Make vs. Take Marketing

Ask a marketing major studying for an undergraduate degree and the interpretation of marketing will be abundant statistical data and case history laden. Ask an MBA candidate with the same major and you will receive a much more sophisticated analysis. In each case, this is preparation for the daunting task of understanding the complexity of marketing, more so in a rapidly changing economy with many geo-political implications.

Now – - ask a grizzled veteran who has endured years of preparation, projections, analysis and evaluation to define marketing with one added caveat – keep it simple. Here is how that explanation might sound:

Marketing is defining how to sell the right product (service) - in the right markets - at the right time - in the right quantities - to the right customers - at the right price.

How’s that for simplicity? Now let’s muddy the waters. I’ll inject a little known phenomenon known as 'make marketing vs. take marketing'. Moreover, this is a key if you are selling specialty products vs. commodities and particularly if you are selling directly to the user. To understand this phenomenon is to grasp the key issue for developing more leads – for more prospects – to whom to sell your products/services.

Simply stated 'take marketing' enables the seller of goods and services to analyze the market, then design a program which will enable the marketer to sell a satisfactory percentage of that market. Once accomplished, this is called market share. There is in the case of most manufactured goods rather accurate statistical analysis which defines how many automobiles (even by make, model, size and color) will be sold in the US. This is equally true of beer, clothing, carpeting -- in fact, most of the manufactured goods offered for sale.

The previous example is especially true regarding building materials. There is a rather accurate projection as to how many houses will be built, torn down or remodeled over the course of a year. An accurate projection can also be made as to how many square feet of piping, flooring, roofing and insulation, windows, etc. will be used. Those who offer goods in those markets will decide how to “take” the piece of that market which their product can accommodate by price, quality, and similar factors.

Next, compute what happens when there is a decline in new construction, and fewer people undertake remodeling. The marketer, unable to maintain their market position, downsizes, adjusts prices or undergoes similar machinations to try and maintain market size.

Now, let's examine make marketing, particularly in how it relates to building products, and more specifically, home improvement sales. The make marketer finds ways to stimulate prospects by offering them an opportunity to look, preview, see a demonstration, get free estimates and other similar tactics. The exhortation to participate in any of the latter utilizes almost every conceivable manner of communication, some a lot more effective than others - while some are complicated to understand.

Here are some examples (this is just a sampling and each method has numerous variations):

• Print media (newspaper and magazine)
• Direct mail and marriage mailings
• Shows and events
• Kiosks in malls
• Radio and television
• Direct and telephone marketing
• Internet marketing including social networking

Each of these methods requires an in-depth understanding of buyers’ habits, attitudes and a probe of value systems. Each also involves a special level of marketing know-how, together with tenacity and a budget which is accommodating. These are nonetheless, the means by which a marketer develops business - by interacting with prospects who are not yet committed. The technique works hand-in-hand with training salespeople how to present (demonstrate) a product or service that meets the specific needs of individual prospects and moreover, how to convince them that now may be the best time to buy. Above all it requires a make marketing attitude.

Incidentally, here is but one example of why and how this works. In early ’08, the statistics were released on the number of windows manufactured for residential housing in the US over the prior 12 months. Those statistics are revealing. Approximately 22 million windows for new construction and 33 million were used in replacement. I estimate that approximately 60% of the latter came because of make marketing which also drives and stimulates the market for others.

There are many other examples of make marketing:

• Canvassing, when done properly (most canvassing isn’t)
• Soliciting around installed jobs
• S.F.I. (sell, furnish, install) programs utilized by wise marketers such as Home Depot, Sears, Sam’s Club, etc.

All of these techniques require thoughtful preparation, supervised execution and budgetary controls.

To summarize, in most instances, it is the make marketer who thrives in a changing economy.

How to Pre-train Your Sales Force

One of my clients, recently came up with a fantastic way of training his sales force in our methodology.

