How to win and lose at the same time
Life is so interesting. My teen-age growing up days included experiences with contractors. I dug ditches and other manual tasks as a kid...to earn money to buy my first car. To go to sporting events, concerts and the movies. To date.
Granted, this experience was very low-end. Never-the-less, I learned something about the guys and gals who build and fix things to keep the world turning.
By the time I got to the university I added a father-in-law as an electrical contractor. And as strange as it in fact is, my second father-in-law was also cut from the same cloth...an electrical contractor.
Later I picked up a son-in-law...Charlie is a building contractor.
And then I met Contractors 2000 a group of high end product and service heating, air conditioning and plumbing contractors. We did some direct mail together. This is their story.
Contractors 2000 is an association of 350 (and growing) companies from around the States and Canada (with a few members from elsewhere, like Australia).
They began life early in the '90s. None of the members compete with any other. The "rules" prohibit membership if there is already a C-2000 member from that piece of geography.
Benefits? Many! To start with, since no member competes with another member, everyone is a friend. How nice.
Which leads to sharing news, experience, contracts, personnel, environmental, city and county codes and regulations, and all phases of the business with each other. Everyone learns from everyone else.
Several times a year "special events" are held. Early in the spring and again early in the fall C-2000 has a SUPER MEETING. A time when all the members come together for 3-4 days of sharing with each other. We might call it a "Conference".
They discuss problems and opportunities. And there is "learning".
Much of it is technical. "Retrotec Infiltrometer Blower Door" and "IQ/Duct Cleaning" workshops, for instance.
Much more of it is business oriented . . . such as "Buying and Selling a Service Business". And "The R.S. Andrews Way of Getting and Retaining Customers".
All is well. The organization is growing. Attendance at these SUPER MEETINGS exceeds 85% of the total membership. Yet, something is missing. That something is marketing.
Sales is what these independent contractors understand. They know when their team is good at selling...and when they are not. Most of them do not know how to spell marketing. It could be sdrawkcab and they would not know it.
It is time to talk target marketing. I am invited to share ideas about direct mail marketing. "How to..." thoughts. From that springs the idea of what is now an "industry first"; Contractors 2000 Marketing Executive Forum.
This concept is certainly not new. Just new to the heating, AC and plumbing contracting industry. It would be an understatement to say the interest and response was high...it went through the roof!
The C-2000 board agreed to some funding. Forum members were to be selected from around the country, small, large, new and old. Only 9 positions were open...34 applications were received. We were thrilled. Interest was out of sight!
The first meeting of the Marketing Executive Forum was a 2 day event to decide exactly what to do. And then to agree on just how to do it. I was there to lead the "brain-storming".
How to develop new business with a direct mail lead generation program, and then how to test it, was the main thrust. What products and services should be offered was an important part of this planning.
Weather plays such a large role in heating and air conditioning, different mail packages are needed for different parts of the country at different times of the year. Over half of the C-2000 members are in all 3 disciplines... heating, AC and plumbing. The rest, obviously, are not. How to service the entire membership became another consideration.
WOW, what a group! That worlds most quoted author and philosopher, Anonymous, once said; "A committee can make dumber decisions than any of its' members". True...yet, not in this case.
There was considerable give and take over the couple of days the Forum met for the first time. Many "no holds barred" conversations. Many "Good, Bad and Ugly" stories from the past. All so we would build on history of individual experiences.
WOW!, what a group.
The result? A series of 6 mailers. To cover plumbing, heating and air conditioning. Each was tested by a minimum of 3 of the Forum members. From as few as 3000 pieces to customers, to as many as 15,000 to prospects. And many combinations in between. Over the following 6 months.
At the next SUPER MEETING the initial results were presented. One of the mailers was "retired". Earlier, in a moment of "protection", I warned at least 1 of the 6 would not be successful...I just did not know which one. Unfortunately, I was right we had 1 campaign that proved less than wonderful.
Of the 5 remaining, 4 were sure winners...and the last one was a definite "maybe".
Much was learned: Customers respond better than prospects... even for home service needs such as plumbing. Which I admit was a little of a surprise.
Do you call a plumber because you have nothing else to do? No, you call a plumber because something isn't working. So, why would a previous relationship matter? Don't know... guess it is a feeling of comfort.
Another thing "learned" is using telemarketing to chase all who received the mailer increased bottom line results. Sometimes better than other times...ALWAYS increased overall response.
This was NOT a surprise. A telephone chase to a direct mail program ups results...almost always.
Thirdly, service offers work better than product offers. Which we guessed would be the case. You do not buy a new furnace if the old one is working. You may buy a service contract at any time.
Fourth, the option of responding by mail or phone increased total response by 25-55%. This is very significant...as up until this test, response had always been by phone alone. The member contractors who did mail on their own never offer a response card option...you either called, or you did not respond.
Giving the marketplace more than a single way to respond, and getting additional response, is also not a surprise. People like options. Options on response, too. It works to offer more than one way to do business.
The C-2000 members were surprised at how many of their customers and prospects wanted to respond wanted to "talk". For many customers it was not urgent...it was not immediate. Yet, they reached out and said "let's stay in touch".
The option of a personalized response card, where all the prospect need do is tick a box or 2, provided excellent results. And "high fives" from the membership, too.
So, what was the next step? There were 2 next steps. First, more mailers were developed. More service mailers. To fill in the gaps not covered by the initial set. Three new packages were developed.
And second, the membership became excited about how successful the Marketing Executive Forum members were with the first test. Many asked for the opportunity to participate.
So, Phase II of testing began to happen with an expanded team. Where 22 members, in addition to the Forum team, went back to the marketplace. With a re-mail of those successful the first time 'round...and with the 3 new mailers, too.
Confidentially prohibits me from sharing with you specific numbers, response rates, conversion and money figures. Yet, you DO get the picture; Phase II would not have happened if the initial phase did not work!
With all the good news, there was a weak link. And that was measurement. Steps were taken to be assured tight numbers between prospects and customers, between phone and mail leads, those that convert and those that do not would be available the second time out. And especially about add-on sales to the base offer...which we thought were significant.
Yes, all basic stuff to "ole timers" in direct marketing. Brand new ideas to contractors who visit your home or office to fix your air conditioning or heating, or to take care of a plumbing problem.
P.S. Yes, there is a P.S. to this story.
The program died!
This is not the first time this has happened to me. (Hey, I've been in the business long enough to have enjoyed smashingly successful programs . . . and, absolute zero response bombs. How else do you get this experience of what works and what does not?!) Yet, this time it was a surprise. Why? Because more good things were happening than not so good. There were clearly more winners than losers. There were more happy people than unhappy. What happened was one of the Forum participants a very large, influential and most successful player in his own multi-city marketplace looked at COSTS only! Not results not profits, only costs.
Some of you have read in these pages before my feeling about cost vs. profit. C O S T is a 4 letter word. P R O F I T is NOT! I like making profits...no matter the cost. It is really that simple.
He compounded the costing error by "assuming" everyone would do what he did. Roger is a grand fellow. Yet, when you get 9 times (yes, I did say 9 times!) your investment in new sales, you'd think he'd give some credit to the mail marketing program. He did not.
You'd think he'd be pleased with his first time results. He was not. And he spoke loudly to everyone. Roger killed the total program for all 350 C-2000 members. In just under a year into the test. Too bad. Really sad. To lose while you are winning.
So, Contractors 2000 killed their Marketing Executive Forum, too. It went away. And the individual contractors were back to doing what they had always done. Which, if it had worked so well . . . well, you get the idea.
Sometimes even good Direct Marketing does not win.