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Finding new business

September 19, 2010
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Contractors want new business for obvious reasons, such as raising revenues and earning more profit.

However, less obvious reasons are equally important, such as:
  • Replacing lost business
  • Entering a new geographic area
  • Acquiring a new customer that can lead to more business
  • Entering a new customer market, such as high-tech, health care, or K-12 education.
These reasons make it essential for contractors to continually seek new business.

Do you have loyalty?
The “I have enough business now, I don’t need any more” statement is valid for as long as current customers guarantee that they will never leave.

It only takes a few customers to change management and then contractors, or one of your big customers goes out of business, then you will realize you should have been looking for new business all along.

You’d think finding new business would be easy, but it’s not.

It’s simple, but not easy.

Finding prospective customers takes effort.

Here are several common methods: Smokestacking, digital data, personal networking, buying contracts, and advertising.

Smokestacking
You’re probably already doing this.

Smokestacking is a classic 1960s sales expression. This style refers to searching around until you see a smokestack.

When you see one, you drive to it and there’s your prospective customer.

This works great if your prospects have smokestacks, but many don’t.

However, smokestacking still works.

Businesses in similar industries tend to locate near each other, primarily because of zoning restrictions, but also for access to transportation services.

For example, distribution centers are often found next to railroad yards.

Moreover, retail centers are strategically located near potential buyers.

As basic as this seems, it helps you stay focused on a particular customer industry.

When you’re good at what you do, customers will be happy to tell others about you.

Gaining that experience and success is easier when you serve a limited number of industries.

Smokestacking works well for new construction.

You can get in on the ground floor by asking the construction company for the final cleanup.

Even if you don’t get the cleanup, you’ll want to get the management company’s name.

As soon as you know who the management company is, contact them about the new property and ask to get on their bid list.

Earlier is better than later, or missing out entirely.

However, waiting around for new buildings isn’t very fruitful.

You don’t want to wait on new buildings to fuel growth — you’ll have to continue smokestacking.

Digital data
A quick and easy way to find new business is to buy prospect data online.

Digital data can identify prospects you never knew were in town.

You’ll still need selling skills, but at least you’ll have prospects to call, mail or visit.

If you use digital data, you’ll need a software program to manage it.

Learning ACT or Goldmine, or using an online service takes time and money, but it’s well worth it.

These programs are designed for the selling process and make creating sales letters, scheduling follow-ups and organizing your data easy.

Also, Zapdata (a Dun & Bradstreet company), InfoUSA, Salesgenie.com, and many others sell prospect data.

Search the Web and you’ll find hundreds, if not thousands of suppliers.

Choose your supplier with some thought.

You’ll want to make sure you’re getting prospect data digitally and not receiving pre-printed mailing labels that can only be used once.

Personal networking
Personal networking has been around since the beginning of mankind.

Joining chambers of commerce, participating in industry trade associations, and helping out local charities all put you face-to-face with prospective customers.

Even if you don’t meet a potential customer, you may meet someone who can refer you to a prospect.

The rule here is to be friendly, active and pleasantly inquiring.

Learning what other people do reciprocates them asking you the same.

Tell them what you do and don’t be afraid to ask if they know of anybody they can introduce you to.

Buying contracts
Buying business from another contractor is not just for large corporations.

Small contractors frequently change careers or move away.

Other contractors want to exit one city and stay in business elsewhere.

They’d like a little money for their accounts rather than leave their customers in the lurch.

Get to know your competitors, stay friendly and in touch.

When their circumstances change and they want to sell, you’ll want to be first one they contact.

If you feel uncomfortable getting close to your competitors, consider using a broker.

They’ll know which contractors are actively looking to sell.

The brokers’ downside is their fees.

They also tend to sell entire companies rather than a few accounts.

However, brokers may be a resource for you if you’re ambitious with a healthy bank account.

Advertising
Advertising isn’t really about looking for new business.

It’s about spending money and hoping the right customers find you.

The upside is that advertising is easy.

You hire a designer/writer, develop an ad, and then place it in publications your customers read.

The Yellow Pages is appropriate advertising for some types of services, typically carpet cleaning, house cleaning, or maid services.

As customers and their contracts get larger, they won’t be looking in the Yellow Pages.

They’ll be looking for cleaning contractors in their trade association meetings, business publications, and online.

The downside to advertising is that it costs money up-front and for every ad placement going forward.

Advertising doesn’t always pay off, either.

The number and quality of the prospects that contact you can be very disappointing after you’ve spent thousands of dollars.

One last word on advertising: A website is an absolute must.

Don’t skimp here; spend a little up-front to get a professional-looking website, not one that looks like your cousin did it after high school.

Save your money and skip the fancy Flash introductions, which are already outdated.

Sooner or later, you’re going to have to find new business.

By using these methods, and others, you’ll be actively working to minimize the challenges of the cleaning industry.



Chris Arlen is president of Service Performance, a sales consulting firm for janitorial contractors. Chris also writes Revenue-IQ, a free weekly sales blog and monthly article — sign up at www.serviceperformance.com/subscribe.
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