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Contractors Rely on Mobile Device Management to Protect Client Data, Control Usage

in Columns/Technology

By KERRY SMITH, Editor, St. Louis Construction News & Review Magazine

As the amount of sensitive project data transmitted from construction sites is increasing exponentially, so is the need to remotely manage and protect that information.

Mobile device management or MDM has been in existence for years. Security software that is capable of monitoring, managing and securing employees’ mobile devices – namely their smartphones – is and has been a reality within a myriad of industries. But for the design and construction industry in particular, tracking who is transmitting what from where to whom in real time is critical.

“If you have mobile device management capability, it means that the owner of the device – the construction company in this scenario – has full access to its intellectual assets,” said Brad Hagemeyer, a technician with St. Charles-based eTech Solutions. “It puts you, the owner of the smartphone, in control with regard to what information is being shared and with whom. If necessary, at a moment’s notice you’re able to wipe sensitive data from the phone, selectively delete information from it, remove contacts or even render the device inoperable,” he added. “And all this can be done remotely in very little time.”

Hagemeyer says that Apple keeps device owners and operators at arm’s length when it comes to accessing and controlling data. “That being said, however, Apple does allow remote managing of the device in terms of usage,” he said. “And with an Android device, you’re able to tap into an unlimited range of mobile device management applications.”

For construction companies whose mobile devices are held by project executives, project managers, estimators and many others, MDM is a necessity in order to protect the privacy of client data. And in a human resources context, MDM enables a firm to ensure that the devices are being used only for what the company intends, according to Teresa Whitcomb, chief financial officer at St. Peters-based Blanton Construction.

“Our customer security is very important to us,” Whitcomb said. “Although the construction industry in particular has a more transient workforce, we still need to enable that communication and also to monitor usage. MDM allows us to restrict mobile device usage from sites that are not work-related, to monitor and control bandwidth usage and to be able to lock down and secure data in the unfortunate case where we do have a termination. Keeping company assets – smartphones and tablets – secure is essential, especially in our industry where so much of the information sharing that we do takes place at the job site.”

In the event that a device is unintentionally lost, stolen or damaged, MDM allows for near-immediate lockdown of the device, according to Hagemeyer. “MDM also makes it possible for contractors to monitor the location where the mobile device is being utilized,” he said. “For example, with MDM a company can track whether a particular worker is transmitting data from where he is supposed to be at any given time and within geographic parameters. Mobile geofencing is the use of GPS or RFID (radio-frequency identification) technology to create a virtual geographic boundary, enabling software to trigger a response whenever a mobile device enters or leaves a particular area. If the worker assigned to the device is supposed to be at a particular job site from 7am to 3pm but leaves the job site at 2pm, by tracking the device’s most recent IP address, the geolocator can send a message to the manager that his worker has left the job site.”

Hagemeyer and Whitcomb said there’s often a misconception with regard to mobile device management that its purpose is to act as “big brother” with regard to surveillance of the nature of the data being transmitted. “That’s really not what MDM is all about,” said Hagemeyer. “As a third-party monitoring agency, we cannot see the actual data and we don’t want to see it. Unlike computer systems, our monitoring software does not remote in and see screen shares of information. What we monitor for construction companies and other clients depends upon the degree of control they want to have over the devices they own, devices that are a company’s intellectual assets. A big facet of what we do for contractors is to control the use of their devices for activities that are directly relevant to their employees’ work. If that device is also being used to stream YouTube videos, Netflix or anything like that which really racks up data usage, we have the capability of knowing about it instantly and restricting the device,” he added.

Monitoring and controlling a contractor’s entire fleet of mobile devices can translate into significant telecommunications cost savings in the short term and long term, Hagemeyer says. “If the company is paying $3,700 a month, for example, for usage of its mobile devices, initiating MDM and taking control of those company-owned assets can immediately spell significant savings,” he said. “In this scenario, we were able to reduce the firm’s telecom bill by approximately $2,000 or 54 percent.”

Whitcomb says employing MDM is a wise human resource strategy for any company, particularly one whose daily scope of work includes large amounts of sensitive data being transmitted remotely from and to job sites.

“Working with eTech Solutions and using (Cisco) Meraki software has enabled us to restrict our band width usage to what is necessary for performing work-related functions,” she said. “It has also enabled us to restrict mobile device usage from sites that are not work related. All of us have done it…we’ve unintentionally left our smartphone somewhere. There is sensitive data and contacts on these phones that we wouldn’t want out in the public. MDM gives us the ability to be able to lock down that phone anywhere at any time instantly if necessary.”

Fueled by E-Commerce Fulfillment, Industrial Bulk Distribution Development Momentum Continues

in News/Technology

By Kerry Smith, Editor – St. Louis Construction News & Review Magazine

Speculative industrial warehouse and distribution construction remains alive and well across the St. Louis MSA, as evidenced by new construction activity and high-tech robotics upgrades.

Kadean Construction of Fenton is building “Building 5,” a 769,000-square-foot speculative building in Lakeview Commerce Center, Panattoni Development’s 750-acre bulk distribution park in Edwardsville. Kadean Construction President Mike Eveler said the construction project, which includes 80 loading docks with clearing heights of 36 feet, is the mirror image of a twin warehouse that his firm completed in 2017 within Lakeview. Eveler anticipates construction of Building 5 to wrap up by September.

