Why Bother with Marketing?
"If I'd wanted to be in marketing I wouldn't have trained as an electrician." It's an understandable sentiment but these days everyone has to do a bit of marketing and sales. It is the way a market driven economy works. But Marketing is not about pressurising people to buy things. It's about issues like customer satisfaction, identifying opportunities, understanding customer needs and as a result being better than your competitors. All of these skills can help reduce business risk and improve profitability, important at any time, but particularly when there is talk of double dip recession and not only electricians but other trades are looking at how they can take away your business.
In this article and a few to follow I will introduce some of the marketing concepts and suggest how you can use them to make your business better.
Work Smart not Hard
One effect of the recession has been that everyone has to work harder to stand still. Chances are staff numbers have been reduced and you are now doing more than you used to. Customers, recognising that there are some good deals to be had, have increased the number of quotes they request but at the same time asked for more information. If your business is short of work you will be chasing jobs that you would have previously ignored. As a result you are probably quoting more work, but every quotation is taking longer to prepare. Worst case is that you have so much to turn around that you are not giving each quotation the attention it deserves, and probably do not have the time to follow-up properly.
So consider a change of approach. Be more selective about the enquiries you respond to. Only invest time in preparing quotations for opportunities where you know the customer well or you feel you have a good chance of success because it is your area of expertise and you have something special to offer. Perhaps spend half the time you do now on writing quotations and invest the other half in talking to the customer first to get a better understanding of the project and their issues. Then following up quotations to establish if there is any more information you need to provide and if you have not won the work, why not.
Getting the most from your business
Develop a 'prospecting' mindset. When talking to clients ask them about other work opportunities and introduce yourself as a skilled provider. Or while on site offer a free safety check and advice. These "free" services will be valued by your customers, allowing you to build a strong relationship and encouraging them to come back to you in the future.
Don't assume that customers know what you do, tell them about the range of services available from your business and leave details, or at least a business card with them.
A changing world
In the ECA's recently published report "2021 Vision" we identified that there will be many new opportunities for electrical contractors. The Green Deal will see most buildings being upgraded to become more energy efficient over the next 20 years, starting with houses. The demand for energy efficiency will see integrated control of various systems including heating and lighting, as well as electrical controls increasingly incorporated into systems like plumbing. All of this will require electrical contractors. There are also plans to install SMART meters in every home and the need to fit charging points for electric cars. Both of these will see high demand for suitable qualified electricians.
But there will also be a need to bring down costs by reducing the number of tradesman involved in installations, so others such as plumbers (for showers) and roofers (for solar panels) could take on some of these roles. Expect a splitting of skills. At the lower level there will be the development of 'plug and play' components which need relatively low skills to install. At the higher end there will be the need for people to integrate old and new systems as well as fault-find where integrated systems have failed. You can expect a high level of competition at the lower end with prices driven down, while good people who can operate at the higher end will probably be able to charge premium rates. Think about how you wish to target work in the future and make sure your business has the skills to meet these.
It is a changing world and for electrical contractors to survive they need to adopt a marketing approach - which means building relationships, more self promotion and innovative offerings to customers.
Marketing initiatives for the small contractor
Define your "ideal" customer. What type:
- Do you like working with
- You understand their needs
- Is less likely to go to your competitors
- Gives you most work
Don't waste time and effort on customers that do not 'fit' your customer profile.
Focus on winning work from your ideal customer:
- Ask for referrals from existing customers
- Ensure they know of your full range of services
- Send them reminders about your services. Include an update on any new legislation you can help them with.
- Identify free services you an offer either when on site or as an excuse to see good customers.
- Always leave them with details of your services.
When quoting for work:
- Think about what the customer wants and how you can best meet this need.
- Contact to discuss any points which require clarification or where you think you can add value.
- Having quoted, follow-up. If you have invested time in preparing a quote it is reasonable to expect feedback from the customer. If you do not win the work ask why.
What new areas of business can you develop:
- Think about the new services required by opportunities like the Green Deal, what training do you need to be able to undertake this work.
- Identify suppliers of complimentary services such as plumbing and solar panels, develop partnerships with these companies to give you access to their work.
Marketing initiatives for the medium to large contractor
Conduct a review of your existing customers and divide them into 4 categories:
- Maintain & Develop customers who you have a good relationship with and that are in a growth sector with potential for future work.
- Invest in Relationships with customers in growth sectors with potential but you currently do not work for. Understand their business and look for ways to help them.
- Maintain Relationships with customers who are not in growth sectors but you have a good relationship with. But invest minimal effort on them.
- Minimum Effort should be invested in customers who are not in growth sectors where you have no relationship. Decline to quote or charge high prices.
Understand your principal competitors, what sectors do they work in and who are their customers, what size contracts do they undertake, are they more successful than you and why?
Focus on winning work from key customers in the 'Maintain & Develop' and 'Invest in Relationship' categories.
- Understand their business and find ways you can work with them, helping them to perform better.
- Build relationships at different levels of the organisation and focus on how you can help save them money and win work.
- Review your performance on each job, getting feedback on what you did well and where improvements can be made. Take action to implement improvements.
- Issue a regular briefing on industry issues, presenting your organisation's core expertise.
When quoting for work:
- Focus attention and effort on key customers.
- Ensure you understand the customer's needs and that you deliver tailored proposals. If lowest cost is the key issues make sure you offer a slimmed down proposal but don't offer at below cost. If best value is important make sure all of the areas where you can add value are clear.
- Having quoted, follow-up. If you have invested time in preparing a quote it is reasonable to expect feedback from the customer. If you do not win the work ask why.
What new areas of business can you develop:
- Think about the new services required by opportunities like the Green Deal; what training does your team need to be accredited to undertake this work.
- Look for partners operating Green Deal schemes (other contractors, retailers, energy companies) can you work with them as a partner or sub-contractor.
- Can you take a lead role in the supply of new opportunities, what partners do you need to succeed?
Chris Ashworth co-authored the ECA report "2021 Vision". He has worked in the construction industry for over 30 years and is founder of Competitive Advantage Consultancy which provides strategic marketing services to the construction industry. He is a fellow of the Chartered Institute of Marketing, a member of the organising committee for the Chartered Institute of Marketing Construction Industry Group (CIMCIG) and a regular contributor to industry journals including Construction News, Building, RIBA Insight's bulletin and VoltiNEWS.
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Chris is founder of Competitive Advantage Consultancy Limited which specialises in market research and training for the construction industry. He is also a member of the organising committee for CIMCIG, the Chartered Institute of Marketing’s Construction Industry Group
First Published: October 2011, ECA Today
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