When he hires a new salesperson he issues them a copy of our newest series, The Science of Successful In-Home Selling, but does so without giving them the workbook that normally accompanies it. He then tells them that they have to listen to the entire series prior to their training taking place (this period is approximately one week). He also makes sure to get a copy of their credit card, the reason for this being that if they decide to skip out with the copy of the album he will charge their card for the full retail price of the copy.

Then, he issues them a test which he has devised by removing some of the key concepts and ideas from the workbook. This occurs on day one of their training and ensures that the new trainee has taken the necessary time to listen to the material.

The learning curve of his first training class of the year improved dramatically because the new trainee had a fundamental understanding of the selling process prior to coming into training.

For more information on how you can accomplish this in your organization feel free to e-mail me at brian@briannsmith.com.

Attitudes & Affirmations

What are affirmations?

I like to define them as positive reinforcements that you give yourself to keep negativity from pervading your daily existence.

Here is a partial list of affirmations that I incorporate into my daily life

• All issues of life, painful and otherwise, are learning experiences.
• Those who reared you, despite their apparent flaws, were doing the best they could.
• In the moment of your greatest pain you may be experiencing your greatest opportunity to “grow”.
• The search for parental approval or acceptance can be destructive.
• Until we are affirmed by a significant “other”, our achievements will seldom give us sustained happiness.
• Negative actions by others in our development can be held to be a detriment to our growth and happiness.
• We are limited by our prevailing awareness.
  

The primary affirmation that I use in my daily life can be viewed in this powerful video.

How to Monitor Your Online Reputation

Last week I received notice that a company in Australia was selling our material on eBay. They cleverly packaged it with other people's recordings and renamed the product so as not to make it too obvious that they were an unauthorized reseller.

We went through the proper channels to file a complaint online and within one business day the seller's profile had been removed from eBay.

A few years back we would have had to rely on someone who purchased the product online to contact us directly, and there is a strong likelihood that we would never discover what was occurring (particularly since the company resides in Australia).

So how did we find out about this and resolve it so quickly?

We sign up for a service called Google Alerts that assists us in monitoring our online reputation.

All you need is a google account to get started - then - choose the search terms that are most important to your company or brand name and decide how often you would like these results to be delivered to you. Google will do the rest. The service will scour the Internet looking for any mention of your search term and will report it back to you in an e-mail.

Do you want to know if you are being slandered online? Google Alerts can help you with that.

Do you want to monitor your competition? It can help you in this area.

Or maybe you are considering breaking into a new market and want to know what the primary characteristics are - - It can certainly assist with this.

The only limit to the service is the creativity of the search terms that you come up with.

If this sounds too much like an endorsement that is because - - it is....How important is it to protect your brand name?

Review from the Summit: Show & Event Misconceptions / Recommendations

The next section of the Home Improvement Economic Summit focused on shows and events.

Two of our Senior Account Executives are experts when it comes to producing a quality event and avoiding some of the key errors that many companies make.

My son David began by discussing the misconceptions that many company owners and managers have about shows and events. Among these are:

• My promoters are at work
  
• My promoters follow the script
• My promoters are doing the best they can (considering the market we’re in!)

Frequently, the owner/manager is not involved enough in the event and as a result these three misconceptions cause him to accept the "status quo" as the best his company can do.

A more "hands on" approach is necessary to make your event successful and this is what Brian Smith discussed. Among his recommendations were that:

• Don’t use sales reps: They will contaminate the presentation process - use Promoters instead
  
• Don’t allow Promoters to work alone: They need to be managed
  
• Do not allow people to sit in chairs: This is supposed to be a job! Your people need to approach it that way. Sitting in a chair transmits low energy to the prospect
  
• Ensure you calculate fully-loaded costs: They’re a lot more than you might think
• Don’t just market at home improvement shows: There are lots of other great places to be.
• You need the right tools: Pictures, light-weight materials, uniforms, reminders
  
• You need documentation to control the definition of a lead: Unless you’re only working sweepstakes or some customer completed form.
• You have to control the conversation: Otherwise Promoters will say too much or too little.

