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The Importance of a Good Organizational Structure to Growth and Profitability

One of the most common reasons why some restoration businesses fail is because they are unable to maintain a balance between sales and operations. In other words, they do not generate enough sales (jobs) to support salaries and other fixed costs throughout the company, or sales are too high and operations cannot keep up.

Most restoration businesses are in the former category, i.e., they need to sell more jobs to support the overhead of the company. So often I hear, “All I need are more sales. I solve that problem, and all my problems will be gone.” For those restorers in this category, you would be surprised to hear how devastating it can be to have too many jobs. Without the proper infrastructure in place, too many jobs will create chaos in your company. In fact, too many jobs can almost always break a company faster than too few sales.

So, let’s start off by providing a solution to creating a company organizational structure that has the adequate production capacity to handle the amount of jobs being generated by your marketing and advertising functions.

Organizational Structure Simply Defined:

Organizational structure is the method by which a company communicates, distributes responsibility, and adapts to change. According to the Encyclopedia of Small Business, “An organizational structure defines the scope of acceptable behavior within an organization, its lines of authority and accountability, and to some extent, the organization’s relationship with its external environment.”

To have a business that is sustaining profitable growth, a restorer needs to keep their company’s structure dynamic and effective so that it can respond to the ever-changing environment of the restoration industry. Keeping the structure lean and productive will allow the company to adapt and change so that it can grow and survive.

Problems Caused by a Bad Organizational Structure:

Without a formal organizational structure, employees may find it difficult to know who they officially report to in different situations, and it may become unclear exactly who has the final responsibility for what.

Evidence of a bad organizational structure include:

  • poor communication
  • reduced productivity
  • high employee turnover and hiring problems
  • misalignment between technology and decision-making
  • poor customer service
  • and the inability for the business to grow.

Why Organizational Structure is Important:

A restoration company’s organizational structure is what maintains the hierarchy in the business and provides guidance and clarity on specific employee issues, such as managerial authority. Its purposes are to:

  • facilitate internal communication
  • make business decisions
  • perform required tasks
  • provide exceptional customer service
  • and keep the company running smoothly.

Benefits of an Effective Operational Structure:

A well-designed organization structure promotes success and facilitates company growth and profitability. Designing an organizational structure helps the restorer:

  • identify talent that needs to be added to the company
  • ensure production capability to accomplish the company goals
  • clearly defines reporting relationships
  • provide each employee with a job description and standard of performance
  • create a framework for establishing compensation for each position
  • and provide high-performing employees room for growth.

How to Create an Effective Organizational Structure for Your Company:

Determine what your company’s organizational structure looks like today. Create an organization chart that lists all your current key functions and management positions. Include the order in which they supervise and are supervised by others, and titles and job descriptions. Review this chart and determine whether your employees know their exact duties, who they supervise, and whether they are being used to their maximum potential.

Create a “Dream” Structure:

The easiest way to begin creating the optimal organizational structure for your business is to design one as if you have not opened your doors yet. Doing this allows you to create a management and position structure that best suits the needs of your company’s model, rather than one that best suits the needs of your current staffing levels. Pretend you can structure your organization without regard to any employees you currently have or honoring any commitments you have made to see how your company should be set up, then work from there to tweak the organizational structure based on the realities of what you have in place.

Organize by Key Function:

Look at the various functions your company has and create your organizational structure to ensure each one is properly staffed. Typically, a restoration business has key functions, i.e., marketing/sales, operations, and administration/finance. Even if you are using subcontractors for production, a manager must oversee their performance.

Many small companies give multiple responsibilities to different department or function heads to save money, such as one employee filling the positions of production manager and project manager. Other examples are combining bookkeeping and human resources, marketing and sales, or office administration and information technology.

Create a Chain of Command:

Your organizational structure should clearly designate who each employee directly reports to. This prevents departments from competing and employees from going over the heads of their supervisors or believing they do not have to follow a co-worker’s direction because that co-worker is not a superior.

Communicate Your Structure:

An organizational structure is not a top-secret document and will work best if every employee, down to the lowest worker on the chain of command, knows your company’s structure. Have a meeting to explain the reason you have created the structure, how it will benefit the company, who reports to whom, and any grievance procedures.