“This is the second building we’ve built recently at Lakeview Commerce Center,” he said. “In addition to constructing Building 5, we built its sister building, Building 4, which is occupied entirely by Amazon.”

Although Building 4 was completed in 2017, Kadean is already performing major technology upgrades for client Amazon as the e-commerce giant embraces the very latest advances in fulfillment/distribution technology.

“In 2017 they (Amazon) invested approximately $23 million worth of tenant improvement work (in Building 4) as well as heavy and electrical distribution,” said Eveler. “Much of this investment was related to robotics within the facility that hold the product and move it around.”

As innovations in e-commerce order fulfillment occur at a pace that’s nearly as swift as that of e-commerce product delivery itself, serving forward-thinking industrial clients like Amazon is also a dynamic process, according to Eveler. “About six weeks ago, Amazon contacted us to request additional work specific to fulfillment robotics,” he said. “We’re already tearing out some of what we built (internally) for them in 2017 to help them upgrade with the latest technology. Upgrades and modifications in their robotics system alone represent about $1 million worth of work,” he added.

The scope of work Kadean is performing includes upgrades of the Amazon Robotics (AR) field, a type of invisible electronic track network upon which automated guided vehicles travel. The robots travel over the AR field picking up an entire upright shelving unit known as an inventory pod, bringing it to a technician at a fulfillment and packaging station and later returning it to its designated storage area. Kadean’s work includes removing the existing AR field and picking stations as well as installing new power and data requirements for the new field and picking stations, and related electrical work to accommodate Amazon’s automated storage and retrieval system.

Kadean works in tandem with Panattoni Development in other industrial parks across the St. Louis MSA such as Aviator Business Park in Hazelwood – the 155-acre park on the site of the former Ford Motor Co. plant at Lindbergh and Interstate 270.

Mark Branstetter, partner at Panattoni, said his firm has developed approximately 1.7 million square feet in Aviator and has equally that much ground available for future development.

“We are about halfway through developing Aviator,” Branstetter said. “It’s interesting…although Lakeview and Aviator are relatively proximate – some 15 miles from each other – their respective user groups are markedly different. Lakeview in Edwardsville attracts the larger, regional distribution centers, whereas Aviator in Hazelwood attracts more local infill.”

Although e-commerce is a prominent driver of bulk warehouse and fulfillment development nationally and regionally, Branstetter said e-commerce isn’t the only factor propelling the construction of these types of buildings.

“A big topic that receives attention is indeed e-commerce,” he said. “It’s certainly a big trend, but it’s not the sum total of what’s driving development in this industry sector. E-commerce is actually a very late trend, just in the last decade or so. Companies are trying to optimize their supply chain, be it location or size orientation. But once they’ve optimized their locations across the country, firms are then working to optimize the inner workings of their processes, again with the consumer at the forefront.”

According to the results of an annual industry outlook survey published in January by Modern Distribution Management, Amazon sold seven billion items last year, serving 70 percent of U.S. households.

New Tax Law Largely Brings Good for Construction Companies

in Finance/Homepage Primary/News

By Kerry Smith, Editor – St. Louis Construction News & Review Magazine

Tax attorneys and CPAs across the St. Louis region are continuing to study the details of the nation’s new tax law, the Tax Cuts and Jobs Act, enacted nearly four months ago.

For contractors and other construction industry players, the news is overwhelmingly favorable – especially for S-Corps, LLCs, LLPs and other corporate entities whose income flows directly through to their balance sheets. But for developers seeking to rehab historic buildings, implications of the new tax law are arguably more restrictive.

Construction companies who purchase qualifying assets such as equipment are no longer limited to a maximum amount of $500,000 in terms of the cost of qualifying assets placed in service during that tax year. The new tax law does include a higher expensing limit of $1 million. Also part of the new law is the ability for contractors to write off the entire cost of the qualifying assets – new and used – that they purchase through what is known as bonus depreciation, according to Steven Dumstorff, senior tax partner at Kerber, Eck & Braeckel LLP. This part of the new law is slated to last until 2022 and then phase out 20 percent for each year following.

“Essentially any hard asset that a construction company buys can basically be written off now, where previously there had been limits,” Dumstorff said. “For example, a contractor that is building an expansion or putting in a new plant is now able to write off every hard asset it buys for that project. The new tax law has really opened up the spigot of what’s eligible to be written off,” he added. “We’re still poring over it and talking with our clients, but overall it’s very good news for contractors and others.”

The first major overhaul of the tax code in more than 30 years, TCJA offers a significant tax savings in the form of a qualified business income deduction or QBI, according to Philip Speicher, attorney/shareholder and federal tax law expert at Mathis, Marifian & Richter, Ltd. in Belleville. “On a broader scale, there are significant tax reductions for owners of construction businesses,” he said. “For owners of construction companies operating their businesses as pass-through entities, the top corporate tax rate has been reduced from in the 35 percent range to a flat 21 percent rate.”

