The 7 Deadly Marketing Mistakes
(and how to avoid them!)
1) Not Having a Plan of Action!
2) Not Knowing what “Success” Is!
3) Relying on Just One Channel of Marketing!
4) Not Knowing Who Your Target Market Is!
5) One Step Marketing Campaigns!
6) Using Shotgun Marketing Methods!
7) Not Asking for Referrals
(or not asking often enough)!
Not Having a Plan of Action –
There is an old saying. “If you don’t know where you are going, then it doesn’t matter which path you take?”
Having a plan of action will give you a clear idea of where you want to go and keep you on path to get there.
Now, that doesn’t mean you need a formal business plan with financial projections for the next 20 years. What it does mean is you need a well defined idea of what success looks like for you (see mistake two) and an outline for the steps you will need to take to achieve it.
To build your plan of action, always work backwards from your goal.
Let’s say you want to sell $1 million this year, the questions you need to answer will include:
- What will your average sale be?
- How many sales will you need?
- How many appointments will you need to PITCH to sell that many jobs?
- How many raw leads will you need to set that many appointments?
- What sources of leads are you going to start with and what others will you phase in and at what points?
- What will you need to start generating leads from those sources?
(ex: Home Show and Special Events require home show displays, tables, table cloths, brochures, entry forms, 10×10 carpet for booth, canopies for outdoor booths, weights to hold down canopies and displays in the wind, etc…)
- How long does it take to do a job?
- How many crews will you need to do that many jobs?
- Where will I recruit my employees and crews?
- How many ads will I have to run?
There are additional questions you can ask, but you get the idea. A weekend of putting thoughts on paper should yield a good, detailed plan of action.
If you know what you want and what it should take to get there, then if you are not getting the results you wanted, you can look back at your plan of action and see what is not working or what you are not doing.
If you don’t have a plan, when you are having problems, you will not have any idea what you need to change to get back on the right track.
Not Knowing what “Success” Is –
Success can mean many deeply divergent things.
One contractor I worked with wanted a consistent six figure income from a small organization with an emphasis on total quality that would give him time to spend with his growing family. No more than 3 crews and less than 10 total employees. Time for family was the most important factor and $1 million per year in sales would completely fulfill his idea of success. Expansion beyond this level of sales and company size would only be pursued if it didn’t interfere with his primary goals.
Another contractor had a goal of $30 million in gross sales and $5 million in net profit in 5 years. He wanted to dominate his current market and to expand to 3 other metropolitan areas in a tri state area. His goals would require 12 crews per market, regional management, and more than 100 employees by the end of 5 years.
Still another contractor wanted to build his existing company to $3 million per year with net profits in the $500,000 to $600,000 per year range within 5 years and then sell the business so that he could retire.
What success means for you is totally up to you. I can’t tell you what success will mean to you.
Decide what you want and then follow your plan of action to get you there.
Relying on Just One Channel of Marketing –
Picture a stool or chair in your mind.
If that stool has just one leg it is difficult, if not impossible, to sit on. If you are not holding it constantly, the stool will simply fall over. It is a failure as a stool.
If the stool has two legs it is somewhat more stable but still difficult to sit on. A little push from the sides and you easily lose your balance. Again if you are not holding it at all times, it will fall over.
Once you add a third leg your stool it can stand on its own. If pushed from the sides it is still stable.
Add a fourth leg and your stool is now completely stable. Even if a leg breaks it can still stand on its own.
And the more legs you add, the more stable it becomes. If you have 8 legs on a stool you could break off several legs and still have a stable stool.
You business is like your stool. The more profitable marketing channels you have, the more stable your company is and the less it can be effected by outside influences like government regulations (ex: Do Not Call list legislation) and rising costs (ex: increases in postage costs).
Not Knowing Who Your Target Market Is –
It seems basic doesn’t it? Who buys your products?
But it never ceases to amaze me how many businesses have never researched who buys what they want to sell and why they buy it.