In the next posting, I will review the presentation of one of the most creative minds in the business who has become a master of holding successful events. You will also have the opportunity to view an excerpt from his recent demonstration at a local show.

Review from the Summit: Shows & Events

The next focus of the Home Improvement Economic Summit was on Homeshows & Events. The panel consisted of three experts and we started off with one of the most creative minds in the industry today.

Joe Talmon is President of Larmco Windows - an Ohio based company. He is a 22 year veteran of the window and home improvement industry. He transformed a small regional wholesale window manufacturer into a respected retailer of high end replacement windows, siding and other products. His passion is quickly uncovered when you hear him speak about one call selling, sales training, and working shows and events.

He began his presentation by discussing the first event that his company held, at the Marion Count Popcorn Festival. Despite getting to the event late, and not getting a prime spot in the show they were able to be successful because they stuck to their strategy, "No-one walks by the booth without being stopped."

The results of the event were very encouraging (and a sign of greater things to come):

In 4 days (Thursday through Sunday) they set nearly 80 leads and sold just under $80,000 the first week after the event. Their overall costs were under $2000.

Two keys that Mr. Talmon learned early on were that:

1. People do not attend the homeshow or event to see what your company has to offer, they are there for their own reasons


2. Their competition was not just the other companies in their category. There may be 200 to 1,000 vendors and every one of them wants the same thing you want - the attention of the people who attend.

Once he had this down pat he was able to develop an effective action plan to succeed:

1. Have the right people working with the right approach


2. Make sure everyone is trained and knows their single purpose


3. Have the presentation scripted


4. Develop an interruption/attraction device


5. Hold a kick off meeting the day before the event


6. Have a practice session each day before the event opens


7. Manage the approach - fun is always a good thing


8. Observe!!!

One of his most recent event demonstrations is quite astounding. Note how the attendees are flocking to his booth in droves. Meanwhile, many of the other company's reps look on with bored and disinterested expressions as people walk past their booths one by one.

For more information on how he accomplished this feel free to contact Mr. Talmon at jtalmon@larmco.com or visit his website.

Review from the Summit: S.F.I. Programs - - The Promise and the Problems (Part 3)

The final presenter on S.F.I. Programs at the Home Improvement Economic Summit was Rob Levin. Mr. Levin holds a degree in Accounting and a CPA certificate, and moved through public accounting to became the controller at a large wholesale building supply company. In 1982 he became part of a newly founded retail siding and window company (American Remodeling) which became a licensee for Sears under their SFI program. AMRE eventually became a public company with average annual volume ranging from $250 to $300 million with 65 offices. He is currently president of Statewide Remodeling of Grand Prairie, TX, which was established in 1994, and is today listed as the 24th largest company in Remodeling Magazine.

Mr. Levin's extensive background in S.F.I. Programs made him an ideal choice to conclude this part of the program. A summary of his key points regarding S.F.I. included:

Positives:

• Brings a good lead flow
• National name gives credibility
• Excellent financing options are frequently available
  
• Can add income to your bottom line

Negatives:

• You are creating your own competition
• Seasonality of traffic
• Higher marketing cost due to licensing fees
• Cash flow difficulty at beginning
• Cash flow can be slower
• May affect core business

Steps for Success:

• Start slowly
• Keep the hours down
• Understand the seasonality factor
  
• Analyze S.F.I. business separate from core business
• Assign separate salesmen when possible
• Make one person responsible for in-store activities
  
• Build relationship with the store manager
  

If you did not have the opportunity make sure to read the previous two posts on S.F.I. Programs. You will discover that all of the presenters shared many of the same key points. The key take-away was that S.F.I. programs can be effective if the right elements are in place; however, they are not for everyone.

The next topic I will review from the Summit will be how to get the most out of shows and events.