Additionally, the rates for most brackets have been lowered and the income range for the bracket has been increased, said Speicher. “While pass-through income will continue to be taxed at ordinary income tax rates, many small business owners will be eligible to deduct 20 percent of their qualified business income or QBI starting in tax year 2018. In other words, some pass-through entities will only be taxed on 80 percent of their pass-through income. This is a real advantage in the new tax law for companies operating as an S-Corp, LLC or another structure wherein the business’s income flows directly to its balance sheet.”

The QBI takes into account real estate and equipment ownership for purposes of determining the amount of the deduction that is available, according to Speicher.

Another one of the major changes inherent in the new tax law is the availability and tax treatment of certain governmental incentives tied to economic development. Speicher said if there’s an amount that a governmental entity contributes to a particular project and agrees to refund a portion of the cost of that project within the parameter of an incentive such as tax increment financing (TIF), the new tax law likely won’t impact such an agreement. “But if there’s an economic development incentive that is actually paid by the governmental entity – such as a city or county – directly to the construction company, it used to be that income wasn’t considered to be taxable income for the contractor…now it will be under the new tax law,” he said.

Robert Berger, CPA, tax partner and director of real estate and construction services at Anders CPAs + Advisors in St. Louis, says another notable tax law change involves federal tax credits such as those being accessed by a number of developers seeking to rehabilitate classic downtown St. Louis buildings into lofts, boutique hotels and more. The rules on how the federal historic tax credit is paid to developers have changed, arguably not to the developers’ advantage.

“Under the new tax law, the federal historic tax credit reimbursement must now be spread over five years rather than accessed during the first year,” Berger said, adding that the change might deter this sector of development in and around St. Louis. “This is a pretty big deal to those operating in this market,” he said.

Another drawback of the new tax law, as it pertains to construction firms in St. Louis and across the U.S., has to do with the income tax deduction often used by contractors that had been known as the domestic production activities deduction. That deduction, which allowed nearly all construction companies to deduct an amount equal to 9 percent of their net income on work performed in the U.S., disappeared with the new tax law in 2018, Speicher said.

Berger urges contractors and others to seek out their tax accountant and attorney to talk through the nuances of TCJA in order to take full advantage of the opportunities it offers, and to understand all of the impacts of the new law on their business.

“I would caution business owners to pause before they make any quick judgments on the new tax law according to their business entity choice,” Berger said. “This is still a pretty brand-new law. We’re all still getting our arms around it. If companies make a decision to change (corporate structure) too rapidly, it’s not easy to rewind.”

Job Costing: Seven Tips to Make it Easier

in Finance

Submitted by Schmershal Treloar & Co.

Job costs are the lifeblood of your construction business and accurately estimating them will determine if a project will make money. Managing job costs across the life of the project will ensure that your firm makes money on every job. Moreover, those job-by-job profits make the office and your executive salary possible.

Despite this, some CFOs don’t take job costs seriously. Some see tracking those costs as more trouble than it is worth, while others think that the costs are so obvious that tracking them seems like extra, unnecessary work. Neither is true and both can limit your firm’s profitability. Here are seven tips that can make job cost tracking easier than you might think:

Tip #1: Set Priorities at the Top

Tracking job costs is a process that involves every level of your organization. All of your valued employees intuitively know the value of tracking costs by job. If you begin to place an emphasis on the accurate identification of every cost by job for every purchase, they will gladly join in and help identify jobs with enthusiasm.

Tip #2: Set up Solid Communication Between the Field and the Office

Cost tracking starts in the field, where the materials are delivered and the purchase decisions are made. Field people are well-placed to know which costs go with the jobs. The trick is making it easy for them to flag the job name or number so that the person entering the invoice, credit card or debit card charge into the computerized accounting system can follow the process of assigning the proper cost code.

Tip #3: Provide Information to Bookkeeping Staff Readily

Bookkeepers may be tempted to let it go when the job information isn’t available, promising to assign the proper job number later. This is the single most common source of errors. Making job information readily available to the bookkeeping staff is the best way to counteract this tendency for misinformation to cloud your reports.

Tip #4: Require Purchase Orders

Purchase orders are a good way to ensure the success of your job cost system, so have your accounting, finance or tax professional help you develop a good system. Purchase order systems work when the office must issue a unique order and all supplies must get purchase order numbers from field staff before providing materials to any job. An effective system helps ensure that no invoice will come to your office without a job identified on it.

Tip #5: Use Caution Handing Out Company Credit Cards

With credit and debit cards, there is usually no way to include a job name or number on the receipt. Provide cards only to responsible crew leaders. They should be required to send receipts right away to the office that identify the jobs. This can be done either by texting receipts as images, e-mailing scanned copies of receipts to the bookkeeping department, or dropping paper receipts off with the job name or number marked on them.

Tip #6: Clearly Separate Costs

Job costs differ from office and overhead costs by getting a job number that is distinct from the general ledger account number. The chart of accounts or general ledger can be a help or a hindrance depending on the skill of the accounting, finance or tax professional who develops your job cost system.

For example, general ledger expense codes typically start with the 5,000 series of account numbers. Job cost tracking then becomes easier for everyone if they are coded with 5,000 series numbers, while allocated costs are coded with 6,000 series numbers and office and overhead costs get 7,000 series account numbers.

