By Judith M. Guido
With a new year upon us, let’s take a quick look back and assess 2011. In my first column, I took a look at some of the trends I thought would impact the industry this year.
Green movement. One of the trends I predicted would increase in value was the green movement. That prediction held true as 68% of contractors had requests for greener products or were questioned about the environmental effects of their current products. Revenues from green projects in 2011 increased by 11.3%, with projections of 19% growth for 2012.
Social media. Property or facility managers who used social media for research, recommendations and providing feedback on snow services contractors increased by 38% in 2011.
Women in power. The percentage of women in property management-related jobs who purchased snow-related services increased by 17%.
Price vs. value. It is important to note that when price and value were seen as being equal, local contractors increased snow revenues, on average, 5%. However, many larger snow companies gained market share (4%) in 2011 as they beat the smaller contractor on pricing, innovation and overall value. Transparency also played a huge role in 2011 and will do so again in 2012.
Looking ahead
So, what’s in store for the new year? As customers become smarter and more connected in 2012, the need for quantifying, communicating and proving your value will be paramount.
Know your customers’ needs. Customers will expect that you’ve done your homework and understand their needs, stresses and goals. Learning how to read and translate the voice of the customer ahead of your competitor will be a critical skill set in 2012. You’ll need to prove to them your value, how you’re part of their solution, and how you’re really different from your competition. You will also need to discuss the “P word” (pricing) up front. You will need to make value a tangible and easy-to-understand asset. Those who align their values around ease of doing business, innovation as a cost-effective tool, environmental stewardship and best-cost provider will do well in 2012.
Focus on efficiency. As a result of the last three years of economic uncertainty, low risk and financial conservatism is at an all-time high. Pricing and terms represented 79.6% of buyers’ decisions and will continue to rank high again in 2012. Customers will continue to hire companies that are innovative in their pricing, terms and technology. Tools like mobile field units, smartphones, GPS, social media, sales force automation, CRM (customer relationship management) and online dashboards that increase transparency will be important. Those who resist technology, will be viewed as dinosaurs and will lose market share to industry innovators.
Promote your technology, snow products and services that will produce a strong return on investment, and intelligent allocation of their investment dollars. Doing so moves you from being an adversary and an expense center to an advocate with your customers’ best interests as your focus. Think different, speak different and be different!
Bundling opportunities. The renovation market will continue to see strong growth, as people stay in their homes longer. They will reinvest in their homes, with 39% allocating money into outdoor living and landscaping. If you’re in the residential market, this shows opportunity for bundling services.
Be transparent. Customers expect you to be transparent in your pricing, contracts and information about your company. They want to know that you are a financially solid company with a professional team. Make your contracts black and white, with the scope of work and roles clearly identified. Indemnification and liability issues need to be clearly documented with all necessary signatures (no more handshake deals). Buyers want to be able to easily understand your guaranties and warranties. Less than 20% of guaranties are redeemed, so differentiate yourself by making your guarantee the lowest risk in the industry. Proving how you are part of that solution is critical today.
Social media presence. Social media will continue to be a great tool for you, and your key stakeholders, in communicating value to others. It will play an even greater role in purchasing decisions in 2012. Customers will use social media to conduct research, identify trends, locate suppliers, find deals and talk about you in either a positive or negative manner. Recent research shows that 80% of buyers change their minds about buying from you if they read negative information, versus 87% of buyers who will buy from you after reading positive feedback. Courting like-minded successful customers, who continue to grow as a result of their relationship with you and your services, will create incredible sales-advocate channels for your organization. Using social media and managing your online presence is a must in 2012. Either you can control your brand and communications, or your competitors will do it for you.
Partner carefully. Expanding smart partnerships with suppliers, customers and value chain partners will not only increase revenues and market share, but will also significantly increase name awareness and reputation. We’re all judged by the company we keep, so choose these partners carefully. Who our philanthropic and community partners are will also play a role in the customer’s decision-making criteria. Customers, as long as there is product and price parity, will continue to favor the local and smaller players.
The year 2012 is showing signs of overall growth with predictions again of heavy snowfall in many noncoastal areas of the country. Those who can listen and leverage the voice of the customer, prove value and price points, deploy technology, provide a green program and have assembled an intelligent team will lead the industry. Listen, watch, learn and leverage the voice of your customer, and make 2012 your best year ever!
Judith M. Guido is a principal in Guido & Associates and a business management consultant who has been helping snow and green companies grow successfully for more than 20 years. Contact her at 818-800-0135. Visit her on LinkedIn, Facebook and Twitter. Results taken from surveys performed through the U.S. Census and by McGraw Hill, commercial realtors and an independent survey by Guido & Associates.