Review from the Summit: S.F.I. Programs - - The Promise and the Problems (Part 2)

The next presenter at the Summit who spoke on S.F.I. Programs was Michael Redman. Since 1993, Michael has been the National Manufacturer Representative for TEMO Sunrooms. His responsibilities include leading the team of manufacturer's reps in recruiting, training and servicing their national network of dealers. Under his supervision, each rep is required to have a successful background in in-home selling and the ability to provide “hands-on” training for the salespeople representing the dealer. He has a national reputation as an efficient trainer. In addition, he interacts with the dealers on their activities as SFI providers to brands such as The Home Depot and Sam's Club.

First, Michael touched on the benefits of using an SFI program, primarily:

• They are an excellent lead source
• Other sources may not be available
• Other sources may be too costly
• Other sources may provide limited results
• Face-to-face (SFI) is proven to work

The primary keys to an SFI program being successful are that the corporate entity must work within the contractor's structure (challenging, but crucial) and that contractors don’t use SFI as their sole marketing strategy. Also, customer service and satisfaction are a must and relationships have to be cultivated that build trust with store management teams.

The displays that TEMO uses in their program are mobile, expandable, affordable and have marketing flexibility.

In the next posting I will recount the presentation from Rob Levin who has one of the most extensive backgrounds in S.F.I. within the home improvement industry.

Review from the Summit: S.F.I. Programs - - The Promise and the Problems

Continuing on in our review of the Home Improvement Economic Summit - our next panel discussed S.F.I. (Sell - Furnish - Install) Programs and what the primary issues are that arise when home improvement companies work with a large, nationwide retail services network like
The Home Depot or Sam's Club.

S.F.I. Programs have a longer history within the home improvement industry than many realize, however, the negative publicity these programs have received tends to outweigh the positive results that they can sometimes achieve.

The first speaker was Murray Gross who is the Chairman and C.E.O. of US Home Systems which specializes in the sale of cabinet refacing. They operate with 42 offices in the United States, approximately 300 salespeople and have a marketing center in Boca Raton, FL. They are a public corporation with revenues of $132 million. They currently act as an SFI outlet for Home Depot in over 1,900 of their stores. Their products are manufactured in their own factory. Mr. Gross was formerly president of Facelifters, a public corporation, acting as an SFI for Sears and producing revenues in excess of $60 million prior to selling that company to another corporation in 1996.

Some of the benefits of S.F.I. programs include:

• Exposing your business to a new section of the market
• Building trust, loyalty and security in your brand
• Incremental revenue and profit
• Access to advertisement and promotions
• Access to financing options

Potential challenges include:

• Being a "guest in someone else’s home"
• Protection of the brand
• Sensitivity to marketplace pricing
• Consumers’ heightened expectations
  
• Compliance, insurance, licensing, permits
• Cash-flow considerations

The key walk away point from his presentation is that to succeed in an S.F.I. Program you need to understand that you are working with a "800-lb gorilla", you need to understand the financial model and most importantly you have to focus on what you as a business do well.

In the next blog posting I will continue to review the panel's presentation on S.F.I. programs.

Review from the Summit: Should You Acquire or Be Acquired? (Part 3)

Now I am going to continue to summarize Hobson Hogan's presentation on whether you should consider being acquired or whether you should acquire another company from Day 1 of the Summit. If you have not read part 1 or part 2 please do so first.

The next topic discussed was the value drivers that affect the outcome of an acquisition (which we also call the "6P Framework"). These include:

• Personnel
• Product
• Process
• Profit
• Pricing of Debt/Equity
• Projections

This is a two-sided framework and the top three elements are on the company side (qualitative) and the bottom three elements are on the numbers side (quantitative). The company side contains qualitative attributes that will bias a value up or down, while the numbers side contains a quantitative measure of the culmination of company attributes and its relationship in its market.

