Recession Proof Your Business Now

From BusinessBuilder.com - "There are some businesses that continue to thrive during economic down times, mostly because they offer products and services that are always necessary or in demand. These businesses are recession-proof. But many make missteps that cause even their own decline…”

As a contractor, you’re taught to almost hate the word “commodity”. It reeks of sameness, lowest-common denominator, “price is the only differentiation” type mentality.

Yet, in contractor marketing, we do all in our feeble power to create distance between you and “that” word. We promote uniqueness, value-driven benefits, creating an iron-cage of loyalty and referrals because of the service you provide.

In all of this, we know a damaging truth: the skill sets and products don’t vary tremendously among other contractors who call themselves “good”. The variance is how you market your particular company to create differentiation. Now, in the grips of an economic downturn, there is a word that has a sweet ring all its own:

Commodity.

If you and I were selling luxury yachts, or waterfront condos as a 2nd home, or any of a zillion businesses even remotely “optional” we’d be scanning the classifieds for work right now. Yet, in the contracting world of keeping homes comfortable and safe, with running water and a dry roof overhead, there is a silent word of thanks that this is our calling. Oddly, to offer a “necessity” becomes its own luxury. Yet, many contractors will do something that – as humans – gives us all reason to shake our heads in near disbelief.

They’ll go silent. They’ll hide. Presumably, they’re wondering if becoming invisible will make them visible. Sorry, I can’t figure it out either.

At the very point on the economically-dictated map when stepping into the light of availability would make the most sense, many contractors play hide and seek. The customer would prefer not to seek, but to find. Instantly, if possible. Thus, the cowering contractor who was “waiting to see how bad it really is” becomes his predictor of fate.

Yet the corollary to this assessment is where my best clients would rather I’d chosen to silence myself. It is that if enough contractors think invisibility is a good idea, then that throws the door open wide for them. It’s almost as if half, or more, of the competition has suddenly left the market.... which in true service terms, hasn’t diminished at all.

The HVAC system doesn’t read the newspaper, and will thus fail if it feels like it. In fact, more readily if unmaintained. The water heater is neither Republican nor Democrat, and will collect sludge at the same rate as always, choosing to rot at its normally scheduled time. My breaker box is just as old and crusty as most of Congress (yet more agreeable) and doesn’t change its rate of corrosion for anyone.

So, the service business is the same now as ever. Only difference is the fearful contractors are leaving it wide open, walking away as if the home’s systems are doing exercises at night to prevent failure. There’s even a sound argument that the service business will expand due to more “cocooning” (marketing speak for more time indoors, at home) resultant from the too-expensive off site vacations, restaurants, and entertainment. I for one agree, but don’t want to take you too far too fast, on the assumption that I somehow benefit from a “pro-marketing” push.

Oh, sure, we marketers always think marketing is “the” answer, and in my not-so-jaded reality voice, I contend it usually is the answer. But only to a problem that is related to generating phone calls, building image, recognition, RETENTION, and referrals. If you happened to notice one word in there more prominent than the others, there’s a reason.

I get paid most of my money to generate phone calls. So be it. You find this proclivity “mystical” but I find your ability to detect a leak you can’t see “other worldly”, so we’re even. So, my reverence and strongest advice is for retention right now. (You can call us to get your phone to ringing, but it’ll be a lot more expensive and quite honestly less productive than the following.)

See, “your” business economy is not currency. It’s customers. So, to go one alliterative step further, customers are your currency. They’re cash. They’re gold reserves. They’re your oil pipeline. And if any of those were in your physical possession, you’d do all in your power to “protect” those, right? Same thing here. Your focus upon your most valuable asset – customers – is premiere, right now, like no other time.

And for those of you who might slip into “fear-think” mode and say, “Hey, they already call me when they need me so I’ll just do nothing” are woefully misguided. I don’t know who told you that customers have 100% recall, 100% loyalty, and that all 100% have you on speed-dial, but sorry to let you know: they don’t. You think the American public doesn’t know and remember who Coca-Cola is? Then why-oh-why do they continue to remind us? Perhaps to continue building and maintaining their position of 65 year uninterrupted dominance in our brains, that’s why.

Your job is to service customers, not to disappear on them. So, if you want a marketing tip or two, be a good steward of both your resources and your customers by.…

1. Reach out. It’s not all about you – at least to your customers it isn’t. So when you make it about them you score every time. This is one reason why your newsletter is so important (ask for a free sample if you haven’t yet done yours for this season). You get to reach out to your customers about more than just their contracting needs – but you reinforce the relationship and their loyalty for when they do need you.
2. Remind. Do you remember everything that you’re supposed to do? Didn’t think so. So why would you think your customers remember every time their equipment needs to be serviced? Or who serviced it for that matter? Remind them that you can handle both for them with your branding and TOMA campaigns (call us if you don’t have one and we’ll get you started before more of your customers forget that they’re your customers).
3. Reward. If your customers repeatedly choose to buy from and refer you, why not make sure they’re getting something out if it? Use discounts, “bonus dollars” towards future services, or small gifts to reward them for their loyalty.
4. Respond. Your customers want to know that they’re being heard. That means when they call with questions, concerns, or outright complaints, you respond. When they know that you’re paying attention and not just ignoring them, they’ll know you really care – which strengthens the relationship and their loyalty to you.
5. Reap referrals. There’s no better way to gain automatic trust than through a referral. You’re covered under the umbrella of whoever referred you. And if you’re not asking for referrals, you’re missing one of the most valuable – and least effort – revenue streams available to your business. Not such a great idea with this economic forecast, eh? Call us for a free Endless Referrals report and start mining this high quality group now.

Before you say “why bother”, you may want to consider these cold hard facts:

• It costs more to find a new customer than to keep an existing customer. It’s estimated that landing a new customer costs 5 to 20 times more than selling into an existing relationship. (Source: http://www.salesresources.com/)
• Just a 10% improvement in customer retention results in a 30% increase in the value of the company: That’s absolutely huge, and although effort is involved, the process of implementing a sound customer retention strategy isn’t hard. (Source: Bain & Co.)
• The probability of selling to an existing customer is 60-70%: And there’s only a 5-20% probability that you will sell to a new prospect. (Source: Marketing Metrics)
• 80% of your sales come from 20% of your customers. (Source: http://www.marketing.about.com/)
• A 5% increase in customer retention can increase business profits by 25% to 125%: Read it again if you have to, because those increases again, are huge! (Source: Gartner Group and “Leading on the Edge of Chaos”, Emmett C. Murphy and Mark A. Murphy, 2003)

Neither of us can “change” the news. All we’re able to control is our reaction to it. Thus, the choices are to do nothing and cause that exact outcome in our business or to market prudently from a true stance of fearless invulnerability. I assure you, either choice will make a tremendous difference in your confidence, business and future.