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Learn all about Direct Marketing for heating and cooling businesses in this Podcast show.
0:24 – Introduction
3:18 – Two types of marketing
5:19 – Gary Halbert story
6:01 – Identify the market
7:21 – Have access to the market
8:09 – Have an affinity with the market
8:47 – Competition
11:04 – Is your marketing accountable?
13:32 – Lifetime customer value
14:24 – Test the market
16:34 – Tip of the week
Thank you and welcome to the first ever HVAC business growth podcast, I’m your host Nick Bielawski. It’s great to be here. I’d just like to give you a rundown on why this show is actually happening and how it was conceived. It was actually an idea that was running around in my head around 6 months ago and we finally got around to publishing and broadcasting the show so it’s very, very exciting.
So first I’d like to extend an invitation to everybody listening if they have any questions or anything they want answering, they can send those via email or via Twitter or via the Facebook page and I’ll do my best to answer those questions. Just anything to do with marketing or online marketing in general, I’m happy to answer those on the upcoming show. So I’ll really appreciate any content ideas that you send through.
Before we get stuck into the meat of the show, I just thought I’d explain to you my background a little bit and my business background. Originally, I was involved in (and still am involved) a search marketing company which is focused really on small and local businesses in a wide variety of markets and niches just providing search marketing services. Things like search engine optimization, pay per click advertising, website design, social media and just enabling those small and local businesses to obtain more customers in their target market and help to convert them online.
I’m sure you guys can imagine that a lot of small businesses, not only in HVAC or heating and cooling markets do struggle with their marketing, so there is quite a market out there. I guess it’s only recently that when I was actually targeting my marketing towards the heating and cooling market or the HVAC market, depending on where you’re from, I actually found that you heating and cooling fellows seem to bite just a little bit harder than everybody else.
Through my discussions with quite a few business owners now in heating and cooling market, I’ve discovered that you guys are pretty savvy about marketing and you are quite keen to learn things and do a little better. One frustration that I had when I was just dealing with the mom and pop businesses, you know, the local business down the street was that some of them didn’t quite understand what we’re doing and sometimes they just didn’t have the budget to work on it.
So the exciting thing is you guys seem to understand a little bit about what’s going on and you’re actually willing to try new things. For anybody you can imagine that’s an exciting type of person to work with, somebody that actually wants to have a go.
So that’s how we started and that’s now why we’re going be focusing into the heating and cooling industry. So we’re planning to do quite a lot of news videos coming up, weekly podcasts as well. We’re gonna have lots of topics written about on the blog and down the track we’re going be getting into some webinars and seminars as well as some products and some master mind coaching as well. So there’s a lot planned for you. Hope to bring it to you in the very near future.
So let’s get stuck into the meat of the show for this week. We’re really going talk about direct marketing 101. So if you haven’t heard about direct marketing before, from where I’m from, there are actually two types of marketing. You have direct marketing and then you have brand marketing.
Brand marketing is probably what you’re most familiar with. And that’s when you just try and splash your name in logo all over the place; all over TV. The brand obviously goes on to radio and all over the internet. And what you’re doing is a very long term strategy and it can actually be quite costly. For a couple of reasons: one, you actually don’t know where the sales are coming from directly coz generally brand advertising is just about building the image of the company.
And secondly, TV and radio, they could cost quite a bit of money. So, before you know it, you’re out of pocket tens if not hundreds of thousands of dollars maybe even millions if you’re quite a heavy duty marketer. And you might be struggling to see a little bit of a return on investment and the result for the money and the effort that you put in.
Direct marketing, on the other hand is, the first word direct marketing, is probably the most important one. And that’s a very specific type of marketing and you’re actually getting immeasurable result on everything that you do. And I think that’s probably one of the most important things.
Even if you’re starting out in business or whether you’re an experienced campaigner, in almost every marketing situation, you want to be able to see if you spend a dollar, you get X back. Hopefully, it’s actually more than a dollar. But what you’ll learn later on is that you don’t have to necessarily make your money back straight away I guess is what I’m trying to say.
