Data Center Design Features Redundant, Sustainable Power Systems

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By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

Specialty contractors engineering data centers consider the back-up power system the “pacemaker” of these mission-critical spaces.

Jacobs Mission Critical Global Technology Leader Ken Kutsmeda has led the construction of more than one million square feet of data centers, adapting the latest technologies to electrical systems design for mission-critical facilities worldwide.

“Data centers are meant to operate 24/7…they can’t have downtime,” Kutsmeda says. “Their systems must be designed with redundancy and resiliency so that concurrent maintenance can be performed without shutting down the data center, and to ensure continuous operation if one part of a system fails.”

Nearly every piece of mechanical, electrical and plumbing (MEP) equipment – the generator, transformer, uninterrupted power supply (UPS) feeding each server rack, power distribution unit (PDU), chiller, pump and fan – has at least one redundant component. “There is also redundancy in the mechanical piping and in the electrical infrastructure, as well as water storage tanks within the cooling system, should public water loss occur.”

In years past, the redundancy strategy for these facilities was to back up IT and cooling through a large, paralleled back-up power generation system. These days, Kutsmeda says, many hyper-scalers such as Amazon, Microsoft and Google are engineering redundancy at the IT level to protect from outages while also engineering power back-up for the network.

“One configuration is providing back-up power in smaller individual power trains,” he says, “pairing a generator with a transformer and UPS system so they can be easily phased with construction.”

A current, growing trend, Kutsmeda adds, is sustainability and carbon emissions-free back-up power generation that replaces the carbon-based diesel generator with sustainable solutions including hydrogen fuel cells, hydrogen generators or even micro-nuclear generators.

Rosendin Vice President of Engineering Ron Wilson, who has been involved with data center engineering for more than 25 years, says many of the larger data centers require as much power as a small city in terms of electrical loads.

“Most power redundancy today is compartmentalized,” says Wilson. “Whereas 20 years ago you may have seen the designs with all the power for the data center within one block, these days that power distribution is sectionalized so that one issue doesn’t impact the entire facility.”

Controls play as integral a role today as redundant systems do, according to Wilson. “Controls and monitoring have become huge because data center users want to be able to monitor their capacity and move it to wherever it is needed. That’s where the complexity and flexibility of current distribution systems come into play.”

Overhead busway that feed power to specific server rows, allowing flexibility for server refresh, is one distribution strategy.

Higher temperatures produced by modern servers are another challenge in engineering data centers. “Placing coolers that are localized at the server rack rather than cooling an entire room is becoming more common in high-density data centers today,” Wilson says.

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Material Delays Killing Sales? Hold On

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By TOM WOODCOCK

Tom Woodcock

Are material and equipment delays are killing your ability to secure projects and orders?

Who can do business in this climate? Is there an end in sight?

These are all very common questions in this construction sales environment. If you’ve followed my articles for any length of time, you’re well aware I’m not a fan of excuses. In 35 years of selling in the construction industry, I’ve determined the best companies see any negative influences on the market as opportunity. The conventional response is to complain and find blame. This is the easy position to take, eventually throwing up one’s hands and saying, “Oh, well.”

I’m currently hearing this reaction often.

Hold on a second. This might be a better situation than you think.

It’s no secret delays and pricing increases are all over the construction arena. Bids are only good for a week and pricing on materials may only be good for a day. Pricing escalation clauses are being incorporated into contracts. Project work is held up waiting for material or equipment. This can make it difficult to complete a project on time or on budget.

Yet from a sales standpoint, this is the best vehicle to close business! It takes some guts or a good firm approach, but you can secure projects and work by closing a bit more aggressively. I’m usually not a proponent of hard closing, but in this economy, it is actually a benefit to the customer. How? It’s very simple.

You are the expert in your industry or trade. Clients are counting on you to steer them in the right direction, of course couched in integrity. You see everyday what’s happening with material and supply availability as well as pricing. By informing customers that they need to pull the trigger quickly on deciding who their contractor is, you are saving them both time and money. The next step is to simply state you need to order material and supplies asap to avoid price increases or change orders. Say this in a fashion where it’s obvious you really mean it, because you do really mean it. And although I’m describing this as a sales technique, in reality it’s simply fact.

The tough part is that many contractors fear being this firm with their clients. They would rather leave information ambiguous instead of applying a little professional pressure. They fear this will push the customer away and they’ll not get the project.

