Contractors can spend as much as 15 percent of gross sales on marketing. But experts say many contractors are wasting that money on ineffective and poorly thought-out campaigns.
“The ultimate end metric for many companies is cost to marketing,” said Ryan Shutt, marketing director for Southwest Exteriors by Andersen, a 2016 Remodeling 550 firm. But Shutt and other experts say those costs are higher than they need to be for many firms simply because they’re not using their marketing dollars wisely.
Here are seven of the most common marketing mistakes — and how to avoid them.
1. Allowing sales to dictate marketing. It might seem that your sales people are naturals for marketing ideas, but often their goals are at odds. “The sales guys are focused on how can we get the sale in the house?” Shutt said. “From my point of view, it’s ‘How can we get the phone to ring?” For example, Shutt said commission-based sales people wanted to focus marketing on high-end neighborhoods. But his research revealed that mid-range neighborhood actually lead to more sales. Additionally, sales wanted to market low financing over 12 years. That’s a great sales tool in the home, but Shutt said to a prospective customer it signals a long pay off period. Instead, he went with $100 off per window, which is more enticing.
2. Trying to sell the product or service in the ad. “The ad should just peak the customer’s interest to call,” Shutt said. But too many contractors think an ad’s end goal is to actually sell themselves or their business. That’s the equivalent to walking up to someone at a bar and asking them to marry you without ever dating, said Mike Agugliaro, co-owner of Gold Medal Service and CEO Warrior. “To get customers, it’s never a one-shot deal,” he said. “It’s a frequency play. You’re saying, ‘I want to give you value. I’m here, and if you’re interested, I’d love to have a conversation with you.’”
3. Failing to target the ideal customer. Many contractors use what Shutt calls the shotgun approach to marketing in which they try to blanket a neighborhood with postcards or other ads. A more effective approach is to identify your ideal customer — who do you like to work with and who has produced the best sales? — and go after that person. Today, data mining companies make it easy to drill down to those types of demographics in a way that was never possible before. Agugliaro said it’s as easy as giving a data mining company a list of your last three years of customers who spent more than $5,000 and getting a report that shows how to reach similar people. “It’s like getting the DNA of the perfect customer,” he said. “When you know that, it’s easy to do the marketing to attract them.”
4. Thinking like a marketer rather than a customer. Sometimes marketers can get so caught up in their jobs and strategies — and get so full of themselves — that they forget the customer. “Marketers think they’re the smartest guys in the room,” Shutt said. “And we’re not.” So every now and then, it’s important to put yourself in the shoes of your customer. If you were them, how would you respond to this ad? Would it make you want to jump up and call? To answer those questions, it’s imperative to know and understand your customer demographics, Shutt said.
5. Focusing on only one marketing channel. It’s easy for contractors to get stuck in a rut when it comes to marketing, especially when it’s worked in the past. But focusing on just TV or direct mail is a recipe for failure, warned Michelle Shook, C&L Ward’s marketing and communication vice president. Shook said that doesn’t mean contractors have to spend more money. Instead, she recommended splitting an existing one-source marketing budget campaign into multiple sources for better results. “You need to look at a lot of different avenues,” she said. “You can’t just rely on one lead source.”
6. Going in too quickly. Entrepreneurs tend to want to move quickly once decisions are made. But when it comes to marketing, that’s not a good idea. “Instead, contractors should “test slow,” Agugliaro said. Start with one or two ads in a channel and see how those do. If the response is positive, add a few more. If it’s not working, pull back and determine why. “You have to ask yourself, ‘Am I fishing with the wrong bait?’ Because if you fish with guppy bait, you’re going to catch guppies. But if you fish with tuna bait, you’re going to catch tuna."
7. Selling instead of being of service. Giving customers value is a great way to earn their trust — and their business. For example, rather than just trying to sell someone on an ADU for aging parents, why not provide a free report with tips on how to make your home safe, private and live in peace with aging parents? Agugliaro asked. “Your saying, ‘Let me serve you with a piece of information and value for free that no one else provided,” he said. Of course, it’s not all selfless. Offering a free report provides valuable lead marketing details such as email addresses and phone numbers, which contractors can use to nudge leads toward their services.