The Design Builder's Blog

Not All Remodeling Leads Are Created Equal

All contractors want leads.  Without leads there wouldn’t be any customers to do business with.  Some contractors are happy just to get leads and they give little thought to the quality of the lead.  Other contractors want specific leads and create criteria they will use for qualifying the value of those leads.  If as a contractor you want to sell more projects and don’t want to waste valuable leads you might want to consider where your prospects are in their buying process before you try to close the sale.  Attempting to close the sale too early can kill the value of a lead all together; at least for your business.

A name and a phone number do not represent a lead

It’s important to consider how you and your business will define a lead.   This subject came up recently at a Remodeler’s event I participated at earlier this year at the Marvin Windows and Doors Training Center up in Warroad MN.  From the discussion that followed we all came to the conclusion that most contractors who do no marketing at all consider a lead to be anyone who calls their businesses looking to get work done.  On the other hand those remodelers who were doing proactive marketing were adamant that a qualified lead was what they were after. To these remodelers, and I agree 100%, a qualified lead was a  lead that qualifies to do business with a company based on that company’s pre-established  target customer and product or service offering. 

Qualifying leads

There are many ways to qualify the value of a lead and whether or not your business wants to work with a certain prospect.  In a previous blog post I shared a list of 25 questions contractors can use for prequalifying prospects.   As the market picks up and leads increase you won’t want to be wasting time chasing poor quality leads.  Use those questions, and any others that make sense for you, to help focus your efforts on the right leads. 

Consider the importance of timing

One thing many contractors neglect to consider is where their prospect is in their buying process.    Here are three ways to think about this:

1. Some prospects are just getting started thinking about what to do.   They aren’t ready to commit to any specific product or choose a contractor to work with yet.
2. Some prospects have already started their research.  They may be clear about what they want to accomplish and the things they need to consider, but may not yet have chosen the right products for them or even know where to start looking to find them.   They too may not yet be ready to chose a contractor and make a commitment to buy.
3. On the other hand some prospects have done their research, done their due diligence picking out products and are ready to interview contractors for the purpose of moving forward and getting their project under contract.

Knowing where your prospect is in their buying cycle can often make the difference between closing the sale and alienating the prospect.

Close the sale or nurture the lead?

Consider that if you try to close a prospect that is still in steps one or two above they will not likely buy anything from you, at least at that time.   How could they?   They still don’t have enough info to make a confident decision.   If you try to close them you might just alienate them.   Depending on your approach, if you make them feel bad because they wouldn’t make a decision and or that they wouldn't buy from you, they may never buy from you.  But, on the other hand, if you know they are not ready to buy, rather than attempt to close them see if you can help them move their process along so they can do the due diligence required to confidently make a decision and sign a contract.   Helping them through this process is what is often referred to as lead nurturing.

Practice Catch and Release

According to GE Capital Research consumers spend 38-115 days researching before making a major purchase. If your qualified prospects are not yet ready to buy, respect their process and consider your approach with them.   Give them the time they need when they need it.  By this I mean give them time to do their research. And, at the same time consider offering them some guidance to help move them along and to show that you can be a trusted adviser for them.   When they are ready to decide on products and need help with that part of their process again be ready with help and guidance, but don’t try to close them yet.   Remember, if they told you they were still trying to decide what products to use how could they make a buying commitment?  Trying to close them may seem disrespectful to them.  Instead offer them guidance and let them know you would love to work with them when they are ready to choose their contractor.  The idea here is that if you practice catch and release, and your prospects can swim off unharmed, they will likely remain in your pond and may decide to jump on your hook when they are ready to bite!

Why Some Contractors Can Raise Their Prices But Most Others Can’t

If you are a contractor or remodeler who has been selling on price to close work, you may have a difficult time raising prices as the economy improves.  I say this because as a result of selling on low prices during the recession you may have created a "low price brand" image in your marketplace.  Referrals and prospects who know about your brand will be expecting low prices and will not buy from you if your prices are higher than they experienced and or were told by your referring past customers. 