In reality, it’s the opposite. A good close can secure the project with more immediacy. Trying to massage the customer in this climate is ineffective and somewhat of a disservice. Different market conditions often warrant a different approach. The construction market has been holding, but there’s a slowdown looming as interest rates increase and construction spending cools down. Securing projects now is critical to carry companies through any dip in the market. Throw in the challenging labor shortage, and you have a recipe for a significant market shift. We’ve seen it before, and it wasn’t pretty. It’s especially true with customers that reward you with recurring business. You have an even stronger platform with this type of client to apply a little extra closing pressure. You already have the client’s trust, so your client will more readily embrace your insistence to move quickly. They’ll understand you’re not crying wolf and are looking out for their best interests. It may even deepen the relationship to the point where things improve, and they still move on your direction.  The truth is, they need your guidance as they most likely aren’t acutely aware of the circumstances in your area of expertise.

Sales can be challenging, even in times when there’s an abundance of projects. The number-one buying motive is trust. This is a great time to either establish or increase this key deciding factor with your clients.

It’s not a half-bad idea to even roleplay this firmer closing technique within your own company. The more comfortable you are being firm with advising your customers, the easier it is for them to accept the premise. Not applying that pressure can increase the bleeding.

Instead of whining about the current pricing, availability and labor issues that exist, convert that into securing a higher percentage of your opportunities. A higher close rate always beats increase your estimating volume.

Tom Woodcock, president of seal the deal, is a speaker and trainer for the construction industry nationwide. He can be reached via his website,  www.tomwoodcocksealthedeal.com, or at 314.775.9217.

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Contractual Protection: Sharing the Risk of Escalating Prices for Material

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By RICHARD A. STOCKENBERG

Dick Stockenberg

Lump sum construction contracts are designed to provide for the comfort of certainty, or at least relative predictability. But in times of uncertain and volatile economic conditions when prices for materials are neither certain nor predictable, an enhanced level of risk is introduced into the equation, resulting in a need to head to shore to seek the comfort of a safe harbor.

During periods of escalating prices, not even an owner with an ironclad lump sum contract can be assured it has the best deal it can get. For example, when contractors are unsure that they can procure materials for the duration of the project at the same price as contained in their bids, it will not come as a surprise that savvy contractors have built into their bids a “material escalation factor” that is perhaps more than is needed. In that case, the owners may be paying more than necessary.

To avoid such a dilemma, an option that may work for some owners, but not others, is to pre-purchase materials, especially if there is storage space available and insurance coverage.

Another source of possible relief is to provide for a line-item contractual contingency fund to be drawn upon when material prices exceed a defined level.

Contractors and subcontractors sometimes qualify their bids to allow for adjustments when there are unusual price increases in materials, equipment and energy. In such case the bidder, in order to receive an adjustment, will have to reveal how it priced these commodities, and most importantly it needs to assure that the price escalation qualification language found in the bid finds its way into the contract. This is particularly important for subcontractors who often have subcontract language saying that their bid does not become a binding contract document.

However, in reality there is no perfect solution that will eliminate all risk for all parties. As a matter of principle, risk should be borne by the party who can best control the risk. But when it comes to price escalation for materials, it can be generally said that parties who sign construction contracts have little, if any, control over such escalation. Fortunately, stakeholders in the construction industry are not totally averse to risk; if they were, they would find employment elsewhere.

ConsensusDocs’ Response

ConsensusDOCS is a consortium of 40-plus trade associations formed for the purpose of agreeing on fair and equitable – but not perfect – contract terms, especially as those terms deal with how risks are shared, not shifted. These documents do not contain one-sided clauses designed to purposefully shift risks downstream. Instead, they are drafted to find a balance that is equitably apportioned.

ConsensusDOCS is believed to be the first, if not only, publisher of a standard material price escalation clause (ConsensusDocs 200.1). This material escalation clause allows users to list specific materials affected for their project, and it may adjust the contract price by referencing an agreed-upon objective market index. In fact, only commodities specifically identified can potentially be adjusted up or down, and the parties may limit the extent of the adjustment.

The new language is intended to be completed and executed contemporaneously with the construction contract. Because it is intended to be flexible and to cover many different kinds of materials, calculation methods are suggested, e.g., established market or catalog prices; actual material costs; material cost indices. 

The document can also be incorporated into subcontract agreements and others, such as design/build and construction management at risk.

Safeguards are built into the language. For example, documentation for adjustments is required. The number of increases/decreases can be limited; however, the Associated General Contractors has noted that using a cap eliminates some of the benefit of a contractor eliminating contingency in submitted bid amounts.

The new form also addresses time extensions in the event of project delay caused by scarcity or delivery delay. Adjustments to time and money are not allowed for impacts caused by the contractor or its subcontractors or suppliers.

Also, the clause can function as a de-escalation clause when prices go down, thus allowing for mutuality to the owner’s financial benefit.