My Personal Mission:

Is to serve the owners of small businesses that suffer from sleepless nights, make little to no money, and have people problems. I help them increase year-over-year performance and profits, build high-performing teams, and get some time back for themselves.

At Business Development Associates, we believe that every restoration business owner has the right to expect that their company can deliver to them what they want out of life- freedom and the ability to create wealth.

Make it a prosperous month!  Stay tuned for next month’s article to learn how to develop an organizational chart.

John Capponi, CR

Operations and Management Consultant

Business Development Associates, Inc.

john@gobda.com

Cell: 407-745-7698

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Yes, Stop Stalking Me and Crickets

Over my last three blog posts we’ve been discussing the fact that cold calling is not dead and that, because a single call rarely gets you a meeting (or even an opportunity to speak with a decision maker) you need to conduct a prospecting sequence of 8 activities over a 2 to 3 week period.

This post will discuss the three possible outcomes of your prospecting sequence.

The first one is “yes”. For restorer business development people this is NOT “Yes, you’ll get the next one,” because that is usually a lie designed to get rid of you! What we want is, “Yes, I do have some of the problems that you’ve brought up and I’m willing to discuss that with you a little bit now and then agree to schedule a sit down (At the Desk) meeting.”

The next possibility is, “If you don’t stop calling, texting, emailing, faxing, stopping by I’m going to call the police!” otherwise known as “Stop Stalking Me”. Now, this is pretty rare because few salespeople are so diligent as to have enough contact to stimulate this but it does happen.

If this does happen, it’s good to reflect as to whether or not your approach is too aggressive but most of the time, put them on your “Do Not Call” list and move on with your life.

The most common outcome of your prospecting activities will likely be “Crickets”. If you’ve ever been out in the country, sitting on a porch as the dusk turned into dark, deeply relaxed listening to the rhythmic sound of the crickets then you understand the reference. No matter what you do to try and connect with your prospect, all you hear is crickets. Nice for a relaxing summer evening but tough when you are trying to build a territory!

When you get “Crickets” you have two choices; “throw them back” or “extended prospecting”.

When a prospect gives you “Crickets” that is “just another prospect” it makes sense to code them as someone that you have run your entire prospecting sequence with and simply “throw them back” into your database.

Because you have coded them in your CRM, (you are using an industry specific CRM like Luxor aren’t you?) you can always take another run at them (run another prospecting sequence on them) a few months later. Who knows, maybe the fact that you made your first attempt will soften them up for your second campaign.

When the prospect that gives you crickets is a big potential client, a large and complex organization to penetrate, someone that has a lot of losses, someone high profile in the industry or even someone that fills out a route for you, then you may want to choose extended prospecting.

Extended prospecting simply means that you keep prospecting even after your initial 8 attempts are done. This is typically done at a less aggressive frequency so you don’t aggravate the prospect but you decide on an extended prospecting sequence (calls, emails, F2F stops, etc.) and frequency and simply keep going. A couple of attempts a month is probably a reasonable starting point.

Let me leave you with some prospecting food for thought:

In 2007 it took an average of 3.68 cold call attempts to reach a prospect. Today it takes 8 attempts. Most salespeople give up after two tries!

Sad in a way but think of how much opportunity that leaves out there for the pros!

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My Customer is Causing Job Delays

You know the type of job I am going to describe in this article and I am sure you can recite the customer’s name, the date, and the location. During your time as a restoration contractor you no doubt have dealt with this type of customer numerous times.

So, who is this customer I am speaking about? Well, they are the customers who want to do “some” of the work themselves. There are many reasons for this situation, e.g., they want to put money in their own pocket to cover the deductible, they think they are a contractor, or they just like doing some of the work for themselves. No matter what the reason, this decision by the customer- if allowed by the contractor- will cause job delays, confusion, and profit slippage to mention a few.

