Create a Marketing Foundation that Wins Customers
The number one reason small businesses fail is that they don't provide a product or service that is needed. What if you could learn how to connect your skill or service with a genuine need in the market place? If you can then clearly communicate this connection, your business will grow without limit. Learn how Michael makes this connection by creating a solid marketing foundation and how you can do the same.
After a tumultuous week, Michael was told that his position was no longer needed at the home builder he had worked at for almost ten years.
He knew that the housing market would always have its ups and downs, but never thought he’d be a casualty of one of the downs. He was wrong. After his long drive home, he shared the news with his wife. Michael's wife, Pam, was consoling, but she was noticeably shaken. After all, Michael was the primary bread-winner; and their savings was not exactly flush with cash.
Pam asked, "What do you plan to do?"
Michael responded, "I really don't know. I suppose I could look for work, but construction is my thing; and I just got laid off one of the best general contractors. I can't imagine a lot of construction contractors hiring in this terrible economy."
"You seem so talented, Honey. Why don't you start your own business?"
Michael reacted, "If there are no homes being built, it's probably a bad time to start my own general contracting business."
"Well, we have to do something. Should I try to get a job to help out?"
Michael appreciated Pam's offer, but he knew that it would be more difficult for Pam to land a living wage as she had been out of the work force for eight years. Let’s face it, she was focused fulltime on raising their two boys. Michael knew it would be up to him to somehow find work that could pay their bills.
In the days that followed, Michael gave a resume and cover letter to any builder he knew. The answer was the same everywhere. We’re not hiring! If he was going to make it, he’d have to do it on his own. Michael was very resourceful and, as an experienced construction manager, knew how to build better than most.
He started a business called Builder Mike's. He lived in a suburb and felt like he could get work from some friends to get things going. He thought he could make enough income to keep the bill collectors at bay until the real construction economy returned.
He was able to get odd jobs from friends who wanted to help him out. He did a few kitchen cabinet replacements and several other odd jobs that weren't enough to pay the bills.
It had been three months since Michael was laid off.
As the family sat down for dinner, Pam asked, "How’s your odd-jobs business going?"
Michael smiled, "I know I'm doing odd-jobs now, but I hope to get a few clients who want me to build something for them."
Pam asked, "How many clients have you tried to sell your services to?"
"I've told all my friends about my new business. If someone wants something built, I suppose they'll call me. Right?"
"I'm not a businessperson, but I think you have to get out and sell your company."
Michael shrugged, "I don't want to be one of those pesky salespeople. If people need something built, they'll ask."
"My friend, Nancy, the chiropractor, hired a business coach. She said that he helped her double her customers."
"I'm guessing there's a higher demand for chiropractors right now, than for builders."
"Maybe. Nancy, told me she hated to sell... just like you; and her coach helped her create a system where customers could find her easily and hire her."
"Hmm. If I can avoid being an annoying salesperson, maybe this business coach can help me, too. How much does he cost?"
"Nancy, told me that you can talk to him for free the first time."
"I suppose it couldn't hurt to give this business coach a call."
Michael learned from Nancy, that her business coach’s name was Coach Russ. After getting his contact information, he gave him a call.
As promised, Russ spent an hour on the phone with Michael. Coach Russ informed him that he needed to do effective marketing. This marketing would attract people who needed construction projects and thus give Michael the higher paying clients he needed. Russ also informed Michael that he needed to establish a Marketing Foundation before he could start marketing.
If Michael were to hire Russ, he’d charge $1,000 per month to work with him on a weekly basis to help him establish his Marketing Foundation and help him execute a viable marketing plan.
After this initial call, Michael was disappointed. All he wanted was customers. He didn't want to pay some consultant a lot of money and still not have the clients he needed to pay his bills.
Once again at the dinner table, Pam asked, "How did your call go with Coach Russ?"
Michael shrugged, "I don't know. I suppose he knows what he's doing, but I don't think he can help me get the clients we need right now."
"What do you want to do?"
