The 10 Biggest Contractor Marketing Mistakes to Avoid

After the last few years, the “same old” marketing rules do not apply as before, and yet, we see lots of “old rules” that should be abandoned. Here’s our top 10 list:

1. No Focus – This tops the list for a reason. Wait, what was I saying? Oh, right.

Hard to hit a target if you’re constantly distracted. This includes spending endless time on discussion boards, allowing constant interruptions and appointments, unlimited time on email, or the “entrepreneurial disease” of thinking every opportunity is worth pursuit. It’s not. This is why we pound “goal setting” into our clients’ heads and stay on them about it.

Top marketing goals should be for number of leads, number of conversions, number of new customers, repurchases from existing customers and increasing average transaction size for the year. (All quite doable with a plan.) Likewise, commit to ‘x’ new products to take on, ‘y’ hours per day/week online, and ‘z’ training meetings in a year, hopefully more this year than last.

2. Too Much Money Wasted on Broad and Eternally Boring Ads – This has been the year to engage customer focus too. Our top clients’ results from “likely” response groups to a specific product or service have been astounding. In doing this, we’ve advised dumping the broad, generalized advertising that eats too much money for too few leads.

3. “One-Sale Customers” – Why have ‘em? Look, it costs you nearly $200 to get the lead and do the appointment, so if the bill was under $400, you probably lost money on them. Your job is to ascend the customer to: a) Additional product b) Frequency of visit c) Referral generation. This is done with good follow-up marketing and putting them into your Customer Retention Program. Resales and referrals happen by intention, not luck. Focusing on this area can make your profits absolutely explode.

4. Perfectionitis – Quit spending half your life “looking into” doing something, but not quite ever doing it. You delay because it’s not “perfect.” Newsflash: It ain’t ever gonna be perfect. The “okay” marketing campaign or product launch that’s well-executed will outsell the “soon to be perfect” one sitting on your desk every time. Results start with action. I don’t know about you, but I find it very hard to make a bank deposit based on things I’m going to do.

5. Not “Justifying” the Sale (ROI) – This happens in marketing and selling. Contractors think that tossing out a low price in an ad is going to make the phone ring. Sorry. It just makes you look cheap and/or desperate. People have NO IDEA how much your stuff is supposed to cost. Therefore, justify your price position with an ‘ROI’ based ad and presentation. Such as…

“The extended warranty is worth ‘x’ because a compressor costs ‘y’”. Or “The 16 SEER system actually generates a 6.2% ROI, better than any bank will offer, plus it keeps you comfortable and increases your home’s value.”

In these times, you need to be prepared to justify a cost – high or low – with effective, logically deductive reasoning.

6. Admit Mistakes, Commit to Get Help, Move On – No one is an expert in everything. If you’re not a marketing strategist or graphic designer, why are you laboring over those functions or “expecting” your untrained staff to do it well? Specialists are abundant and yes they charge money for their craft (don’t you?) but can likely save you more than they cost in results. Go online or check around.

We recently rewrote a letter that was sent to 13,000 customers for a contractor. His original generated 34 leads; ours generated 112. He paid us $4,000 for the custom letter but sold an extra $116,000 from the previous effort. Though results are atypical, you can hire a web designer, sales trainer, or marketing consultant who has seen your problem before and can solve it way easier than you can. This is why we hire people to tune our furnaces.

7. Committing the Engineer Error – The gadgets and gizmos that made you get weepy at the last conference will NOT have the same effect on your customers. Continually adding new solutions without selling them really only adds to the problem. Commit to the new product after learning how to market and sell it to customers. Without that, who cares? If you have shelves of stuff you thought was the answer to the question nobody ever asked, maybe you should hire the guy that sold it to you.

8. Failure to Segment – This mistake relates directly to items 1, 2, and 3 on this list. It is that important. No one can afford to attack the full list all the time, and in this economy, it makes no sense. Then consider that 80% of your profit comes from 20% of your customers. Find the 20% and clone them.

Segment your database by recentness, frequency, transaction size, product interest, lead type, and which ad generated the lead. In this way, you strategically “engineer” results from your marketing in response clusters. Aim, sell, profit, and repeat. The smartest most successful clients we have make a nice living off segmentation.

9. Customer Service That Isn’t – This hardly needs explanation. Customers are attracted to good service, repelled by the awful “norm.” Bad stories are oft repeated and silently cost you thousands – maybe tens of thousands. Good service standouts are rare, lauded, referred and are remarkably insensitive to price. Thus, an investment in Customer Service can repay you massively. Consider CSR part of your “company experience” that flows from the ad, to the phone, to the visit, to the follow up. Treat customer service as “it doesn’t matter” and customers will feel the same way about you.

10. No Customer Retention Program – This one area touches about 7 items on this list. Contractors who “can’t get to the next level” in sales often find that by installing a customer retention program, it “magically” happens. To me, the gold of your business is already in your business, buried in the customer list waiting to be mined.

Customer retention only costs you about 8-12% of your marketing budget, yet generates a high ROI by repeat purchases, less negotiation, faster purchases, more referrals and far greater willingness to buy your recurring revenue Maintenance Agreement.

If you don’t actively and intentionally “keep” customers, why should they stay? It’s not their job to remember you; it’s your job to be remembered. Pursue them more with follow up calls, postcard reminders, newsletters, advance sales notices. Easily done yet also easily not done. Make a goal to keep every customer for life.

Avoid these common marketing mistakes and you can prosper way beyond those who found out too late that the rules have changed. Here’s hoping that this year is your best and most profitable year ever.