The best option is for the Sales/Estimator or Project Manager to position the customer experience for success from the beginning of the job. Here are some suggestions:

  1. Explain to the customer that your company works to the industry Standard of Care to protect the health and safety of their family and their property’s value. In order to ensure that the work is done to that Standard, tell them that your company must perform all of the work.
  2. Help them understand that the production scheduling process is complex and requires that the Project Manager has complete control of all aspects of the job to meet the schedule and customer expectations—especially getting them back to normal as fast as possible.
  3. Emphasize that most “problem” jobs are the ones where the customer is self-performing work and that prevents the production process from going smoothly. As a result, the company is not able to complete the job as fast as possible and will not be unable to provide a warranty where they have not performed all aspects of the job.
  4. Should you accept the job where the customer is self-performing work tell them that they must perform the work after your work is completely done.
  5. When adjusting the invoice and the contract do not remove the entire line item. The best option is to insert a note that explains what has been agreed upon regarding the self-performed work and provide a credit that will be allowed for the work and/or material. Make sure you have recovered the total requirement for your overhead and profit, not to be confused by 10% and 10%, which we all know is not an accurate reflection of what it costs you to run your business and make a reasonable profit.

Use your judgment! If the job is from a large referral source or high-profile customer or if the other aspects of the job are highly profitable, then make an executive business decision.

When clients use the BDA marketing programs we often suggest that that the restoration contractor not turn the job down when it becomes less profitable and instead consider that a marketing expense.

If you decide to work with them you need to make sure you have written a contract that specifies the work they are going to do and the dates that they must have their portion of the work completed. Should their work not be done by the stated completion date, you will be required to bring in your specialty contractor or employees to do the work. Based on this action the allowance for the self-performed work will not be allowed.

Help them understand that you cannot accept any excuses: their work must get done on time or you will step in and get it done to keep the job on schedule.

Remember, the reason they are doing the work themselves, or bringing in a friend to do it for them, is to save money. It is fine to save money, but do not let their savings cost you time, money, and frustration. That’s not how it works.

The recommendations above also apply to any materials the customer may want to supply for the job. They might want to supply their own materials to save money, but it can cause problems if it is not handled correctly.

Make sure you give them a time schedule for when the materials will be on the job site. This means concise language in your contract that specifically states that the materials will be on-site and ready for installation at least three working days prior to when you need them. You also must state that if the materials are wrong, broken, or unusable for whatever reason, and you must make a trip to the supply house to return them or get the appropriate materials to keep the job on schedule, the customer will pay for the material, your travel time and your mileage, plus your markup on those costs. Make it clear that you will not wait until they have time to replace those materials. You could sit and wait for days. The materials must be on the job site and ready to go, or you’ll get them yourself and the customer will pay all costs plus markup.

I hear these issues often. If you don’t want to lose time and money on a job make sure your Sales/Estimator and Project Manager sets clear boundaries and defines the parameters in your contract.

What are you going to do now? How about emailing me to request a FREE one-hour Business Strategy Session. You will be glad you did.

My mission is to serve the owners and executives of small businesses that suffer from sleepless nights, make little to no money, and have people problems. I help them increase year-over-year performance and profits, build high-performing teams, and get some time back for themselves.

At BDA, we believe that every restoration business owner has the right to expect that their business can deliver to them what they want out of life, freedom and create wealth.

Make it a prosperous month!  See you on the next blog.

John Capponi, CR

Operations and Management Consultant

Business Development Associates, Inc.

john@gobda.com

Cell: 407-745-7698

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Let’s Be Honest – Are You Really Leading Your Company?

This may be a question you have not considered; however, it may be one of the most critical questions you need to answer to profitably grow your business and lead your team to high performance and greatness.

A rewarding learning exercise would be for you to pause from your busy day and take a few minutes to ponder this question. First, we need to establish a point-of-reference of what a great leader looks and acts like.

Leadership is subjective. I believe that Its foundation stems from one thing: the ability of a business owner to establish a following among their stakeholders, i.e., customers, adjusters, referral partners, employees, suppliers, and subcontractors. Every leader has their own style and strategy. Further, their leadership styles and methods will vary because they are influenced by multiple factors — the influence of TPAs and managed care programs, lack of positive cash flow, demanding customers, digitalization, changing regulatory over-reach, and recruiting and retaining talent – just to mention a few constraints in your daily work life.

A definition that impressed me is from Jordan French, founding CMO at BeeHex, Inc. who expressed- “Leadership is serving the people that work for you by giving them the tools they need to succeed. Your workers should be looking forward to the customer and not backwards, over their shoulders, at you. It also means genuine praise for what goes well and leading by taking responsibility early and immediately if things go bad.” Very perceptive I would say.