Can, will you, rebrand your business?

Perhaps by selling on low price during the recession you have doomed yourself to remain there.  You can of course re-market your business to create a new brand, but that will take a whole new strategy than you have used in the past, and it will also cost lots of money.  Keep in mind it will also take much longer to replace or correct a brand than creating the right brand from the get-go.  Rebranding may not be an option if your low prices didn’t or doesn’t generate enough gross profit to pay for doing it.

Also, if you’re a great carpenter without any real professional sales training and sales skills, you will probably not have much luck raising your prices because you don't know how to sell to begin with.   Think about it.  That lack of sales training is probably why you had to drop your prices during the recession just so you could sell something.

And, if you are a contractor who relies almost exclusively on referrals and word of mouth, and don’t do any marketing, you are not likely to get enough leads to take the risk of raising your prices.   

Why some contractors will have success raising their prices

However, those contractors with great marketing and sales skills, those who charged enough during the recession to bring in the gross profit dollars needed to keep doing and pay for great marketing and sales systems at their business, are in a great position to raise their prices.  When a contractor does strategic marketing, and does it well, that contractor gets far more quality leads than the business needs.  If you have more leads than you need you can typically afford to take the risk of raising your prices because you can afford some “no’s” when you have plenty more leads to pursue. And, if you have professional sales skills the risk isn't as great.

So, here’s my advice if you have been selling on price

• If you are close to retirement, say less than 3 or 4 years to go, don’t bother.  The investment needed to fix your problem will require both a lot of money and time.  Any marketing strategy can take at least 6-9 months before you will see quality and sustainable results.  And that’s if you do it right.  If you try to do it yourself through trial and error it could take much longer or might never make enough of a difference before you are ready to retire.
• If you plan to remain a small company, only worried about generating enough work for yourself and maybe one other worker, I suggest you work really hard creating and nurturing referrals.   This is a good low cost option but it does take a lot of your time.  You’ll need to spend time calling your previous customers to let them know you’re still around and would love to get more work from them.  I suggest you also let them know you would appreciate their referrals.  While you have them on the phone get their email addresses and permission to send them information about your company via email.   If you can do this you can take advantage of low cost email marketing strategies to stay in front of them and remind them about referring you.  If this works for you and you get enough quality leads, you will also need improved sales skills so you can raise your prices and still sell enough work.   If you can pull off selling at higher prices use the money to expand your marketing strategy beyond the email related tactics.
• If you have a business that is already doing at least $500-700K worth of business, but you are not making enough money, I suggest you find a coach and or a mentor who can help you.   For a business of that size you really need the help of a pro who can help you strategize what to do before you do it.  My experience working with contractors in this position is that there is typically much more to fix than the marketing and sales functions of the business.  The most common challenges I see with these businesses is a lack of understanding of the costs of being in business and how to properly price projects so they include the money needed to pay for things like marketing and sales training.  Sure, it will cost money to hire that person.  However, if you hire the right person to help you he or she can really speed up the process and help you control the cost of doing it.  The right person will also be able to refer you to other resources you need will to make the changes.   On the other hand, if you try to do it all on your own, you might just end up right where you already are.

 

• My last suggestion is for those contractors who won’t do any more marketing and won’t improve their sales skills.   If this describes you and your business I suggest you consider the option of getting out of the game before it’s too late.   As the economy improves savvy and committed business owners will be doing what it takes to beat out and even eliminate their competition for the high margin customers and projects.  If that happens in your market you will need to stay selling on low price.  My experience working with contractors in this mindset has shown that these contractors often live from check to check and most will never be able to retire.  I suggest you consider the option of a job at a company that already does good marketing and knows how to sell.  These businesses will be growing as the economy improves and will need the talents of good carpenters and project managers.  If you find the right company to work for you will probably make a lot more money, have a whole lot less stress in your life and your new job might even include a company sponsored retirement plan. 
  

