Ho, ho, ho! Merry Christmas! It’s advertising season! It sure seems like every year holiday advertising, oh heck let’s not be politically correct, Christmas advertising starts earlier and earlier. This year it started right after Halloween, with the typical Black Friday sales coming very early this year in an attempt to extend the Christmas buying season. So, when is advertising season for your business? Do you advertise in the spring and again in the fall? These are the two traditionally slow periods for the HVAC business. Do you advertise year round? Do you advertise at all? What should you do?
Advertising is the lifeblood for many businesses. Think of it this way. If advertising isn’t important, why does Coca-Cola spend billions of dollars a year advertising a product that everybody in the world already knows and many buy on a regular basis? I often have contractors ask me when the best time to advertise is. We know that manufacturers love to offer preseason programs to fill their pipeline. That’s not a bad idea and it works out for manufacturers but what about you?
Unscientifically speaking, in preseason you spend a large portion of your budget at a time when maybe 10% or less, of people have HVAC problems at top of mind. Is this a good way to spend your advertising money? On the other hand, in-season advertising reaches your audience when air conditioning or heating issues would be at the forefront of their thoughts. Interest levels could be as high as 90% or more, but wait, isn’t that when you are the busiest? Your phone rings off the hook, your guys work round the clock, and you have angry customers calling asking when the technician is going to get to their house. So when is advertising season for your business?
The answer could be it depends. It depends on your goals – it always gets back to those annoying goals. What do you want to accomplish? Typically, we talk about three basic types of growth goals: aggressive growth, moderate growth, and maintenance mode.
If you want aggressive growth, you invest a significantly larger portion of your profits to marketing and advertising. If you have a new business and you want to reach many new customers, you could reinvest 10 to 20% of your profit toward getting your message out along with lead generation and promotions. It would be smart for a new business to budget for year round advertising. I know, most new business don’t have the cash or credit to advertise year round. So, when is advertising season for your business?
If you desire moderate growth for your business, you could invest a smaller portion of your profits into advertising, lead generation and customer retention programs. Assuming you have a larger profit pool and a larger customer base, you might consider reinvesting 5 to 10% of your profits in to advertising to generate leads, and into customer retention programs, as we all know it costs much less to retain an existing customer than it does to develop a new customer. When is advertising season for your business?
Maintenance mode – you have an old established business; your main concerns might be retaining customers, and adding enough new customers to replace customers that you lose to attrition. You could consider reinvesting 2 to 5% of your profit primarily in customer retention programs with some minor lead generation programs. For this business, when is advertising season?
When is advertising season for these businesses and for your business? Analyzing the different types of business relationships can give us some insight into your advertising season. Essentially, you have three basic relationships to analyze, transactional, connection, and collaborating.
A transactional relationship exists mostly in a low-priced, low-profit business. In our industry, this could be new construction tract work or the low priced service contractor. You get in, get out, and collect your money and move on to the next customer. There may not be much in the way of repeat business.
A connection relationshipinvolves giving adequate attention to the needs of your customers and your customers want a connection with your company. With high competition in the contracting market, we realize that if you want to be ahead of your competition, you need a better approach to the buyer seller relationship. Customer loyalty depends on paying attention to the needs and wants of your customers. Contractors that offer service contracts typically work in this area.
A collaborating relationship is the highest level of buyer-seller interaction where both parties work together to develop a plan of action that satisfies the needs of the customer while benefiting the contractor as well. Buyers don’t see themselves as customers but as partners with the contractor. This kind of business relationship can build a solid competitive edge for the partners. Potentially this type of relationship can last a long time.
Relationships take time to build, and you need time to build the relationship with your customer. If you don’t advertise, how will potential customers know that you exist? If you aren’t talking with your customer on a regular basis, how will they know what you offer?
If you conduct primarily transactional business where your customer drops by your store to purchase filters and humidifier media when necessary you probably don’t need to do a lot of advertising unless you want to grow your business. If you are in that growth mode then you might want to increase your visibility and extend your reach to new customers.
If your business runs on connections with existing customers, you might work on customer retention programs that provide your customers with incentives to recommend you to their friends. People like doing business with people they know or with people their friends’ trust. So, how do you reach these people?
If your business thrives on collaboration, you need to get the word out to the customers with whom you can collaborate. How do you find those partners? How do you market your business?
In reality, your business has a combination of these different types of relationships. Think about how to use these relationships to your best advantage. If you can segment your customers into these categories, you can determine which segment is the most profitable to your business. Use this information to attract more of these profitable customers.
We started this article by asking, “When is advertising season in your business?” Advertising season should be year round. If you advertise when you are slow and when you are busy, you can even out the fluctuations and drive business into your slower periods.
When you think of advertising think of overall visibility from your trucks, your building, your website, your Facebook page, your news releases, your newspaper ads, your radio spots, even your TV commercials. All of these elements are part of your advertising profile, they should be consistent, and they should all complement each other. It does not have to cost a lot if you consistently get your message out there. Consistency is the key, week in and week out. Put your message out there where potential customers can see it.
You can learn how to do more with less in advertising. Advertising brings in customers and helps you grow your business; it is not an area to cut in tough times. Remember that if advertising weren’t important, Coca-Cola wouldn’t spend billions of dollars per year advertising Coke. There are ways and techniques to increase visibility without spend billions of dollars. A marketing professional can help you work through the details on what will work for best for your business and for your budget.
Andy Fracicais president and CEO of Fracica Enterprises, Inc., a consulting firm specializing in marketing, PR, social media, and lead generation strategy. He has over 30 years of sales, marketing, technical training, and product management experience in the heating ventilating and air conditioning (HVAC) industry. He concentrates on helping manufacturers, distributors, dealers, and startup companies find their voice in an ever increasingly crowded market place. Contact him at 260-338-4554, a[email protected] or visit the website www.fracicaenterprises.com.