Sales and Marketing Success

Start with a sound strategy
Jason Polka
October 17, 2019
COLUMN : Your Business Matters | Sales & Marketing

Once a homeowner upgrades their windows or doors, chances are they won’t need more for a long time, if ever. Since most home improvement projects are a one-time deal, success for window and door contractors depends on having a steady stream of new customers. 

Hiring good salespeople is necessary, but that alone is hardly a viable strategy. Sure, a good salesperson can knock on doors, cold call and network to find good leads. But even the most sales-driven contractors recognize they are more effective when their time, energy and expertise is fueled with good leads. That’s where marketing comes in, along with the need for alignment between sales and marketing.

The key to success is to have a solid overall strategy that links marketing and sales. There are four major steps of this strategic planning. 

1. Identify the ideal customer 

For a business that geographically covers a total population of two million, it’s likely that only a very small percentage of them are worth marketing to. What makes someone a part of that small percentage? Generally in the window and door business, contractors need to define their market in three terms: the product, the service area and the budget range. 

Product: Distinguish what window and door products you provide. In the end, it’s most helpful to have a specific product positioning such as, “full-service residential wood window and door solutions.” To simply state “window contractor” is not very helpful. Examples of specification include: repairs as well as replacements, a particular manufacturer’s line or style, associated services, residential customers, commercial projects and so on.

Service area: Be clear on the specific geography in which you want to acquire customers. Consider whether it’s profitable to operate across a given metro area, for example, or if the plan is to dominate the inner core of a city or an adjacent community. Technology allows companies to increasingly geo-target marketing campaigns. Although it comes with a price, it can be worthwhile if it yields the best possible leads.

Budget range: Consider the realistic high and low ends of project budgets. If costs of service delivery make any jobs under $5,000 unprofitable, set up marketing outreach and lead screening accordingly. In turn, this could lead to referral agreements with other contractors who operate above or below this target range. 

2. Crystalize a value proposition

A value proposition proposes why customers should choose a particular business as their contractor. The three areas contractors most often use to differentiate themselves are service quality, product quality and price.

Service quality: Promote aspects of the business that the company can deliver on, i.e., if a business is set up to consistently be more punctual and reliable than the competition, or offers greater access to experts who are knowledgeable about window and door products. 

Product quality: This can mean both the quality of the branded products and the quality and reliability of the installation services. Some customers care about this greatly, while others are much more focused on the next item.

Price: This doesn’t have to mean the absolute cost of the window or door project. Rather, it’s pricing relative to competitors. Our research shows that 88 percent of window replacement shoppers plan to get two or more bids. That’s usually for the sake of ensuring that they get a fair price, or perhaps even the lowest price. It’s important to know where your business falls in the spectrum.

3. Target a cost per acquisition (CPA)

When marketing is a component of an overall new business strategy, it’s crucial to have a target for how much to spend per completed sale, just as it is to know how much commissions for completed sales cost. Start with the benchmark of a typical or average revenue per sale. This is the average order value or AOV. Some contractors don’t track this, and it may be a moving target, but it’s important to at least start with an estimate. 

For instance, if there is a required minimum purchase of $5,000, the AOV is greater than $5,000. Looking at the average bid size of past projects over the past year or so can provide a solid AOV estimate. From the AOV, businesses can determine how much to budget for the acquisition of new leads, which we call cost per acquisition, or CPA. 

Target CPAs can vary widely from one company to the next, but most successful home improvement contractors find it’s profitable to invest between 10 and 20 percent of AOV as their target CPA. So if the AOV is $10,000, starting with a budget of 10 percent of the AOV for lead acquisition, that would be $1,000 of marketing expended per closed new account. 

4. Plan across lead generation channels

The context of all the strategic elements above allows a business to look across the available marketing channels and determine where to invest based on each channel’s capabilities to deliver high quality lead volume. Balancing CPA and growth potential across them creates a strong overall portfolio for any marketing strategy. 

The list of channels to consider might include: canvassing, content marketing, direct mail, display/print advertising, email, SEO, or paid search, among many options. 

It’s imperative to set an overall marketing strategy before investing in marketing “stuff.” Follow these simple steps for a sound basis for making marketing investments and evaluating their impact.

Jason Polka is the CEO of Modernize, a company that uses business intelligence software to connect homeowners with contractors.