Tag Archives: brad humphrey

Winning New Customers

In today’s post, we’d like to give you another preview of our video series, The 2-Minute Drill. Developed for the construction industry, the 2-Minute Drill includes videos specifically designed for owners & senior leaders, field leaders, and front-line employees at your company, as well as sales tips to help you boost your bottom line.

Winning New Customers

In Winning New Customers, Brad provides actionable tips on how you can change your behavior to start winning new customers. These tips include:

  • Doing more market research before pitching to customers
  • Identifying networking opportunities to grow your business
  • Being able to demonstrate your industry knowledge to customers
  • Highlighting your firm’s competencies
  • Being able to share your unique selling proposition

Enjoy!

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New Revenues From Old Customers

From marketing we understand that it takes less money to maintain our customer base than it does to develop new customers. It also means you can increasingly see new revenues from old customers as a key aspect of your future growth. While this seems to make sense for businesses that produce or sell “perishable” products like food, clothes, maybe even cars, I always found it rather difficult to apply this thinking to construction.  Boy was I wrong!

In more than twenty years in the construction industry, both as a contractor and consultant, I have realized time and time again the reality of increasing business from my number one “prospect”…my current customer.  Yet I continue to get requests from contractors on how to grow their revenues through developing new and creative business development strategies to capture new customers.

Now, we certainly need to maintain an effort to drive new business but too many opportunities slip by us to increase our revenues, and our profits, with those customers who we have performed work for in the past.  Let me share a few techniques and approaches that may help you to raise your revenue this year by going back to a proven “fishing hole.”

Gain the Vision of Your Customer

New Revenues from Old Customers

Photo courtesy of www.freedigitalphotos.net

Getting a clear picture from your customers about what their building or project objectives are should be an effort made during the selling phases leading up to the first sale.  If the project is commercial, will there be additional concrete needs?  What are the expansion projections?  If the job is for a residential customer, will the customer be looking at additional add-ons or improvements in the future?  Don’t be timid when it comes to identifying future opportunities that your customer may be looking at in the future.  If you don’t ask the customer might mistakenly assume you really aren’t that interested in more work.

Strive to “Partner” on the Development & Budgeting Effort

Nothing ties a contractor to a customer better than having been part of the actual development phase of the project.  Whether you can assist the customer develop a more inviting patio design or you can provide a more efficient method to put the columns in place, being part of the development of any project gains you greater respect and long-term opportunities.  Likewise, working as the financial consultant on developing a practical budget with your customer allows you to get close to the real emotional side of paying for the project.  Once you enter the “inner sanctum” of the customers financial world there is little else that they will be shy about discussing with you.

Personalize Your Follow-up and Stay-in-Touch with Customers

This combination of efforts continues to be the leading reason why more contractors fail to new revenues from current customers.  Follow-up moves to contact the customer about work that is in process to see how they are doing and what they are thinking.  If the customer shares their desire for additional work in the future follow-up gives you license to call or e-mail them on a consistent basis to keep your name and desire in front of them.  Even if you have sales people who made the sale it is important that you contact the customers.  Often, an owner brings even greater interest and intensity to the relationship.  Many contractors will send out generic thank you cards and letters, perhaps even putting new customers on their newsletter receiving list.  While these efforts keep your name out there they are not of the personal nature that brings greater “likeability” to you and your company.  Touch your customers…personally.

Host Customers for Your Company’s “State of the Union”

Once a year you should host a breakfast or luncheon where you invite some of your better customers to share with them your firm’s direction and commitment to your customers.  This is a good time to invite your customers to share their needs and expectations about where they are going.  I’ve facilitated many of these luncheons, often called “Lunch and Learns,” for contractors across the United States and the response is always very positive.  You can always hold more than one of these luncheons a year and simply better segregate the customers you want there.  The customers actually enjoy the luncheon since they will often fall into conversations with other customers who have also enjoyed your company’s work results.

Provide an Incentive to Repeat Customers

Certainly, many customers appreciate an incentive from a contractor who they have given work to in the past.  An incentive might be a percentage discount on upcoming work to be performed, a “pass” on a deposit that is often required of new customers, or a higher priority in scheduling upcoming work.  While the financial incentive might be the hook with customers whom you have just completed one or two projects the long-term customer may simply appreciate knowing that you will move their job up a little sooner on your schedule when possible.

