The 4-step program

When it comes to marketing strategy, any marketing course beyond high school will break it down into four parts: segmenting, targeting, positioning, and the value proposition. Does any of this apply to your water systems business, or is it just academic jargon? I think it applies, and here’s why.

Let’s start with segmenting. My version of this is “a customer is not just any customer”. You probably do this all the time. You know intuitively that the water system needs of an expensive lake home are different from those of farming operations which are still different from those of a municipality.

Segmenting leads to targeting, which is simply identifying which of these segments you feel are the most profitable and make the most sense for your business. As a water systems contractor, you may decide to target everybody that needs water, or just certain segments, such as agriculture.

Once you’ve identified your target market, the strategy moves to positioning. This answers the question, “Where do my products and services fit versus the competition?” Are you the low-cost leader? Are you the expert on variable-speed constant pressure products? Or, is your company somewhat of a generalist, providing a variety of water services?

Finally, after you’ve segmented your potential customers, targeted which ones you’re going after, and decided how you’re going to position your business within that target market comes the value proposition, also sometimes called the unique selling proposition. A couple of fancy names, but this is the meat of a marketing strategy and the essence of your business. It’s also the hardest part. Your value proposition encompasses your advertising, your brand, your competitive advantage, how you do business, and even your logo. It says, “Here’s why you should buy from me.” The list of choices can be long: I am the most convenient (24 hour service); I am the most experienced and reputable; and I am the most affordable, are just a few examples.

The reason the value proposition is so important is that the alternative is to try to be all things to all people. That rarely works because it just confuses the customer. What makes finding the right value proposition difficult is that it has to match the capabilities of your business to what will resonate with your target market. For example, if it doesn’t make financial sense for your business to be the low-cost leader (and it rarely does), you shouldn’t go there.

As a water systems contractor and business owner, you’re probably already going through this exercise, maybe even unconsciously. Nevertheless, you’ll never regret taking a step back from time to time to think the steps through. You just might find a better (and more profitable) value proposition.

Slow down and have a conversation

The following post originally appeared in June of last year. Since we’re in the busy season for many water systems contractors, I thought the timing was right to post it again.

Let’s face it. The term “sales” in many circles has a reputation for trying to sell us things we don’t need or even want. But, truly successful sales people will tell you that’s not how they do business. They’ll tell you that what’s made them successful is a relentless focus on helping their customers get the products and solutions they need. They see themselves as educators and consultants, guiding their customers through a decision-making process and providing options.

There’s no area where that’s more true than with the professional water systems contractor. Most don’t like to think of themselves as sales people. But, a huge part of job is just that. You are our industry’s educators and representatives to the rest of the world.

What makes this especially true in our industry is that water systems are far more reliable and have a greater lifespan than most of the appliances in our lives. As a result, most homeowners will only need a new water system or something repaired every 10 years or so. That means that you will only get the chance to stand in front of your customer once every decade or so. So, we need to make the most of that opportunity.

In many cases, the homeowner is out of water and is literally desperate to get it back. Nothing highlights the critical nature and value of water more than not having it. As a result, the conversation becomes a one-way, two-part question of “how soon and how much?”. Try to slow things down. Have a conversation. A few minutes goes a long way. Show them how their water system works. What does that tank do anyway? Explain why they are out of water. How has their home and lifestyle changed since someone last looked at their water system? Have you always had that garden?

Why do this? Because two things will happen, both of which are good for you. It will be a springboard to upgrading their water systems. Perhaps it will be a constant pressure system, or dry well protection, or water treatment. Maybe it will be simply a larger tank. More importantly, you will have instilled confidence, both in their water system and you. From there, they will tell their neighbors.

What will they be telling them? In so many words, that you listened to them, the two of you had a great conversation, and they ended up with a far better solution and water system than just being “back in water”. What they didn’t get was a sales pitch.

Locked in

Several years ago, a manufacturer made a major marketing push in an attempt to move the groundwater industry to 3-inch residential submersible wells. Their pitch centered on the lower costs of drilling a 3-inch well. Of course, they offered a 3-inch submersible that no other major manufacturer offered: a “perfect match” for these installations. In some regions, this manufacturer had some success with this strategy, at least in the short-term.

Fast forward to a couple of days ago, and what I saw happen. A young couple, who purchased their home a couple of years ago, was out of water. The homeowners didn’t know what was downhole, but knew the unit had failed and it was time for a replacement. After talking with a couple of neighbors and doing some internet research, they decided they definitely wanted a Franklin Electric 4-inch submersible. They contacted their water systems contractor, who was not the same one who drilled the well ten years ago.

