SWOT your business

A couple of weeks ago, I wrote about the four parts of a marketing strategy: segmentation, targeting, positioning, and establishing the value proposition. This week, I want to back up just a bit, because the marketing strategy is actually just part two of the four parts of a generic marketing plan.

There are lots of variations on this, but the four parts are 1) analyzing the situation 2) the marketing strategy 3) the marketing mix 4) implementation / feedback.

This week, I wanted to touch on part 1, “analyzing the situation”. The most common tool for this is what’s called a SWOT analysis. That’s a semi-clever acronym for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis can be done on almost any business, team, or individual for that matter.

As the owner of a water systems business, if you did a SWOT analysis of your business, what would it look like?

Strengths – Ask yourself, what are the top 5 things that make my business a strong one? It could be your experience, your reputation, a certain expertise, or perhaps a piece of equipment no one else has. It could even be something like your location.

Weaknesses – What are the weak points of your business? These could be anything from a lack of properly trained employees to a lackluster accounting system.

Opportunities – Looking externally, what are the biggest opportunities for you and your business? Is it geothermal, a new housing development, or upgrading existing systems to constant pressure? This summer, perhaps it’s been the drought.

Threats – If you’re in the water system business, several possibilities come to mind here, such as the encroachment of public water, price competition, no new housing, and the economy in general. But these will be different in different markets.

Note that strengths and weaknesses look internally at you and your company while opportunities and threats look outside your company. Actually, my preference is the inverse of the above, TOWS analysis, which is, you guessed it, Threats, Opportunities, Weaknesses, and Strengths. It’s become more popular in recent years because it forces you to look externally first, not last.

In any case, the reason a good SWOT analysis is crucial to a marketing plan is that it forces you to match your marketing strategy (step 2) to the situation. For example, if new construction is at a standstill in your area (that’s a threat), targeting builders doesn’t make sense. Likewise, if constant pressure systems are doing well in your area (opportunity), and you’re experienced here (strength), your strategy needs to target this area.

This is not complicated stuff, and like I’ve said before, you probably do much of this already without thinking about it in precisely these terms. However, a thorough and rigorous SWOT analysis is generally much harder than it first appears. But whether you’re building your business or coaching a Little League team, it can help you frame and organize the situation. And once you truly understand your current situation, the other components of your marketing plan start to fall into place.

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.

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.

Be the expert

In last week’s post, Know your stuff, I talked about a massive research study that concluded that salespeople who know more sell more. This week, while attending the 2012 South Atlantic Well Drillers Jubilee in Virginia Beach, I had an impromptu meeting with the current NGWA President, John Pitz, which fed right into this.

John, who holds a Master’s degree in mechanical engineering from Notre Dame and owns and operates a water well construction and pump installation business in Batavia, Illinois, demonstrated one of the most complete and advanced submersible sizing programs I’ve seen. Over several months and many hours, he’s developed a laptop-based program called the NGWA Pump Sizer that goes beyond the usual inputs of GPM, pressure required, and depth to water. For example, you can also input the type of drop pipe used, amount of precharge in the tank, and desired run time between cut-in and cut-out. From these inputs and others, the NGWA Pump Sizer calculates sizing for everything in that submersible system. Not only pump size, but tank size, wire size, and a slew of other parameters such as the total weight of the system.

John is still putting the finishing touches on this, and he tells me it will be available soon on the NGWA website.

Beyond the technical aspects here, John sees the potential for this to be an important sales tool. I couldn’t agree more. This type of tool allows a contractor to show an end-user in concrete terms why you’re quoting a particular system. You just didn’t pull it out of the air or with a “that looks about right” mentality. You have designed a system based on the customer’s requirements. It radiates confidence to your customer that you know what you’re doing and that you are the right contractor for his water system requirements.

When pricing enters the picture, which it always does, such a tool such as the NGWA Pump Sizer also allows you to make sure the end-user can compare apples to apples. For example, are the pressure tanks the same size and quality? Has the drop cable been sized all the way back to the service entrance? Has future expansion been taken into account? With everything that can go into a submersible installation, especially a new one, it’s easy to forget that it’s truly a system with numerous components.

Down the road, you may be using the NGWA Pump Sizer. In any case, the better you can explain and show your customer why you’re quoting the water system you are, the better you’ll be positioned as an expert, someone who is trusted to provide reliable information and whom your customer will recommend to others. And we all know experts sell more.

Know your stuff

I recently came across an article on a prominent business magazine’s website about an extensive research project conducted by two business professors, both PhDs. Their goal was to scientifically identify what made a successful salesperson. Here’s what they “discovered”.

The project started with the researchers attending a slew of sales meetings in a variety of industries. They observed and interviewed over 800 sales professionals. They then analyzed the “sales personalities” of these 800 sales professionals and identified eight distinct classifications, each representing a predominant method of selling. These classifications had such names as socializers, closers, aggressors (price negotiators), and story tellers.

Then they used statistical analysis to correlate these eight types to long-term sales performance. Their findings led to the conclusion that one personality type was more effective at selling than any other. Not surprisingly, after all the research and analysis, they identified the most successful sales personality type as what they called the “EXPERT”. These sales types knew their products, their company, and their industry. Salespeople in this category were trusted by their customers, easily overcame objections, and were highly prepared for every meeting. They were also the best at solving customer problems. By no means were the EXPERTS unsociable or unable to pitch a product, but their tour de force was a deep level of knowledge.