The market outlook was then presented and while Mr. Hogan stated that the market should recover, it will likely not approach 2007 peak levels within the next five years. The recovery will be asymmetric with certain geographies recovering more quickly than others.

He wrapped up his presentation by discussing the financial market factors that affect value. These include:

• Bank lending standards significantly tightened
• Use of debt in transactions significantly curtailed
• Equity out refinancing and home equity loans greatly curtailed

To learn more on how FMI can help you acquire a company or sell your business you can contact Hobson Hogan at hhogan@fminet.com.

Audios and Videos and Books, Oh My!

Okay, so that’s a take off on Dorothy’s line from the Wizard of Oz. But this isn’t Oz, this is the 21st Century and audios and videos and books (especially e-books and audio books) are becoming a much bigger force then radio, television, cable and satellite radio and TV and the traditional bookstore trade book.

Sure, there are still millions of people who can’t/won’t give up the traditional ink on paper printed book. But, as the Baby Boomer generation is aging, the media the Baby Boomers grew up with are also aging. Technology has grown at an unprecedented rate since personal computers became a household word. The Internet has only been widely known and acknowledged for about 15 years. There are now over 1.5 billion brains around the world who are connected to and use the Internet in their daily work and personal lives. The Internet is the fastest growing and biggest networking opportunity that has ever been created. It grows exponentially by the day.

Broadcast radio, television and the cable and satellite services are finding competition with the Internet constantly eroding their market shares. The number of radio stations going off the air is growing each year. Smaller TV stations are following suit. The cable companies are in the Internet provider telecommunications businesses. The wired telephone companies are losing subscribers by the thousands to the wireless networks. And, of course, newspapers by the scores are turning off their presses and shutting the doors.

So, what does this mean for the home improvement industry? Very simple. While you still have some viable radio, TV, cable and newspaper advertising media, you should use them. However, as the population ages and the “new order” takes their place as the primary consumers of home improvements, you need to explore new approaches to reaching these upcoming generations. The use of podcasts and vidcasts, blogging and e-books and other forms of audio, video and reading materials for both wide broadcast and targeted narrowcasting on the Internet require your attention. People are learning, information gathering and being entertained in new ways. Having a Web site is not enough anymore.

At Dave Yoho Associates, we are using more and more of these new media and methodologies and seeing, not only growing acceptance by the public, but also measurable effectiveness.

To discuss how you can expand your outreach by applying these new methodologies and media for your business, contact Ed Helvey at DYA and explore how you might use these changes to grow your business.

Enthusiastically,
Ed Helvey
Audio, Video and Publishing Consultant/Producer

Making Your Day

In this time of economic uncertainty, more than ever you (and those around you) need to “start your day” with something stimulating.

The level of pessimism and negativity has become rampant. Daily newspapers and the airwaves are cluttered with headlines which do not bode well for positivity and without caution, you will respond to most of what you hear and see rather rapidly. The phrase GIGO (Garbage In, Garbage Out) was created by the computer industry with the implication that incorrect information projected into a system will remain incorrect information unless erased or overridden. The human mind is the greatest computer ever devised. Unfortunately, GIGO gets compromised here, i.e., Garbage In – remains in until neutralized or replaced by the person controlling this complex computer -- (you).

Scientific research has proven that the mind does not know the difference between the real and the imagined. Therefore what you are accepting as real or imagining will happen, creates the foundation for how you will react on any given day. Your mind will act as a compulsive “endorser” for whatever you want to believe and you are twice as likely to listen and respond to information which endorses the way you already feel.

So what is a positive alternative?? Consider affirmation.

Affirmations are the key to building relationships: in selling, management, even in your personal life. Begin today to affirm others. It’s not praise or manipulation. It’s acknowledging some unique quality in everyone you meet.

Start by affirming yourself. View this 4 1/2 minute video entitled The Power of Affirmation then forward it to your employees and associates. Have them construct their own personal affirmation utilizing the principle for at least 21 days, then measure the results.