Readers here know that I’ve focused my marketing efforts the last few months on our newest publication — Ontario Construction News — that is seeking to break a competing publication’s multi-decade legal monopoly.
In some respects the new business is a no-brainer. We can offer our services at upwards of 50 per cent less cost (and with much greater speed) than the competitor, and we can be truly profitable with a 10 per cent market share.
And the competing publication’s monopoly was in fact “legal” — for a specific type of legal ad that seems to be required of the construction industry only in Ontario — the public “Certificate of Substantial Performance” notice, required under the Ontario Construction Act (and formerly the Construction Lien Act) to preserve lien rights and release holdbacks.
We can tell the exact market size and even (in at least a business name and address sense) who has been purchasing these notice ads — because they are published in a public registry.
So far, so good. While new legislation allows the publication to be digital rather than printed — and thus allows our entry into the marketplace, because it would be folly to compete with an incumbent with a full printed newspaper — the other requirements for content and exclusive construction focus still narrow the field and discourage entry from others.
That should make things even better.
But we’ve learned the hard way a couple of things:
- People don’t rush to change even when they can save money; and
- It isn’t that easy to reach the right people directly and offer them the money-saving opportunity.
A strategic alliance with the DataBid.com leads service has helped, as has some positive relationships with key associations including the Ontario General Contractors Association. But the person who actually orders these ads in a construction company — often the office manager or someone in the legal/accounting department — is hidden in the company’s bureaucracy. In any case, she isn’t spending her own money, the long-standing process has always “worked” and the cost — while significant from an advertising point of view, is insignificant in the overall project value. So, why change?
After six weeks in business, we’ve certainly won some repeat business and satisfied customers. But our current market share, under 2 per cent, is still way below where it needs to be. Fortunately I designed the new business with a bootstrap operating budget, so it can survive for many months on low revenue until we figure things out. (But I have to work extra hard to achieve things.)
One decision I made was to have our offshore administrative contractor (at $3.25 US per hour) datamine the public database for daily updates on CSP listings from the competing publisher.
This information is sent to our Canadian administrator, who prepares a (postal) mailing each day to the “office manager” at the relevant companies. We also are able to track the repeat need for this service, and are now accumulating a list of more than a 100 companies who have purchased two or three “certificate” ads in the past six weeks.
This suggests there is a definite 80/20 market situation and a big long tail. Some medium to larger contractors will need the service frequently, while smaller businesses or part-time enterprises may need it once or twice a year, or less often than that. It seems logical that after a couple of months of data mining we should have a list of most of the businesses which will need the service frequently — and these ones should be given special follow-up attention.
And that is where the updated marketing plan is taking shape. What strategies can we take to build trust, relationships and connections, especially since we still don’t know the names of the individuals within the construction companies actually responsible for purchasing/placing these ads?
This is a marketing work in progress.
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