This seems pretty self-evident to me. Knowing what you’re talking about and being able to solve my problem as a customer counts more than the ability to deliver a good sales pitch. It always has, especially in the long run.

There’s no place where this is more true than in the groundwater industry. Time and again we’ve proven that as a rule, our homeowner customers don’t know much about their own water systems–they count on us to know their system for them. Knowing your stuff counts just as much when you’re in front of a municipality, a farmer, or a business, too. It inspires confidence, and it comes from experience, training, certifications, trade shows, and state associations. When you know more, you sell more. But I’ll bet that’s something you already knew.

We need to talk

Over the 4th of July, I attended at a family gathering at some relatives’ home in the country. It’s a lovely home on several acres, and it wasn’t long before I was asking about their well and water system. Being on city water myself, it’s always kind of a cheap thrill for me to connect with the real thing. “Watch out,” I heard from the other room, “Mark will want you to buy a new one.” And yes, coincidentally enough, a couple of years ago, I had strongly recommended to someone else in attendance that he replace his submersible pump that had been in service since 1978. He eventually did, and later thanked me for it.

Using that as an opening, I asked how long their submersible pump had been in service. My jar dropped when I heard, “We’ve been here 25 years and never replaced it.” Things got more startling when they added, “Actually, we don’t even know where the well is. When we bought the house, the previous homeowner said they had covered it with landscaping a few years back. So, there’s nothing sticking up out of the ground anywhere. It’s interesting that you bring it up though. We’ve noticed that it takes a lot longer to fill the tank than it used to.”

I think it’s tremendous that they’ve gotten this much life out of their submersible pump. But, there are two things that are excruciatingly inconvenient to be without: electrical power and water. There is a difference however. By and large, you don’t have control over your electrical power; the utility does. But you do have control over your private water system (one of the many advantages, of course).

The homeowner (my relative) is an engineer and a smart guy. The rest of the home is immaculate and very well-maintained. He’s the type who regularly installs a new furnace filter based on a schedule. But here was another case that when it comes to water systems, people have an out-of-sight-out-of-mind mentality.

Someday in the not too distant future, that pump is going to stop delivering water altogether. I can almost guarantee it’s going to be at an inconvenient time so that it becomes a crisis. The replacement pump is going to be determined by time and who can get out there fastest. What I proposed instead was that they do this on their schedule. They could even talk to more than one contractor and review the options. At a minimum, they could have their chosen contractor at least determine the well’s location. With my strong encouragement, all that is going to happen.

As an industry, we should do more of this. I know there are lots of exceptions out there, but we don’t do much to encourage homeowners to think ahead in terms of pump replacement. I’ve seen advertisements for water heaters from plumbers that say, “If your water heater is more than 10 years old, we need to talk.”

Why don’t we do the same thing?

Top line success

Sales is a discipline. Like any other skill, it must be learned and refined. More over, it’s not about talking someone into something he doesn’t need or want; it’s actually about matching the needs and wants of the customer to the right product.

We are all salespeople in one form or another. Even though you may think of yourself as a contractor, a well driller, or a pump setter, you’re also a salesperson. You’re selling the value of a private water system and all of its benefits. You’re selling the homeowner on the value your services provide and the value of the products you sell. If you’re involved in a state association, you may be selling your fellow contractors on the value of being a member of that trade association. You may even have to convince legislators of the value of private water systems and how protecting those resources contributes to the health of the greater community. Regardless of what you do, you’re always matching someone’s needs with the best solution–and trying to convince him of that.

By the same token, if you’re not actively doing these things–if you’re simply waiting for the phone to bring you that next service call–you’re not selling your product. Day in and day out, if you’re not asking yourself, “What does my customer need and how can I give it to him? How can I make his life better? you’re not doing anything to improve your top line. You’re becoming dependent on your customers instead of making them dependent on you.

Salespeople are resources of information and the vital link between the business and the customer. They make business happen. Sales requires knowledge of products, markets, competitors, and customer needs. It requires interpersonal, communication, and persuasion skills. Even so, it’s tough to find much of any instruction in this field.

I’ve included above a listing of course categories for a nationally ranked, well-known graduate business school. Under the marketing category, there are 10 courses offered. Under the management category, there are 16 courses offered, but none in sales management. Nowhere in their curriculum is a single course offered on sales, even though revenue is the top line driver of a business.

Digging even deeper, it’s difficult to find an MBA program that teaches anything about the sales component of business, and it’s only slightly better at the undergraduate level. Via Google, I found a couple of schools that offer a Bachelor’s degree in Sales Management. But when I pulled up the 4-year curriculum for one of them, only 14 credit hours of the 120 required to obtain the degree were courses actually focused on sales.

It’s up to us, then, to do what we need to do to get better at it. There are a lot of books, including some really good ones, that can help a person learn critical components of the sales process. Better yet, though, is to find a mentor. Look around for a success story; see who’s really got it together–regardless of the business or industry. Watch that person and learn. Establish a relationship and ask questions. Seek out best practices and use them in your business. Build your own support network. Learning how to be a good salesperson is too important for you to ignore–even if all the business schools do.