Marketing. A very simple word, and one that we all know, but
what does it mean and how important is it to our success?
For the “short” time that I have been involved in the construction
industry, I have noticed that most of my competitors
don’t put much of an effort into marketing. They might
spend some money, but there just doesn’t seem to be any
rhyme or reason for what they do. Why is that? Do they not
understand what significance and importance marketing has
for a company?
Simply put for purposes of this article, I will define marketing
as the effort and resources that a company dedicates to
enhance the sales process. I know this is not the “technical”
definition, but it can work. That being said, how much money
should be spent on marketing? What should you spend the
money on, and what kinds of things can you do that will
enhance your sales processes?
I have been taught that a company should spend between 1
percent and 2 percent of gross revenue on marketing. If we
use the lesser amount and say 1 percent, that means for every
million dollars of sales, a company should dedicate about
$10,000 to marketing. That can be a lot of money, especially
for a company that performs $25,000,000 of work That company
would spend a minimum of $250,000 per year, and that
seems like a huge amount of money to spend!
Each year, as an estimator, my boss requires that I submit my
own plan for marketing. I use I percent of sales to establish
my total dollars, and I use $4,000,000 as my gross volume of
sales. That means I have a budget of $40,000 for marketing.
Establishing the total amount for my budget is the easy part.
I have to plan for the coming year, and then during the year,
I need to justify the spending of that money. I have to convince
my boss that we got additional sales volume, or a higher
margin on sales as a result of spending the money. In the
words of my boss, “failure to accomplish that will result in
unemployment.”
The result is that the company sets aside $40,000 for my use.
I am required to spend that money. Our company is convinced
that we must “prime the pump.” If we don’t do that,
if we don’t dedicate time and money, either our sales volume
or our margins will deteriorate.
During the year, I make the decision to take a client or potential
client to lunch or to play golf. I decide to charter a boat
and take the staff of one of our general contractors fishing. I
decide if I want to take a client or potential client to a concert.
Those are my decisions, and I am held accountable.
Each month, I do a marketing report. That report consists of
three parts. In the first part, I review the past month and show
how I spent the marketing money. I also report on what the
results were from that investment.
Part two is to state my plans for the current month and what
results I expect, and part three requires me to list all my clients
and corresponding amount of sales and marketing money
spent for each. That seems like a lot, and you probably think
I spend a great deal of time on this report, but in reality, it is
time well spent.
I know this program is unique and that it probably won’t work
for everyone. The important thing I hope you get out of reading
this is that you should have a marketing plan. You need
to dedicate money to be spent on marketing, and you should
be able to see the results.
Comments? Send your e-mails to [email protected], or fax
to (703) 534-8307.
