Things You Have To Do To Adjust, Survive, and Perhaps Thrive in 2009

Now, as never before, remodeling companies have to closely evaluate every action they make and every dollar they spend to maximize their marketing effectiveness. In this issue, we discuss the must-dos of a do-or-die market:

Boost the Attractiveness of Your Brand
Your brand is your business. It defines you, inspires consumer loyalty and is what makes consumers feel you are the best company to help them achieve their goals or solve their problems. And while your brand is something that generally should not be a moving target, it is important to evaluate how well you are communicating different elements of your brand so that you connect with current trends in buying habits and give consumers concrete reasons to choose you now.

For instance, if one element of your company brand is higher price/higher quality, but consumers are now more concerned about getting value, then you will have to emphasize the ways your company provides that value, such as offering a guaranteed price or better warranty. Or, you may need to educate consumers about the dangers they might experience by buying solely on price such as cost overruns or poor craftsmanship.

Don't fall into the trap of trying to make major changes that might erode your brand to fit into the current market. An example of this would be advertising yourself as the low price remodeler, when this is not the brand image you've projected in the past or will want to project when the market improves.

Increase Your Visibility
Any time consumers hear your company's name, they should immediately recognize it and be able identify you in a positive way. Research shows that companies that continue to market their name in a down economy often fare the best when business is back on the rise. Since marketing dollars are harder to come by, that means getting your name out to the community in no- or low-cost ways: by offering free remodeling seminars that can be advertised in community calendars and publications, by sponsoring local youth sports teams or offering items at fund-raising auctions so your name can appear in the program, or by forging a connection with a specific cause. You ultimately want to be seen as a company who has a stake in and is tied to the community.

Recognize Your Strengths and Act on Them
Consumers will only become clients if your company has something it can offer homeowners beyond what other companies can offer. This is the time to accurately and realistically assess your company's assets and strengths. Once you have defined what it is that sets you apart, your communication should clearly articulate and explain these strengths and differentiate your company from others in a way consumers will find attractive. Consumers will choose you only if you give them a reason to choose you.

Respect the Ripple Effect
The remodeling business is highly dependent on the ripple effect. Every positive relationship you have has the potential to lead to another relationship, and each of these in turn can do the same. But you lose the momentum of the ripple effect if you do not work purposefully to identify, nurture and maintain relationships in your Circle of Influence (COI).

If you find your COI is static or not producing the type or quantity of leads you need, focus on ways you can expand it. Remember, the bigger your COI, the more ripples it can create for you. Determine whether your COI can be increased by reconnecting with lost prospects, or by establishing reciprocal relationships with non-competing companies.

Also think about how you are communicating with those in your COI. In the past, you may have marketed to each person in your COI the same way, through e-mail, newsletters or direct mail using a general message. But now, it's critical that remodeling companies think strategically about their COI, and evaluate how it can be segmented and purposefully appealed to. For instance, you might further connect with a segment of your COI through "cause marketing" such as the Race for the Cure or by supporting a local school sports team. Or, you can increase a perceived connection with your COI by hosting an event such as a catered reception or dinner for past clients. You can also have special offers you extend to those in your COI, such as a reduced rate on your handyman services.

Know Your Numbers
Your marketing dollars need to work harder than they ever have before, so now is the time for intense analysis of your leads and sales. You should be able to identify where every lead is coming from, and have a system in place for tracking these leads all the way to closing. Once you are able to evaluate which types of leads are most likely to close on profitable work, devote more of your resources to creating those leads. And always be on the lookout for cost-effective ways to generate new leads that can be sustained over time.

This is also a good time to study and refine your sales process. With increased competition, and consumers shy about pulling the trigger, it will take more contacts and a longer sales cycle to convert the lead into a sale.

Your best source of immediate leads is referrals from past clients, so don't be shy about asking for them in a personal letter. Also use direct mail to stay in touch with lost prospects, since research shows that 1/3 or more of them will want to choose a different remodeler on the next go round and would not recommend the remodeler they selected but might recommend you.

Make Every Marketing Dollar Count
In a weak economy, remodelers must realize and plan for the fact that marketing and sales will have to be a larger percent of their budget than in good times. But, you can still create marketing efficiencies by seeking out possible cost sharing and joint marketing opportunities. For example, if you find that direct mail to new homeowners produces qualified leads, you could include in your direct mail package information not only about your company, but also about another who will share in the costs. You can cut your list, mailing and postage in 1/2 with just one other company; you could probably reduce printing costs as well if you coordinated the production of the mailing pieces and split the cost of the cover letter development.

Chances are if something has not worked well in the past, or has only marginally worked in the past, it likely won't work now. If something did work in the past, you will need to measure whether it is effective in the current market. Be open to new ideas that make sense in these market conditions. Evaluate and test new marketing approaches that allow you to market more with less.

Advertising dollars are being pinched, so you will no doubt be approached by aggressive salespeople who promise they can positively impact your numbers. Although you may feel like you are getting the deal of the century, it continues to be important to look at your advertising and marketing strategy as a whole. CMG can help you analyze which advertising and marketing opportunities are worth testing and which will likely just pull needed marketing dollars from other more effective or promising efforts.

In conclusion, the remodelers who will be able to successfully ride out this storm will be those who remain reflective and strategic regarding their strengths, who methodically analyze and synthesize all available sales and lead information, who seek cost-saving efficiencies and decidedly act on them, and who seize every available opportunity to increase their company's visibility as they communicate to current and potential markets.

And with that in mind, let's thrive rather than just survive in 2009.

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