Contractor Advertising

Thriving Not Just Surviving

in an Economic Downturn

By Marty Valentine

"Times are tough."
"We're in a decline."
"We may never recover from this economic downturn."
"We'll certainly never get back to where we were a few years ago."

With all this negative speak, it's hard not to listen. You can't go out to dinner or pick up the Sunday paper without hearing some person's opinion about where the housing market is heading. Realtors, contractors, and consumers alike are trying to make sense of all they're reading and hearing. Wherever the truth lies, there are a few certainties you, as an industry professional, should hold onto. First and foremost-there is a lot of truth to the adage, "Bad times aren't when you cut your marketing budget-that is exactly when you need to at least maintain it, if not step it up." More than ever, you need to continue your advertising and marketing even in an economic downturn. Maintaining your marketing budget in tough times may require making some tough decisions such as reducing your take home pay as a business owner, and/or putting off that long overdue family vacation. Perhaps it's as simple as skipping that morning latte-those little expenditures add up. Paying for a specialty coffee could cost up to $5 a day. That's a $25 weekly savings that tallies up to more than $100 a month or $1,200 a year that you could be investing in advertising your company. Whatever decision you make, know that the short-term sacrifices will have long-term effects.

Now that you've safeguarded the marketing budget, you have to create a marketing plan (if you haven't already). When your business and your dollars are wearing thin, the key concept to remember is "target marketing". There are plenty of ways you can keep your company name out there in front of key decision makers without bankrupting the company. The first step is to identify your target market. Doing your research and being observant in today's marketplace is the best way to accomplish this goal. Who is your perfect client? What does he/she look like? Where do they shop? What do they drive? Where do they live? Attend area home shows, go to the shopping mall and people watch. The current financial landscape has likely effected whom you consider your target market. Many homeowners who have purchased a home within the last three or four years have seen a major change in their home values. Unfortunately, their home value has dropped so much they no longer qualify for a home equity line so they probably aren't in a position to do any upgrades. Mortgage lenders are asking for nearly perfect credit scores now before they will lend any money to new homeowners. Your target demographic, therefore, may have shifted from first-time homebuyers to retiring baby boomers. Perhaps your target audience is minority baby boomers-the key is to be as specific as possible when identifying your target market.

Once you've identified your target audience, it's time to focus on your advertising and marketing budget. The general rule of thumb is to dedicate at least 2 percent of your gross revenue from the previous year to stay in business and up to 6 percent if you want to grow it. It's hard to think in these terms when your business is in a downturn, but remember--your advertising and marketing budget should be considered an investment and not an expense. If finances are a concern, look for other ways to reduce your expenses without reducing your marketing and advertising budget.

Now that you know who you want to deliver your message to and you've set aside the dollars to do it, where do you begin? The options can be overwhelming, and like the market, advertising has changed. Are you savvy enough to navigate the waters? Do you know how to reach the people you're trying to attract? In the old days, you'd place an ad in the Yellow Pages and wait for the phone to ring. Unfortunately, newspapers and the Yellow Pages are no longer reliable marketing vehicles for most types of businesses. More and more homeowners are researching contractors and builders on the internet before they place a call. There are several "industry specific" search engines where you can list your company for free.

Become the expert. Call up some of the local talk radio shows and let them know you are the expert in your field and that you would like to discuss industry trends like "going green". This will give you third-party credibility, and the best part is that it's free! Send out a press release about something that's unique and different. There are more than fifteen home improvement related magazines in the metro area that would love to get good, interesting content from an expert.

If you have some downtime (which you likely do in a down market), get active in your community. There are many non-tangible ways to shine. Join the Chamber of Commerce, Rotary Club, or some other a networking group in your area. Volunteer your skills.

The bottom line is that homeowners are not pulling contractors and builders out of their trucks anymore. There are many resources for you to learn more about the finer points of marketing and advertising, and many of them are free. Surf the web--check out www.nahb.org under "advertising and marketing webinars." www.nari.org, www.nkba.org or contact your local community college for a crash course on marketing.

You likely hired a professional to help you keep your books and design your logo. Perhaps you should consider hiring a professional to help you develop and execute your marketing strategy. In many cases, advertising agencies and marketing firms get compensated through their media partners. Chances are good that you can have your own marketing director at no cost.

Whatever times you find yourself in, focusing on your marketing and advertising allows you to not only survive, but thrive.

Marty Valentine is the Marketing Director and founder of Advertising Your Way, a full service marketing and advertising firm for builders and contractors. He has been involved in the local advertising market for more than fifteen years, specifically the last three years in the contracting industry. Marty is an Advertising and Marketing committee member for the Metro DC Chapter of NARI and he is currently a member of NAHB, ASID, NKBA, USGBC, NARI, LCA and NVBIA.

Marty Valentine can be reached at 703-310-7114.