Marketing Your Service Business - Cleaner Times

Marketing Your Service Business

Marketing Your Service Business

A Guide for Small Business Owners

By Beth Borrego / Published February 2020

C

hapter One: A Marketing Primer

Editor’s Note: This is the first revised chapter in the Marketing Your Service Business series, which will be updated in the Pressure Washer’s Guidebook (PWG) at certain points in 2020. The chapters will be published in Cleaner Times on a monthly basis before they are included in the PWG.

If you want to fail in business and have a silent phone with no money coming in, the last thing you should be doing right now is reading a book on marketing. If you plan on not doing any marketing at all in your business, that’s exactly what will happen to you. It’s often said that a little information can be a dangerous thing, yet we’re better equipped to accomplish our goals and face the challenges that lie before us if we have all the information we need to make informed decisions. In fact, more information is better when it comes to owning a healthy business. After all, if you have someplace to go that you’ve never been to before, it’s a good idea to have a roadmap or, perhaps these days, a GPS.

Some may argue that you can learn as you go by trial and error. Well, yes, you can. There is nothing wrong with it if you’re talking about something as simple as building a doghouse without a blueprint. But let’s face it—there’s a big difference between building a doghouse and building a successful business. To build and maintain a successful business, you should always operate with a plan, and you should review that plan regularly. Owning a business means working smart. The hours may be long, and it might seem overwhelming at times, but it’s only because you’re new at it. The alternative, of course, is that if you work without a plan, you might just end up in the doghouse you didn’t intend to build.

There is no one book that has all the answers on a single topic, but by the time you finish this book, you should have a good, solid marketing plan with identified market segments and an understanding of all of the components of marketing. The purpose of this book is to inspire and motivate you. It contains information I believe to be valuable and hope will be useful.

There are many misconceptions when it comes to marketing. Some people believe that sales and marketing are the same thing; they aren’t. Some people equate marketing and advertising as the same thing, and that’s not true either. The three do go together but are by no means identical and should not be considered to be synonymous. In 2017, the AMA (American Marketing Association) defined marketing as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” Therefore, it can be said that effective marketing focuses on the relationship between your company and the market it serves.

Think of marketing as a tree with many branches. Each branch is a part of the whole, but without the trunk solidly planted and growing, the limbs themselves will not grow. We will be exploring the branches and will learn about the correlation between the branches themselves and the whole. Advertising, sales, social media, demographics, identifying target markets, websites, blogging, and professional image branding are all a part of that tree known as marketing.

If advertising isn’t the same thing as marketing, then what is it? As of 2019 the AMA defines advertising as “the placement of announcements and messages in time or space by business firms, nonprofit organizations, government agencies, and individuals who seek to inform and/or persuade members of a particular target market or audience regarding their products, services, organizations, or ideas.” Today’s advertising takes place in many venues. The internet is arguably the hottest place to be right now, with more and more companies building websites and adding pages to Facebook and accounts to Twitter. Some companies also blog, post to Facebook groups, occasionally participate on BBS (bulletin board system) forums, or place linked images on Pinterest. However, not all customers are online. There are folks who still reach into the mailbox looking for a coupon mailer or grab for the phone book. Not everyone is comfortable with technology; however, their numbers have declined in recent years.

In order to advertise effectively, you must first have the product or service and establish the basic pricing structure. Most importantly, you should have identified the market segments that you will be targeting, using very specific demographic, geographic, psychographic, and behavioristic information. Oversimplified, you’ll need to pinpoint who they are, where they are, what they like, and why they would buy your company’s products or services.

Sales is not marketing, either, but is the process used to generate revenue by establishing mutually beneficial relationships generated by advertising products or services that the company has established in the marketplace. The AMA defines sales as “any of a number of activities designed to promote customer purchase of a product or service. Sales can be done in person or over the phone, through email, or other communication media. The process generally includes stages such as assessing customer needs; presenting product features and benefits to address those needs; and negotiation on price, delivery, and other elements.”

The Consumer Market

Before you can accurately market your products or services, you need to understand the demographics of the consumer population best suited to purchase, based upon their needs. Let’s look at what demographic market data is compiled from. Factors such as age, gender, race, marital status, income, religious affiliations, births, deaths, immigration, and demographic and geographic dispersion characteristics are used to create well-defined segments that marketers use to understand the population in a specific area. These definitions provide a useful snapshot that can be used to more accurately position the company’s offerings to the consumer.

Psychographic information can also be useful and should be considered as well. Psychographic information includes activities such as sports, interests, and hobbies, as well as personal attitudes, opinions, and values. In short, who we are and what we like to do in our spare time is very much a part of who we are and why we purchase what we do. Behavioral characteristics include the benefits sought by the consumer, brand loyalty, readiness to buy, and the occasions surrounding the purchase. Behavioral characteristics are pivotal because they often define the reason for the purchase. For example, many life events are centered on social functions. These functions often involve large gatherings of people celebrating milestones such as graduations, engagements, and weddings. If you own a service business serving the residential market, this is important information because it pinpoints a reason to purchase. For our purposes here, we will refer to demographic, psychographic, and behavioral characteristics simply as a whole called demographics.

There will be multiple markets that will all be addressed as you market your business. Let’s look at them as a traffic light. Those customers whom you already have represent your actual market. They have bought from you in the past, and you have already established a relationship. That’s a green light. Next, you have a much larger group who, should the need arise, might purchase your services, and they represent your potential market. That’s a yellow light. It’s a shorter light as light cycles go. But the group that should be focused on primarily is your target market. Your target market is the one you will identify as your best prospect based upon their demographics and your presentation of your services in the market. In short, they represent the best consumer fit with the best potential return on investment. Your target market is like a red light because it’s the one that always seems the longest when you want it to be the shortest. And let’s face it, you really want that light to change to green.

