Construction marketing: How much should you pay (invest?)

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We earn most of our money by selling advertising in regional and national publications, such as Canadian Design and Construction Report. But what approach is best for you?

Marketing for the architectural, engineering and construction community can be described as messy expense. The reason: Some of the most effective marketing is dirt cheap (free, even), while other expenses can be dauntingly high with uncertain if any return on investment.

The reason for this problem relates to the long sales cycle and high ticket price compared with typical consumer and many business-to-business products and services. In the latter, where annual sales volume can be measured in thousands or tens of thousands of units, you can effectively and quickly test your marketing concepts for effectiveness, and as you build your benchmarks, improve on the results until you are almost certain that any campaign you attempt will be profitable. The exercise of tweaking, iterating, and improving is best expressed by the technology giants such as Google and Facebook, who constantly try new approaches on a small-scale, gather data (quickly) and then roll out the ideas system-wide if they are profitable.

But you clearly can’t get enough data to provide statistically meaningful insights when you are building $10 million schools, and even residential renovation contractors completing $50,000 jobs will need quite a bit of time and patience to gather enough data to be confident in their marketing expenses.

This leads to the second “rub” when it comes to marketing allocations. If you have healthy relationships and/or provide an exceptionally valuable or scarce service, you really don’t need to spend anything on marketing, provided you manage at least a basic strategy for word-of-mouth/referral communications and make it reasonably easy for people to find you if they know it is you that they are seeking. This can easily be accommodated with a basic, but solid, website, which you could build yourself for virtually nothing, or contract out for a few hundred (or if you wish to go high-end) a few thousand dollars.

With these observations, marketing often gets “often ran” status within this industry.? Much money is wasted on useless vanity or “police” publications, and (in time and effort) in responding to bidding/RFP opportunities without properly assessing whether you have a reasonable chance of winning in the first place.

Marketing and business development initiatives clearly have value, if they are executed properly, and with patience and a rational degree of self-enlightened common-sense. The challenge: If you seek out advice/consulting, are they interested in selling you their own thing, or a recurring revenue product/service (for them), or are they truly ready to help you craft an on-going marketing strategy where your interests are put first? And, say you discover one of these consultants. How would you feel about paying several thousand dollars a month in retainers/fees, with only an indirect hope of gaining additional business, with a measurable success timeline requiring upwards of two years or more?

I believe the best answers to these questions can be found with these observations:

  • If you wish to achieve success, consider your industry associations at a state/province or national level, and seek out advice from peers in other communities who are where you want to be; and would never be your competitors. They may be able to refer you to relevant consultants and advisors.
  • Especially if you are working in the ICI space, consider joining/participating in your local Society for Marketing Professional Services (SMPS) chapter. Here, you’ll meet dedicated marketing professionals from the AEC community, and you’ll be able to get feedback on effective strategies and models.
  • With the help of inside or outside consultants, develop a marketing plan and budget.? Depending on whether you wish to include dedicated business development (sales) costs within this budget or separate them out, you may wish to allocate 5 to 15 per cent of gross revenues. Yes, this can be quite a sum — especially since you need to bite the bullet and be patient about results. (A good consultant, however, should help you with a program for up-selling/encouraging repeat business and immediate referrals, and you may find really good return fairly quickly on these initiatives.)

If you want to “go cheap” however, you can just put all of that away, and focus on providing an incredible client experience, and then ask for referrals and offer an option for repeat business. You’ll probably end up with most of the value of the more expensive strategies, but at virtually no cost, if you are disciplined.

(I’m obviously not speaking from my own self-interest here in suggesting the last observation.)

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