Sounds like an anatomy lesson! The truth is that your contracting business has six important "flex points" that, when combined, determine your sales/marketing success. According to industry statistics, remodelers are only converting about 10 to 20 percent of all inquiries to installed projects. Understand that we are not talking closing ratio here; we are talking conversion ratio, which is a huge difference. There is tremendous opportunity for improvement here but only if you isolate, define and work on each of these important flex points.
But isn't it all about generating and selling leads?
The simple answer is yes! But, what really matters here is not simply how many leads you can generate or what your best salesperson's closing ratio is. What drives your business' profits is how effectively you are converting those expensive leads to paying, referral giving customers. Your leads need constant attention and nurturing. From the second an inquiry (lead) comes into your office, your process begins to whittle away at your chances of converting to a sale. The following six flex points will determine just how well your company does in its lead conversion process.
- Lead generation. This is where is all begins. Are you transitioning your lead generation efforts to adapt today's new consumer? Using targeting techniques? Implementing sound Web strategies that go beyond just having a website?
- Inbound/outbound call. You might think the simple phone call to obtain the inquiry is the same thing as generating the lead. It's not! Statistics show about 20 percent of all inquiries never turn into a set appointment (which is usually the goal) often because of inadequate techniques used by contractors on the inbound/outbound phone call. Are you providing the necessary training and scripting to your staff to minimize this problem?
- Pre-approach processes. You might be asking … what is this? Today's competitive marketplace is starting to demand that you set the stage for your salesperson's visit. Are you using pre-positioning packages (consumer guides, customer reviews, etc.) or other strategies such as strategic use of your website, white papers, emails and scripting to make people want to buy from you before your sales person ever sets foot in their home? First impressions really matter in today’s marketplace.
- The presentation. Today's consumer is not responding to yesterday's sales techniques in droves anymore. Are your salespeople in tune with how to empower their prospects to buy?
- Follow-up strategies. Are you aware 60 percent of the prospects that don’t pull the trigger right away and buy immediately do end up buying a similar project from some company within a year? Wow! Are you systematically communicating with these unsold leads to recover this easy business by implementing an effective lead nurturing program?
- Repeat and referral strategies. Don't you love repeat business and referrals? It's the best! Unfortunately, most contractors don't lift a finger to get as much as you can. Do you have systematic processes to maximize your repeat and referral sales by leveraging newsletters, online reviews/testimonials, etc.?
Just how effectively your business flexes its strength at each of these important points in the lead conversion process will determine just how good your conversion ratio is. Remember, the average in our industry is between 10 to 20 percent, which will not sustain optimum profits in today's economic environment. Most companies are very good at one or maybe two of the aforementioned flex points. The exceptional companies are very good at all six. What about your company?
Here’s the best part. Grow your business by 61 percent by simply getting 10 percent better at each of the above flex points!
How can that be? It would seem that your business would increase by 10 percent if you make a 10 percent improvement in your processes, but not here. These small incremental improvements will compound and have a dramatic effect on your bottom line. Drop an email to firstname.lastname@example.org and request the “Compounding Effects” planning spreadsheet to see for yourself (very cool planning tool).
Action Plan: Have a brainstorm meeting with your marketing staff to discuss these critical business strategies! In today’s “New Normal” it’s all about sales and marketing efficiency! The companies that set out to identify and execute many of the little things that separate themselves from their competition will be the winners.