From my observation working with mitigation and restoration contractors across the nation for the last three decades, I have witnessed that great business owners that achieve enormous success in leading their teams have critical leadership skills. Simply stated, if you are a business owner, you are a leader. You have a choice whether to be an effective one or struggle with mediocrity.

The absence of leadership in a mitigation and restoration business creates a lot of frustration and challenges, from employee-management issues, to financial issues, and to customer facing issues. In my work with small-business owners, I notice that once business owners get into the mindset of “I’m a leader,” a lot starts to fall in place.

Many business owners I have worked with think of themselves more as the person who does the work instead of the person who leads the people doing the work. There are many skills that owners must have to lead their businesses successfully. Here are 5 leadership skills that I believe are the most important for restorers to have to survive and thrive in today’s fast moving and ever-changing environment:

  1. Smart Decision Making. It’s important for you as the strategic thought leader in your company to be able to make quick, confident decisions. Knowledge and experience under your belt helps in this area; however, sometimes you must make a decision and stick with it, even if it turns out to be the wrong one. Just pick yourself up and move on. Learn the axiom “Do it Now!”
  2. Hiring. Especially when you start your business as a one-person shop, it’s hard to open it up and let others join in. Come to the realization that you cannot do everything by yourself. Once you are ready to hire, do it right. Do not hire the first warm body that walks in the door that wows you or hire because you know them, e.g., a friend or family member. Make sure you have a bunch of qualified candidates who can carry out your vision.
  3. Listening. Once your “Dream Team” is in place, make sure to listen to what they are telling you either verbally or unspoken. I am not saying to let them boss you around; instead, make sure to respect and value them by listening to their suggestions and feedback. They may very well have tremendous insight if you just stop to listen. Do not be a know-it-all- make sure you park your ego at the door. The best option is to get rid of the business owner “Ego.”
  4. Communicating. Think about what impression you leave behind after a conversation or meeting with your employees. What kind of reaction do you cause when you leave a room? Are your employees happy, angry, sad or do they feel threatened and unheard? Work on communicating in a way that brings about motivation and results, not resentment and anger.
  5. Delegating. As the business owner, you probably know how to do every job in your company. But that doesn’t mean you should be doing every job. Trust your employees to do their work effectively. Do not micromanage. Caution – this is a tough one!

My personal experience has taught me that working on these skills can get frustrating! Most of them do not come naturally, i.e., you are not born with them, they are learned. Success as a leader in your company requires a lot of self-discipline. An awesome quote– if not my favorite quote– from Steve Brown aptly sums things up- “Anything worth doing is worth doing poorly– until you learn to do it well.”

So what are you going to do now? How about emailing me to request a FREE one-hour Business Strategy Session. You will be glad you did.

My mission is to serve business owners and corporate executives that suffer from sleepless nights, make little to no money, and have people problems. I help them increase year-over-year performance and profits, build high-performing teams, and get some time back for themselves.

At BDA, we believe that every restoration business owner has the right to expect that their business can deliver to them what they want out of life, freedom and create wealth.

Make it a prosperous month!  See you on the next blog.

John Capponi, CR

Operations and Management Consultant

Business Development Associates, Inc.

john@gobda.com

Cell: 407-745-7698

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One and Done? I Don’t Think So!

Several years ago I was working with a Business Development Consultant (BDC) in a major metro in the Southwest. We had trained him to go after the agency market and he was getting good initial results.

After a few months he came to me and said that he was out of leads! Out of leads? He had a list of about 2,500 agencies in his market. There was no possible way that he could have worked all those leads in just a few short months.

“Well, I did”, he asserted, with a thrust out chin (I assume, since we were on the phone. But it sure sounded that way!)

Now, let me digress just a bit. This is a perfect example of why you need a high degree of transparency when you are working with your salespeople—ideally utilizing a shared CRM like Luxor. What had happened in this case was some combination of miscommunication, stubbornness (and not the good kind) and an inability on my part to clearly see what the salesperson was doing in his territory.

You see, back in those days I based a lot of my evaluation of the people I worked with on the number of referrals and the dollars of closed collected jobs they brought in. Now those are still crucial KPIs but I have learned the hard way that you have to look deeper.