Some final thoughts

If the survival of your business has been a constant battle and or struggle for you, deciding to proactivily change what you do, rather than waiting to see if your business can make it or not, might just be the best option for you and those you care about.  Changing what you do can include working on your business or seeking a job opportunity.   Either option is a good one, you get to decide.

Related article:

11 Common Traits of People Who Buy Remodeling On Price

Finding a Good Web Site Designer for Your Contractor Web Site

As a contractor you need to think of your website as a tool.  No contractor would buy a tool before verifying it would do the job intended.  And, if that tool didn’t perform as sold I’m sure you would want to return it.  You can typically return a tool if it’s not working, but you can't return a web site - ever!  

When I was ready to have a web site for my contractor coaching and contractor training business I didn’t just want a tool that listed what I could do.  I could have easily done that with a basic static web site for far less money.  Instead, I wanted a tool that would help my target contractor coaching prospects find me and figure out whether or not they wanted to work with me or not.  I was looking for a way to differentiate myself and my approach from other contractor coaches and trainers.  What I was looking for was an advanced marketing tool, not just a web site.  

Seek referrals before you choose a website designer

In my quest for a web site company to work with I was specifically referred to the one I chose by another business owner I know who had similar goals for his business.  This web site design company owner did what I thought was a great job interviewing me to uncover my purposes before she designed, priced and built my site.  Now, because of her assistance, I can help targeted prospects find me and prevent suspects from wasting my time and resources!  And, if contractors seeking help with their businesses aren’t yet ready to buy, I can nurture them along with more information about me and my business until they are. 

Don’t waste time or money on a bad web site or a bad web site designer

You and your business may not be looking for the same prospects as my business, but I bet you have the same desire to have a web site that will help you find and prequalify the right prospects for your business.  Done right, after the original investment of working with a web site designer, your contractor website can be a very effective and low cost way to attract the right clients for your business.  But if you choose the wrong designer or choose one based on price alone, you will have wasted a lot of time and money.  Even worse, your target customers won’t be able to find you on search engines and you will remain a commodity selling yourself and your service on price.

I hope you found this article helpful.  You might also like my list of red flags to watch out for when selecting your web site designer. 

If you want help planning the purpose and function of your web site, or help with selecting a web site designer, send me an email me now.  I’d be happy to discuss what you want and or need so you can do your first website right the first time.

More articles about creating a contractor website:

Seven Ways Contractors Can Prequalify a Good Web Site Designer

Hate Contractor Lead Generation Services? Why Not Get Some Chickens!

On Your Contractor Web Site, Qualify, Don’t Disqualify Your Prospects

If You Don’t Or Won’t Offer Generation Y Prospects What They Want They Will Go Away

Seven Ways Contractors Can Prequalify a Good Web Site Designer

Having and working on my web site has been a very rewarding and educational experience.  Because the web site company I worked with helped me design the function as well as the appearance of my site it quickly became the primary source of new business for me and my company.  Because they helped me select my hosting service and my content management system (CMS), and because they trained me on how to use my CMS, I can create pages, edit my content and even optimize my site for SEO on my own without needing them to do it for me.  When I want to add a new function to my site they are there to help me do so and will also teach me how to use and maintain the new function.

Win-Win!

All this leads to my ability to help my targeted customer types find me and find out what it will be like to work with me as their coach or mentor before they contact me about my services.  The experience of getting  my own web site up, learning about using it as a marketing tool and the success I have had using it as a tool  has also given me the ability to help my contractor coaching clients get on the right path with their own web sites!

Do you have the right web site and web site designer?

If your business doesn’t yet have a web site, or the one you have isn’t helping your target customers find you like mine helps me, don’t make the mistake of working with the wrong web site designer.  Here are a few “red flags” to watch for as you either work with your current designer or as you interview one to work with.