There was a long pause, "I don't know what we CAN do. I can't find a decent job; and I'm not making much money with these odd jobs. I think you may have to find a job."
"Okay. Will you be watching our boys while I work? Or should we hire a daycare service?"
The reality of the situation settled in for Michael. If Pam worked, she’d just make enough to pay for the daycare service they’d hire to look after their boys. If he stopped working and looked after the boys, they wouldn't be able to pay bills with Pam's income alone. If he paid Coach Russ $1,000 per month, at least he’d have a chance of creating a successful construction business.
"If I hire Coach Russ, it’ll cost us $1,000 per month. Do we have this kind of money?"
Pam responded, "We have some savings. I think we can go at least 6-months, paying our bills and paying the $1,000 per month. If you feel like this coach will really help, I say 'go for it'."
"Okay. I hope this coach knows what he's doing."
The next day, Michael called Coach Russ back and they started their coaching sessions. The first session was relatively intense.
Michael asked, "What can I do to get customers?"
Russ responded, "Hold on. I first want to know what problem you solve for your customers."
"What? I build stuff. What do you mean what problem I solve? If someone wants something built, I'm their guy."
Russ smiled, "In order for people to buy something, they need to have a want or a need. Even when people want you to build something, there's some reason they want you to build it. What is it that drives their desire to seek out a builder?"
Michael thought about it and then responded, "I suppose they're running out of room in their house; or want a new kitchen; or new bathroom; or just need more space. They may even need a new house."
"Very good. Let's dig a little deeper. Didn't you tell me that you were laid off because people are not buying new homes?"
Michael was incensed, "Rub it in, why don't you!"
"I'm not trying to open old wounds. But I am trying to get a sense of your marketplace."
"Right. People are not buying new homes."
"So, what will people do who can't buy a new house; but still need more space in their existing home?"
"I suppose they may try to make an addition; or finish their basement; or make do until they can afford to buy a new house."
"Very good. Which need do you want to speak to in your messaging?"
"I don't know what you mean. What do you mean by messaging?"
"You just told me that homeowners will either renovate, add on to their existing home or make do with what they have. Which one of these needs do you want to address with your business?"
"I suppose I would be good at doing basement finish projects."
"Great! I think we've started to build your Marketing Foundation."
"I'm not sure what you mean. What’s a Marketing Foundation?"
"A Marketing Foundation is the ‘Why your company exists’ and how you will communicate your Message in a way that compels new customers to use your company. This foundation includes seven fundamental elements:
What you do;
What problems you solve; or benefits you provide;
How you’re solution process is better than others;
An avatar of your ideal customer;
An elevator speech;
A Unique Selling Proposition; and
After Coach Russ explained all the elements of the Marketing Foundation, Michael was given homework to develop his own Marketing Foundation prior to their next coaching session.
Coach Russ was impressed with Michael's resolve in doing his homework. It appeared that Michael was invested in making his business work.
Michael changed the name of his small business to Michael's Basement Finishers. He felt that this new name was more consistent with his newfound niche of finishing basements.
He created a clear elevator speech that went like this:
Why buy a new home when you can double your square footage by finishing your basement? Michael's Basement Finishers has close relationships with local contractors to create an impressive addition to your current home at less than half the price of buying a new home.
Michael stated that his Avatar was a married couple who owned a home ranging from 1,000 to 3,000 finished square feet with two or more children; and another child on the way. His logic was that such a family would be wanting to buy a larger home but couldn't afford it. This was a family that would be willing to take out a home equity loan to pay for a basement finishing project.
Coach Russ and Michael polished his initial elevator speech and messaging to the point where they both agreed that Michael would gain a lot of traction through direct-mail marketing; and Facebook ads targeted directly to Michael's niche Avatar.
By Michael's third coaching session, he had a few interested homeowners.
At first, it was a challenge to convince his new prospects that he could successfully renovate their basements. Michael had never done this work outside of his former employer. However, when he talked about the long-time relationships he had with local subcontractors, his homeowner prospects were convinced that Michael's Basement Finishers was the best choice for their basement remodeling project.