In addition to the duty of both the contractor and the owner to mitigate damages due to price escalation, the contractor is not allowed to include overhead and profit in any price adjustment.

Like the entire family of contract documents published by ConsensusDOCS, the new price escalation clause represents a consensus of a broad spectrum of construction industry stakeholders. Whether the ConsensusDOCS form is used, parties at all levels should consider some form of contractual protection extending the entire length of the contractual food chain, starting with the owner and extending down to the lower tier subcontractors and suppliers.

Richard A. Stockenberg, founder of The Stockenberg Law Firm LLC, limits his law practice to construction law. He can be reached at richard@stockenberglawfirm.com.

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Effective Digital Storytelling Must Be Compelling, Persuasive, Complete

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By CRAIG WORKMAN

Craig Workman

Storytelling is all the rage in today’s digital marketing world as organizations seek to connect quickly and often with their target audiences in deep and meaningful ways. But attention spans are short, so marketers and communications professionals now craft shorter and shorter stories loaded with keywords intended to find their way through the clutter of busy media platforms – with just enough information to generate a click, share, open, like, response or purchase.

Whether you are selling a product or service, making a point or giving a speech, you need to reinforce what you’ve got to say with a great story.  This means making it personal, emotional, truthful, valid and relevant to the audience for which it is intended to influence.  Great storytelling should be compelling, persuasive and memorable for your target audience, which means is also must be complete. 

Great storytelling takes more time and creativity to prepare and produce than barebones messaging, but the rewards are well worth your trouble. Consider the significant benefits of “earned media coverage” to the sales and marketing communications programs for any type of organization.

Earned media is achieved by first presenting a compelling idea for a news or feature story to a targeted news editor or key influencer, and then convincing that editor that your content has great news value for readers or viewers. The story idea can be built around the key marketing messages being advocated by the communicator and then creatively linked to the interests of the publication or digital media platform being pitched. This process often involves research, writing, preparation of background information and effective interpersonal communications with the editor or influencer to present a complete story. 

News releases are often the source that leads to your earned media successes. A well-written news release should provide all the basic information needed to stand on its own as a news story in the media outlets you are targeting. This information should announce the who, what, where, when, why and how of the news being publicized and include visuals, links to related information and keyword optimization.

A well-written news release should make an editor’s or influencer’s job easy, but all too often that is not the case in this digital marketing age. One trade journal editor I know told me that he receives an increasing number of news releases that are only one or two sentences long and do not provide any context or background to make the news more interesting to his readers. While such brevity has become the norm for achieving clicks, it does very little in advancing the reputation of the organization or individual behind the announcement.

Indeed, earning great publicity in today’s “tradigital” media is still one of the most highly sought-after results in the marketing mix of most organizations. News and feature coverage conveys very high levels of importance, credibility and accuracy for your brand or organization to a large and targeted audience. And it often leads to more earned coverage for your organization in the future. Great news publicity makes for equally great social media content for marketers to further optimize.

As the use of digital marketing channels and techniques evolves, many marketers are taking another look at the importance of good storytelling and reputation management in their marketing mix. One local marketing communications trade association recently announced that the featured speaker at its upcoming chapter event is an expert in news media relations and storytelling. The association says its members can benefit from learning and adding this effective storytelling strategy to their marketing plans.

As the storytelling style of your organization or brand evolves, remember that for stories to be more compelling and persuasive, you need to tell the whole story.

Craig Workman is president of Workman Communications Group, a St. Louis-based public relations and brand management agency that has served clients in the construction industry since 1996. He can be reached at craig@workman-company.com or (314) 640-9033.

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The Rise of New Media: What ONE Thing Should Marketing Teams Be Focusing On?

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By STEPHANIE WOODCOCK

Stephanie Woodcock

This is a black and white industry. 

In a typical RFP, there are a slew of numbers. Percentages, fixed fees, hourly wages, rate schedules, exclusions and more. It’s as black and white as it gets. 

So, as I paint the picture of why content marketing is important to the bottom line, I’ll try to be as black and white as possible. 

Words matter. 

Every company owner wants more leads. But sadly, it’s not point A to point B anymore. Salesperson calls prospect. Converts prospect to buyer. Nope.

Buyers are savvier.  It’s marketing’s job to build trust, create demand and help fill the sales funnel. Trust is not black and white. 

Gone are the days where we can get traction from cold calling. Think about your own personal buying behavior. I hang up. I don’t have time for cold calls. But when I want to purchase something, I do make time. 

I take time to do the front-end work of researching and educating myself, so I don’t have to deal with the potential fallout of making a wrong decision based on slimy sales tactics. I would rather depend on my own research of a subject than someone who calls me randomly, selling me something. I also tend to trust companies that invest in content to educate me, the buyer. 

