Custom Install 2.0: How to Find New Business
“Long is the way, and hard ... that leads up to light”
— John Milton, Paradise Lost
I think many of us can relate to Milton’s quote from his epic poem when we look back on the last four years. Custom install faced its toughest period in, perhaps, the industry’s history: The economy contracted, housing and credit markets collapsed, and consumer confidence and spending seemed to vanish. Many manufacturers, distributors and integrators exited the market, some by their own choice and some not. Those that remain have adapted their businesses to the changing wants and needs of the consumer, as multiple technologies are colliding—everything from mobile phones, tablets, smart TVs, cloud storage and services, and wireless everything. We are truly now in “Custom Install Version 2.0.”
One topic that I discuss often with our customers is how to find new business in this rapidly-changing environment. In this new world, where does one find new business opportunities? Are the tried and true methods of pre-2009 still valid? The answer is both yes and no.
Customer referrals are still considered by many in the industry as the most reliable source of new business. When an existing customer shows off the work you’ve done to a friend and gives glowing reviews on the services you provided, it’s like having an unpaid salesperson in the room. Take note of the word “unpaid”. How many of you are incentivizing your prior or existing customers to refer you?
One dealer I spoke with stated that a quality lead from sources outside of referrals costs him anywhere from $350 to $500 in ad fees, materials, resource time, etc. He offers his prior clients $350 cash per referral that becomes a new client. Are there ways you can be incentivizing your existing customers to help fill your business pipeline? If not cash, what about prizes such as iPods or iPads? Incentives encourage behavior.
Now that you have your customers beating the streets for you, have you also looked within your existing and prior customers for opportunities? How much do you know about your residential clients? How do they earn the money to enable you to do work on their home? You would be surprised how many residential customers own businesses or are decision makers for corporations. Many of our dealers get a second or third job and build a closer relationship with existing clients by adding video and audio to the customer’s dental office, signage to their retail stores or paging and background music to their bars. This also expands your potential referral base as clients see the versatility of your work. The key here is to learn more about your customers while you’re doing work for them, and to use that information to find the second opportunity while you’re still interacting with them on the primary job. You need to ask, not wait to be asked. Even if the answer is that they’re not interested now, you’ll have planted the seed for a follow-up discussion later.
Let’s talk about the housing market. (I’ll wait a moment for you to stop screaming, and start reading again.) OK. While the housing and credit markets are not as roaring as they were in 2006, home values are beginning to increase in many markets, inventory is at a low, and many people have the money to spend on a down payment after a few years of renting and riding out some of the market volatility.
So who is spending money and how do you find them? Let’s start first with the average home buyer: How many relationships have you built with real-estate agents in areas that have rising home prices in desirable markets near you? Not only can they tell you what their clients are looking at purchasing or selling—they can give you a heads-up as to what properties are in play and which need some integrator TLC.
How many tradesmen do you have referral agreements with? Electricians, plumbers, flooring and window companies and general contractors are all great sources for leads. Same goes for interior designers and landscape designers.
How many relocation companies do you interact with? Corporations relocate tens of thousands of employees per year, and many use companies to manage the process and vendor selection from everything from house hunting to movers. And speaking of moving companies, how many of them do you interact with? Are you offering to provide them with labeling, transportation and reassembly of sensitive electronics for their local residential and corporate moves?
And let’s not forget the Wall Street investor. (Again, I’ll wait for the screaming to subside.) Throughout 2012 and 2013, it is estimated that private equity and hedge funds will invest more than $5 billion in the U.S. housing market, buying homes they believe are undervalued and fixing them up to be rented out and eventually sold. They are purchasing directly or investing in Real Estate Investment Trusts (or REITs) to find and acquire properties. If you can find the contractors and trades people being used to get these properties in shape, there could be enough business to keep you occupied all year, from wiring work and audio work to lighting control, shades and more.
Also, don’t forget about the high-end rental market. Just because someone is renting an apartment, condo or home doesn’t mean they don’t want quality products. It just means they can’t cut a bunch of holes in the walls or re-wire the house. Real-estate agents and property management companies that specialize in placing rentals can be excellent partners.
And finally, don’t forget about the power of the Internet and social media. Sites like Yelp—and even more importantly for installers, Angie’s List—are searched on a regular basis, and reviews can be powerful motivators to either give you a call or avoid you like the plague. Same goes for social media properties like Facebook and Twitter. A customer’s post with a photo of your work, your contact information and how happy they, viewed by their 1,000 friends or tens of thousands of followers, can be incredibly powerful.
It has indeed taken longer than we would have liked, and it has been hard times for our industry over the last few years. But if you know where to look for new business, there’s plenty of light to be found. CR