This was a typical job for me, ok, in reality no job is typical, but the premise was the same none the less.  I walked into Gabriel’s small office to assist his company in marketing with the same problems I had run in before.  He knew he had to change his business because he wasn’t making enough money but wasn’t sure how to do it.

Gabriel had been an electrician for quite a long time and had renewed his contractors license number twice before.  This time he was contemplating whether or not to renew it again or shut his doors.  He had heard about what I was able to do for his brother-in-law and decided to ask me to come in.

Gabriel had been losing money but was stuck in a rut because the sources of revenue he had become accustomed to were now oversaturated and bigger and bigger pieces of his profit margin were being eaten up as he competed with both legal and not so legal competitors.

Gabriel knew he had to make a change, but he thought that in order to get his business on the right track he would have to change everything he did.  Basically, he wanted to turn his business 180 degrees. 

I run into this far too often to let it lay.  When a business suddenly or gradually begins losing money, the owners think they have to do a drastic change.  This often causes a loss of self and takes the business in a whole new direction.  Rarely is this decision for the better.

My first car was a 1980 Corolla.  The engine was acting up on it after a friend of mine and I had given it a tune up.  We started by changing the sparkplugs and ended up working on nearly every part of that car before finally taking it to a mechanic.  Within a couple of hours I got a call from him telling me the car was now purring like a kitten.  I got to the shop and started up the car on my own and sure enough, the engine hadn’t run as well since I had bought it from a school friend’s mom.  When I asked the mechanic what was wrong with it after telling him everything I had done he laughed.  He told me that my timing belt was off just a few degrees and that most of the work I had done was pointless.

This has stayed with me to this day and I apply this thinking on many occasions to my clientele’. Most businesses don’t need to entirely reinvent themselves every time there is an economic turn.  If a business is just a few degrees off from where it needs to be, the business motor can run poorly, if at all.  Many times just a few degrees are all that is needed to get a business running as prime as it once was.

If your business is sputtering there are a few things that you can do before you decide whether or not a rebuild is really in your best interest or if it’s time to sell the old junker.
First off, look at your competition.  Not just any competition, but the competition that is beating you every time the two of you pull up to the starting gate.  Ask yourself the following questions:

• Do they do better quality than me?
• Are they cheaper than me?
• Are they getting more commercial or residential accounts?
• Is their image better than mine?
• How do they market their company?
• What can I do to match, if not, exceed them?

Do they do better quality than me?  This is a hard question to ask yourself.  We all like to think we do the best job possible for what we do (if not, there is your first problem).  However get an objective comment from a customer you lost, or never had, about why you weren’t in the running.  Many times the customer is taken aback by your wanting to improve yourself, and there will be no shortage of responses.  Remember that rarely are these responses personal, and your ultimate goal is to remedy problems.  So don’t be angry at the mechanic when he laughs at you.  Just use this as a time to learn.

Are they cheaper than me?  This question is up for debate in many ways as many of you have heard in my seminars.  The real question in most circumstances is whether or not you were able to sell the customer on the value of your company.  If you think price is really the biggest issue then you should take a look at the automotive industry.  How many expensive vehicles are sold compared to cheaper models?  The truth is more mid and high priced vehicles have been sold than their cheaper counterparts.  Why?  The value for the money is really what is important to the consumer.  If you can convince your customer of the features you offer and their value, someone else walking in with a lower model and price won’t be anywhere as successful as you.  Want examples?  Yugo, Eagle, Dae Woo, etc.  Just because something can be cheaper, doesn’t mean it should be.  The customer just has to know that where they are putting their money is worth the sticker price.  If your prices however are too high, no matter the features, you better be content selling less units.

Are they getting more commercial or residential accounts?  To get the answer to this question will take some shopping.  Call your competitor and ask them if they have a portfolio and list of people you can call to testify to the quality of work they do.  Many times I will simply ask the receptionist whether they work more with businesses or residents.  Yes, this does require a little covert work, but thankfully, many of us have separate phones for personal and business.  When shopping always use your home phone so you don’t answer it with your business information.  Many times you can even go online to their website and look at their portfolio online.  This is important because this will give you an idea of where they are getting more of their accounts and who you should be targeting more.

Is their image better than mine?  You may think when asking this that I am talking about within the industry.  However most of your potential customers have probably never dealt with anyone in the industry until they had need of your service.  What I am referring to is how your company appears.  You can have the best engine, the most features, and the best fuel efficiency in the industry, but if your car is esthetically grotesque, you will have to change it.  Your company image should mark the times and your target customer.  A huge error seen in contractors today, is that they market their business image to what they like.  Remember this simple fact, the majority of contractors are men, and the majority of people who make the final decisions on who is being hired are women.  So ask yourself who your present image caters to?  Do you want to impress contractors or the female home owner?  The answer may seem obvious now, but this is easily the biggest problem facing the contractors industry as a whole.

How do they market their company?  Grab your yellow pages, a penny saver, a newspaper, drive around, get online.  How many different ways were you able to find them?  What didn’t you see them in is almost as important as what you did.  Many times a change in where you put your advertising dollar can make a significant difference in your end result.  If you have a form of advertising that gets you tons of calls but no appointments, you have to wonder why.  If the peg isn’t fitting in the hole, you either get a new peg or new hole.  Don’t keep throwing your money where it isn’t working.

What can I do to match, if not exceed them?  If you found out that your best competitor has beat you in any of these areas it’s time to make the needed changes.  If you didn’t you need to look harder.  Part of marketing is the tedious job of research.  You will find that you have to either do it yourself or hire a respectable firm that isn’t attached to some form of advertising venue, to do it for you.  Never have a rep for one radio station give you the information on another.  They are programmed to tell you why they are better. 

Gabe was able to find them online, a small ad in the yellow pages, and discovered from two different bids he lost that his appearance compared to theirs was poor at best.  He got a new image, a good website, and brings a change of clothes that he specifically wears out when he is doing bids between jobs.  Within just a few months he was taking on so much business that the last time I called I got his receptionist and spoke to one of his new sales people.

So before you go rebuilding the entire engine you may want to see if it’s the timing belt first.  A couple of degrees is usually the cheaper and better decision in the long run.