Back to the story. What had happened with this salesperson is that he had run through his entire database making a single phone call to each agency. If he was able to get a meeting, he pursued it. If not, he moved on. That was it. One single phone call. On the vast majority of them he never spoke to the decision maker. Just one and done and now he needs more leads!

Given that, for this vertical in his market there are no more leads (!) we have to be more efficient at getting to decision makers and having our initial conversation to see if the prospect has any of the pains we can address.

There are two pieces of marketing research that influence our prospecting process.

The first is that it takes seven contacts for a prospect to realize that you are making a concerted effort to reach them. However, the average salesperson only makes two attempts to reach a prospect! So, while you are getting frustrated and indignant at your rude prospect for not returning your calls he or she isn’t thinking about you at all!

The second piece of research is that prospects have better recall concerning you and your message if that message is delivered to them via multiple different media. In other words, a mix of phone calls, emails, faxes, letters, bulky mails, face-to-face calls, etc. is far better than seven phone calls or seven emails if you want to get the decision maker to actually talk to you.

So, the best way to get in touch with your prospects is to create a sequence of different prospecting activities arranged in a meaningful sequence that makes sense. We recommend 8 activities conducted in a compressed time period, typically two to three weeks.

This time frame is important to convey a sense of momentum and urgency to your prospects. This also allows you to sift through your database without wasting enormous amounts of time on prospects that have no intention of talking to you.

These activities should relate to each other when possible.

For example, let’s say you start your prospecting sequence with a face-to-face visit but are blocked by the gatekeeper (obtaining your prospect’s business card). You then leave a specially designed marketing piece behind that is clever, funny and advances your value proposition and the problems you solve without giving away your “secret sauce”.

The following day you make a phone call to follow up on the leave behind piece. If you get blocked, you leave a scripted voice mail that also touches on the problems you solve for folks like your prospect.

Your next step is to attempt to connect with the prospect on LinkedIn with a scripted message.

Following this, you send an email to follow up on your communications thus far and so on.

The idea is that you are sending your marketing message in a variety of different ways and at least seven or eight times in a compressed period of time in order to stimulate the initial conversation.

In our next post we’ll discuss “Yes, Stop Stalking Me and Crickets”.

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Without This Cold Calling Will Be a Real Struggle!

In my last two posts we established that cold calling is far from dead and that the most critical element to successful cold calling is having a well thought out marketing strategy behind your sales and cold calling efforts.

Now, we have to take that strategy and create a powerful cold calling script.

I can almost hear the wailing and gnashing of teeth at the concept of scripting your cold call openers. Here’s the thing; sales professionals create and use scripts—period. Of course, they ultimately make the scripts their own but being extremely specific about what you want to communicate and how you want to communicate it is simply sales best practice.

After all, you want a specific outcome to your cold calling, don’t you?

Most salespeople will say that they want a meeting or they want to obtain new business when I ask that question but I think it’s important to start a step earlier. I think that the number one goal of all prospecting activity is to find pain!

Sales is about getting people to make changes (ideally to your company!). And given that people generally resist change unless there is a powerful motivation that incents them to change you’d better find such a motivation as early in the process as possible. So whether you call it pain, problems, challenges, dissatisfaction or “owies” all of these things are motives to get your prospect to change.

The process of creating your marketing strategy will have identified the pains that your prospects most likely are suffering from. So now you have to build your script around those pains.

Let’s also face the reality that when you are cold calling your prospects are often busy, rushed, not expecting your call and therefore may be short or irritated when they take your call or walk out to see you at their office. This means that you have to get to the point immediately. Don’t waste time with the fake salesman voice asking how they’re doing today. That immediately marks you as an oxygen thief to be gotten rid of as quickly as possible!

I also suggest that you do not identify the company you work for or wear company logoed apparel when prospecting. Why? Because once your prospect identifies you as a restoration contractor salesperson they will immediately place you in the category of all such salespeople that have called on them previously.

If you have a good marketing strategy and value proposition this is the last thing you want to happen because you can be sure that 99% of your competition doesn’t! If they think they know what you are all about they will turn off their brain and stop listening except to wonder why you aren’t carrying a box of donuts.