What becomes most important to my buying decision?

Content.

Trust sells.  Content marketing is the key to building that trust. This should be the number-one priority of every marketing team in this industry: increase content marketing. Buyer behaviors are changing.  Two-plus years of doing most everything digitally has changed the marketing landscape. People are online researching!

Some quick stats:

  • 70 percent of business buyers find content directly on the company’s website.
  • Content marketing was the most popular B2B marketing strategy in 2020.
  • B2B email marketing produces the highest ROI.
  • LinkedIn is the most effective platform for B2B lead generation.
  • 52 percent of B2B buyers say they’re “definitely” more likely to buy from a brand once they’ve read its content.

Because buyers and owners are self-educating and becoming more sophisticated, we must finetune our marketing strategy to be where they are looking.

This is called inbound marketing – creating content that someone will find through research, whether it be on your website, a LinkedIn blog post or in a magazine. 

Where are they looking?

  • Association & Industry Events
  • Expert Panels & Industry Resources
  • Online & Print Industry Magazines
  • LinkedIn
  • Email Inbox
  • Company Website

Anywhere that content can be seen, heard and shared is where your prospects are looking.

It goes beyond traditional marketing. Traditional marketing is direct mail, direct email, billboards, one-sheets, flyers and cold calls. They have one static message: “Buy from me. Here’s why.”

Content marketing is a long form answer that addresses customer pain points and provides solutions.  It’s white papers, blog posts, articles, press releases, videos and podcasts – where knowledge is centerstage.  It’s not “Buy from me. Here’s why.” It’s “Trust me. Here’s why.”

The best marketing teams are made up of in-house and outsourced marketing experts who know your industry. Our jobs should be to curate content from the experts and harness thought leadership and insight from team members across department and roles. Content marketing should not be relegated to those who have free time on their hands or solely to salespeople. A brand and its employees are the subject matter experts. The content creators are the content marketing experts.

Hiring an intern to post on your Facebook page is NOT going to suffice for your “content marketing plan.”

Content marketing should be present at all levels of an organization – from the company executives’ keynote speeches at an industry event, to a salesperson closing a sale by sharing a white paper or blog post article – it all seeks to inform, inspire and reassure target audiences that they are making the right choice. 

While it’s very possible to measure ROI of your content marketing plan, it also can be difficult and not nearly as black and white as we may like. 

Take paid LinkedIn ads as an example. A user will rarely click a paid ad and immediately convert on the landing page or website. The process may be more gradual.  More likely, a user will see a LinkedIn ad, research the company on Google later, read a blog or article and then later begin the buying process. That’s three to four different types of content marketing platforms. If we only measured the value of the LinkedIn ad by the click-through rate and leads generated, we would never run a paid social ad again.

Our target audience for content marketing is not finite and easy to predict. The goal of content marketing shouldn’t be focused only on known potential buyers, but rather on working to build a brand that informs future buyers on problems that they may or may not know they have.

An effective content marketing plan communicates expertise, longevity, flexibility and problem solving.  It’s not just about telling a story about history or years of service. It’s about instilling trust in a brand, conveying the DNA of that company, establishing credibility and educating for the future. It’s not black and white.  It brands the past and paints the future. In full color. 

Stephanie Woodcock is president of Too Creative, a St. Louis-based marketing and creative design firm for businesses in the building industry. Contact her at Stephanie@toocreativestl.com or (314) 753-1148.

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The Market is Alive: Shake off the Rust and Get Back Out There

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By TOM WOODCOCK

Tom Woodcock

Well, I hate to say, “I told you so,” but I told you so.

The minute pandemic-related restrictions were beginning to be lifted, outside sales activity started picking up.

Zoom is fading. The desire to meet face to face is once again taking center stage. The new normal didn’t quite happen as predicted. Whoever said the handshake was going away obviously had no idea how business works, or he simply doesn’t know how people prefer to interact.

We are now coming back to the way it was. The big question is: Were you working your sales effort properly before the pandemic took center stage? The past two years have seen sales efforts deviate from tried-and-true methodology. People scrambled to find ways to stay connected to their customer base and often resorted to digital communication. Since so many took this route, a lot of sales individuals simply melded into the white noise of social media, video conferencing and electronic communication. The introverts amongst us loved it; they said, “It’s the way to go. We’ll never have to go to the office again and interact with other humans.”

Sorry, wrong.

The point is this: People want to interact with others. Psychologist after psychologist attests to this fact. Therefore, we need to structure our sales efforts and aggressively implement them. Time to go back to blocking and tackling, covering the basics.