When the contractor came to pull and replace, he immediately noted the 3-inch well. Not an older, encrusted 4-inch well, but a relatively new 3-inch well drilled exclusively for a 3-inch submersible. Of course, he had to tell the homeowners, “Sorry, but there’s only one product that will go down that hole, and I don’t carry it. Or, I can drill you a new well that will accommodate what you want. And actually, that might not be a bad idea, since with this drought, it looks as if this well might have gone dry. Three-inch wells offer far less storage of water, so they are more prone to being overpumped.”

The homeowners found themselves locked in with no options, and that left them feeling frustrated and angry. They didn’t like being told what they had to do, even if they had been happy with the performance of the original system. In fact, they were angry enough that you can bet they will run fast and far to another manufacturer the first time circumstances allow them to do that. The manufacturer may have garnered a sale from its exclusive approach, but it did not build a relationship.

What’s better? The short-term sale or the long-term customer? I’ll pick the long-term customer every time.

The object lesson here is that gimmicks and strong arming don’t build a brand, and they don’t build loyalty. Listen to your customer. Figure out what his problem is and how to solve it. Give him options and let him be part of the process. Otherwise, if you lock him in, the next time he needs something, you may find yourself locked out.

When Customers Call

This week’s post is taken from Thad Plumley’s EDITOR’S NOTE in this month’s edition of NGWA’s Water Well Journal. 
As a business owner, there’s no doubt that you can’t be everything to everybody. But as Thad reminds us, there’s a right way to handle those situations and a wrong way. 

When Customers Call, Show Off What You Do Best

I knew the life of my hot water tank was near its end when it began operating more like a mildly warm water tank.

I decided to call the company that installed it and jotted down the phone number from the sticker slapped on the tank by the installer 16 years ago.

That’s when things got strange.

I told the employee answering the phone that I was interested in getting information on the replacement of a hot water tank. His reply?

“We don’t do those this time of year.”

I paused because while I knew it was “air conditioner season” I assumed more detail had to be coming. And it was.

“Sorry.”

That was it. You’re not a big ticket, sir, see you later.

I know not all jobs are created equal, but c’mon! I was essentially told, “Call when it’s convenient for us.” Do people really act that way? In this economy?

Customer service is more critical than ever today. Phones don’t ring like they used to and e-mail inboxes don’t contain quote requests like a few years ago. So it’s a must that every time you’re contacted by a potential customer, you take it as an opportunity to show off what you and your company do best.

My call could have been handled so much better in so many ways.

For starters, the company could have gladly taken my business. I know, I know, crazy talk. But I was on the phone ready to spend money. Granted it was not air conditioner money, but a customer ready to write a check is a customer ready to write a check.

The company could have asked if I was a past customer. They could have a no-tank policy for cold calls while asking everyone if they are someone they have already done business with. When hearing I was a past customer, they could have worked me into their schedule. A “past customer is a customer for life policy” is a sound one.

I could have been referred to another company that the business has a friendly relationship with. Not all jobs are right for all companies, so from time to time a firm should work with another one on referrals—we’ll send ABC job calls your way if you send others to us for XYZ jobs.

Any of those options is whole lot better than “Sorry.”

Customer service can’t be taken for granted. Even if you seem busy today, you really don’t know when the next call is coming. Take every interaction with a customer as a chance to blow them away with great service so they will not think twice about calling you again.

Oh, and allow the calls to come any time of year.

Why you?

Unless it’s selling a pure commodity, every successful business has figured out a way to differentiate itself from its competition. That is, it has answered the question of, “how is my product or service different and therefore better, than everyone else’s and here’s why should you buy from me.” Much of the time, a business’s differentiation strategy is very direct: Wal-Mart differentiates itself with low prices and that’s about it. In other cases, the differentiation is more subtle: “Chevy Runs Deep” is meant to invoke a sense of history and tradition versus its competition. 

Here’s an excellent example of differentiation close to our industry. This plumbing business has established itself as the expert (see last week’s post, Be the expert) on older homes. Now, my guess is that most experienced plumbing contractors can handle the challenges of an older home just fine. But, as a consumer, I may not know that. What makes this tactic even more effective is that this contractor is not located in a newly constructed suburb, but in an area where there are many older, classic homes. He’s matching his marketing to the market. As a consumer, if I need a plumbing contractor and I have an older home, I’d better call them. After all, I need an expert, not just any plumber. 

As a water systems contractor, how are you differentiating yourself from your competition? The list of ways to do it is long. But, as a business owner, if you don’t, you’re just like everyone else.