You also want to establish credibility as quickly as you can. Ideally, you have a couple of well-known members of the prospect’s industry that you work with that you can name drop. (If you don’t have them yet, just omit this part of the script until you do.)

Then, you want to get to the pains as quickly as you can.

Here’s an example that works just as well on the phone or in person:

“Hi, my name is Tim Miller and I’m a business development consultant that works with agents like Bob Bigshot at State Farm by Bigshot and Tony Tiger at the Tiger Agency helping them to increase policyholder retention, generate more word-of-mouth referrals and create a new competitive edge to help them sell against Internet competition like Geico, Esurance and Progressive. Are you facing any of those issues?”

Remember, the goal is to find pain so that is how I want to direct the conversation, if possible. Ideally, the prospect will answer my question about whether or not they are facing any of those issues and I can start asking my “drill down” questions which are designed to lead me to an “At the Desk” meeting.

Now, prospects don’t always cooperate and you have to be able to think on your feet. The prospect may not answer your question and instead ask you who you are with. When you get this response you have to answer them but get back on track as quickly as possible:

“I’m with Fabulous Restoration. Are you familiar with our company?”

Chances are that they aren’t (unless you’ve been doing a lot of advertising or previous marketing). A great way to respond when they say that they aren’t familiar with you is:

“Well, I’m sure you’re familiar with (the guys in the yellow trucks) and (the guys in the green trucks) and (a well-known independent). We’re exactly like those guys only completely different!”

Unless your prospect is completely humorless they will usually bite. “Okay, how are you completely different?”

Your response here has to get you back to their pains.

“Well, we have decided to grow our business by helping the agents that we work with protect and grow their business. In speaking with many agents we find that they are often looking to increase policyholder retention, generate more word-of-mouth referrals for new business and are constantly looking for new ways to compete against Internet insurance providers. Are any of those issues for you?”

In my next post we’ll discuss what it takes to get the conversation in the first place.

All the best!

Tim

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The Most Important Secret to Successful Cold Calling

In my last blog post I discussed that cold calling is very much alive despite the many vendors of inside sales and lead generation services that pronounce it dead loudly and often. In that post I promised to break down the critical elements of successful cold calling in my subsequent posts and today we are going to discuss what I consider to be the most important one.

This critical element is having a well thought out marketing strategy behind your sales and cold calling efforts. Unless you provide a commodity service and can compete successfully on price day in and day out, marketing strategy is crucial. Even if you can successfully sell commodities based on price today, I would suggest that working out a marketing strategy for the future is simply sound business planning.

Let’s start by defining marketing strategy. For the most part, your marketing strategy answers the questions (spoken or unspoken) in your prospect’s mind that go something like this, “What makes you and your company different and better than my current vendor and the other (20, 30, 100) companies just like yours that also call on me? Why should I change whatever it is I am currently doing? In fact, why should I even listen to a word that you are saying?”

So, if we face reality, these are the questions that we must acknowledge are likely on our prospect’s mind as soon as we make contact with them on a cold call. The prospect is going to make a decision in a few split seconds whether or not to spend any more time with you at all so your strategy must be strong, the salesperson must understand how it addresses pains the prospect is likely to have and it must be formulated into a powerful script that has been role played and delivered to near perfection.

If you do not have this component in place then your poor salespeople sound just like the dozens of competitors that call on the prospect, get shut down quickly, tossed out on their ear (or hung up on) and become quickly demoralized. Their call reluctance grows to epic proportions!

Needless to say, this is a recipe for failure.

Now, explaining how to create a powerful marketing strategy is something best covered in a Webinar rather than a blog post. Stay tuned for an invitation to our next Webinar that will be devoted to this topic!

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Why You Should Be Using a Subcontractor Agreement

Many restoration contractors rely on subcontractors (Subs) to complete much of the work on their jobs. Without a doubt, they play a vital role in the disaster restoration industry. Because many restorers have long-standing relationships with their Subs, they fail to use Subcontractor Agreements because they feel comfortable with these small businesses. This means that they could be exposing themselves to a great deal of risk and liability.

Simply put, a Subcontractor Agreement is a risk control strategy which shifts risk from one party to another. With such an agreement, the restoration contractor is protecting themselves from risk derived from the work of their Subs.