The first step is to make sure your information gathering system is in place and up to date. This will help you in reaching out to potential targets and give you a home for the customer information you collect. The next step is to determine which organizations and associations you want to engage with. Remember, your first criterion in making this selection is the degree of customer involvement present in the group. Focus on customer-rich environments. People are heading back toward these organizations to restart the interaction process. Skipping this step can lengthen the amount of time it will take you to reengage with your customer pool.

The next step is to set your customer targets. These can be existing customers you need to retain or grow, or new targets who haven’t used your product or service in the past. The one thing I promise you is that you’ll see there’s been a personnel changeover in many of these firms. Also, keep in mind that a contact is a person, not a company. Relationships you’ve held onto during the shutdowns and restrictions should be the first face-to-face meetings you schedule. Make sure all is well with those who have hung in there with you. Then move on to the true development of sales. Set a high level of activity and see as many people as possible. Letting competitors get out ahead of you can result in lost opportunity. The floodgates are open. You need to shoot right out of the gate. This can create an initial advantage for you. The old adage; “You snooze, you lose” is a reality in this scenario.

The final step is to actually close the business. Our economy is all over the place currently, and legitimate sales opportunities need to be secured as quickly as possible. Between the financial and political landscapes, the level of uncertainty is increasing. This can slow down construction spending at any point. Nailing down projects you’re being presented now can go a long way in getting over any slowdown. The supply chain and raw material cost factors are real. They have significantly affected efficiency on construction projects. Using these factors as a closing strategy is actually a good idea during this period of time. You’re simply taking a factual situation and relaying it to the client. If the client waits on a project, it may not hit the client’s schedule or your client may end up paying higher prices due to escalating material costs. This is absolutely acceptable sales behavior.

The ultimate point: Now is go time. Don’t be lulled to sleep by the past two years of sales hibernation. Shake off the rust, clean the machine and blast off from the starting line. If you need a refresher, get out those old sales videos or books and hone your approach. True professional businesspeople understand the critical role sales plays in their businesses. It’s only the most important aspect of any business.

Why on earth would you wait on full implementation the minute it is possible? The market is alive.

Tom Woodcock, president of seal the deal, is a speaker and trainer for the construction industry nationwide. He can be reached via his website,  www.tomwoodcocksealthedeal.com, or at 314.775.9217.

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COVID-19 Causes Breaches to Construction Contracts: Which Party Bears the Risk?

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By TYLER SCHAEFFER

Tyler Schaeffer

The COVID-19 pandemic has been extremely unpredictable in its effects on businesses. On March 16, 2020, at the very beginning of the pandemic, the Dow Jones Industrial Average plunged 2,997 points – the largest single-day point drop in history. By the end of 2021, however, the stock market had fully recovered and reached new record highs. At the beginning of the pandemic, the concern focused heavily on rampant unemployment and need for increased government benefits. More recently, the job market has been measured by the number of available jobs that remain unfilled. 

One of the most noteworthy – and perhaps not immediately predictable – consequences of the COVID-19 pandemic was its exposure of the fragility of our global supply chains; many businesses and industries experienced unprecedented delays in obtaining needed products and supplies. The breakdown in the supply chain coupled with drastic changes in consumer demand caused wild inflationary swings in the pricing of certain products and commodities. These swings in the availability and affordability of certain goods and services caused many businesses finding themselves unable to fulfill contractual obligations made before the beginning of COVID-19. 

 Which party bears the risk of pandemic-caused inability to fulfill the terms of a contract? Parties may allocate the risk of unforeseen circumstances in what is known as a “force majeure,” or escape clause, in the contract. “Force majeure” is a French term that means “greater force.” A force majeure clause allocates the risk if performance becomes impossible or impracticable especially because of an event or effect the parties could not have anticipated or controlled at the time of contracting. 

If the contract does not allocate risk through a force majeure clause, the common law provides several related defenses that may excuse performance due to unexpected causes: impossibility, commercial impracticality and commercial frustration.

  • Impossibility is the most stringent standard and excuses a party’s performance only when its performance is rendered impossible by an act of God, the law or the other party. Unforeseen difficulties, however great, will not excuse performance.
  • Commercial impracticality will excuse a party when an occurrence of a superseding, unforeseen event prevents performance, not within the reasonable contemplation of the parties at the time the contract was made and that goes to the heart of the contract.
  • Lastly, commercial frustration may excuse performance when the contract’s principal purpose is frustrated without fault by the happening of some event, the nonoccurrence of which was a basic assumption on which the contract was made.

