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As a marketing consultant, I have worked with many different types of businesses over the years within the cleaning and restoration industry: Chemical and equipment manufacturers, national associations and franchises, software companies and more to our primary focus, which would be restoration contractors.
One of the first questions I ask potential clients is whether or not they have a written business plan. Most of the time, the answer is no. And the lack of a business plan is not all that surprising.
In many instances, business plans are written to secure loans or performance bonds or to satisfy some other financial requirement, and many contractors don’t always have such requirements, or the one they have written is ancient and collecting dust on the shelf.
But what is shocking is that, whether or not there was ever a business plan, they have never created a marketing plan! And without a marketing plan, it’s very difficult to have an effective marketing strategy.
The value of the plan
A marketing plan should be a component of an overall comprehensive business plan, but it can be (and quite often is) a separate document.
From my perspective, there are several standard elements that should be contained in a marketing plan, such as current situation, target market details, products and services offered and so on. But, an effective plan must also have a very specific purpose. That purpose is to specifically state exactly which steps the company will take to achieve the sales and profit goals described in the business or marketing plan.
Creating the plan
This is where it gets tricky. Many companies fail to answer a critical question when it comes to their marketing plan. Since it is exceedingly rare to start a business as the only game in town, the marketing plan must detail how the company will answer the same fundamental question:
“What’s my differentiation, and when, how and why will that difference get me to where I want to go?”
The key to this question is to really think hard on how you will answer. Why would someone already happy with their current vendor switch to your company? In other words, what differentiates you from the pack? How will you answer that question with a powerful, compelling narrative that makes sense? How will our company be different and better in a way that is meaningful to the targets that you are trying to sway to your camp?
Most new business owners feel that the effort, the quality and the determination that they will provide will help them rise to the top. While these things are necessary to help you get your initial business, they’re not enough to help you sustain your presence in the marketplace.
And what makes this situation so deceptive is that a new business can have a certain “honeymoon” of sorts that the owner does not recognize as such, but instead thinks is the beginning of an ongoing trajectory of business that will lead to yachts, vacation homes and world domination.
What is actually happening is that a new business often has the benefit of “newness” which indeed commands a certain attention from the market. But even more importantly, start-ups have a minimal overhead structure (often combined with a simple naivety of the way a business like theirs should work) that allows them to be highly price competitive.
In addition, most owners often do not understand all of the real costs involved in their business and in the beginning, are just trying to survive. That means they can often provide services at minimal or even negative profit for a long time.
Once this new company starts operating more or less like a typical business in the industry, they will eventually encounter what Seth Godin calls in his book of the same name, The Dip. Simply stated, the dip is where the company can no longer operate without the more formalized systems, processes, procedures and people necessary to meet the demands of its clients.
Examples of this is when restorers must buy an estimating license, find a way to consolidate all the details about all of their work into one software platform, hire restoration division managers, etc.
At this point, the honeymoon is over and the company will need to figure out the best ways to handle the new requirements of growth. These requirements will cause a corresponding increase in overhead and the organization will more or less have achieved parity with its competition.
Now, the competitive advantage of newness, low overhead and low pricing is gone and the company is faced with duking it out with more established competitors.
Regardless of which stage the business is at, your marketing plan should always be able to answer the earlier fundamental question of why you are different, why your targets should care and how will you get that message out to them. You must be prepared to answer the following:
“Since there are already 27 companies that do what you do, why are you calling on me? I am working with two of them quite successfully, so why should I spend any time talking to you, let alone give you my business?”
And, if your answer is that we will provide better quality, better service and care more than the competition, you are in for a rough road, because that is what your competitors are saying and what they spend almost every minute of every day trying to deliver.
If you find yourself in this situation you will find yourself expending enormous amounts of energy slugging it out with well-matched competitors.
In order to deliver your differentiation effectively, your overall strategy must also translate into specific tactics that you will help you communicate that differentiation to your target market.
What combination marketing elements will your plan consist of? Exactly what will you do? How often? How many? To whom? At what cost?
These are all the rubber meets the road questions that a good plan must address so that it can be budgeted, scheduled and then executed.
And, as your business will almost certainly find itself in “dips,” your plan must be updated, reviewed and revised at least annually in order to make sure you’re not just getting the business, but sustaining your share of the marketplace and getting your company to the next financial goal.
Tim Miller, a sales and marketing expert for the restoration industry, is president and chief executive officer (CEO) of Business Development Associates Inc. With 30 years of experience, he offers a unique perspective to help businesses solve their challenges and grow to the next level. He is a published author in several trade magazines and speaks at multiple industry events and conferences throughout the year, where he leverages his business experience in both the restoration industry and his other entrepreneurial ventures, including his construction company in New Mexico. You can reach him at (777) 773-9956 or Tim@GoBDA.com. Visit www.theBDAway.com for more information.