Tommy the Painter
For the past year, Tommy has chased every commercial and residential painting job in town. He has implemented a marketing strategy that includes yellow pages, local newspaper and directory listings such as Angie’s List. He spends nearly $60,000 a year in advertising to maintain a $1 million painting company. Margins are about average to less than average. He is on the grind and determined to get off.
He admits that something needs to change. He commits to getting to know his customer base on a deeper level. He focuses on the top 20 percent of his customers. These customers have been loyal to him; they are repeat purchasers. He contacts a couple who has hired him on numerous painting projects. Tommy is a savvy sales person and knows he needs to be prepared with questions so he doesn’t waste their time. He references an old book he had during his commercial sales career, “How to Swim with the Sharks without Being Eaten Alive” by Harvey McKay.”
During this initial meeting and the four other customer getting-to-know you meetings, he uses 20 questions for customer profiling. After analyzing his customers’ answers, he finds five common but distinct attributes.
1. Busy Lifestyles (Entrepreneurs, Vice Presidents or CEOs)
2. Avid Golfers (four out of five either play in a league or live near a golf course)
3. Well-kept Homes (homes beginning at $300,000)
4. Men (three out of five are on their second marriage)
5. Not Handymen (pay service providers for daily maintenance, lawn care, pool, etc.)
During his last customer meeting, Tommy’s client suggests that he provide a gift certificate as a prize for his golf league’s weekly tournament. Tommy obliges, but he is quietly resenting the time and effort he has put into getting to know his customers. He is not sure adding “selling his services at a discounted price” to his recent change of business practices is his best move. Needless to say, frustration is increasing.
Tommy agrees to donate a $100 gift certificate. He personally goes to the golf course to present the gift certificates to the participant. Tommy arrives at 11:00 a.m. while the golfers are walking off of the golf course and into the reception area. He realizes the golf course is located in a neighborhood where he would like to do more business. He enters the clubhouse and recognizes two former clients. He approaches one of his clients who immediately introduces him to three other people as his “go-to-painter” (two business owners, one vice president of sales.).
A light bulb turns on. Wow! This is not just an act of charity, but a stinkin’ goldmine. As the winners are announced he hears his company’s name over the loud speaker. His name and tagline were just broadcasted to the entire group of golfers – a.k.a – his ideal clients.
Five people ask him for his business card. The gentlemen that won the gift certificate got a quote for a $3,000 interior job. Then, he tweeted his big win to his Twitter followers. All in all, the “selling his services at a discounted price” strategy produced approximately $23,000 in new business by the end of the month. After seeing the ROI, he agreed to provide a gift certificate every week. Tommy also networked with nine other golf course managers and replicated the strategy that had now become an integral part of his business.
Tommy became “the” painter to the upscale, busy, golfing professional that wanted someone he could trust with his home and around his family. He accomplished this with a total marketing investment of $3,500.
That year he was up a record 42% to $1.42 million. He reduces his total acquisition expenses by $50,000 when he suspended other advertising tactics besides Yellow Pages (decreased dollars spent by 2/3) and Angie’s List.
Tommy continued to build his niche – sponsoring youth golf teams, having a presence at local tournaments and working significantly to make his service more attractive to the anti-do-it-yourselfer-busy-golfing-entrepreneurial-male.