Should a company find itself unable to fulfill its obligations under a contract due to COVID-19, looking to a force majeure clause as well as the defenses listed above provide potential avenues to escape liability for the COVID-caused breach of contract. Although COVID-19 has been with us for two years, the caselaw providing guidance on the applicability on typical force majeure clauses and these defenses is not fully developed and often has limited applicability to the specific facts in such cases. As such, none of the options above provide a sure-fire solution to an otherwise innocent party unable to meet its contractual obligations due to COVID-19.

The complications caused by COVID-19 have also inspired many companies to revisit and rethink the negotiation of their contracts to include greater protections for the risks of pandemics and their collateral consequences. Concepts such as pandemics and government shutdowns will surely be expressly appearing in future contract escape clauses. Additional rights for cancellation and for delay based on such events will also be appearing in such contracts. On the other hand, parties to contracts concerned about the other side’s potential delay or inability to perform due to unknown consequences of a pandemic will also wish to obtain protections in their contracts. There are many new and creative contract options for both sides to consider in a post-COVID-19 world.

Hopefully COVID-19’s effects on businesses will soon be a thing of the past. But, before memories of this time fade, businesses would be wise to ensure they protect themselves contractually from the risks of a severely disruptive pandemic or similar event in the future. Any contracting parties unable to fulfill their contractual responsibilities due to COVID-19 or wishing to negotiate a new contract with an escape for unforeseen circumstances caused by the pandemic should contact their attorney to explore available options.

Tyler C. Schaeffer is an attorney with Carmody MacDonald and concentrates his practice in business litigation. He works closely with businesses including construction companies in disputes, including contracts, business tort, financial restructuring and bankruptcy, and consumer protection. Contact Tyler at tcs@carmodymacdonald.com or (314) 854-8645.

This column is for informational purposes only. Nothing herein should be considered legal advice or as creating an attorney-client relationship. The choice of a lawyer is an important decision and should not be based solely on advertisements.  

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What’s Your Marketing Budget for 2022 and How Do You Measure ROI?

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By STEPHANIE WOODCOCK

The average B2B company spends between 6 percent to 7 percent of its overall revenue on marketing costs. According to a study conducted by Deloitte and Duke University’s Fuqua School of Business, each industry varies based on different growth strategies. The energy industry, for instance, spends 3 percent of its total revenue on marketing and the construction industry spends 2 percent.

Based on these numbers, a small construction company with an annual revenue of 3 million dollars should be spending $60,000 on marketing.

To determine our own 2022 marketing budget, we need to know our growth objectives. Let’s start with what we have in common:

We all want qualified leads, repeat clients, better cross selling, greater market share, market recognition and brand loyalty. 

For those of us who want to grow in 2022, a quick overview of our numbers helps. What is our annual recurring revenue? And by what amount do we want to increase that revenue? The difference is the growth delta.

Typically, a company will spend 40 percent of that growth delta in effective marketing to achieve certain goals. Isn’t that fascinating? Many of the companies I see who want to grow miss the big picture. They buy more equipment, onboard an expensive CRM program, get better computers but neglect to realize their website has a slow load speed, is not optimized for mobile, is not SEO friendly and has no value proposition to set them apart from their competition.

Companies typically spend money on items that count the money rather than make the money because it’s easier to measure than make. 

I was recently asked in a new client meeting, “How do you measure ROI (return on investment)?” Great question. 

ROI is based on whether you meet your key performance indicators (KPIs) with your marketing strategy and implementation.

You can’t determine your KPIs until you know your marketing objectives.  A KPI of 4 new clients a month may be good for one company but not good for a firm that wants to increase market share with 10 product lines.

What is your KPI? How do you want marketing to move the needle for your business?

Here’s where so many company owners differ, stating:

I want to grow my company XX amount. 

I want to increase my brand presence and enhance my company image.

I want to grow the company through more product lines or services.

I want to increase customer loyalty.

I want to impress existing customers with technology enhancements.

Your marketing budget should be based on determining your objectives and putting real numbers to those objectives. Finding the right strategy and a good workable budget depends on which of these objective(s) you want to meet.

Now the good part. How do we get in front of those new clients? What’s our strategy?

We find the events where they are. We use the marketing channels they pay attention to. We get in front of them with inbound and outbound marketing. 

Measuring the ROI is no easy task because our key performance indicators are so dependent on the quality and accuracy of our strategy. 

I once had a client who spent the bulk of his budget being a platinum sponsor in a customer-rich association. He attended every meeting, spent beyond his annual platinum sponsorship and knew the value of each customer attained through that association. Event marketing was his main strategy to reach his KPIs. 

I had another client who needed website leads nationwide. He had a new product on the cusp of an emerging market but needed brand recognition. His marketing budget was devoted to revamping his website, optimizing it for higher Google rankings and investing in paid search.