If the chart of accounts and job cost ledger are set up professionally, cost allocations will become easier and more accurate and job cost reports will be more accurate and useful.

Tip #7: Follow Best Practices

The actual job number you assign should be carefully chosen following best practices. For example, a good job number is not just the next number in a haphazard sequence that starts with some arbitrary number and has three or four digits. A good job number always conveys information such as the year the project started, the specialty trade involved, and whether the expenditure was a material cost, equipment rental cost, labor cost, or subcontractor cost.

Consult with your accounting, finance, and tax professionals who are familiar with construction best practices. This will make your life easier down the road as well as more profitable.

What’s Your Company’s Sales Culture?

in Columns/Marketing/Sales

by Tom Woodcock

Tom Woodcock

Webster defines “culture” as: “a set of shared attitudes, values, goals and practices that characterizes an institution or organization.” Most interesting is the concept of shared values.

Every company develops a sales culture. Whether by plan or accident, a culture will be established. This culture directly relates to the way customers are treated and approached. Some companies mistreat customers and don’t even realize it. This is because they’ve developed their culture without regard for the effect their choices will have on customers. That type of culture can stunt a company’s growth and profitability. Others companies bend over backwards to please their customer base. They go the extra mile and do whatever it takes to serve them. That breeds both customer loyalty and increased profitability.

How do you establish a positive, progressive sale culture?

It starts at the top. Ownership sets the rudder in regards to the value they place on their client base. They establish the priority level of customer needs and the parameters of service. They get involved with the client base and assist in the sales effort. The more detached ownership is, the more opportunity for customer abuse or neglect. Owners that are absent from the sales effort cannot expect staff to place a proper prioritization on clients. If it’s not important to ownership to be involved, why would you expect the employees to place proper value on them? The good thing is that the weight of ownership helps minimize the time commitment the owner needs to make to sales. A little attention from the president of the company can go a long way towards making the clients feel appreciated.

Next up, upper and mid-level management. Direct supervisors must reinforce a customer-first focus to their staff. They must encourage staff to freely communicate issues that develop with clients. A belief that management isn’t as concerned with customers as internal issues causes staff to focus more on paperwork than customer retention. Management also must have contact with the client base and be willing to support sales staff in servicing them. The thought that insulating management from the customer base may make a manager’s life a bit easier is understandable, until numbers drop!

Adjacent to management is the sales and business development personnel. Those individuals become the immediate face and personality of the company. This is why strong people skills are so critical to a company’s sales efforts. Internal relationships with management and support staff also are integral to a successful sales culture. That means this group actually has three customers: the true customer, management, and internal support staff. Failing to adequately invest in any of those relationships can inspire negative impressions that filter down to the buying customer. You’ve probably seen it in the common tension between sales and administration. Business development people feel the support staff is there to “make it happen” for them, while the admin folks believe the sales personnel are out there just “playing around”. I see it all over the country within GCs, subs and vendor firms. It’s a poison that kills customer trust.

Finally there’s the support staff. This can be everyone from the person doing invoicing to field personnel. A great sales effort can be completely dismantled by unhelpful, arrogant staff. The pleasantness of a good sales relationship is fast forgotten when dealing with a short-tempered collections person, a cocky driver, or a belligerent field worker. Often those individuals have more regular contact with the customer base than the sales personnel! It’s remarkable how when invoices are fought over and change orders questioned repeat business dissipates due to issues created by support personnel. Often those issues go unknown or unreported to management.

To practically begin developing a profitable sales culture you must enact a few basic steps:

  1. Determine the company sales philosophy, which is set by ownership.
  2. Set regular corporate sales meetings to reinforce the philosophy.
  3. Monitor staff implementation of the philosophy.
  4. Create an environment of free customer information exchange.
  5. Set a central CRM program to capture customer information
  6. Survey a sample of customers to verify how the philosophy is being experienced.
  7. Adjust, account, correct, and replace if necessary.

The vast majority of companies will never invest the time or effort into consciously developing their sales culture. They will continue to go with the flow and watch their profits shrink as they race to the bottom to be low. They will blame the customer for their profitability issues and blame suppliers for high material pricing.

Customer loyalty is not a thing of the past. There are companies with strong profit percentages. The reason? A sales culture that looks at the customer first permeates through the entire company and has the correct corporate priority. How did your company’s sales culture come into being? I’d love to know, wouldn’t you?

Tom Woodcock, president, seal the deal, is a speaker and trainer to the construction industry nationwide and author of “You’re Not Sellin’, They’re Buyin’!” He can be reached at his website: www.tomwoodcocksealthedeal.com or at 314-775-9217.

Setting Annual Expectations

in Columns/Marketing/Sales

By Tom Woodcock

Tom Woodcock

As the holidays pass and we barrel into the new year, companies scramble to forecast next year’s performance. Numbers will be thrown around, projections made, and hopes elevated. Ownership will almost always demand better results in either revenue or profitability, or worse, both. Then the great master plan is formatted and presented at a company meeting. At that point, virtually everyone walks away leaving the sales team to make it happen.