Why risk transfer is important

Taking on your Sub’s liability can cost you tens of thousands of dollars. Without a Subcontractor Agreement, if your Sub does poor work on a job that results in loss, you could be held legally and financially liable for their work; thus, the much wiser decision would be to go with a formal written agreement. A Subcontractor Agreement has many benefits:

  • It can help control the type and the impact of the liabilities a restorer could face.
  • It can generate additional profit by lowering overall costs.
  • It can save money on insurance workers’ comp audits. Certificates of Insurance aren’t always enough.

Since a Subcontractor Agreement is designed to protect contractors from the intentional or negligent acts of their Subs, most attorneys recommend that the agreement should have language that resembles the following:

  • “Subcontractor, agrees to defend and indemnify the contractor (and others if applicable) against any claims, lawsuits, and damages arising out of the subcontractor’s negligence or intentional acts.”

Furthermore, language about the Sub’s agreement to defend and indemnify the contractor for any misrepresentations (made knowingly or unknowingly) regarding the Sub’s licensing, corporate status, or other relevant issues should be included.

A restorer can really help themselves and avoid liability with a well-written Subcontractor Agreement. Even though you may have a long-standing relationship with a Sub, the situation could get very sticky should something go wrong, so it would be a good idea to let your Subs know that these agreements will be required if they want to work on your job sites.  It’s a good idea to have someone like an attorney or your insurance agent look over or provide you with a solid Subcontractor Agreement.

Ground rules for subs

I have observed that my successful clients that are using Subs to produce the majority of their work have created and communicated the ground rules required to work with their businesses. You should negotiate a written agreement with each Sub on a yearly basis.  

The Subcontractor Agreement needs to list the requirements necessary to work with your company. These should spell out any areas in which disagreements could occur, which could include, but are not limited to:

  • Is a job site visit required before a price is given?
  • Who will pay for job clean-up and trash removal?
  • How will Subs’ invoices be submitted and when?
  • What payment terms are agreed on?
  • Can the Sub do side work for the customer?
  • How will change orders be handled?
  • Who will purchase the materials for the job?
  • What warranty will the Sub provide?
  • What are the license and insurance requirements?
  • What agreement has been made on the job schedule?

Your Subcontractor Agreement should include at a minimum:

  • A firm and fixed price quote for each job. No Cost Plus or T&M quotes for work to be done.
  • Proof of all required licenses and insurance.
  • Proof of financial competency when a requirement of the job.
  • Showing up at the job site on the agreed-upon date and time.
  • Following the same work and safety rules that you expect of your own employees.
  • Keeping the job site clean and orderly.
  • No use of loud radios, drugs, smoking, or alcoholic drinks on the job site.
  • No agreement to do side work for the customer without prior approval from your company.

What to do now?

Look at your Subcontractor Agreements that you currently use and make sure they are effective in your day-to-day operations. If you do not have or do not use these agreements, I recommend that you immediately contract your attorney to create one. Be proactive and eliminate potential problems with your Subs.

My mission is to serve small business owners that suffer from sleepless nights, making little to no money, and having people problems. I help them increase year-over-year performance and profits, build high-performing teams, and get some time back for themselves.

At BDA, we believe that every restoration business owner has the right to expect that their business can deliver for them what they want out of life (freedom) and to create wealth.

Make it a prosperous month!  See you on the next blog.

John Capponi, CR

Operations and Management Consultant

Business Development Associates, Inc.

john@gobda.com

Cell: 407-745-7698

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How to Become Someone Your Clients Know, Like and Trust

Part of our services to our clients is going to their market and doing ride-alongs with business development reps to help them get a running start as they implement the proprietary programs we teach them.

Sometimes these are industry newbies; sometimes newbies to outside sales and sometimes they are BDRs that have had long experience in their market and with their company who are now implementing a new and/or improved value proposition.

The ultimate goal for a BDR is to become someone that clients know, like and trust.

Why?

Because people do business with people they know, like and trust. In fact, this is a maxim in the sales business coined maybe by Dale Carnegie or Zig Ziglar or maybe even Henry Ford.