So, I think what we really need to do is to look at the basics of direct marketing. So, it’s about getting back to the basics of generating and converting leads. That’s really the bread and butter and the core of what direct marketing is. So I figure if you’re making any mistakes that’s really in the fundamentals that’s not in any fancy thing that you’re doing…
I remember a direct marketing legend saying in a seminar, his name is actually Gary Halbertt. He passed away, unfortunately, around 5 years ago. Anyway, Gary Halbert was actually caught at a direct marketing conference, he was actually spotted in the beginners seminar. There were actually 2 seminars: the beginners and advanced. They had probably the king of direct marketing and copywriting in the beginners’ seminar and they said to him “Gary what are actually you doing in the beginners, shouldn’t you be in the advanced? And he said “No. I actually figured that if I am making any mistakes, it’s to do in one of the basic fundamentals. So I wanna make sure that I am getting those right.” So I think if it’s good enough for Gary Halbert, it’s going to be good enough for you guys too.
So let’s just go over a few of the things that are features of direct marketing and how you need to get direct marketing actually working for your business.
So first I think what you need to do is actually identify a market first before a product or service. Most of you guys, you probably already have, all of you, heating and cooling products out there all of you depends on what you’ve got. You might have hydronic systems or you might have split systems or you might be marketing a little bit more business to business. That doesn’t really matter. What you need to do is identify the market first and the need of the market before the product or service.
You can spend hundreds of thousands of dollars or millions of dollars actually developing products and services but if there isn’t a market for them and the people don’t actually want what you produced then you’re actually in a lot of trouble. You’re just pouring money down the toilet as far as I can see.
You really need to do a little bit of research first and figure out what the problems are in the market and then you can actually create a product that suits from there. I’m sure you’ll actually find your products and services that you’ve got now. You might actually be able to re-engineer those a little bit or re-label them or re-market them in a way that actually suits the needs and the wants and the desires of the market just a little bit better. So I think it’s important that you look at the market first before the product or service.
Secondly, I think it’s really important that you can actually have some access to the market. Where you’re actually marketing to is very very important if you’re selling some super high-end systems you know. Well over, if we’re talking in the consumer sort of things here you know that you might be well over 10 thousand dollar mark with the type of work that you’re doing.
If you’re actually targeting this work as the low income earning population or you’re actually advertising on magazines or on newspapers that are a little bit more …. Or a little bit more local or targeted at that low income level, you’re going to really struggle getting new conversions because this is a mismatch between the market and the product that you’re trying to offer. As simple as it sounds, I think it’s something that you really need to look at.
Also, just on that point, having an affinity with the market is actually really important. In fact, it’s actually ideal if you’re marketing yourself as quite a high-end product or service company. Are you targeting high-end or high-network individuals with your marketing? I think that’s really important. Again, if you’re targeting that lower-income bracket and you have a bit of a disconnect between your products and services and the market that you’re going after, the conversions are gonna really struggle. So I think it’s a really important point to make that you really need to be able to access the market and also have an affinity with them.
The other thing that you really need to look at also is the competitiveness of the market. Are you playing in waters that are a little bit too dangerous for your business or should you actually be making a little bit more of a step-up into the major league, so to speak. There needs to be some competition in the market. A market without any competition is pretty dangerous.
If there isn’t any competition in your market, it’s probably because your market actually sucks or people have tried to go into that market before and they’ve been unsuccessful with it. So, you need to have a little bit of competition to make everything worthwhile.
And if you can see your competitors spending money consistently in an advertisement space, your competitors aren’t 100% stupid, some of them are a little bit stupid. But if they’re spending money, it must mean that they’re getting some sort of a bite from the market or some sort of return on their investment and it’s probably worth going into.