1. Never work with a designer who doesn’t offer a CMS or requires that he or she be the only one who can add to or edit your web site.
2. Never work with a designer unless their offering includes a way to measure your web site efforts and results (analytics) and you have access to those analytics on demand.
3. If they don’t ask you about and include any calls to action and landing pages, you will probably end up with an on-line brochure that won’t generate quality leads.
4. If the price seems too good to be true, don’t work with them.  Either they don’t know what they are doing, will only be creating an “on-line brochure” or they will get you on “extras” after you’re stuck working with them.
5. If they offer to help you with SEO, but never ask you who your target customers, job types and market area are you may get visits to your site but you will probably never be able to covert those visits into paying customers.
6. If they don’t insist you include a blog they probably don’t understand SEO for contractors.  Also, make sure the blog is part of your site, not linked to another site or service.
7. Never work with a designer who wants to own your URL (web site address).

I hope you found this article helpful.  Please use the comments area below to share your own good experiences and or your own “red flags”.  If you want help planning the purpose and function of your web site, or help with selecting a web site designer, send me an email me now.

Other related articles and information about websites for contractors

Hate Contractor Lead Generation Services?  "Rather than buy all your eggs, why not get some chickens?"

On Your Contractor Web Site, Qualify, Don’t Disqualify Your Prospects

If You Won’t Offer Gen Y Prospects What They Want They Will Go Away

11 Common Traits of People Who Buy Remodeling On Price

Consumers who buy remodeling on price typically don’t care about anything else but price; until they become customers.  Then after your remodeling or construction company has them as customers they seem to always want more than they agreed to pay for. 

There are two main types of prospects who buy remodeling on price. 

• The first is those who are driven to pay as little as possible.   These people typically apply this logic with everything they buy.   They are also much more likely to lie to you, your employees and your subcontractors if it suits their purposes for saving money and or getting more than they paid for.
• The second is those who, lacking insight, simply don’t know what else to consider when deciding between contractors so they base their decisions on the bottom line.  These people may actually be willing to pay more when selecting one contractor over another, but the contractor must be a true sales person to help them discover other more important things to consider.  

It also takes a true sales person to distinguish between those who buy on price on purpose and those who buy on price due to a lack of insight.  Most contractors are terrible salespeople, so most contractors have to sell on price.

For those who have been selling on price

My purpose of writing this blog is to provide contractors with some motivation to embrace sales training so they are not destined to sell on price forever.   Check out my list below of the common traits of those who buy your services on price.  If these things are happening to you it’s your own fault.  When you think of yourself as a contractor first and a sales person second, you doom yourself to a career that will probably pay you less than per hour than your employees earn.  If that is already happening you have three choices:

1. Decide to do something about it and get some professional sales training and coaching.
2. Decide to do nothing and recognize that you and your business are commodities
3. Or, avoid thinking about it and stop reading this blog post before you feel any worse about your situation

People who buy solely base on price have these common traits

I encourage you to use the comments area to add any others you feel should be on the list.

1. They see remodeling as a commodity where every contractor and proposal are the same, not a service where one company does things differently than another.
2. They always seek to get more than they paid for.
3. They don’t like to give big deposits or commencement payments; they expect the contractor to finance all or most of the job until the final payment.
4. They lied to you and think it’s just fine to do so.  This often leaves them wary and concerned that you will lie to them as well, creating a need for them to always be suspicious when interacting with you and your team.
5. These people won’t like discussing change orders at all, won’t pay for change orders at acceptance and or will want to negotiate their cost at final payment.
6. These people try to get free stuff out of you and your team after you start their job.  If you give in on this they will want more free stuff.  They are also likely to forget about the free stuff you already gave them when you want to charge them for any extras or change orders.
7. They will typically dispute your payment schedule, make scheduled progress payments late and delay your final payment as long as they can.
8. They will only buy from you again if you are the cheapest of the contractors they speak with.
9. They get closer to their own retirement at your expense and limit your ability to retire.
10. They will often find some way to blackmail you into reducing the final price.

These people hang out with other people just like them!

