"Mr. Singletary, this is your 10th Pro Bowl and you're a shoo-in for the Hall of Fame. How do you always seem to know where the football is going?" a sports reporter once asked the All-Pro linebacker, Mike Singletary.
"I'm not sure if it is intuition or not, but regardless, I must commit to a direction and react as soon as the play exposes itself," Singletary said.
Man, I'm glad that Chicago Bears player isn't in the decorative business in my town, because the same principles that made this man one of the best players of all time apply to the decorative industry today. The market is certainly exposing itself and we must react to it to keep business moving forward. I'm pretty sure by now everyone has realized the housing market has corrected itself and the winds of change are blowing through most every community. The good news is that the strong housing boom of the past has given the decorative industry a strong foothold. But, we must commit to the direction of the new market. I will outline three options to help shift your company into a market that will continue to stay strong regardless of how well the housing sector performs.
First, I want to share a story that happened early in my career. A friend of mine was working as a receptionist for a custom home builder and mentioned to me in passing that their subcontractors were unable to keep up with the workload.
"This may be the break I'm looking for," I said to myself as I entered my prearranged meeting. I left with a full set of plans and a smile from ear to ear. My small company started the foundation work on a new custom home and we were well on our way to the next level when a strange thing happened. The vice president and superintendent appeared on the job site with another set of plans and asked if we could start another project when we completed the first.
"Absolutely," I said before he finished his last sentence. That was more than 18 years ago.
Last week my decorative concrete company stamped more than $30,000 on projects for this same gentleman, and next month we will do close to the same. He has long since moved on and is now working with one of our city's leading remodel firms. Before that, he worked for a family firm and handled all real estate development and construction. Each move this gentleman made up the career ladder led my company to new clients. I'll be willing to bet this one man has led me to well over $1.5 million of work.
What if I would have been distracted or just simply procrastinated until another company stepped up? Keep in mind, when I went into the first meeting we were only talking about one job. I, like you, had no idea where or if this would lead to something more. This is the whole point of this article today. Make no mistake about it; this is an article about money, your money.
Now let's talk about keeping your company in the profit zone.
Go back to the fundamentals
I realize that in a strong growth mode, like the one we have experienced over the last few years, a contractor could do nearly everything wrong and still stay in business. I'm here to tell you that those days are over, at least for a while. The real estate market has corrected itself across the country with few exceptions. This means only one thing. Contractors must implement the same strong business fundamentals today that built their company years ago.
Simple things such as: Follow up on every call and every lead. Each and every estimate should receive a courtesy call to see if there are any questions about the bid given the week before. Let me ask you, did you used to spend more time with the customers? Try to spend a little more time doing what you did when building your business.
Marketing efforts should be geared towards remodel work or improvements to existing homes. Remember, if people can't sell their existing homes, then they will put money, through improvements, into the homes they live in. This is a fact in every downturn of construction that holds true in every market. People will continue to spend money if they can see the value in the service you provide.
Another sector of the construction industry that seems to remain strong is the commercial side. These projects can be profitable but usually move at a faster pace than residential work. Jobs will usually be bigger and owners and architects will be much more budget-minded. This means you may very well sell their socks off with great products and service and still lose the job over a nickel per foot. Don't take it personally. Most project superintendents will require your crew to move in and out quickly — but this is good for the bottom line. Many of these types of projects will require night work for exclusivity.
Do everything the competition isn't doing
Here is something else to consider: Look for the weaknesses in your competition and make them your strong points. If they are poor at callbacks, make sure during your presentation that the potential client is told you are unmatched at customer service before and after the sale. If the competition is poor at returning calls, make sure your phone is answered or the call is returned quickly. Please don't mistake this for dogging your competition because that is not what I'm recommending.
This is simply outperforming the competitor, plain and simple. It may be hard to believe, but many companies' services worsen when their work slows. You would think they would use the free time to service the remaining customers, but not always. Don't let yourself fall into this same trap.
Listen to what your future client is asking for on the first or second sales call. Sometimes you may have a better idea at what would look best, but remember that this is about taste, their taste.
The side benefit is that this will give you a chance to sell down the job if they have sticker shock. Try to pick up on signs of sticker shock during your presentation and sell accordingly.
Half a loaf is better than nothing. Your competition is most likely bidding only what the customer is asking for. Take your bids one step further by offering two options, with the second being more affordable. Remember, more affordable doesn't always mean less profitable.
Create and promote a cookie-cutter affordable alternative in whatever type of decorative concrete your company specializes in. An example might be for a countertop company to develop a simple type of counter based on a minimum size. This limited time option could be marketed or promoted during your meetings with key customers or builders from your customer list. Clients may call about the promotional option but some will end up purchasing something nicer. I truly believe most people do not know all the different options in decorative concrete or their affordability. Remember, the goal in a down market is simply to keep the wheels moving and bills paid.
Increase marketing, decrease personal spending
It may be tempting to tighten spending on marketing or promotion in a down market but this is not recommended. Please don't confuse this with spending bigger dollars on advertising. I would hold these dollars until the springtime when people are thinking about yard improvements — not spend them during the winter. The type of promoting that will be most beneficial will cost less and deliver more than half-page ads.
Pick key customers, builders, architects and subcontractors and invest in a lunch or dinner meeting with them. Talk about projects that they're working on or designing and see if decorative work is a possibility. It is so true that "out of sight means out of mind" in today's business world.
Now is a great time to create or build a database to help build and retain referrals. Use this database to promote specials or maintenance (such as resealing or waxing) of decorative concrete when you are slow. Some bookkeeping software has built-in database abilities and will create client labels for mailers. Better yet, address the mailers by hand for a more personal touch. Get a copy of Concrete Decor magazine into the hands of potential clients and referrals. This will create faith and prove strength in the decorative industry as a whole. Nobody wants to feel like they are part of a test market.
Redirect advertising dollars into publications geared towards remodel work. This market gets less competition and will outlast typical construction cycles. The only decrease in spending should be at a personal level. Now is a good time to sit down with the family and discuss how everyone contributes in his or her own way. My family had our meeting last week. This will also help build a team atmosphere around the home. Your family may decide eating out four times a week is not necessary and a home-cooked meal is something everyone can help with.