And just on the subject of competition, people think about competition in terms of price. It’s probably one of the main things people speak about in terms of competition. Going about it in that type of manner is probably one of the most stupidest things you can do from a direct marketing perspective. With direct marketing, you want to make sure that it’s impossible for people to compare apples with apples. You want apples to oranges or apples to any other type of fruit approach so people can compare your business or your offer to every other offer ad on the market then they pretty much are just going to be going on price alone.
They can compare all the features and the benefits and they’re just going to go with the cheapest one. So that’s why I think it’s really important that you use your marketing and you use direct response in particular to differentiate yourself between the competition and what you’re doing and it’s one thing we’ll go into in the later episode.
So on that note, probably if you have any questions about USPs that you want me to answer maybe just send them through in either of our website or via Twitter or Facebook and I can answer those on one of our upcoming shows that we’re going to do on unique selling proposition.
So one of the features of direct response marketing is the fact that it’s actually very accountable to the result which I think is super important with your marketing. Like I said with brand advertising that people are doing, they’re throwing money up against the wall: TV, radio that type of thing. And they’re quite not sure of the return of their investment so one of the golden rules is that you must have a call-to-action in your direct response marketing. So the call-to-action might be “visit the website”. And when you’re saying visit the website, you’re not just going to put your particular website address on there.
What you’re going to do is actually put a custom landing page or a custom URL on there so you know that every person that went to that webpage actually came from the ad that you created. So you can do that either with a Google tracking URL or you can just create a different URL altogether and you know that that page is a bit of a secret to everyone except to the people that have actually seen your ad. So, if a thousand people managed to hit that page you know that that ad that you created actually created one thousand prospects I guess you could say. One thousand people visiting that particular web page. From there again, using all of your tools, Google Analytics is again good for this and then check your sales volume from there.
You can see what actually happened in terms of inquiries and sales from that traffic. So, in a very short space of time, maybe even within a week definitely you can actually say whether that direct response newspaper ad that you created or that improvement in the radio ad that you created or the online pay per click campaign that you’ve done—whether it actually has an impact to your bottom line at all. So you can, again like I said, check how many people came through to the website. That’s the first thing that you want to check or how many people called your business. ……………. How many enquiries you got from there? So that’s going to give you an idea in terms of what your conversions are like on your website or from your telephone staff. How many appointments you’ve made—whether that’s actually applicable to your business— and how many sales you’ve made from there.
Then obviously you can work out a profit if you sell a unit and just say you make five thousand dollars in profit or 500 dollars profit and the ad cost you 5 thousand dollars to run and you can work out whether the ad that you ran is actually profitable at all.
Just a little bit of a side note to that, one of the things that you need to do is actually measure the lifetime value of the customers that are coming through the business. So, I said you could actually measure the productivity of what you’re doing or the effectiveness of what you’re doing after one week.
If you have a lifetime customer value philosophy in your business, meaning that you say that you’re a consumer business and you have a servicing department, you really don’t know the lifetime value of a customer after a little while in terms of, just say you sell them a particular unit and then they have it serviced and then they might actually refer some people to your business if you have any kind of marketing referral program going. So, the lifetime customer value of the customer that’s coming in to your business could actually be a lot higher than what you think it is. But that’s just another side note.
I think it’s important that with the direct marketing that you’re doing that you actually have a philosophy of testing the market so don’t be afraid to pay for testing. One thing that will actually cripple your growth if you’re too much of a cheapskate to actually go out and try things and test new ideas and test new marketing methods, you never actually gonna find out what works for you. So, the only risk that you have really is an inexpensive test. You can get started with some online pay per click marketing for $500 if you want to run some Google AdWords campaigns.
You might get a couple of hundred clicks for $500 and you’ll actually find out whether your offers or whether your webpage is actually converting. I think it’s really really important. And you need to do it quickly but also need to give it some time as well. So you might do it for 1 or 2 months or you might spend a said amount of money. Just make sure you get enough people to the offer that you’ve got to actually make it statistically significant thing that you’ve actually done. So, as long as you’re always testing and you’re actually learning from the test that you’re doing, then you’re in a really good place because you can use the test results to actually fuel other marketing activities that you’ve done. If you’re constantly out there testing what you’ve done, if you have yellow pages rep come in or a rep from another advertising company, you know what works for your business because you’ve tested it.
