Some thoughts about construction marketing luck, effort, and success (or failure)

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There are many inequities in business, and these are most apparent in marketing and business development. We like to think we succeed because of our merit, skill, ethics, and innovation. Often, however, our success occurs more because we are the incumbent, or it is easier to continue working with us than to switch to an unknown “better”.

And anyone who says hard work and effort result in success doesn’t know much about sales work. Sure, you have to put in your hours, learn your skills and be great at what you do. But consider this example, from a business circumstance close to me.

We have a business with about two dozen customers, some larger than others. Our biggest and best client routinely purchased a volume more than twice that of the second largest customer. And he was co-operative and communicated well, providing materials for us to complete our part of the job, sealing his orders with quick emails. And this customer paid promptly, as well.

Now the business didn’t totally depend on this client — that is a killer — but I would say the customer represented about 10 per cent of the overall volume.

A year ago, the client called and said he is cutting most of his purchases from our competitors completely, and downsizing his order with us by 75 per cent.

So effectively, in one call, we lost about 7.5 per cent of our business.

Not a killer, but . . . the trade-off in filling that hole is more and more challenge and effort. It is an uphill battle to convince several clients to make small purchases, enough to total the sales lost from the major customer. Worse, the volumes dropped to the point that profit margins become questionable — so even with much additional work, stress, and effort, the bottom line is worse than it has ever been.

Is this fair? No. Is it something that more “hard work” can overcome. I doubt it. There will be a need for a fundamental restructuring and rethinking of the business.

And that leads to my second example, of how an existential business crisis forced a change that ensures the business long-term survival.

Sales were declining, losses mounting, fixed costs weren’t going away. There was a redline. Any more losses, and there would either be insolvency, or a need for a massive infusion of cash  . . . or, a little creativity.

We were printing our publications in newspaper form. Faced with the possibility of a bottomless pit of despair, I decided to switch quite suddenly to produce online magazines.

Did we lose any business?  Much to my relief, the advertisers continued — paying the same as they were before. And we attracted new business. We could produce products with the “long tail” business model — because our incremental production costs were now very low, smaller jobs that would have previously been unviable became totally profitable. The business had a new lease on life.

These two stories remind us that sometimes simple things can have significant consequences; there can be quantum shifts and jumps in our circumstances, and not everything is fair or even rational in business. In the latter situation, I could look with hindsight at my “brilliance” in surviving a crisis, but I’m not so vain to assume that I really have the magic answers.

Rather, I respect the balance in business and life. It isn’t always fair, it isn’t always easy, but sometimes luck combined with creativity really works — and sometimes hard work saves the day. But you can’t count on any magic formula.

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