Kinda comical if you really think about it. Marketing budgets get cut, entertainment expenses reduced and owner engagement wanes, yet you’re tasked to increase business. “Do more with less!” is the new company motto. You sit there wondering how you’re going to pull it off, if at all. It might be easier to just start making your excuses now as opposed to when the projections are blown. It seems to be an annual ritual. The real question is how do you project what an upcoming year will hold?

Projections can be very strategic or de-motivating in nature. Most are unrealistic in scope and cause unnecessary sales stress. Many have no formulation on how to achieve the numbers. Whether revenue, profitability or expansion of customer base, projecting results without having a plan is a shot in the dark at best. There are a few key areas related to sales that will require a strategic approach. Otherwise, reaching a projected goal will be a seat of the pants proposition. Hitting these main points will at least allow you to hit the basics:

  1. Market Conditions: Understanding and calculating what is taking place in your specific markets is paramount to setting your company’s sales rudder. Is demand trending up or down? Are there economic factors that dictate market direction? Has the customer base shifted in need or demand? These are important questions to answer. These influences can send you in the wrong direction if not addressed.
  2. Historical Sales Data: I find many organizations evaluate their sales teams via gut reaction. You “feel” like someone is doing a good or bad job and approach that person accordingly. The sales data may reflect the opposite of your impression. It’s impossible to project where you’re going without knowing where you are. What’s the starting point? What increases have you been averaging year to year? If historically you’ve realized a 5 percent increase year over year, you’d better have some strong data supporting an expectation of a 20 percent increase for the projected year. Unrealistic growth is never realized.
  3. Ability of Sales Personnel: Being realistic with the talent and work ethic of your sales team can assist in determining what you can truly expect that team to produce. Are they seasoned veterans? Developing rookies? Maybe a combination of both? Break the team down by individuals and measure the past contributions of each to your sales total. Use that as a baseline then incorporate the information you attain in the first 2 points and project growth. Combining the individual results will give you a company-wide figure. It’s useless to predict a high level of growth when you don’t have the players to get there. It’s like expecting your nine-player baseball team to hit 90 home runs when no one has ever hit more than five. It is just not possible.

If you’re diligent in at least these three areas, you can expect to make reasonably educated forecasts. Hitting projections will fuel the motivation tank. Over analyzing causes paralysis, insecurity and mistrust. Set your direction and stick with it. Be sure everyone clearly understands the requirements and the result of hitting or missing goals.

Recognizing that your company can fall into the trap of letting external factors dictate your success will keep you working on your strategy. You really do control your growth, not Wall Street or the next President. Rising above circumstances requires more than effort. Having a strong sales strategy tied to that effort has virtually a zero percent chance of failure. Of course each company has its own idiosyncrasies that can affect success, but having your sales ducks in a row can mitigate the negative and extenuate the positive. You are in control.

I’ll be sitting with the companies I work with over the next few weeks setting projections. Owners will argue with me and want to push the numbers. My response will be; “Okay, how are you going to pull that off?”. That will at least light the fuse. From there, reality will kick in and we’ll end up with a good, aggressive, yet achievable projection. Which, truth be told, is exactly what both they and you need. Don’t give in to the wishful thinking of pie in the sky expectations. The eventual result is a bad taste in your sales mouth.

Tom Woodcock, president, seal the deal, is a speaker and trainer to the construction industry nationwide. He can be reached at his website: www.tomwoodcocksealthedeal.com or at 314-775-9217.

 

Butts in the Seats Marketing: Don’t Obsess Over That and Miss Your Existing Client

in Columns/Marketing/Sales

BY STEPHANIE WOODCOCK

Stephanie Woodcock

When do owners usually start thinking about marketing? When they need to get more business, correct? When they experience a lull or change in the market or business climate that spurs them to say to themselves (and I’m paraphrasing), “Hmmm…I need to get more butts in the seats.”

But what if owners look at the purpose of marketing a little differently? What about those “butts already in the seats,” so to speak? In other words, what about those customers they already have?

In traditional marketing there is a sales funnel. We market to the masses through traditional and non-traditional means – radio, television, billboards, flyers, social media, electronic marketing and signage. The sole purpose of this broad-reaching campaign is to “catch” as many in that large end of the funnel as possible. Then we keep marketing to that captured audience through drip marketing and ta-da: out comes a sale at the small end of the funnel!

What if we flipped that funnel upside down and started marketing to the core business base we already have? This outlandish idea also flips the definition of marketing on its head. I can hear the objections now (again paraphrasing): “Why spend all that money on customers I already have? I want more and new customers. I’m looking to differentiate and move into new markets. I’m looking at my numbers, and I need to increase volume and sales by XX percent.”

Marketing is part of an overall strategic culture of a company. If part of that strategy and culture is appreciating those longtime clients and the core business we already have, we can transform our sales approach. By spending time and marketing dollars on our core customer base, we help instill a sense of ownership, loyalty and “brand love” with our clients. We fill up that small end of the funnel, invest in our greatest resources and trust they will help spread our message.

