Marketing strategies for growing your electrical business during a recession
There's no question that the current electrical construction market hurts. The question is, why are some companies turning out record quarters while others are closing their doors? One explanation has to do with market share. Electrical contracting firms by nature are very fragmented. In fact, even the largest firms (mostly made up of roll-ups) on EC&M's Top 50 Electrical Contractors list only have about 0.5% market share while the players lower on the list have about 0.1% market share. That leaves around another 60,000 electrical contractors out there with significantly less market share. Why is this relevant?
The point is that even the largest electrical contractors simply don't need that much more work in terms of market share to maintain or even gain ground in this economy. And if they can do it, so can you. Following are 10 grass-roots marketing efforts that can help deliver consistent results for growing your company despite the current economic climate.
Tip No. 1 — Pamper your contact database
You wouldn't try to manage your accounting and job costing with everyone keeping track of their own (with little or no management oversight), yet many contractors keep their contacts in haphazard systems, ranging from business card files to personal Microsoft Outlook files. Even those companies that do have a consolidated contact management system rarely have clean, complete, and current data in their files (The Three Cs of Contact Data Management).
Your first step in improving your business development processes should be to consolidate all your contacts into one central database. Most companies use Microsoft Exchange for e-mail, and simply using a public folder for contacts can work well. Beyond that, there are many customer relationship management (CRM) systems out there that can be customized to fit your needs.
Make sure that this becomes an ongoing activity with regular reporting to show you the status of contacts, including last contact date, new contacts, and missing contact data. The importance of this activity cannot be overstated. While the work of consolidating the contact data is tedious, it's well worth the effort.
Tip No. 2 — Leverage the meet-and-greet opportunity
If you're a larger contractor with what many would consider an impressive building, fleet of vehicles, extensive staff, and a way to showcase your capabilities, by all means bring owners and general contractors (GCs) to you. Show them you're not what they view as a typical subcontractor — and that you have the facility and operational capability to handle their highest-level projects and needs. Office equipment that can easily handle their drawings and quickly generate submittals, tool management and tracking systems, on-site material storage, and dedicated pre-fab areas all demonstrate your professionalism and capability to roll at a moment's notice.
If your facility is still a “work in progress,” you might want to consider taking your team to your customer's office. There are some definite advantages to this approach, the most important of which is that you don't have to worry about them not showing up. While people generally have good intentions, you do run the risk of a small showing when you invite potential customers to your facility. Not only do you have an opportunity for more face time with more key players, but your customers are also more comfortable at their own place of business. Recommend a mid-morning meeting; people have had their coffee and are still fresh. It will give you at least an hour before noon and sets up an opportunity to take people to lunch after the meeting. Make sure you're aware of upcoming bid deadlines and coordinate office visits accordingly so as to not be rushed or have customers too focused on getting back to work.
The purpose of these meetings is to expand your company's relationships by getting out there to meet new people. You will want to make as many connections as possible during this event (click here to see Figure). Bring your best team together of two to five people. Depending on the size of the meeting or potential client, gather up your strongest players and leave the marketing collateral and other fancy props behind. People want to do business with others who have common experiences, goals, and business philosophies. That's what you are there to discuss.
Tip No. 3 — Cultivate team relationships
Projects are awarded to people by people. Of course, there are other dynamics at stake, such as pricing, but the information that can lead to an electrical contractor successfully winning a contract is very closely related to relationships.
Think about the vendor who gives you a break on pricing and notifies you of potential projects on the market. Think about that great contact with the GC who “advises” you about your scope and pricing — even on public works projects. Think about that facility manager who you're on a “nickname basis” (better than first-name basis) with who gives you all of his work and never questions the bill.
If these things rarely or never happen for your company, then you definitely need to increase your focus on relationships. If they do, then think about their value and contemplate what it would be worth to significantly increase the number of those relationships.
Relationships are the building blocks to most — if not all — business transactions. Within your organization, every individual has undoubtedly established a relationship with someone who can bring value to your company. Imagine how many relationships you'd have if you were to take all of your service technicians, foremen, project managers, estimators, etc., together and harness each of their experiences.