Continue to Provide Before & After Photos

One mistake contractors can make is to discontinue giving past customers photos of their projects.  This is a subtle way of telling the customer that you don’t have to work that hard to keep their business or that you might be taking their business for granted.  It is just as important to maintain the same energy and sales effort with customers that you have done five or fifteen projects for as it is with the brand new customer who you are trying hard to impress.

Ask Customers for Referrals

This networking technique is especially important for contractors who work with residential customers.  While the home owner who needed a drive way or patio poured and finished might not own other homes or buildings they very often have other friends and relatives who trust their judgment to use you for their concrete needs.  Asking your customers for referrals is really part of “Sales 101” for sales and estimators but is often neglected.  Too bad because for those sales professionals who do ask for referrals every time they sell a job they increase their revenues 40%-60%!  This technique is a great way to grow your revenues through turning your existing customers into sales people and door openers for your company.

Introduce Your Customer to Other Building “Partners”

[pullquote]By keeping an open ear you might just hear something that could allow you to play “broker” between two potential partners that would only naturally look at you to do the construction portion that you specialize in providing.[/pullquote]

This technique may be more doable with commercial clients but there is a growing number of building owners who are looking to further their investments and ownership of buildings by looking for partners who might share some of the financial and management risks.  The conduit common to such an arrangement could very easily be you!  This gets back to the need to understand what your customer’s vision is for their own company growth and their resource situation.  By keeping an open ear you might just hear something that could allow you to play “broker” between two potential partners that would only naturally look at you to do the construction portion that you specialize in providing.

Do Quality Work!

One thing is certain, if you do not perform quality concrete work for your existing customers you fail to get new revenues from old customers.  All the greatest marketing and customers service tricks in the world cannot make up for poor quality.  You can increase the likelihood of driving up revenues from existing customers by doing a great quality job the first time.  If you and your work crews are not 100% fanatics about performing quality then you would be best served by getting this part of your company fixed first.

Just Ask for It

Do you really want to increased revenues from old customers?  There is only one thing that will do this in the end and that is to just ask for the business.  Even the customer whom you have had a great relationship wants to be asked.  No one likes to be taken for granted, even your most loyal customer.  When you are having that morning cup of coffee with a long-term customer and they talk about that new construction job they want to get started on in the next year, don’t assume that they already have your name written in as their contractor of choice.  Ask them for the work and let them know that you want their work.

Increasing your revenues can certainly be done without a lot of extra marketing and advertising costs.  Treating your current customers well and taking a sincere interest in their future will open many doors to repeat work.  Sure it may cost you a dinner a few times a year, maybe even a round of golf or some tickets to the ball game but this is still small potatoes compared to digging and scratching everywhere possible to find new business.

If you are doing some of the items listed above then go back and measure how successful any technique has been to increasing your revenues.  Can you see a direct correlation?  If not, perhaps you may need to rethink and adjust the effort to capture more opportunities to win additional business.  It is possible to realize new revenues from old customers but it will take working many of the ten techniques and approaches shared here.  Go back to your “old” customers and consider renewing your commitment to their future success.

The Start-Up Guide for Contractors

OK, seriously, starting any new business is taking a huge risk.  I love new business start-ups, and the owners who start them.  Over the years, I have supported many such new companies, especially new construction companies, and have used these conversations to create my own start-up guide for contractors. But, I also realize that starting any business is often begun on some less than ideal facts.

After conducting many educational sessions at a few construction industry conferences, I was amazed how many new start-up owners were attending.  Many of them were searching for answers to strengthen their leadership, their firm’s sales and profitability, and the proverbial search of the “holy grail” of workers.  Let me share a few insights that I shared with these new and young owners.

Prepare for the Worst; Plan for the Best

Old advice that fits more contractors today than ever.  I have found three keys to success missing from many new start-ups.

  • Under Capitalized – honestly, the owner simply doesn’t have enough money to keep their dreams a float till they obtain enough work.
  • No Business Plan – even the older seasoned business owner needs a business plan. You just can’t run a successful contracting business for long without one.
  • Focus on Sales OVER Quality – hate to say the obvious but you can sell all the work you want but if you have no workers who can complete great work…the right way…the first time…you got nothing but problems coming your way.
start-up guide for contractors

Photo credit: FreeDigitalPhotos.net

Obviously there are many other things that can throw a wrench into the dreams and hard work of a new contractor but my goal isn’t to write a book on such things (at least not yet!).

