Download Home Contracting - Adam Armbruster

Home Contracting Service Television and Web Marketing help Beat Market Downturns
Home service companies are spending a lot of time these days trying to come up with ways to
beat the negative sales effect of the downturn in their local real estate activity. Since Americans
tend to fix up their current home before selling it and moving, sales are off, these same home
improvement and home contracting companies have been calling us and asking how they can
redesign their marketing plan to include television and internet advertising.
For example, in Florida the real estate market pacing is down anywhere from thirty to fifty
percent. As such most home contractors are seeing double digit declines in traffic as well.
Believe me, when a business owner is sitting in front of you and telling you that their sales are
down double digit and that their ad budget has increased 50% it is truly time for drastic action.
Well, if there has ever been a truism in marketing, it’s that when the available market share
decreases, your ad plan needs to increase. Increasing your plan does not mean spending more,
it means that your plan must get much more cost efficient thereby making the same ad budget
work harder.
As we have stated before: Achieving client growth in an expanding economy is easy since the
marketplace takes business forward. However, achieving growth in retracting economy is the
demonstration of real marketing prowess.
In short, businesses caught in a down market have two choices. Either they can “wait out” the
market until the market regains momentum, or they can examine their ad plan for weaknesses
and replace weak media with a more efficient marketing model.
To help a business owner the first thing that you need to ask is: “Are you prepared to do what it
takes to get your business moving again?” We ask this because when you move into television
and web marketing, everything changes including how the campaign is designed all the way to
how it is measured.
We then ask if the business owner is ready to flexible enough to adapt to local market conditions.
This is to make sure that the business owner is realistic with market factors and is not living in
denial about where the market is at this time in regards to price and value. (Real estate
salespeople know this as they spend a great amount of time negotiating the listing price of their
client’s home…you simply must “price to market” and not just “market a price”.)
Next we look over the client’s ad plan and look for media that they have outgrown. These can
include niche magazines, local newspapers, and other small audience media. These media are
simply not powerful enough to pull a client forward in a down trending economy and keeping
these media in the plan will keep bringing the same poor results.
Our firm employs the use of disciplined broadcast television on a local level since the resulting
low cost per thousand prices make a home service client ad dollar hit hard.
Lately we have been seeing a lot of yellow page advertisers seeking an alternative to the books.
Since yellow page usage is down dramatically over the last ten years it’s clear that consumers
are beginning to use Google and Yahoo and also local television web sites as local search
engines just as they used to use the phone book for the simple reason that the data found on line
is “fresher”. Phone numbers still work, companies are still in business, and the consumer can also
click over to the business’s web site instantly for even more information.
We recently worked with a large residential electrical company that wanted to grow sales in a
down housing market. This client needed a 20% increase in sales just to maintain last years’
profit margin. Clearly some bold action was needed.
We first examined his media plan and found it to be very heavy in yellow page directories and in
direct mail. In the past these two media had worked well together. But over the last 5 years his
direct mail response rate has dipped from a 2% return to a .02% return rate. And his yellow page
ads were only drawing “price” shoppers that wanted quotes on the phone and did not seem to be
serious about having work performed. In short, the owner of the business felt that his yellow page
ads were being used by consumers to cross shop his competition and the ads did not effectively
separate his business in the mind of a consumer.
Surprisingly, despite this slide in direct mail response rates our client was increasing his spending
in direct mail. Some clients do this. They will throw money at their current ad plan expecting it to
work harder and thereby generate more customers. This is a fallacy. If a media plan is outdated
or poorly designed, it will not keep up with the market place.
We then moved to examine the current media plan from a cost perspective. When we broke down
the CPM analysis it turned out that he spending $600 for every 1,000 homes reached. Few
regional businesses can afford to spend anything close this high of a CPM and still expect to
make money. Further, when we structured a television and web plan the cost per thousand came
in at $25 per thousand. By moving to television and web marketing, the owner of business was
saving so much in customer reach costs that he literally was putting $575 dollars back in his
pocket with every 1,000 TV viewers that he bought.
We launched the plan and within six months his sales were up 40% in his TV advertising markets.
He is now considering doubling his local broadcast television plan for 2008 since he expects
home sales to be even or even down from 2007 levels. When I asked the President of the
company what he liked about TV advertising he stated “My competition is still advertising in the
yellow pages…I am on television…who do you think will get the phone calls?”
Creating success for a mid sized business in a declining real estate market is not difficult. But
getting a client to shift his or her mind to take action can be very challenging. As one of my
mentors said “Some people won’t reach for a lifeboat until the water level reaches their chin”.
Some business owners will delay taking action when their market declines. It’s our responsibility
to help business owners understand the tactics to use on a non-growth economic scenario.
Television campaigns that are boldly executed draw the attention of consumers no matter what
the market conditions bear. So next time your client complains about a weaker economy, help
him or her by finding the weaknesses in their marketing plan. It’s the fastest way to improved
profits.
-Adam Armbruster is a partner in the retail and broadcasting consulting firm
Eckstein, Summers, Armbruster and Company located in Red Bank, New Jersey and can be
reached at [email protected] or 941-928-7192.
Source: Kelsey Research