Depending on the number of employees you have and their work history, you'll need to determine the most effective way to gather warm leads within your organization. If there is a small group, setting up a roundtable session to compare notes with regard to previous and existing customers can be effective. This opens up discussion and gets people to think of connections they might not have otherwise considered. It also gives you a chance to identify as a group some important target customers based on previous relationships. With a larger group, it's best to either break the team into smaller groups of three to five people or assign a single individual to manage the process, going to each person individually and working to consolidate their contacts into a centralized database (as noted in Tip No. 1).
Simply encouraging everyone in the organization to make contact with old relationships and some new ones each week will produce amazing results. A team of five people making five contacts (new or old) per week equals more than 1,200 customer connections per year! The key here is consistency.
Tip No. 4 — Inspire mouth-to-mouth references
When we consider painting our home, very rarely do we open up the yellow pages to the “painters” section and start dialing. You most likely know a neighbor, friend, or relative who has recently had his house painted. This is the person you first make contact with for a referral. Word of mouth is a simple concept that can lead to widespread success — or failure.
So how do make this opportunity work for you? Of course, the absolute best “brand-building” tool is providing amazing service to your customers (as defined by the customer). How do you blow this opportunity? Provide poor customer service, and you'll quickly realize how powerful this form of communication can be. As they say, bad news travels fast.
Name branding is an excellent way to stick in someone's mind. Your brand recognition is the accumulation of experiences that invoke the values of your company. Anywhere you may have a potential customer can be a brand touch point — your business card at a meeting, attitude, service of your employees in public, clean company vehicles, professional-looking attire, hard hats with your logo, and stickers placed strategically at the completion of a project.
Tip No. 5 — Leverage your design capabilities
In-house drawing and drafting capabilities can give you a competitive edge in negotiating projects. Value engineering and the ability to solve a customer's problems through design and modifications (i.e., design-build) can be an even stronger selling point when developing relationships with architects, engineers, and owners. Almost every contractor is involved in the design in some way — even if it's merely through a partnering initiative with a local electrical engineering firm. It's your job to showcase these capabilities and work hard to expand them.
Although the details of building your design capabilities are beyond the scope of this article, we would like to touch on some key points.
Work on planning the jobs with CAD tools for areas such as underslab and power rooms rather than having the foreman sketch it out in the field. Even if it seems inefficient in the short term, the skills you gain will serve you in the long term.
If you're involved in new building construction, start learning about 3D BIM technology — if you aren't already using it. This is a design technology that will have a significant impact on the entire industry. It looks a lot scarier than it actually is — start small by detailing power rooms and ceilings after you have mastered them in 2D.
Look at the GPS location technologies that tie to your layout. These save time and improve quality.
Learn to showcase this work with your clients. Create examples and case studies showing your capabilities and quantify the results in terms of schedule days saved, minimized re-work, improved quality, and/or lowered costs.
Tip No. 6 — Expand your reach via service offerings
The job is done and you're out of there, right? Wrong! Warranty calls are one of the last things a contractor wants to hear about once a project is completed. Undoubtedly, it means something has gone wrong and the minimal profits you made on a job are now in jeopardy as you make repairs on your dime.
Instead of looking at a warranty period as the time you have to wait before you are out of the woods, look at it as a way to introduce your company to the facility owner. As an electrical contractor, your exposure during a project is typically with the GC. You work for them, communicate with them, and wait for them to pay you.
When the job is complete, there is still an owner or an end-user that most likely will need your services in the future. An easy way to start a relationship with that end-user is to introduce your “warranty team.” When you make a visit or a phone call, explaining that you want to ensure the end-user has all of your contact information in case there are any problems with the systems that were installed, you immediately establish yourself and your team as a proactive contractor.
You aren't asking for business. You're offering solutions while separating yourself from the GC. Setting up a meeting or handoff from a site foreman/project manager to a service manager or warranty team with the owner or end-user gives you an opportunity to further sell your company. As you are managing the warranty period, you can work on presenting additional services, such as lighting maintenance, tenant improvements, and emergency service.
Remember that word-of-mouth thing? This is the perfect opportunity to shine in this area and help differentiate your company. In addition, remember that while service revenues may be relatively small compared to contract revenues, the profit margins are much higher and the risk much lower. Building up your service department will help grow the top line, bottom line, and overall value of your business.