Now, let me share some wisdom from many of the best start-up contractors I’ve had the privilege to either work with, listen to, or read about.

New Contractors Start-Up Starting Five

  1. Insure you have capital to carry you for 2-3 years.
  2. Develop a business plan that reflects growth objectives for markets served and expansion steps for adding employees, equipment, etc.
  3. Have a marketing plan.
  4. Hire wise & solid players.
  5. Set weekly, monthly, & quarterly goals.

OK, again, there are at least another one-hundred things that need to be done by the new owner but this list of five will get you heading in the right direction.  Let me expand each point with some greater clarity.

  1. Insure you have capital to carry you for 2-3 years.

Either flush out your retirement money, borrow from relatives, or line up some credit with a banker (be willing to mortgage your life) but shoot to have 2-3 years in available money to pay wages, rent equipment, buy materials, etc.  To say money is the root of all problems would be stating the obvious.  More businesses, and marriage relationships, can be brought to a very unpleasant ending if the needed capital is not secured.  To believe that your first year will produce an incredible ROI is grossly mistaken.  Create a budget and consider what your financial needs will be.  Sure, cut to the bone initially, but realize that you will need to pay employees, your family needs to eat, and banks will take your home, or equipment if you fail on payments.

  1. Develop a business plan that reflects growth objectives for markets served and expansion steps for adding employees, equipment, etc.

A business plan is not that difficult to build but is more often missing from new contractors than any other of the four items addressed in this article.  The business plan needs to clearly identify: Where are we going as a company?  What markets are we to pursue?  At what levels of growth will we add workers, equipment, etc.?  Will we leverage production by “sub-contracting” sold work to other contractors?

A business plan is a roadmap of sorts, sometimes needing to be adjusted and edited, but still providing some well thought-out strategies on how to best attack our future.

  1. Have a marketing plan.

A great companion plan that new start-ups need is a market plan.  Combined with a business plan and the contractor has two key weapons to address the future.  The marketing plan should address more clearly what business that the company is in, what markets will they be serving, and what strategies will best gain greater recognition, reputation, and branding.  I always encourage contractors, especially start-ups to determine how they will be selling their wares, products, and services.  Certainly the entire “electronic tool box” opens the door to outlets to spread the news of our company and what we can deliver.  Check all outlets including your own Web-site, Face-book, Linked-In, etc.

  1. Hire wise & solid players.

Now, here we have perhaps the toughest of all the five recommendations to overcome.  Hiring “wise and solid” workers any time can be a herculean effort but with our current transition in the generations, the lack of mechanical minded education in more and more communities, just finding available workers who really want to work can be daunting.  But finding capable workers is still greatly needed and must be pursued aggressively.

Over the years I’ve written about finding, hiring, and retaining workers, so I’ll be brief here.  However, the best thing any new owner can do to find and hire wise and solid “players” is to first create a clear description as to what is needed in the company, specifically related to what is expected in the job including the roles that might be fulfilled and more importantly, the responsibilities that will be completed.

To strengthen this fourth recommendation it is critical for even new owners to prepare to make “on the job training” and education a major part of their weekly efforts.  Unless you can hire seasoned and proven craftsman, prepare to spend a lot of time teaching, keeping workers  a little late some afternoons to train on a needed technique.  Even consider hiring technical consultants, even retired workers, to assist in the training.  Such an effort early will provide greater returns later.

  1. Set weekly, monthly, and quarterly goals.

This final recommendation is key because it sustains a new contractor to keep his or her vision focused on what is attainable in shorter segments of time.  Sure you need the business and marketing plans, but its’ just as important to have short-term objectives that can be measured and managed on a regular basis.  Keep the goals clear and important to the upcoming week, month, or quarter, and review the results regularly.  Make such a review part of your weekly meetings with your team of leaders and workers.

The Start-Up Guide for Contractors Wrap-Up

Starting up your own company is hard work.  If you do it, have more than just some dream and an emotional hunger…both will die out if that’s all you have.  However, if you are starting a new construction company then determine to be methodical, persistent, and never say “quit.”

Living the life of a successful contractor is only achieved via the extremely hard work known by those who have paid the price.  Work to be the best that you can be…stay away from comparing your success against other contractors.  Seek the best for you, your family, and your company and enjoy all of the learning experiences you will endure.  Let them form and mold you to be the best that you can be!

Here’s to building your best!

Brad Humphrey

More from Pinnacle Development Group

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