Business Articles - Marketing

As things wind down in 2007, we can review what went well last year, and we can begin to think about 2008. There are several things that happened in 2007 that are going to affect our market in 2008. The biggest thing is probably the sub-prime mortgage market collapse. With numerous stories about foreclosures, and the economic cost of these foreclosures, many homeowners will not be encouraged to spend money on their homes. That and the general slow-down in the economy make our planning for 2008 a necessity.

If you don't live on either the East or West Coast, you may have already experienced a work slow down in the area where you live. Due to all the negative press on radio and TV, potential customers may be postponing getting certain projects done. If things are slowing down, here are some necessary steps that you can take to prepare yourself for a tougher business climate.

Know your cost of doing business. Prepare a budget for 2008, and identify all of your costs of doing business. You must know what you need to sell and produce on a monthly basis to stay in business. Identify all of your overhead costs, and then add all payroll expenses. When you have identified that total, identify how many jobs or projects you must sell on a monthly basis to have a gross profit that will allow you to meet all payroll requirements and overhead expenses.

Marketing is a numbers game. Once you have identified how many jobs or projects you need to sell to meet all of your payroll and overhead expenses, create a plan to generate enough sales calls to achieve that number of sales. You do this by looking at your closing ratio. How many sales calls do you attend to close one sale? If you close one in three sales calls that you make, and you need to sell 10 jobs on a monthly basis, then your marketing plan has to generate 30 sales calls per month.

The purpose of a good marketing plan is to document how you can generate sales so that you don't just rely on referrals. You can't control referrals, so you need to create some new avenues that will bring potential customers to you. Here are some suggestions:

• Truck signs—Let people know what you do everywhere you drive
• Job site signs—Let people know when you are working in their neighborhood
• Neighborhood mailings—Send simple postcards to the surrounding 30 or 40 houses where you are working. Let surrounding homeowners know that you are working with their neighbor. Give them your name and phone number, and let them know they can call you with any questions they have
• Internet leads—Optimize your relationship with ServiceMagic. If homeowners don't know your company name, use ServiceMagic to allow homeowners in your designated work areas to find you on Google, Yahoo, and Citysearch.com. If you need additional leads, expand your coverage areas and add additional work categories.
• Update your profile—Review your SM profile, and make sure it is up-to-date. Send it to your friends, and get their responses to it. Add additional pictures, testimonials, and rating and reviews. Make sure your profile accurately tells your company story.

You must track where your leads are coming from to know what marketing is working and what isn't working. If one part of your marketing plan is working better than the others, you may want to put more resources in that area. Put your time and money where it is getting the best results. Done correctly, you can fine tune your marketing to increase or decrease your lead flow as necessity requires. Tracking your marketing does another thing for you. If you regularly monitor your leads, you can know ahead of time if work is slowing down. If your lead flow starts tapering off, this may be telling you to take action to generate additional leads. This can allow you to make adjustments before you run out of work. By expanding your coverage areas and work categories, you can proactively increase your leads before this becomes a problem.

In spite of your best efforts, develop a fall-back budget in case you don't meet your required number of sales and required income. Proactively, begin to think about where you can cut back. Identify where you can cut expenses and save money. If necessary, identify which employees might be the first ones to go. This is preparing for the worst, but every successful company has a fall-back plan. Think about this ahead of time so you know what you will do. By tracking your marketing and sales, you will know when this may be happening, and you can respond accordingly.

Tough times are not necessarily bad. Tough times allow you to "sharpen your sword", and force you to focus on what you do best. Think about these issues ahead of time, and you may eliminate a crisis before it ever becomes a crisis. Good companies survive tough business climates. They do this by planning to survive. This doesn't happen by accident; it happens with careful and thoughtful business planning. You can do the same!