A Methodical Strategy To Scaling Up
The archaic remodeling industry is currently undergoing a shift. I can’t help but think, “It’s about time.” Considering that construction is one of the industries least disrupted by technology, it was only a matter of time.
So, what does this shift mean? Companies are starting to leverage technology to acquire more clients, build teams, implement systems and generate exponential revenue compared to traditional companies in the space. Traditionally, companies in the home-services industry have been limited to smaller operations – a handful of employees and a few hundred thousand dollars of revenue at most.
Over the past decade, I have built numerous design-and-build companies while keeping a few outcomes in mind. I wanted to:
• Grow a design-and-build company to service the remodeling/renovation and custom-home-building industries
• Grow a scalable company that could handle exponential growth and revenue without compromising service
• Leverage technology for optimal efficiency
By keeping these key objectives in mind, I was able to build a proven system that I call the T.O.O.L. Box Engine for scaling remodeling companies. I have used this system to generate over $20 million in revenue across four cities in Canada annually.
T.O.O.L. stands for: traffic, omnipresence, optimization and leads. The T.O.O.L. Box Engine is a marketing engine that provides an almost infinite number of leads of consumers who are interested in renovation or custom-home-building services. It compartmentalizes your sales and allows you as the owner to achieve the four Ps of freedom. What are the four Ps of Freedom?
Well, let me first explain why you need the freedom. Most owners of renovation companies wear multiple hats in the organization, such as sales guy, marketing guy, project manager and, sometimes, contractor. They spread themselves thin and work long hours. Without a consistent flow of leads and sales, they have difficulty hiring others to take on these tasks. This defeats the purpose of why they got into the business owner game in the first place.
The four Ps of freedom are: predictable leads, predictable sales, predictable revenue and predictable profit. When you achieve a state of predicting your sales and profit, you can make key hiring decisions so that you no longer have to be a slave to your company.
For those business owners looking to scale up their remodeling companies, here’s how the T.O.O.L. Box Engine works:
Build a series of ads on multiple platforms that push to high-converting funnels. The primary platform I use to drive targeted traffic is Google Ads. The key here is that the traffic consists of consumers who have the intention of buying remodeling and custom-home-building services. It does not consist of random people. So, how do you ensure you are targeting the right people?
Google allows you to bid on keywords that consumers are using to find information about products or services. When you bid on these keywords, you are actually bidding on traffic that consists of individuals who have buying intentions or at the very least are gathering information about a certain product or service. When building your keyword list on Google Ads, put yourself in the shoes of your target buyers. What would they search on Google if they were looking for your company? The more specific, the better.
The definition of omnipresence is, “the state of being widespread or constantly encountered.” Ensure that your ads are constantly being seen by the traffic you are targeting during their buying journey. Buying decisions are made in the research and discovery loop during the buying consideration stage. Use this loop to tell your prospects a story about your company, your process and the individuals behind the company.
Don’t go more than three days without them seeing your ads during this stage to ensure you capture the leads. Install a Facebook pixel on your landing page that receives traffic from Google. This pixel will allow you to build a campaign on Facebook that you can use to drive cheap ads to these consumers on a daily basis.
Optimize traffic, systems, processes and collateral for optimal performance. Digital marketing allows you to capture data that will, in turn, allow you to optimize. Optimize your processes to ensure that prospects are having their hands held through the buying journey to get them closer to converting. Key data to keep in mind for your digital marketing strategies: cost per lead, number of site visitors, bounce rate and average time per visit.
Many consumers have the expectation that contractors must work for free in order to earn their business. However, this sales system helps you get paid to provide quotes through an efficient process that walks the client through a step-by-step buyer journey. I was able to get paid for pre-construction planning while keeping prospects away from my competitors.
Divide your sales team into lead opportunities, design opportunities and build opportunities to provide guidance at every stage of the process. When consumers feel confident and supported throughout the buyer journey, they are more likely to pay for pre-construction planning upfront.
So, how does this system allow you to achieve the four Ps? Once you have consistent lead flow, you have predictable leads. When you have predictable leads, you are able to find your close rate and multiply it by your average project size to achieve predictable sales. When you have predictable sales, you can predict your revenue based on historical turnover data. When you can predict revenue/turnover, you can use your average gross margin percent and subtract your overhead to achieve predictable profit.
A deep understanding of these numbers allow you to make strategic decisions, such as human resource planning, investment planning and tax planning, thus freeing up your time to focus on high-level business decisions. This is the solution to many of the pain points for business owners in the remodeling industry. I encourage everyone in the industry to rethink remodeling as they scale up.
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