While there is a time, place and strategy for marketing to the masses and filling up that large end of the funnel, sometimes we can miss the forest for the trees in the process.  We are so concerned with getting more butts in the seats that we become obsessed with the seat – the height, the cushion, the proximity to other seats and the emptiness. We can’t wait to pack the room with a new, fresh audience of future customers ready to buy that we miss the low-hanging fruit of what we already have.

Part of our marketing plan should be focusing on existing customers and going beyond the status quo in our marketing efforts. If we concentrate our marketing message and dollars on helping our existing customers feel special, they will gladly spread our brand for us. When we start appreciating them, we reap dividends in referrals. Plus, we get to build on an already established platform of trust.

I am a big advocate of referrals and the power of word of mouth. In fact, research shows that 70 percent of buying experiences are based on how the customer feels he or she is being treated. My company has grown through just that – referrals and word of mouth. I have a select few who I thank often for helping me grow (you know who you are). Then I try to do a good (great) job for my clients and see where else that word of mouth takes me. While I like to display your marketing message in as many creative ways as possible, nothing, absolutely nothing, beats word of mouth.

But clients need something to talk about. They need to see a new marketing campaign, a new website or be invited to a carefully orchestrated open house. They need to see a marketing plan in action and feel like they are an essential, intrinsic part of it.

If we market to our clients, if we create a VIP club and appreciate them with our marketing dollars, clever marketing messages, promotional giveaways, happy hours or simply thank-you messages, if we appreciate them the way they deserve, that upside down funnel will start churning out new customers.

We essentially market to the masses as well. We do it through our customers.  Our core clients tell other new, potential customers about the loyalty and brand love they have towards us and ta-da: out comes more sales. In other words, our powerful word-of-mouth message and our strategic culture of making our customers our primary focus helps increase the volume of our sales.

We are no longer marketing to sell to the masses. We are marketing to appreciate our current customer base: the people who keep the lights on. Then we will realize that this forest has a lot of trees. Plus, those new customers we get through word of mouth have been vetted and already believe in our strategic culture because they have started with trust. It’s a beautiful thing when marketing goes from selling to the masses to appreciating the most important.

I’m not advocating removing all marketing to potential new clients. However, I am proposing a new way of approaching marketing. It begins with a company-wide culture of appreciating clients. In this type of culture, the main goal is appreciating those we already have rather than despairing over those we don’t have. Potential customers know when they are being oversold to. In the same way, they know when they are being appreciated. How we frame our marketing messages to both segments can make all the difference.

With this approach, the new clients will come. They will wonder what all the fuss is about. They will see all those butts in the seats and wonder why they are all being treated so well. Instead of being sold to, they will see and hear all about the brand loyalty and brand love that they are missing out on.

Benjamin Franklin famously stated, “Well done is better than well said.” We can say all we want in our marketing messages, but the people who have walked through our doors and experienced our service and product firsthand are the best messengers. They can testify to the fact that our companies are “well done” as opposed to just “well said.”

Stephanie Woodcock is president of Seal the Deal Too, a St. Louis-based marketing, creative & communications firm. She can be reached at stephanie@sealthedealtoo.com .

 

Cold Calling is Dead, Networking Lives

in Columns/Marketing/Sales

By Tom Woodcock

Tom Woodcock

For decades, people have tried to find business through the painstaking process of cold calling. I battle old school sales managers all the time who swear that cold calling is the way to go. Think about it: Do you like someone coming in and interrupting you –when you’re in the middle of working on a project – and trying to sell you tools? No! Then why would you think someone else would?

Don’t get me wrong. I grew up as a salesperson by cold calling my little guts out. Back in the day, we had no choice. Our lead source was the Yellow Pages. We hoped we would be greeted by a cordial receptionist; more often than not, the prospect’s building sign was the only advanced information we had. This made cold calling not only necessary but mandatory.

The ability to get advanced information on today’s potential customer is at its highest level in history. Via the web, you can secure company information, market presence and even contact information. This eliminates much of the need for a cold call. The issue here, however, is that you lose the physical presence with your would-be customer.

With that in mind, you need to find a way to accomplish this in-person connection in order to gain your initial meeting with the prospect. The best way to do this? Go backwards in order to move forward. Use your associations, organizations and chambers of commerce as resources. Yup, that’s right. Pools of people. Add your own customized network of contacts and you have a leads machine. Consistently attending events, happy hours, business breakfasts and business group meet-ups is paramount to finding opportunity. There are some qualifiers, however, to keep in mind so you don’t waste time and effort:

  1. Customer-rich? Does the event appear to be attracting customers or potential customers? Though often you’ll never really know until you attend, promotional media will give you an indication of the function’s target market. Customer-rich environments are always your best shot at direct business opportunities.
  2. Network development potential? Are there going to be current or potential network contacts in attendance? These are individuals who also sell to your customer base. They can be great sources for introductions and inside information. Your personal network should include a high concentration of these types of individuals.
  3. Association affiliation? Events that are hosted by associations are often well attended. They tend to cater to specific groups, so it’s a bit easier to qualify attendees. Many times the events are limited to members and their guests, but every so often they’re open to visitors. Grab those opportunities.
  4. Known host? These are events hosted by well-known individuals or companies in a particular industry. People will attend because they know historically that this host has strong networking meetings. Some hosts have a knack in setting up these programs. Why reinvent the wheel? Take advantage of their expertise.

