This and other key points for Psychology and Strategy of Sales are addressed by Shawn McCadden in a recent spot on Remodeling TV. In the short excerpt from his seminar, McCadden points out that a real understanding of sales, understanding “the psychology of this dance that’s going on,” can make a world of difference to your company.

As McCadden summarized, “The questions that you ask will be far more valuable in proving your value — the difference that you bring to the table — than the answers you give.”

McCadden covered several other points in this excerpt (part 1 of the seminar), but there was one other which I found to be especially pertinent. It involved “Determining Your Niche.” That is, know who it is you want to sell to and where they are. Just as important as paying attention to a prospect and asking questions is, it is equally important as a contractor or business to know what you want as well.

In other words, find your niche, find who you want to sell to and focus your attention there. It may take longer to put things in motion, but a localized and focused selling process will reap strong benefits, says McCadden, such as referrals and repeat business — very important facets of business in dark economic times. And as hard as it may be to get the “niche” ball rolling, it will be equally hard to stop once on the move.

In the chaos and hysteria that followed the bubble-burst last fall, there was a good deal of panic and a lot of shoulda-woulda-coulda talk. Well there’s no preventing what has already happened. We can, however, begin to do something about, as well as make absolutely sure that we learn from past mistakes. The building industry has a proven cyclical nature; a nature that many builders failed to recognize during the lucrative boom that preceded the equally destructive fall.

In order to help builders avoid another crash, or at least find a way to weather the next drop (assuming an impending rise), Builder Online has compiled a list of lessons for builders to take away from the current recession. Designed to illustrate some rare recession successes and prepare for a smarter boom the next time around, the six lessons are summarized below:

1. Build Smarter. Think energy efficiency, renewable energy, and smaller, lower maintenance homes. These will be key attributes of the recession-era home for the eco-conscious consumer and a government likewise determined.
2. Limit Land Holdings. Some builders were buying up every site in sight during the boom, many of whom have been left holding their hats. On the next go round builders should be thinking twice about purchasing land before its true value is known.
3. Find New Cash Streams. Banks have folded their arms and zipped their books shut in the wake of mass failures. Therefore credit is rather hard to come by these days, so some builders have been searching outside the banking arena, even overseas, or signing deals to finish projects acquired by lenders via foreclosures.
4. Respond Quicker to Market Conditions. The general excuse for recession-weary builders is that they were caught completely by surprise when the housing bubble went bust. Some builders recognized the coming storm early and began downsizing. Others are reacting with inventive programs such as mortgage protection and new marketing schemes, or reenlisting the age old tactic of keeping in close contact with former clients.
5. Value Workers and Trades. Layoffs have been rampant, and those employees remain with builders have had to take on a wider number of tasks and learn new skills in the process. Hence the value of cross-training employees, as well as appreciating subcontractors and suppliers to a much higher extent.
6. Diversify. Some builders get stuck in the stigma of single-family, new home construction during a time when new homes aren’t being built. Those builders who have diversified into multi-family and commercial building, including remodeling, are generally doing better during these hard times.

For the complete article, including more detailed explanations for each of the above lessons, check out 6 Lessons for Builders from the Housing Bust.

According to the marketing gurus of the world, anytime a logo is scraped, it sends a mix of messages to your customers and clients. On the positive side, this change says the company is forward thinking, willing to refresh their message and therefore able to broaden or narrow its appeal. This all demonstrates that your company is open to changing with the times.

The downside of a logo change can suggest instability within the company. Is new management on board and can we get the same service we’re used to? To consumers who are not familiar with the company, they may believe the change represents a brand new organization entirely.

Millions of dollars are invested into brand marketing. It takes time for consumers to connect the dots. Throwing the old logo over board is a risky step. Company advertising on vehicles, shirts, hats, and billboards may all be wiped out or slowly fazed out. Rebranding can be harder than you think. From altering graphics and mission statements to changing front line customer service and sales staff, this is all in play and must be considered.

Industry giants like Microsoft and Nike have never feared change. Both have made several tweaks to their iconic logos but never lost touch with its core symbol. We identify the “swoosh” even though it’s been shrunk, streamlined, and modernized. Ultimately, that could be the difference we’re talking about. These logos have evolved with fresh images but at the same time, they continue to embrace their past.

Sources:

