Start 2009 on the Right Path
by Ruth King
December 6, 2008
Use slow business cycles to prepare for recovery
The weather cycles. The economy cycles. About every seven to ten years our economy goes through a down cycle. Hopefully this time you’ve realized it and will start planning to take advantage of the next downturn. What marketing actions do you need to take in the next few years to thrive in the next downturn? Then, what can you do to maximize the results from the four types of clients you have? (Internal clients [employees], current external clients, inactive external clients, and prospects). Current external clients have done business with you in the past 18 months. Inactive external clients are those people on your client list who haven’t used your services in the past 18 months. Look at your internal client needs over the next seven years. What do you need to do to build a solid base? What needs to happen in 2009, 2010, etc.? Is training a critical component of your internal client plan? You want to be the employer of choice in your market area. Potential employees should knock on your door constantly because they’ve heard your company is a great place to work. This happens through consistent communications, constant training, clear expectations, fair discipline, clear career tracks for all employees and feedback. Your employee manual should describe what is expected and what happens when non-acceptable behavior occurs. If you don’t have all of this in place, your first goal for 2009 should be to get it done! Second and third, evaluate your current and inactive external clients. What is the goal to continually increase the number of current clients? How many do you need each year for the next seven years? If someone used your company once, why haven’t they you’re your company’s services again? Call and find out. The answers may shock you. Do what you need to do so that inactive clients become active clients and active clients remain active clients. The trend should be toward increasing active clients and decreasing inactive clients. The overall goal should be to increase the total number of clients each year. Unfortunately, if you are like most contractors, your number of inactive clients will far exceed the number of active clients. A goal for 2009 might be to turn at least 15 percent of the names on the inactive client list to active clients. Finally, plan the activities necessary to generate more business from each of your clients. This is the easiest way to increase sales. It takes client education, planning, and execution of that plan. A goal for 2009 might be to increase the average client revenue 15 percent. That means if the average client spent $500 with your company in 2008 that client would spend $575 in 2009. Fourth, how about people or businesses that should be clients? One of the best ways to increase your client base is through referrals. How many of your new clients come as a result of a referral? One of the goals for 2009 might be to increase the percentage or number of referrals over those attained in 2008. Then look at your advertising activities. Hopefully you have tracked them throughout the year so you know where your leads are coming from. If you haven’t, this is should be a goal for 2009. Assuming that you have tracked your leads, you know what worked well and what didn’t work at all. Plan to repeat the activities that worked well and determine why the others didn’t so you can either fix the problems or not do them again. Direct mail is a long-term strategy that fits in well with a seven-year plan. It requires a commitment for the long term to see results. Look at monthly postcards, quarterly newsletters, and other direct mail activities that can slowly increase your client and potential client base. What public relations activities did you do this year? Public relations includes all non-paid advertising including your truck signage, service forms and uniforms as well as donations you made to charitable organizations, articles that appeared in the media, etc. Plan on doing more public relations activities. They may produce better results than advertising does. Next, consider the “yellow pages”-type directories. I haven’t found too many contractors who like them. My philosophy is that you can’t live with them and you can’t live without them. Some contractors have found a way to live without any display ads with very successful results. Others still need to have a large presence in those directories. Be different. Talk about benefits rather than features. Or, state the features differently (instead of 24-Hour service, tout your “23-Hour” service or that you take those emergency calls at 3 a.m.). If you decide to decrease your directory presence, the key is to invest the money you save on referral and direct mail marketing. Your goals should reflect the activities that you want to continue doing in 2009 and those that you want to increase (or decrease) as a result of what you found doing your research. Put them on a piece of paper and post them where everyone can see them. You will remind yourself and your employees where the company is going with respect to marketing. You’ll have concrete plans with concrete expectations for 2009 and beyond.
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