Serge Massicotte (right) with GCAO president Hubie Splinter
Last night, when Serge Massicotte of Massicotte Construction received the General Contractors Association of Ottawa (GCAO) Integrity and Ethics Award, I felt some decidedly mixed emotions. Serge lives in memory as the person who set out about seven years ago to bring down my business because he considered our practices to be unethical and disrespectful of the industry.
He almost succeeded.
Did we deserve the attack? In hindsight, I would agree, though at the time I naturally had rather different emotions.
Serge did not (and still does not approve) of our business model, where we publish feature articles about businesses and projects and then co-ordinate with owners and general contractors to invite sub-trades and suppliers to support the features with advertising. This method of selling advertising is controversial. Many believe that publishers like us use the relationship and economic power of fear of losing future business as a strong-arm tactic to unjustly extract advertising revenue from gullible and sometimes desperate businesses.
Back in 2003 or 2004, one of our former sales representatives decided to co-ordinate a feature profile about a major hospital project. Serge’s business was one of the major general contractors working on the job. He declined to participate or to provide the list of sub-trades and suppliers. Our sales representative decided to go over his head, to the owner, to obtain the list and start the marketing.
At that time, Serge held office as chair of the Ottawa Construction Association. Livid about our approach, he decided to take “in house” the association’s twice-yearly magazine published by an external contract publisher. The OCA hired my former editor and negotiated a contract with our designer Raymond Levielle to lay out the magazine. The association set out to encourage its members not to do business with us, instead supporting their newly-revamped magazine.
In some respects, this measure caused little direct harm to our business. I remember the awkward conversation with Raymond when he discussed the lucrative design offer. “Take the job,” I told him. “It is good money, and I’m sure you will be able to respect confidences so that what we do and what the association does are private until the respective newspapers and magazines are published.” Our former editor, of course, had honored the non-competition clauses in the employment contract and only set out to the new work when he could rightfully do it. (He is still working on the magazine, now as an independent contractor for another organization, and we had a fascinating conversation at the GCAO reception last night.)
Since the association’s Construction Comment magazine would not itself publish the special features and profiles we produced, it never has been a direct competitor — instead the magazine actually provides leads for our sales team. However, the issues Serge Massicotte brought to the surface exposed a deep malaise and serious problems within our business practices.
Although I had preached that we should never force or coerce sub-trades and suppliers to support the special features, and we always sought to produce useful and relevant publications, we had failed to truly appreciate our responsibility to deliver genuine respect, relationships and value to the community as a whole and to individual advertisers. Massciotte’s hostility to our business reflected the feelings of other general contractors and sub-trades to the business model we used in several markets where he had absolutely no relationship or influence; especially the metropolitan Washington, DC market, where we published our then-most successful newspaper, The Washington Construction News. As things started falling apart (the Washington Construction News closed in 2005 — replaced more recently by the Design and Construction Report), a frustrated sales representative there told me that one advertiser had accused us of running a “scam” by playing the supplier/client relationships to the hilt. We were rubbing raw nerves the wrong way everywhere.
The cure to this problem ironically occurred in late 2006, when, as our business hit rock bottom in near-death crisis, I set out on a campaign to truly understand effective construction marketing and deliver real insights and value to our advertisers. I joined the Society for Marketing Professional Services (SMPS), learned everything I could to qualify for professional certification, and started this blog to provide a higher level of support and service to our advertisers. My thinking then, as it is now, is that if an individual sub-trade or supplier buys an advertisement in support of one of his clients, he is making a wise marketing decision if he appreciates why this type of relationship-marketing is effective.
As well, however, I realized we had a responsibility to deliver value beyond the ink on paper for a single advertisement costing several hundred dollars. If we could provide practical, effective and objective marketing advice and resources (without worrying if the advertiser ever advertises again), then the money spent on the advertisement would be worth every cent.
The second element of my rebuilding strategy related to improving relationships between our publications and the community. I set out to actively support, participate and connect with relevant associations and groups such as the GCAO, while listening to the issues of greatest concern especially to the sub-trades who advertised in our newspapers.
We encourage our sales representatives to spend at least 25 per cent of their time working on community initiatives and projects without worrying about how much advertising they can sell. We’ve helped uncover issues, attract membership and provided support and recognition for good deeds.
These facts don’t change the reality that some contractors like Serge Massicotte won’t do business with our organization and that many advertisers simply think they need to support their clients with the supporting advertisements without looking for or using any of the supporting free marketing resources we provide. (I frequently remind our advertisers, for example, that my Construction Marketing Ideas book is free to them on request — some certainly request their copies but, perhaps ironically, we sell many more than we give away.)
Does Serge Massicotte deserve his award and recognition despite the less-than-warm relationship he has had with our business? Absolutely. Fortunately, his painful shock treatment also helped me to reform my perspectives of our business practices and this revitalized value system allows our business to thrive seven years after Massicotte set out to stop us in our tracks.
My subcontracting company was approached my a marketing magazine developing a feature article for a general contractor. I had performed one project for them and I liked them. I can attest that the marketer’s approach tapped very strange mixed and conflicted feelings inside. I needed business. The marketing fee would come out of payroll. Would my new client reward my support with business? Would my new client penalize me for non-support? Would the marketing generate new business? Most of the feelings centered around, not the value of the marketing, but the worry that my new client would or would not like me based upon my financial response to the marketing magazine. Very strange mix of feelings. I am pleased to see a Builder that recognized this and supports his subcontractors in this way.
Tim, your points here of course relate to both the strength and controversy of this form of relationship marketing. I encourage contractors wishing to develop new business to apply this model in their own strategies — the key is to win an endorsement and referral from the client of the ultimate client you wish to serve yourself. In other words, you plug your business in the supply chain at exactly the right place.
Unfortunately, when fear of potential lost business combines with actual financial hardship on the part of the subtrade (and clearly taking the money from payroll would fit in that definition) then an ethical line indeed is crossed by the publisher if he uses any “pressure”on the subtrade. But what happens if the “pressure” is implied or actually in the mind of the sub, rather than in real fact?
As an example, one of my friends (and a former employee, in fact) received this sort of letter for his business and he, like you, didn’t know how to respond. I suggested with candor that the letter is coming from the newspaper, not the organization he wishes to do business with, and he can safely ignore it — unless he believes the media itself will be a useful place for him to advertise.
Do many of our own sales, in fact, arise from the fear of lost relationships rather than the more positive emotions that if you help your client with their promotion/marketing, your client’s business will do better, generating additional revenue for subtrades, and (more importantly) you will be associated as “good enough” to do business with that organization — and thus worthy of additional business from others, including, perhaps, the organization’s competitors? Perhaps.
As I noted in my posting, we do our best to create an atmosphere of genuine value for our advertisers. So if they purchase a $300 or $500 ad, they can access ideas and information to improve their business and earn revenues far more than the individual ad costs.
But, as I noted before, marketing has its paradoxes. My efforts to provide this value to our existing advertisers in part through this blog morphed into something a little different. The blog and resulting book have started generating revenue from contractors from around the world looking for marketing advice — and the monthly royalty cheques along with speaking fees and the like go right into our bank account. So our initiative to give real value to our clients turned into a revenue generator in its own right.