One of his new clients wanted a $50,000 renovation and the other was a $100,000 renovation. He acquired both clients through his direct-mail campaign.
It wasn't long before Michael had lined up $500,000 in basement finishing projects, He now needed to hire help to do all the work. It was clear that Michael would have no problem paying the bills.
Coach Russ and Michael were no longer working on marketing. Instead, they were working on business growth plans so that Michael's Basement Finishers could handle $2,000,000 in basement finishing projects the following year.
Michael and Pam reveled in their mixed blessing.
When Michael lost his $85,000 a year job with the home builder; they thought he’d be lucky to find such a high-paying job again. When Michael flopped at his odd-jobs business, it felt like they were headed for financial ruin.
It took a month of coaching from a professional like Coach Russ to turn their curse into a blessing. With the profits from Michael's Basement Finishers, Michael and Pam wouldn't be concerned about a poor employment economy ever again.
What an uplifting story! Many small businesses are started from some abrupt career event. It could be a move, a loss of a family member or just getting tired of your job. Or, it could be the loss of a job as it was with Michael.
In Michael’s case, he had to learn a lot about business in a few short months to keep bill collectors at bay. This is not an ideal situation. Honestly, it can be quite helpful to have a time limit. The key ingredient to surviving in your first year of business is getting new customers. If you don’t get new customers, you get no revenue and your business quickly drains your savings.
Unfortunately, for many new business owners… their desperation takes over and their marketing messaging when they try to get new customers is “desperation”. In our story, this desperation approach worked for a few odd jobs with Michael’s friends and family. They felt sorry for him losing his job and wanted to help him out.
To make a real business, Michael eventually had to create a more hopeful message for his prospective customers. I call this creating a Marketing Foundation. It is one of the most challenging and yet most critical aspects of starting a new business. It is also one of the hardest tasks to do on your own. Why? Because we have great difficulty seeing our business from our prospective customer's viewpoint.
In its simplest form a Marketing Foundation answers three questions: 1) Who? 2) What? and 3) How?
In the world of marketing, you pay to expose your advertisement or message to specific people. If you know WHO, your message is meant for, you’ll ensure your marketing dollars are spent wisely. Not only that, but your target client will more likely respond to a message that’s directed at them, rather than a general message blasted to the universe.
In Michael’s case, he was targeting young families with another child on the way. He believed that these families would need more space and would be interested in expanding their current space more affordably than purchasing a new home. Especially, if that family is budget minded.
With our current ability to market directly to a niche market, you must narrow your focus and your message to reduce marketing costs and increase marketing effectiveness. Especially, if you’re just starting out.
What is referring to “what you do”. A common question asked in any social setting or business networking event is “What do you do?” The typical answer to such a question is a noun. You may say, “I’m a plumber” or “I’m a salesman” or “I’m a nurse”. If you own a business, this what needs to be a little more robust.
In our story, Michael changed his “odd jobs” title to “basement refinishers”. The new title changed the expectation that a prospective customer has of what Michael does. Honestly, Michael would have had to sell several odd job projects to pay his bills. He only needed to sell a few basement-finishes to launch his new business. Had someone asked Michael to complete a basement finishing project while he was still calling his business odd jobs, he would have been glad to do the project. However, without shifting his marketing foundation and defining what he truly was, it would be almost impossible for someone to consider Michael for a basement finishing project.
In Michael’s more robust definition of WHAT, he used language in his elevator pitch to highlight the benefit of adding square footage to your current home for much less than buying a new house. This tied his WHAT to a specific benefit that his prospective customer needed to hear.
In our story, we really didn’t cover the answer to this question. To be honest, the HOW is more or less important in different industries. In Michael’s Basement Finisher’s case, he would have shown his clients an idea of how he could renovate their basement. He may have created a vision of how they could expand and improve their living space.
Most modern-day consumers don’t simply want to know that you can do something for them… they want to understand how your process will get them from their current situation to a better place. With so many competing products, the HOW is often the point of differentiation that will convert your prospect into a customer.