Here's one last thing to think about if you sell to people who buy on price; they hang around with other people just like them.   If they refer you they will probably be referring you to other prospects who also buy on price.   When they do so, based on their own experiences working with you, they will often coach the referral on how to lie to you and get stuff for free.   They will also often identify what your business’ weaknesses are so the referral can watch for them and use them to blackmail you into some type of money related concession before they are done with you.

Hate Contractor Lead Generation Services?  "Rather than buy all your eggs, why not get some chickens?"

On discussion groups liked LinkedIn, contractors and remodelers have been bantering about on-line lead generation services.   It seems for every business owner who speaks negatively about using them, there is another who shares stories about how these services have been great for their business.  For the purpose of this blog post I won’t get into the pros and cons of or any specifics about one service vs. another.  Instead I’d like to offer an alternative; take control of your destiny and create your own leads.

What’s the problem?

In my opinion way too many contractors are abdicating their marketing responsibilities to lead generation services without a full understanding of how those services work.  Then they complain they don’t like how they work and or how they are being treated when they seek customer service to resolve problems.   Many others complain that the quality of the leads is very poor and or the same leads are being sold and distributed to way too many other contractors, increasing competition.  Still others complain about negative customer reviews that are libelous and the service won’t help remove them or go after the customer who posted them.  

Why should these business owners be surprised?  

Just a little research on the internet is all it takes to find out what many other businesses have already found; that’s how those services conduct business!

What is sad to me (and really ridiculous if you think about it) is these business owners are doing the same thing many remodeling consumers do.  They hire a service provider to take care of something for them without first being clear on what they expect, or, what they can expect will actually be included if they buy.   Then, rather than take responsibility for their own lack of due diligence before buying that service, they rationalize why it’s the service provider’s fault they are not happy and want their money back.  You can find lots of evidence to back up this reality by reading just a few of the articles on the“Dietz Angie's List and Yelp Reviews Lawsuit Updates” page of my web site.  The page is full of links to articles and blog posts about the nightmares many businesses have experienced with lead generation services.   It also has links to helpful information regarding what to do if you are already having problems with contractor lead generation services.

What’s the solution?

I suggest business owners work to generate their own leads.   Not saying they shouldn't also use a lead gen service, just pointing out that those services often have a history of changing their business model and many have gone out of business.  If your lead generation service leads go away, you might not have any leads at all unless you are creating your own leads as well. 

"Don't put all your eggs in one basket" 

Good quality leads for targeted customer and project types might well be the most significant factor when it comes to creating and growing a healthy and profitable construction or remodeling business.   Without a way to create a sustainable flow of high quality leads the business has to wait for leads to show up out of the blue.   If you wait for leads to happen, or for a lead gen service to send you leads, your business has little or no control over who will be inquiring for your services.   Also, you won’t know whether or not they are the right prospects for what you offer, how you perform your services and or what you have to charge to provide them.   Essentially, you might get leads, but after you get them you will need to still figure out which ones are qualified and which ones aren’t.  Prequalifying leads after they contact you, instead of before they contact you, wastes a lot of everyone’s time.  Think about it.  Are you and or your sales people visiting with people who would have disqualified your business if your business took control of how its leads were generated?

"Rather than buy your eggs, why not get your own chickens?"

Instead of the old outbound marketing methods of buying ads, buying email lists, paying for lead generation services and praying for good leads, consider the new wave in marketing; “Inbound Marketing”.  Inbound marketing focuses on creating quality content on your business’ web site that pulls people toward your company and product.   By aligning the content you publish with your target customer’s interests, you naturally attract inbound traffic that you can then convert, close, and delight over time.  If visitors to your contractors web site don’t like what they find out about your business and how you do business, they won’t call you or waste your time.  In addition to creating high quality leads, done well, inbound marketing can also help you increase the number and quality of referral leads from those customers you have delighted. 

When you own the chickens you know where the eggs came from, and after eating the eggs...

You still have chickens still laying more eggs!