I have another client who writes articles and sends them out in press releases, magazines and online newsletters. She creates her own tribe of followers through thought leadership articles and can charge top dollar for her services because she has personally helped construct its value.

We can be successful with a variety of strategies. The key is to BE where the customers are or where they are going to be. 

Your marketing team’s focus should not be on improving the measurables to prove their own success and better measure ROI. Rather, they should be focusing on tactics that will make an impact.

We can become so consumed with trying to measure the data and determine ROI that we forget to use common sense and our instincts. Marketing in this industry takes instinct. Our buyers take a long time to become customers.

It’s easier for me to measure the ROI of an email marketing campaign than it is to measure the value of an event sponsorship or a print ad. The three work together, so which strategy gets the marketing credit?

Together we learn how to carefully curate the best value for our customers with the right marketing channels. 

My favorite strategies for the construction industry are content, email and event marketing. Content marketing delivers 3 times the leads versus tradition advertising. It also has a longer sales cycle because you’re often developing brand awareness with customers before they are “now” buyers. Traditional advertising works as well strategically in the right environment. 

The research backs me up. In a 2019 survey of 1,000 senior-level B2B marketers, the most effective B2B marketing channels were reported as:

1.) In Person Events (41 percent)

2.) Content Marketing (27 percent)

3.) Email Marketing (14 percent)

4.) Paid Social and Search (6 percent)

5.) Organic Social and Search (3 percent)

But I’m getting ahead of myself. Once you answer some of the questions above and find a budget line for marketing, contact me to discuss strategy and ROI.

Stephanie Woodcock is president of Too Creative, a St. Louis-based design and marketing agency. She can be reached at stephanie@toocreativestl.com.

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Is Your Insurance Company Refusing to Pay Out a Claim?

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How the Law’s “Good Faith” Measure is On Your Side

By MEGHAN M. LAMPING

Responsible business owners and companies understand they face risks every day. To manage – and potentially mitigate – those risks, companies purchase insurance. In exchange for sometimes hefty premium payments, companies expect their assets to be protected in the event of a claim for damages or a lawsuit. 

In fact, companies turn to their insurance carriers for help in many situations. Companies may look to their insurance carrier if they experience property damage or are dragged into a lawsuit alleging claims of negligence or unworkmanlike performance. In these types of situations, companies expect their insurer to step in and either pay out a claim for damages or settle a lawsuit. When an insurance company balks at paying out a claim or settling a lawsuit on the company’s behalf, that company is, understandably, frustrated. 

But there are some mechanisms built in the law to encourage insurance companies to treat their insureds fairly, act promptly and in accordance with the policies of insurance they issue.  Insurance companies owe their insureds certain duties and obligations under the law and the policies of insurance issued. When insurance companies do not act properly, they can then find themselves facing additional liabilities. 

For instance, in Missouri, an insurance company can be liable for causing damages to its own insured if it “vexatiously” refuses to pay claims covered by its policy. Damages, including attorneys’ fees and monetary penalties, can be awarded when an insurer’s refusal to pay a claim is determined to be “vexatious and without reasonable cause.” The statutory protections exist, in part, to incentivize insurance companies to pay legitimate claims without litigation. 

Additionally, an insurance company can face tort liability, including punitive damages, if it unreasonably refuses to settle a claim or lawsuit against its insured. In Missouri, an insurer runs the risk of a legal liability where, in bad faith, it assumes control over a legal proceeding against its insured and refuses to settle a claim within insurance policy limits after the insured has demanded that the claim be settled. Missouri courts describe “bad faith” as “the intentional disregard of the financial interest of the insured in a hope of escaping responsibility imposed upon the [insurer] by its policy.” Again, the purpose of these laws is to encourage insurance companies to settle cases or claims covered by the policies. 

To be sure, the penalties and awards of damages ordered against insurance companies, where liability is found, are not insignificant. Litigation against an insurance company is expensive and courts often recognize this burden when they award litigants tens or hundreds of thousands of dollars in attorneys’ fees. Damages awarded to an insured – apart from attorneys’ fees – can similarly be significant. In 2013, a Missouri court of appeals affirmed a jury’s verdict of more than $6 million in favor of an insured over its insurer where the jury “apparently believed the refusal to pay the claims or make a determination of coverage was unreasonable.” In another Missouri case, an insurer was ordered to pay its insured more than $900,000, including punitive damages, for denying a claim and defaming the insured by claiming – incorrectly – that the insured had burned down his own house.   

It’s obviously important to mitigate risks in business by having the proper insurance coverage. It’s also important to remember insureds have legal protection when working with insurance companies not acting in good faith. Specifically, the existing applicable laws and stiff penalties associated with running afoul of the purchased protections. 