Simply using these four criteria will produce results. At that point, it comes down to your personal approach to networking. You have to develop a methodology that you’re comfortable with and matches your personality. Some people can simply own a room. Others? They need a good, structured plan of attack. Either way, it’s best to attend with a little information and strategy. Here are some tricks to get even more bang for your buck:

  1. Get there early. Check out those nametags and select a couple of targets you want to approach.
  2. Ask for permission to call. Politely asking if you can contact a potential client goes a long way. Do not be challenging or confrontational; you’re hoping to obtain permission to contact them.
  3. Use your existing network. Connect with those who are already in a network relationship with you and leverage that existing relationship in order to meet new contacts. This is the easiest way to gain new contacts.
  4. Stay late. A lot happens after the scheduled meeting is over. Those who hang around tend to be more open and share more freely in their discussions. This can provide an inside track on potential projects or opportunities.

I’m a firm believer in the power of networking. I feel that if you combine a good physical network of contacts with a functioning electronic network of them, you’ll have the basis for a well-oiled, lead-generating machine. Finding business opportunities should be a primary goal that all companies share. Without leads, there aren’t sales. Without sales, there aren’t projects. Without projects, there aren’t contractors. Continually priming your network will result in a steady stream of leads and prospects. Undervaluing the power of networking can not only be shortsighted but may result in your business’ decline. Forcing a “cold call first” mentality displays a dated sales approach. It also reveals a weakness in network development. With the increase in communication and social connection, it is far easier to find as well as secure sales leads than it ever was.

The final piece of the networking puzzle is this: Be sure to follow up on the information you secured at the networking event. This, of course, is assuming you gained some information. What good is information that you never act upon? It happens all the time. Taking the time to make the phone calls and get the appointments is where the real rubber meets the road.

Not turning networking information into business is inexcusable. The discipline to attend networking events must be followed by the discipline of acting upon the results. A healthy sales effort includes between four to eight networking events per month. That’s roughly 50 per year! I find it hard to believe that kind of networking commitment will not produce results. As a matter of fact, I know it will because I do it myself. The results have been impressive, and it will always be a part of my sales regimen.

How’s your network producing?

Tom Woodcock, president, seal the deal, is a speaker and trainer for the construction industry nationwide and is author of “You’re Not Sellin’, They’re Buyin’!” He can be reached through his website, www.tomwoodcocksealthedeal.com or at 314-775-9217.

Build Brand Love by Taking it Up a Notch from Good to Great Marketing

in Columns/Marketing/Sales

BY STEPHANIE WOODCOCK

Stephanie Woodcock

Companies hire marketing firms for many reasons. Some are obvious. They want to freshen their brand, broaden market awareness, increase lead generation, drive sales and “take it up a notch.” Many times companies decide to reach out for help in marketing when they want to gain a foothold in a new market, have an upcoming anniversary, notice a drop-off in sales or need a whole new brand and direction. While all these goals and needs are important, there is no “silver bullet” marketing technique that will stun the customer base into handing over their business. Before results can be measured, we need to step back and evaluate why we want those results. What is our real motive and measure of success?

Effective marketing requires a “long game” approach, where both parties sit down and assess the big picture and long-term goals before diving into the details. It’s more than listing sales goals and last year’s YTD numbers. It’s about asking key questions such as the following:

  • How does my company’s brand, big or small, make a difference and impact in the world?
  • How does my company’s vision align with the vision of my employees and my company’s culture?
  • What does my brand provide customers and employees beyond a product or service?

Answering these macro-level questions is the start of building Brand Love. Surprisingly, many times a mission statement is just words on a wall, not a company culture and daily vision. Brand Love embodies that mission statement with a sense of purpose and connects employees and customers around that purpose.

Brand Love is when a customer experiences a bond with a company’s values and mission through its messages. This is marketing at its best. It’s when the message goes beyond selling and connects clients to the real reason and vision of that company’s driving goals.

Brand Love is achieved by building on brand loyalty and can be accomplished through a variety of marketing objectives. This is where the marketing professional can dive into the details.

Good marketing helps create brand loyalty. Many companies have a good, solid marketing plan that helped gain a loyal following. Great marketing helps create Brand Love. Fewer companies achieve this kind of recognition. Brand loyalty is when customers trust your services and reward you with their repeat business. Brand Love engages the clients, tells a story and offers a clear, concise vision that is more than a product or offering. It creates a partnership with its customers and enables trust, security and hope in its brand. This keeps a customer for life and protects against the commoditization of the company’s product or the clients coming and going with a particular salesperson.

This is a good indicator whether or not a company has achieved Brand Love. If a key salesperson leaves a company and takes much of his or her book of business, then that company hasn’t done a good job at creating a partnership and trust with its clients.

Building Brand Love requires more than bullet points on a sell sheet. It requires a vision that aligns with the goals and internal culture of the company and a vision that is consistent, transparent and relevant. No touch point is too small to build Brand Love and tell the company’s story.

