The HVAC Performance Bridge
Hooray! It’s budget season. And if you’re like most contractors, you’re working on next year’s budget right now. You’ve probably pulled your last three years’ sales numbers for review. You’re making educated assumptions about what your market will look like in 2010, based on the best information you can gather and how that information will affect your financial performance And you’re probably estimating which product lines will grow and which ones will shrink. This is all really critical to the health and success of your business next year. But it’s only as good as what I call the “HVAC Performance Bridge.”
The HVAC Performance Bridge is what bridges the gap between your budget and actually achieving your budget goals. The Bridge answers “What am I going to do to reach my goals?” and “How am I going to support my budget and make sure that I hit my sales,revenue and net profit goals?” This is not a new concept. You’ve heard of the HVAC Performance Bridge before. It’s more commonly known as your marketing plan and marketing calendar.
Developing your marketing plan and calendar can be a challenging and sometimes painful process, but it’s absolutely necessary. Here are some tips to get you moving in the right direction as you develop the Bridge to your success.
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Commit to marketing proactively—not reactively. I’ve seen it all too often, and I’ve even fallen into the trap myself. Contractors wait until a slow time to market the company, in hopes of generating enough leads and new business to catch up. This is a sure-to-fail approach. If you wait until things are slow, often it’s too late to effect any positive change; you can easily overspend; your market activities are usually not well thought out because you’re pressed for time, and your efforts are typically ineffective and too costly. This is reactive marketing.
Proactive marketing will have you spending your dollars thoughtfully, efficiently and productively. You’re going to be spending your marketing dollars either way, so give yourself the best chance to succeed and market with a plan. By the way, the best-in-class contractor will invest 5% to 8% of their revenue to execute on their marketing calendars in 2010 and I’d recommend that you allow for the same in your budget.
Here’s one more tip: don’t be tempted to reduce your marketing spend in a recession. It will be the first step into a downward revenue spiral. It’s like damming a river in an effort to get more water downstream…it’s completely counterproductive. |
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The calendar is critical to the plan. A marketing calendar is crucial regardless of the business you’re in. In the HVAC world, it’s even more critical because our industry is so seasonal. Your calendar will serve as the blueprint for your marketing activities throughout the year. Make sure it is seasonally adjusted. For instance, you know that February and March are slow months for you. So plan to spend more on marketing in these months to generate enough sales leads to break even or drive some level of net profit. And remember that the calendar can be flexible during the year. You might find that one particular marketing tactic works really well and you want to increase activity. Or that something isn’t working and you want to remove it. The year-long marketing calendar should be treated as a living document. |
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Negotiate with your advertising vendors in advance. With a marketing plan and calendar in place, you have a major leverage point. Because you know what your plans will be, you can get the best rates when you are negotiating with radio, television, newspaper or any type of advertising. On the flip side, if you’re trying to play catch-up and you call to run a big newspaper ad in one week’s time, you’ll get hammered on price—just like if you were to purchase an airline ticket on the day you want to fly. You have committed to spending your marketing dollars, so leverage this to your advantage when negotiating with your vendors. And don’t forget to strategize with your top equipment vendors to leverage your co-op dollars to maximum return |
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Next week, I am going to share some innovative marketing strategies, which I’ve used and seen in the industry, that you can use as part of your 2010 marketing activities |