Meghan M. Lamping is an attorney at Carmody MacDonald and focuses her practice in the areas of general civil litigation. Contact Meghan at mml@carmodymacdonald.com or (314) 854-8676.

This column is for informational purposes only. Nothing herein should be treated as legal advice or as creating an attorney-client relationship. The choice of a lawyer is an important decision and should not be based solely on advertisements.

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Field of Dreams: How to Showcase Your Company’s Best Assets Through Marketing

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Stephanie Woodcock

By STEPHANIE WOODCOCK

At the time of this writing, I am stranded at a hotel near The University of Massachusetts Amherst for my son’s first college prospect baseball showcase. Our predicament is courtesy of “Henri” making landfall on the New England coast as a category one hurricane for the first time in 30 years. Though it was downgraded to a tropical storm, it was angsty enough to cancel our return flights to St. Louis. Not good. The showcase got moved from the campus’ pristine baseball fields to an upper gymnasium with no air circulation. The camp was reduced from 8 hours to 2.5 hours. The school tour was canceled. The only originally scheduled event was our free lunch at UMass’s “award winning dining hall.” What should have been a delightful campus stroll to lunch morphed into a gusty, mad dash through a torrential downpour. It was a no-frills, soaking wet showcase.  

Let’s not let this happen to you.     

When a company asks me, “What’s the best way to spend my marketing budget?” I say, “Create professional marketing assets that showcase your company’s talent, identity and culture.” I get really excited. “Let’s turn your work into art,” I add.  

“Why?” They react. “Don’t we want to sell, sell, sell? Print up a flyer about our services? Promote our great products with a blast?”  

While these things are important, “No,” I say, smiling. “Sit down. You’re making me nervous.”   

Then I explain how professional, well-executed marketing assets like video and photography can transform a company’s image and brand to showcase the best part of who and what they are. When done right, these marketing tools are elevated to art. They evoke a sense of something bigger than a sales vehicle, while still becoming the engine that drives your sales. 

It’s difficult to convey the culture of a company – the “who” behind the “what.” So much of our business comes through our relationships, longevity in the industry, reputation and referrals. It’s the nature of our industry. We network.  

So how do we extend those relationships in this digital age through our marketing efforts?  

In an age of endless Zoom, Microsoft Teams and digital influences – when everyone is grappling to be heard – production-value video and custom photography tell a deeper story.  These assets provide more long-term, greater traction than the traffic and buzz of today’s next big thing in digital marketing.

Photography and video should portray something intangible about the identity of the companies they showcase. They create brand voice, a major marketing component necessary before unleashing the salespeople with flyers and promotions.

In other words, when you’re inviting a client to come to your proverbial “campus,” we need to show them the green, well-groomed baseball fields before we drag them through the rain to the dining hall. We need to show them our culture and identity – why we are worth doing business with – before we get to the hot upper-level gym.    

I recently asked CEO of Solstice Productions, Amanda Aschinger, how important video is to our marketing. She gave a great answer: 

“There are some set standard expectations in the A/E/C (architecture, engineering and construction) world, such as on time, quality, safety and on budget. What makes one company a better fit for a given project often comes down to the people, the experience and the approach. Construction is a long, sometimes painful and expensive process. The ‘who’ of the team can greatly impact the ‘how.’ Aside from an in-depth in-person session, a well-crafted video is the best way for prospective customers and employees to experience the who and how of your team.” 

Aschinger adds, “Video is not a standalone solution. Like any marketing or sales tactic, it works best when used in a full strategy. All of the channels (social, email, web, trade show) can be made more effective when video plays a role.”  

She recommends a standard package of videos that every A/E/C company should have:

  • Company intro or overview 
  • Capabilities-specific videos (one for each) 
  • Market expertise-specific videos (one for each) 
  • Core values/culture – something that works very well for both business development and recruiting, and is really focused on your people 
  •  

Aschinger also recommends highlighting key milestones as part of ongoing video campaigns. Adding a new division, targeting a new vertical, celebrating an anniversary, completing a high-profile or unique project and releasing a new product are all great times to use video to help communicate your wins.

The value of seeing and hearing a company’s faces and voices through video is more than a sales avenue. It is a way to portray a company’s true identity, culture and mission, beyond what we have to sell. In the relationship business, we don’t want to lead with sales slicks, fancy flyers or rock bottom deals. We want to lead with our voices. We want to show, not tell.

My dream clients are ones who need and want content creation. They want to figure out the best way to tell their story and convey their culture. Great marketing educates, energizes and engages. When a story is told right, customers get excited, too. They see the beauty of the campus, the “field of dreams” and can envision their own success. When a story is told right, customers see the company’s best assets and want to “go the distance.”

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

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