http://thelogofactory.com/logo_blog/index.php/changing-a-logo/

http://marketingprofs.com/ea/qst_question.asp?qstID=23409

1. Confidence. Of course the way in which you carry yourself is important. Many homeowners are already tentative about new remodeling projects, so the last thing they want is a contractor is unsure of himself.
2. Knowledge. There’s no need to know everything, but homeowners will have a lot of questions and those contractors who can adequately answer them on the spot will move to the front of the line.
3. References. Any blog similar to this one, but geared toward homeowners, would have references very high on a list of 10 things to look for in a contractor…and for good reason. In an age of high competitiveness as we have now, getting some sense of a contractor’s past performance is key.
4. History. That leads us to history. If you had a choice between the new kid and the contractor who’d been in the business for 30 years, who would you choose? This is not meant to discourage new contractors. By no means, even the youngest remodeling contractors have likely had several years of experience under the tutelage of a tested predecessor; you just may have to sell yourself on other counts. For time-tested remodelers, having a long history shows endurance and commitment.
5. Thinking on your feet. With budgets and time frames often tight in remodeling, a contractor who remains calm and composed under pressure and can address problems accurately as they arise will garner a second look from homeowners.
6. Reasonable Price. Oh yes, and we can’t forget that giant number (no matter how small you write it) that is the price on a bid sheet. Just remember that price is only one of these 10 things homeowners are looking for. Of course you must be cost competitive, but homeowners who have done their research will know better than to rely simply on the bottom line.
7. Honesty and to some extent, transparency, is also a key. Because homeowners cannot know for sure how honest someone’s words are on first meeting, they’ll rely more on feeling. At the same time the best way to convey a sense of honesty is to be honest. This means not getting yourself in over your head by claiming abilities you don’t have or promising time frames you cannot keep. This is how contractors get bad references and lose money.
8. Resources. A tape measure, pencil, and a pretty face do not a good contractor make. Be ready to field questions about tools and manpower to complete the work on time and with quality and professional performance.
9. Organization and Cleanliness. During the interview and bidding process a show of organization will make a positive impression. After the job is underway, maintaining a clean job site will make that impression last and go a long way toward getting your name spread around to other prospective clients.
10. Energy Efficiency. Remodeling in the near future will likely have a heavy focus on energy efficiency. Tax credits and the stimulus package are pushing the green envelope even further. Therefore knowledge of energy efficiency upgrades and even available tax credits for different projects.

Tell me about your book and who it’s written for.

“I started my real estate career in 1987 with CB Richard Ellis Commercial Real Estate. They taught a very specialized system to brokers. The system was based on product and geographic specialization. The system worked in every market. In 2000 I started investing in Real Estate and added a design/build business. I got into decorative concrete and coatings as an inexpensive curb appeal solution to rehabbing properties. I found that most contractors just took business where they got it, with no business plan. The book is written for any trade within Real Estate. I use Case Studies in The Guide of decorative concrete applicators, but it’s written for every contractor. I’m considering writing a version for Real Estate brokers.”

How did you gather your research?

“What inspired me to finally write The Guide was a marketing project (I’ve evolved to the Internet as well) I did for a company with a new coating. They developed a product for resurfacing concrete. Excellent product for floors over 1,500 square feet. The product is a one-day application, which is fine for small floors. They based their business on the one-day application. Problem is, small floors lose money. They never did the financial analysis to determine profitability. I realized they were doomed to failure because they were targeting the wrong market. Once I saw this I realized that the market needs The Guide.

“Here’s a company with a superior product and tremendous knowledge. They have exactly what it takes to be extremely successful, but they are targeting the wrong market. This is why I wrote The Guide. 99% of all contractors have the ability to be financially successful but don’t know how to go about it. The 99% of contractors who break even or fail have just as much talent as the successful 1% and work just as hard breaking even as the 1% who succeed.”

Tell me about the system for success that you describe in The Guide.

“The system is based on being the expert in a market. Let’s say a contractor identifies 75 Grocery anchored shopping centers. Now there are a few different kinds of shopping centers. I’m choosing Grocery anchored for a reason. Every successful investor specializes. So when it comes to Grocery anchored centers, there might be only 15-20 owners of the 75 targeted properties.

There is a good chance that the same property managers run the properties, the same architects, electricians, plumbers and frequently tenants. Many of the tenants are frequently local instead of national, so it’s easy to get to the owner. Now if a contractor stays focused and turns away all business other than the 75 properties, they will capture a large market share. They become much more efficient, they don’t have to travel far, they will control their expenses and manage their books easier because they have a specialized business.

Consider that 75 Grocery anchored centers have 20 tenants minimum per center, that’s 1,500 stores. 7% annual vacancy yields 100 new stores every year. You can see the program can work for architects, general contractors, flooring applicators, electricians. That’s how a contractor controls business. Another basic is that ‘people do business with those they like and trust.’
By specializing, contractors can charge a premium and still get the business because they have developed a relationship. Without a targeted plan every project is like the first. This strategy applies to every trade and market.

Specialization is a science and an art. It’s not hard when you know how but you have to know the process. It starts with the economics of a trade or specialty, then the target market like Grocery anchored centers or office buildings or single family homes. Learning to use the proper marketing tools properly, like newsletters, blogs, and websites to pre-sell services. Presentation packages, contracts, communication logs. They all work as one. This is how a quality profitable business is built. I might point out that this is how a contractor brands their business and gets lots of Word Of Mouth Business. Word of Mouth will lead to other like kind business.

Here are some of the suggestions they came up with, along with a few of our own.

1. Know where your money is going, the small stuff really adds-up. If you budget more efficiently, you can potentially cut costs and allow yourself more of a profit.
2. Try your hand at reducing the price of some of the insurance policies you have to carry. Shop around and try to negotiate better prices.
3. Contractors are suffering, but so are suppliers. When they send their sales people out to charm you, see if they are willing to negotiate lower prices.
4. Try to reduce waste by recycling materials and using those small pieces you might normally throw away.
5. Do more of the project yourself instead of subcontracting the work.
6. Workers’ compensation rates vary based upon the work being completed. Consider doing the more expensive jobs yourself, or consider hiring a less expensive subcontractor.
7. Target what projects net you the most profit, and pursue those over others if possible.
8. Discretely look for other jobs while on site, you never know how one job can lead to another.
9. Offer an incentive to your customers for repeat or referral business.
10. Treat your employees well. It costs money to rehire and retrain new employees.

A smart business plan is the key to surviving this economic crisis; take a few minutes when you get the chance to reevaluate your operation and look for ways to adapt to the current conditions.