I was always envious of one of my acquaintances. He had a wife to kill for, two children who excelled in sports and a beautiful home. He went on great vacations, worked out regularly and had a bronze muscled body. He always appeared pleasant and happy. Later in life we became friends and I learned that his wife was beautiful but had emotional problems and they were not close. One of his kids had a drug problem, he was mortgaged to the hilt and had very few friends he could count on in a pinch. All these years, he was envious of me. Me?
I was recently asked to write some comments on “stacking up against the competition.” I am happy to do so, but I think we have to be very careful when undertaking such a project. All that glitters is not gold and you have to run your business for you and not your competition.
The most profitable companies I have worked with focus on what works for them and use that to drive their business. They don’t even know they have competitors. The grass is not always greener on the other side of the fence.
With this said, it is still true that none of us can live in a vacuum. Positioning your company will have a lot to do with its success. I would like to share thoughts on how to help your business stack up against the competition. First, it is a given that you must practice the basics needed to create the appropriate image in your marketplace. We cover most of these basics in our sales and marketing course titled How to Get the Job at Your Price. Here is a brief but incomplete checklist that can help you get started:
- Lettered trucks and trailers with appropriate signage.
- A proposal packet that tells the basics about your company and includes a folder with some references, a fact sheet about your company, product literature, etc.
- A professional method of answering your phone and returning phone calls
- Uniformed and professional looking employees.
- Business cards, letterhead, invoices and other company information that has the same color look and feel.
- Professional proposals that can be left with the customer.
What is important is not to take the stealth bomber approach where you go into a neighborhood or business park, do a good job, and then mistakenly think people will automatically refer you just because you do good work.
Core Competency and Leveraging Your SuccessThe real key to competitive success is to stick to what you know and do best, and are capable of communicating to your customer. “Keeping up with the Jones” is a destructive strategy, whether it be in your personal or business life.
One trait of successful companies is that they know who they are and what they do well and stick with it. If they diversify, they look to things where their core competency holds true. They are able to communicate and leverage the traits of their success with their customers. For example, 3M utilizes new products and innovation to drive its business. McDonald’s uses kids and an inexpensive family dining experience. Sandals Resorts uses an inclusive package and appeals to couples and honeymooners. Southwest Airlines uses low fares and its ability to turn planes quickly.
Many companies who try to diversify and get away from this basic core strategy fail. Some of the original discount airlines did great until they thought they were real airlines and could compete on that basis. They moved into major markets, copied the big boys, went after business travelers, got squashed and failed.
Know what you do best and stick to it. You might think you do everything exceptionally and, well, frankly, I have found that to be a bunch of bull. When I was younger, I thought I was a great athlete and could do anything. After several years of playing middle linebacker, I tried the outside. In those days, you could crack back block and when I woke up in the ambulance, I realize that there were a few tricks I needed to learn to make a transition to this new position.
Just like my football experience, many contractors have to be spanked a little and lose some money on a certain segment of their business before realizing they cannot try to be everything to everybody. In my experience, what was mostly hurt was my pride. True, my girlfriend nursing me back to health did have some benefits, but with contractors, you can create a financial hole that takes years to dig out of.
One way to identify your core competency is to objectively review profits. To do this you must convert job costs to some common denomination. Take all your jobs and convert them to some type of common factor like gross profit per hour, gross profit per crew day, etc. Then have some way to compare them; sort of like miles per gallon. Look at what type of jobs has low returns and what has high returns. Use this to get a handle on what your core competency is.
How can you identify what you do well and then use this logic for future decisions? A way to accomplish this is to create a grid and grade yourself. Your sample company might look like this; we use a 1 for what you do poorly and a 10 for perfection:
Repair jobs 7
Large jobs 4
Jobs under 10k 5
Jobs 10k to 20k 8
Jobs over 20k 4
Steep and deep reroofs 4
Basic roofs 7
Let’s look at the above data and what it might tell us. Remember: This is not an exact science but the numbers can offer some solid, indisputable hints.
To me, this points to a contractor who does good work and treats customers well but may be disorganized or too detailed for production work. Maybe he or she is just a nice person and cannot pound out the production work on steep and deep roofs. Maybe he or she doesn’t charge enough. Frankly, it does not matter why the contractor is not good at those things. The simple fact is that this information points us into areas that meet this high success profile.
Customer Follow-upCustomer follow-up is a great way to make your company stand out against the competition and is very easy to do.
Let me offer a simple idea that works: Find an independent third party to call all your customers. Why independent? You want someone not emotionally attached to the job. You also want someone who has time to do it and the process will not get lost when you are really busy. Busy times are when you are more likely to mess up the simple things and need this follow-up to stay focused. This person will call customers at night and ask the customer how the job went, were they happy, did you leave any tools or have any problems, do they have anyone they might refer, etc. Pay the person so much per call.
You could also have them visit the job site. What? How could I afford that? It’s simple: Add $25 to each estimate. Train a person to go by and check on the job. Give the $25 to the person. The customers will love it. You can find a retired person, housewife, etc., for this. It is a great part-time job, but find someone smart who can offer insight and even has some emotional company ownership. Also make sure the person does not oversell his or her ability.
A few years ago we were working with an air conditioning contractor who did installation on a lot of new homes (1,500 a year) and we were trying to get the service department beyond being a warranty arm of the contractor. We discovered that half of the warranty calls were “no calls” — meaning that there wasn’t a problem, the people simply did not know how to run their unit.
We hired someone we called “the warm, fuzzy lady.” Why? She knew nothing about AC but was really nice and friendly and knew how to turn the system on and off. She would take an extra filter to the customer and leave warranty information for them. She also offered input on how they could sign up for the maintenance program. An odd thing started happening. A couple of the builders started to get notes on how wonderful it was that they sent this person by and how much it was appreciated. The program ended up being a major selling component for the new construction department and was cheaper than the warranty calls run by service guys. Everyone was a winner.
ConclusionMy closing thoughts are these: Worry about your business and what you do well. If you want to differentiate yourself, try the follow-up contact suggestion. It won’t work unless you assign it to an independent person. What is another $25 dollars or so, even $50? You are probably quite a bit higher than your competition anyway and your best jobs come from referrals. Put a program in place that drives referrals. This is a simple way to stay ahead of the competition.
Oh, by the way, if your business and life are messed up, blame yourself, not the competition. With a pickup truck, hammer, ladder and a little desire, you are a contractor. It has always been that way and always will be. Bitching and moaning about the competition may make you feel better but it is not going to move you towards success. Change is never easy and if everyone could run a successful business, everyone would. The issue is you, not the competition.