You can literally spend months and months just actually testing a particular advertising medium. So you might actually just be testing a landing page that you got on your website and you can do things like test the headline—what the headline actually says— test the color, test the positioning, test the subheadings, test the bullet points, put a video on it, don’t put a video on it, change the length of the video if you’ve got a video on there, change the style of the video, the presentation of the video. There’s so many different things that you can actually test. Obviously, you only want to be testing one, maybe 2 things at a time. One is obviously preferable so you can actually see the negative or positive or neutral effects of what you’re actually doing in your campaigns.
Okay, now it’s time for the tip of the week. This tip of the week really is to take some actions on some of things that what we spoke about in the Podcast. What I want you to do is head over to Google Analytics and actually go through or spend probably half an hour just going through some of the learning activities that they have in there. So what we’re going to do is actually go into Analytics and actually make sure we have some goals set up. Some conversion goals. So obviously, they’re going to be different for every business. You have a different conversion goal for your business. Then what we’re going do is actually head over to Google AdWords. So, you should have this all connected in the same account. And then what we’re going to do is actually run an inexpensive test. So if you’re doing local marketing into your particular suburb or town, what I want you to do is actually pick out some key phrases and again, Google Analytics will actually.. sorry Google AdWords I should say will help you with this. So what I want you to do is head on over to Google AdWords and set up a campaign for your business if you don’t already have one. Set it up around your local business or town and actually draw some traffic to your home page or some specific web pages that are specific to any products or services that you’re actually offering.
So, if you’re in the market of selling some split system air conditioners then send split system traffic related to your local area to that particular page. So, obviously that’s going to be very targeted traffic. So using Google as an example here people are going to be typing in “town/location split system air conditioners.” If your business comes up and you service that area you’ve got a pretty good shot of landing either a phone call or a consultation or at least a visitor to the website. You can use as pretty vital business information to make some decisions off later on.
So, if we can do that, just spend around maybe $500, maybe a little bit more. What you want to do is probably get around 300 clicks coming to the website. So depending on the town that you’re in, that could take 3 days, it could take 3 weeks or it could take 3 months. Again, it just depends on the town that you live in and how much traffic is going be coming in to the site. And what I want you to do is actually test that across maybe 10 to 20 different key phrases. Okay? And again, make the landing pages, that you send people to, as specific as you possibly can.
So I want you to do this test and actually get back to me again via the website or Facebook or Twitter and tell me if you’ve come across any challenges or whether you’ve actually made some money from implementing this test. If you actually have to think about it, just say that you’re spending $500, if you have a pretty good profit per customer …. say you got 300 clicks. You know, how many people do you actually need? So let’s just think about this for a second.
If you spend $500 and just say you might get 250 clicks through to your website. So if we do just a little bit of math on that we’re actually going to be paying $2 per click which, depending on where you’re from, that could be quite a high amount or quite low for some markets, depending on where you’re playing. So if we get 250 clicks coming through and we get 25 phone calls from those 250 clicks, that’s a 10% conversion rate to a phone call. And say from there, if we closed 10% of those phone calls and actual customers, that’s 2.5 customers. Why don’t we just round that down to 2? So 2 customers and you spend $500. So, obviously from a profit perspective if we want to break even, we need to make $250 of profit per customer. Just on that initial transaction to break even. Again I think I mentioned earlier in the show you have the lifetime value of your customers as well. So that’s not to mention any servicing that might happen, depending on the product or service that you actually sell or any referrals that you can generate from them.
So I think this is gonna be quite a worthwhile test. Again, let me know how you go with it. I’d love to see some positive results. That’s all we’ve got time for today so I hope to see you next week on the HVAC business growth podcast. Thank You!