But regardless who said it, this is the ultimate goal: to have a personal relationship with your clients who trust you as an expert, as a friend that won’t let them down, as a resource that has expertise and the ability to help them solve fundamental business challenges and problems that they face or may face.

I had the pleasure of riding with a well-established BDR over the last two days. She has invested 10 years in the building of her book of business. She has been to countless association meetings, served on committees, on boards, has a near photographic memory of her client’s properties, past losses and their personal lives.

And as I observed her working her magic in the field this week I had an insight about becoming trusted that I wanted to share.

Some years back I read a book about having successful romantic relationships and the author had a neat little trick where he broke down the word intimacy into, “Into me you see”. In other words, intimacy comes from authenticity, from letting other people see who you really are as a person.

So many salespeople get caught up in the idea of some “Joe Salesman” persona that just comes across as phony and inauthentic. People can smell this out a mile away and it tends to generate the opposite of trust!

Now, I’m not saying that BDRs should just walk into every account and bare their souls about every trial and tribulation that they are facing. There is such a thing as over-sharing!

But at the same time, the people that you are doing business with are people just like you. They face marital problems, illnesses, deaths, difficult children, job struggles and career challenges just like every other person.

Being authentic is recognizing that they are people just like you and that as highly social creatures we seek connection. In fact, the salesperson I rode with this week told me words to the effect that, “Even though I’m there to try and get restoration work, I feel that the underlying work is to connect with people on a human level and that there is some divine purpose underlying all this that I don’t understand and don’t need to.”

Another great mentor of mine, Nick Paolella told me many years ago, “Timmy, don’t sell to your friends. Make friends out of the people that you sell to.”

So it is worth considering how you can reveal yourself to your clients in ways that let them see you as a real person. How do you let them “see into you” and connect with you on a different level than simply as a vendor providing services they need from time to time?

This doesn’t mean you don’t have to develop expertise, make sure you and your company deliver on your promises and deliver real value added to differentiate you and your company from the competition.

But to get to the highest level of trusted advisor and resource, you have to be real.

All the best!

Tim

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Is Cold Calling Dead? Not Hardly!

Even though I spend the majority of my time on sales development I’ve been primarily a marketing guy my entire career. And that’s not really surprising because marketing and sales are really two sides of the same coin.

Another broad way to think about it is that marketing decides what and sometimes how something will be sold and sales then goes out and sells it.

In my experience, marketing is a fad driven industry. If you’ve clicked on any marketing related email or website during the last few years then your inbox is probably crammed full of offers to provide you with information on the latest and greatest marketing innovation. Some of the most recent are inside sales, inbound marketing and lead generation services.

Now, I am a total fan of inbound marketing and lead generation and inside sales programs.

The problem I have is that they are marketed as a replacement to cold calling—as if cold calling was dead (they often say just that in the email!)

As if cold calling no longer works.

As if millions of years of the ways that humans communicate and create relationships has suddenly been erased with the advent of the latest and greatest software and data mining technology.

Let me state with clarity that cold calling is dead if you don’t know how to do it!

If you don’t know how to do it then it is a huge time and money waster, an absolutely demoralizing activity to put your salespeople through and the results may have you searching for the magic bullet only to find websites that confirm what you are already thinking:

  • It’s not that my salespeople are ineffective.
  • It’s not that I don’t have a clear differentiation strategy from my competition.
  • It’s not that I don’t have solid, proven scripts and processes.
  • It’s not that my salespeople don’t role play or are not coached as they go through the process.
  • It’s not that my products or services are commoditized and I haven’t taken the time to reframe them as solutions to different, more important problems.
  • It’s not that I’m calling the wrong people.
  • It’s not that I don’t have a prospecting sequence to follow and instead do the same thing over and over and expect different results.

Nah! It’s that cold calling is dead. I knew it! And see, this website hawking the latest and greatest technology said so—it must be true!

Cold calling, which includes cold calling by phone as well as face-to-face (F2F) is still (and likely always will) be an important part of the skills that true salespeople bring to their profession.

When done correctly it is a very powerful and fast way to build a territory, to get things moving, to get traction, to start setting the meetings that are necessary to move prospects through the pipeline from suspect to client or customer.

Watch this space as we break down critical elements of successful cold calling over my next several blog posts!

All the best!

Tim

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