September or October [of the preceding year] , we know pretty much month to month what our plan is,” Jackson explains. “We list every tactic; we could probably have 30 headline tactics and under each of those there may be eight strategies. We plan that out month by month, how much are we going to spend and what week are we going to do it in.”
Planning ahead can have its advantages, Jackson says, relating how he negotiated a 50 percent discount on 2012 TV advertising by paying for it (and writing it off) in 2011. “We knew we were going to spend it anyway in the next six months,” he explains.
Marketing starts with the basics, Harper explains. “You have to have a good product to market. You have to have a business that has integrity and does good work. That is marketing 101.”
Beyond that, she asks, “What makes you different? What will break you away from your competitors? Who really is your client? Are they men, 50 years old? In what part of town? What are the geographics, demographics and psychographics of your clients? What is your budget for the year? Plan that. It should be a percentage of your sales. What are your goals? How many leads do you want? Set some solid goals and opportunities for yourself and then work on a plan that is detailed and involved.
“Have a consistent message, and then move forward,” Harper says. “Marketing for a remodeling company is a moving and fast-paced job.
“Our goal has always been to be the leader in what we do; that’s where I like to be, so I’m very motivated. When I first came on, everyone [in the industry] was doing the same thing, and you [as an individual remodeler] become vanilla when you were not vanilla. Clearly, you have a lot more to offer.”
“Why did our business increase 50 percent last year, and why are we on target to hit $10 million this year?” Jackson asks. “It’s because our brand has finally arrived.” Harper agrees, noting that developing a brand can take at least three years.
Marketing isn’t just about buying shiny ads, Jackson notes. People forget about opportunities, such as public relations. “There are many opportunities to be written about if you communicate with the people who are looking for stories,” he says. “If you find those outlets—newspaper, magazine or whatever—and present those people with a very tight concise story with photos and verbiage, you make that publication’s job easier; they’re going to call you, but you have to be proactive.”
Another way Jackson stretches his marketing budget is co-op advertising agreements with appliance dealers, cabinet suppliers and other vendors with whom the company does business. “Twenty percent of our marketing budget was paid by co-op dollars in 2011, and this year it will probably be more,” he says.
“It’s a formalized partnership,” he adds, “It’s not just a handshake deal. We follow it up with a two-page signed agreement that says what we’re going to do, what the goal is, when we get paid and how we track it. It takes the mystery out of it, and then we commit to it.
“During good times, no one wanted to give you any kind of co-op deal,” Jackson says. “Now they’re saying, ‘What do we have to do to earn your business?’ We’re supplementing our dollars. I think if vendors see you’re spending money on marketing, and it’s going to give them more business, they’re willing to invest in your business.”
Asked if remodelers should keep their marketing operations in-house or hire an outside firm, Jackson replies: “I’m probably more of a control nut, but I’ve done it both ways. I had an outside person who, at the time, I thought was my marketing person, but all he did was buy media. Today, I have a project manager on staff to run my jobs, I have designers on staff to design, and I have a marketing director to market. The latter position is as important a position in my company as my accountant or my controller.”
Casting a Wider Net
For another California remodeler, marketing is a mix of old and new tactics. “Speaking for our company, we certainly still do a lot of business from referrals and repeat customers, but I think part of the reason we’re seeing increases in our business is we’ve made the commitment to cast a wider net via the Internet,” says Jim Tibbs, vice president and creative director of HDR Remodeling, Berkeley, Calif.
“More and more clients are finding us every month through Internet searches or because they happen upon an article or a blog where we’re mentioned. The number of those is increasing, and I’m confident that’s contributing to our double-digit growth at a time when the industry is not growing at the same pace,” he says.
Nevertheless, Tibbs is not about to abandon what has worked in the past. “We still invest a pretty significant amount of time and resources in keeping in contact with our current client base. We send out an email newsletter on average every six weeks. We’re staying in contact with our top customers and keeping our name in front of the people who have been very loyal. We certainly don’t want to let them slip out of the mix,” he explains.
Tibbs does not discount social media, but cautions remodelers about expecting more than it may currently deliver. “I think the age group we’re appealing to [as potential clients] is between 40 and 70, which isn’t necessarily the core social media group. The social media outreach we’ve used is a great supplement in terms of giving clients or potential clients access to more information in very user-friendly ways. I don’t necessarily think it’s effective in terms of making the initial contact or attracting customers who are maybe only just hearing about your company,” he adds.
“Young people who are getting into their first homes [and who are more likely involved with social media] probably aren’t going to be using our company to do work on that first home. They’re going to look for more cost-efficient ways of doing it or doing part of it themselves,” Tibbs says, acknowledging that 20 years from now, the Facebook demographic will have changed or have been replaced by something else.
For now, Facebook is “another avenue to get current information out, whether it’s photos from a job in progress or a little blurb about something that may be happening in the company. Website updates can be costly and time-consuming if you do them right. We used Facebook because it’s user-friendly—anybody in the office can do it. Of course Facebook is going to evolve, and our strategy will evolve with it.”
Don’t Overlook the Costs
One perception Tibbs advises remodelers to guard against is the notion that Internet and social media don’t have a substantial marketing cost. “I think we all have tended to overlook the amount of time it takes. For a while, I wasn’t charging the hours I was spending blogging and doing newsletters to the marketing account. It was kind of living in overhead, and we really didn’t have a handle on what our marketing costs were. If you go to the effort of capturing those hours and charging them in the right place on the profit and loss statement, it does really add up.”
Tibbs likes to keep a balance between evolving digital marketing strategies and what has always worked.
“I see again and again the thing that cements a relationship and will really nail a sale is the face-to-face interaction between two people with a business card exchanged. It does go back to the basics at some point,” he says. (For more information about effective business cards, see page 27.)
“The way you attract people and get your name out to them is certainly evolving and changing,” Tibbs concedes, “but when it comes to those first couple of meetings after the dialogue has started, quite honestly, it does go back to the basics and to some degree the tried and true.
“I would add, this is a time when successful companies should be taking some calculated risks, trying new things and learning from their failures. I know budgets are tight, but if you become paralyzed about trying something new, you’re really going to miss a lot of opportunities.”