Even worse to me is the number of existing companies that have never sent out a questionnaire to their past customers to find out who they are and what THEY want to buy.
One Step Marketing Campaigns –
Too many contractors contact potential clients only once. This is a mistake on so many levels that I don’t have space here to cover them all. Let’s talk about the top three.
#1 – Advertising science tells us that your customers do not even register your name until they have seen it an average of 15 times. FIFTEEN TIMES!
#2 – Most advertising pieces are never even read! How many times have you sorted your mail over the trash can? How many times have you gotten up for a snack or bathroom break or simply changed the channels during TV or Radio commercials? I mean the whole TIVO industry is built around that one!
#3 – Contacts from multiple sources add to your credibility.
Using Shotgun Marketing Methods –
TV, Radio and most major media are shotgun marketing efforts.
By that I mean that they will go to a large and varied demographic and are not targeted on your customer’s key demographics.
Yes, hundreds of thousands and possibly even millions of people read the Sunday newspaper in most major metropolitan areas, but how many are your customers? Yes, millions watch Oprah daily, but do they purchase paint jobs and new roofs? Are they in the areas you WANT to do work in?
One contractor I worked with spent tens of thousands of dollars on San Diego Padres TV and Radio broadcasts which provided great branding and some leads. Unfortunately, many of the leads were in outlying areas of San Diego County he didn’t cover like Ramona and Fallbrook that were not covered because of the cost of traveling there to sell and then do the jobs.
Also, because of the cost of the advertising spots, he had to cut short his message so that many of the leads did not want a premium product like his; they just wanted a cheap paint job.
His cost of raw lead was within his parameters, but the cost per sale was way too high because so many raw leads did not result in an estimate.
We moved his marketing dollars to target the areas around his current jobs and into media that more closely targeted his customers demographic.
Local weekly papers,
and even open houses.
While the total number and cost of raw leads didn’t increase, the number of usable leads did increase and so did his sales.
An added plus was that because the advertising targeted a small geographic area around his sales, the costs of travel were reduced.
More sales and reduced costs. What a concept!
Not Asking for Referrals (or not asking often enough) –
I hear this all the time.
Do you ask for referrals? –
Yes we do. In fact a lot of our business is from referrals.
When do you ask for referrals? –
After the job is complete.
What percentage of your business is from referrals? –
I am not sure what is from referrals but I know it’s a lot.
How many referrals do you get from most jobs? –
Well, we get 1 or 2 referrals a month.
When it comes right down to it most contractors are getting a big percentage of their business from referrals only because they are doing so little business. 1-2 or even 5 referrals a month is a total failure.
30% of all your customers should be giving you 5+ names of referrals!
To do that you need to build your whole marketing effort around gathering referrals.
EVERYONE in your company should be asking for referrals.
– On initial contact your canvasser or telemarketer or special event personnel should ask for referrals whether or not they set an appointment.
– Your Sales Reps should ask for referrals as part of the sales presentation. In fact they should offer a discount for referrals up front!
– Your Production Manager should ask for referrals when they come to do an initial walk around with the customer before the job starts.
– Your Painting Crews should ask for (and be compensated for) referrals as they do the job. They will have more contact with your customer than anyone else.
– Your administration personnel should ask for referrals on each contact (using a pre-written script).
– You should send a thank you package with their warranty that asks for referrals and gives them an outline to follow to write a letter of recommendation.
– You should send a questionnaire 30 days after completion that asks for referrals and compensates them for sending in the questionnaire.
– You should send a company newsletter quarterly that offers discounts for other products and asks for referrals.
I think you get my point.
Ask for referrals every time you can.
Compensate your customer generously for giving referrals.
Let them know about the great deal you will give to the people they refer, and keep asking for more referrals every chance you get.
Remember, the more referrals they have given you, the more vested they are in your company, and the more willing they will be to give you more referrals.