One exercise I conducted with a client helped differentiate between brand loyalty and Brand Love. As a team, we came up with 10 different touch points or marketing techniques to unroll our recent campaign, such as lunch and learn sessions, sales flyers, social media, event engagement and electronic blasts and contests. Each one of these techniques was designed to provide helpful information about our product and would help create brand loyalty.

Then we created two columns and explained exactly what we wanted to achieve through that technique and how each would create both brand loyalty and Brand Love. This exercise was really helpful in showing the difference between the two. It forced us to look beyond the obvious marketing tool and “take it up a notch.” One is based on logic – on features and benefits. The other is based on emotion – on engagement and instilling a sense of purpose. The insight gained through this exercise was immediate. Now with each new marketing objective and message, we think first about what we can do to make it a little better and increase our Brand Love. It’s taking the marketing techniques from good to great.

The overall goal is still achieved. We broaden our market awareness and increase our lead generation, but we also deliver our message with an extra level of care. We try to surprise and delight our customers rather than just promote or sell to them. While it may not be the “silver bullet” of marketing, Brand Love safeguards against commoditization, creates a community with the client base and adds to overall long-term goals.

Stephanie Woodcock is president of Seal the Deal Too, a St. Louis-based marketing, creative & communications firm. She can be reached at stephanie@sealthedealtoo.com .

Contractors: Did You Know That Your Whole Company is Selling?   

in Marketing/Sales
Tom Woodcock

Sales is an all-inclusive, company-wide effort. Anyone having direct or indirect contact with the customer influences the customer’s buying experience. Failure to demonstrate value in virtually any area of the company can cause the customer to head in another direction. Departments such as accounts receivable, reception or even transportation (drivers) play a bigger role than many companies realize. Direct contact positions such as project management and estimating can acutely affect the customer experience. In construction, so much of the focus is on the project itself. The scope, schedule and costs are at the forefront. What can be lost in the details is what the customer is feeling throughout the project. Not having the sales skills to handle customer personnel may mean the company’s front-end sales efforts have been in vain, and prolong the endless cycle of having to be low bidder. That’s if the relationship isn’t damaged to the point of elimination from the bid list.

Taking the time to train all company personnel in relation to their role in the sales process accomplishes at least three key objectives:

  1. Creates a Company Sales Culture – Many companies sell but few have an actual sales culture. A company-wide sales culture is an understanding that sales are the most important aspect of any business. Cultivating and protecting customer relations is a top priority. The desire to meet and exceed customer expectations permeates all departments and personnel. This ensures the customer will feel well served and appreciated. All staff responsibilities are measured against the ultimate impact on the sales experience each and every customer has.
  2. Breeds a Unified Team – If everyone is pointed in the same sales direction with the same sales focus, a sense of achieving a common goal is realized. Staff members hold each other accountable and encourage one another. Sales and administrative personnel respect each other’s role. Employees become more supportive of each member’s role, knowing the sales success of the company is at stake. Understanding this affects everyone’s financial position.
  3. Instills Customer Confidence – Customers notice the sales cohesiveness of the company and feel they are being taken care of. Though basic in nature, trust and security are a big part of the sales experience. The more consistent the communication is company-wide, the more secure the customer base will remain. Customers entrust the company with their projects and funding. Consistency is the core of sales trust.

The strength of a company’s overall sales effort can make the difference between strong and weak profitability, growing and flat revenue and large or small market share. These are the drivers of business success. Having an entire company that understands the critical nature of sales and respects the role each person plays is exceptional. I rarely see it in my travels, but I have witnessed it in the construction industry. Contractors who engage in these practices reach high levels of sales success. Many achieve it for generations. An authentic sales culture becomes more than just the company culture; it establishes a firm’s corporate identity. This becomes the company to beat, the contractor no one wants to bid against. When that company is spotted on a bid list, competitors drop off and choose not to bid. These are the elite contractors. Sales excellence permeates project performance, estimating and vendor relations. It is not a stretch to link a strong sales culture to virtually every aspect of the business.

Finally, a strong sales culture can drastically influence your marketing results. Marketing in itself cannot become a sales effort. However, a marketing message embraced by a staff well trained and educated on the importance of sales goes a long way. Employees reinforce that marketing message when speaking with customers and even go out of their way to communicate it and this can magnify the overall marketing campaign, gaining greater reach and penetration for the firm. The thought that your marketing isn’t working because your internal staff doesn’t perceive the sales value is a foreign concept to most contractors. It would be like working for Apple, supporting Apple’s marketing campaign but buying a Samsung for your personal use. That one sale makes a difference, small but real. A staff that understands the importance of each customer – and even more so, each sale – will embrace the marketing message.

Making sure team members are aware of the role each plays in the sales process is an indicator of a company with a mature sales culture. Most will think it’s trivial and do nothing to improve the climate. They’ll continue to irritate the customer base and wonder why they have to fight for every project, often placing the blame on the customer. It’s not that they don’t want results; they simply won’t invest the time or resources for the training. Those companies that do will create an edge very few will be able to compete against.

 

   Tom Woodcock, president, seal the deal, is a speaker and trainer for the construction industry nationwide and is author of “You’re Not Sellin’, They’re Buyin’!” He can be reached through his website, www.tomwoodcocksealthedeal.com or at 314-775-9217.

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