Who is your customer? Create a list of criteria. This should be an easy exercise and will provide you with a focused segment to target. To do this, picture your customers in your mind by asking yourself simple questions. What’s important to them? Where do they shop? What activities do they enjoy? Are they DIYers, or do they hire professionals? How valuable is their free time? And perhaps most importantly, do they have the disposable income necessary to purchase your services?

Repeat this exercise for each segment that you will target in a unique way for a specific service. For example:

  • Between the ages of 30 and 50
  • Married
  • Lives within 30 miles of your office
  • Has K–12 school-to-college-aged children
  • Lives in an upwardly mobile or affluent neighborhood
  • Socially active and influential
  • Spends disposable income on the service you are marketing with a measurable frequency (for example, yard service, window service, gutter service).

This same exercise can be performed for commercial business as well.

The Commercial and Industrial Markets

Commercial and industrial markets have their own set of characteristics that need to be classified and understood in order to be successfully targeted. In some cases, commercial and industrial companies appear in geographically regional clusters and so may require the same services at multiple locations in that region. Examples of this might include shipyards, railroad yards, train depots, auto makers, and water towers that may appear in certain locations. Some factories may be regional. Similarly, residential areas typically have shopping malls nearby with multiple retail outlets, banks, sit-down restaurants, and drive-through fast food chains as well as hospitals, doctor’s offices, and schools. A quick visit to your prospect’s corporate website will show you the locations for that company’s stores, for example. In fact, some websites have a store locator, which can be used to pinpoint the number and proximity of prospective locations. Information such as the store address and telephone number are typically listed, and some sites offer information like the fax number and store manager’s name.

To target commercial or industrial customers, they’ll need to be classified. They might be classified based upon the company size, the industry they serve, the decision makers, and the service requirements. It’s important to know if your prospect is looking for service once a year for one location, or twice a month for 50 locations, for example. This is not to say that the smaller prospect is not important. It is important, especially when you have crews to keep busy. Never count on business you don’t have, and always work to keep the business you do have.

Commercial and industrial business is a bit more formal than a residential consumer is. A commercial or industrial business may put out a Request for Quotation (RFQ), which is a business standard that invites competing vendors to provide quotes for goods or services that the company requests.  For service businesses, this usually involves a site visit where all of the bidders can tour the site and ask questions that pertain to the scope of work being quoted. In some cases, individual site visits may be possible, depending on the customer. Typically, the best price is the driving force behind the RFQ. The higher the response rate, the more varied the price range the customer may get in response. Sealed bids will typically be due by a specified date and time and may need to be signed in. The RFQ can also be used as a step prior to presenting an RFP, or Request for Proposal. An RFP can be requested to study what is available or to procure services. Typically, RFPs are sent to an approved vendor list.

Understanding the service usage rate, buying status, account potential, and sales cycle is important when courting new business. It’s always wise to fill your sales pipeline with as many prospects as possible and to use a contact management tool to set follow-up reminders that will keep you in touch with them. Today, many successful businesspeople perform these functions via smartphone or tablet when they are not in the office.

A Market Segment Should Have the Following Attributes:

  • Identifiable and Measurable—The attributes of the service segments must be measurable so they are easily identified. Information can be captured at the time the potential customer calls the office to help identify where they found you and to qualify them as a prospect.
  • Easily Accessed—Each segment must be reachable through the communication and distribution channels used by your company. Simply put, if you are placing an ad in print media, they should see it. If they go looking for you online, you should also be easily found.
  • ROI Qualified—The segments ought to be substantial enough in size to justify the resources required to target them, so that you have a positive ROI (return on investment). Simply put, they should have the money. If they are residential, this means they must have the disposable income to purchase your services. If the segment is commercial or indus- trial, they should have a budget or else be willing to create one for future years. Your contacts should also be authorized to negotiate, contract, and pay for your services.
  • Targeted Offerings—The customer you are looking for needs to have his or her needs identified with the message in your marketing campaign. Some customers may identify with multiple service segments, while some will identify with only one. Each service segment targeted by your company promoting a specific service should receive a measurable response to the campaign. The results of the campaigns should be monitored to see if the campaign was effective. Tracking the campaign results is as easy as asking callers how they heard about your company and if the information was helpful to them. You can also do this with a contact form on your website, by creating a drop-down list with a variety of appropriate options. Always ask them  how your campaign or website could be better. It sets a good tone with the prospect, and if you are listening, it provides you with some very valuable information.

It’s clear that service segments have different needs. There’s no doubt that you’ll be able to tap into multiple segments; the trick is tapping into the best ones. Successful service segmentation should result in customers that are as similar as possible within a service segment, but as different as possible between service segments. Simply put, each customer group should be easy to identify within that service group and should be a good match for the company’s services, regardless of which of the company’s services were purchased.

To recap: when marketing, you’ll research your market, determining who and where your prospective clients are. You’ll develop your brand and company image and create all marketing materials, such as business cards, letterhead, and line cards. Advertising is a subset of marketing, and you’ll take the brand’s message and use it in targeted ads with a specific call to action. This generates leads, which your sales force uses to generate revenue in addition to any cold calling they’ll do.

In this chapter, you should have learned the basic definitions of marketing, advertising, sales, and demographics and have completed the exercise on targeting your market’s many service segments. This foundation will become useful as you complete future chapters.