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.

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.

Wait a minute, Mr. Postman

This weekend, I was sitting outside my local Starbucks enjoying what’s left of the summer sun when a US Postal Service truck pulled to the curb. The driver got out, grabbed a plastic tote from the back of the truck, and ambled to the drop box he had come to empty. Without much effort, he got the job done. All in all, it was a pretty mundane scene.

However, I took notice of this guy’s clothing. Although he sported the standard-issue postal trousers, they sagged more than a little, the plain blue t-shirt was untucked, and he wore his trendy, flat-brimmed baseball cap backward. None of it seemed very uniform-like, and he just looked sloppy. It occurred to me, “Would a guy from FedEx or UPS ever look like this?”

I knew the answer: no way, and although there must be exceptions somewhere, UPS and FedEx drivers always seem crisp and put-together. Instead, this postal driver’s attire seemed to be a projection of his attitude. Ho hum, punch the clock, get it done. He certainly didn’t see himself as a representative of the brand. More importantly, he didn’t inspire confidence and instead made me think, “I’m glad I pay all of my bills online these days.”

Thinking about this in the context of the water systems industry, as groundwater professionals, we often interact directly with homeowners. Even if a whole crew arrives and starts setting up for a job, someone still has to go to the door and check in, maybe even go into the house to troubleshoot a pressure tank, a control box, or a pressure switch. What does the homeowner see? Continue reading