Tip No. 7 — Define your marketing strategy
Successful organizations, both large or small, have a clearly defined marketing strategy and plan. Can you clearly define the following?
What types of work have generated your revenue/profits over the last three years? How much for each?
Where do you see your revenue/profits coming from in the future?
What geographical areas do you now serve? Which ones do you want to serve in the future?
Do you have the skills and resources to deliver on the answers to the second and third questions? If so, are you presenting this effectively in your marketing materials and presentations? If not, what are you doing to build these skills and resources?
If nearly everyone in your company can't answer these questions, then you will have a hard time pulling everyone together to work on a specific marketing project. Marketing of your company is a group effort. Everything from the way the receptionist handles calls to the delivery of a proposal will either move you closer to (or farther away from) the next customer or project.
Communicating your efforts, successes, and failures helps eliminate wasted time and repeated mistakes. Make sure your team understands that your overall goal is to produce income, not waste scarce expense dollars.
Tip No. 8 — Survey your customers
Do your customers remember you six months after you've completed a project? If they do, is it in a positive manner? If you can't answer this question, then ask them. People in general spend so much time “selling and telling” potential clients what they can do, they often forget to step back and listen.
Calling up past customers and asking them a few simple questions can lead to fantastic insight, which often results in referrals and additional jobs. There are many ways to perform a client survey. The important items to address when developing your survey are to make sure it is: (1) structured, (2) happens on a regular basis, (3) the feedback gets back to the project team so they can make changes, and (4) the customer is notified of the changes you made based on his feedback.
Surveys will also help you clean up your contact database and refine your marketing strategy. The simple process of talking to all of your past customers — and then relaying that feedback to your team — can be an extremely valuable tool.
Tip No. 9 — Force open lines of communication
Educate everyone on selling the company and its full breadth of capabilities. Project managers and foremen should be comfortable talking with owner's reps and GCs during a project. Open lines of communication often will result in hearing about upcoming project opportunities and being introduced to other potential customers and decision makers. Regularly communicating progress, problems, and solutions with your customers will instill the level of confidence necessary for strong relationships.
Rarely do the people you work for understand the intricacies of the work you are completing or the service you are providing, nor do they care to. The systems in place behind the walls are not nearly as important to them as the fact that a project is done on time, on budget, and that everything works as it's supposed to when you leave. What they do understand is communication.
Doing what you say you will do, when you say you will do it is a powerful tool. While on the surface this doesn't seem like marketing, it is the essence of building your business. It is why you will (or will not) be invited to bid on the next project. It's also the reason you will or will not be referred to the next owner, architect, or GC.
Tip No. 10 — Pay attention to emerging trends
Investing a few dollars and a little bit of time to learn about solar and wind technologies, green building requirements, lean construction practices, and building information modeling (BIM) software can pay big dividends in relationship building. Going to a seminar on lean construction with your project team will not only improve your bottom line, but will also likely introduce you to some GCs you didn't know before. Going through the LEED (green building) certification process will put you in the same room with architects and possibly building owners. Spending a bit of time learning about alternative energy and becoming an information source for your customers and potential customers will make a huge difference in how you are perceived.
Although we purposely haven't covered certain marketing basics, such as direct mail, newsletters, and marketing collateral, this doesn't mean we don't believe in them. These topics have been covered extensively in other articles, and we typically don't see as many problems in these areas as we do with companies not delivering on the 10 tips discussed in this article.
You will get better results from having a 10-minute marketing meeting and spending the next hour trying to set up “meet and greets” with several target customers than you will from spending months preparing the “perfect” marketing plan.
Brown is the founder/president and Burres is a senior consultant with D. Brown Management, a consulting firm located in Lodi, Calif. They can be reached at firstname.lastname@example.org and email@example.com.
Sidebar: The Three Cs of Contact Data Management
Your efforts should focus on creating clean, complete, and current data.
Contacts/companies logically categorized.
Complete names, addresses, phone numbers, e-mails, etc., for all records.
All company contacts, including customers, past customers, vendors, subcontractors, etc., consolidated into one database.
All contacts from every company stored as separate records.
Notes about history that are time/date stamped are included with each contact.
The oldest “last contact” date is no more than 90 days ago.
Management reporting should be built to make sure all of the above are happening.