I’ve been seeing a lot of stuff about “recession-proofing” your business on social media lately.
Some of the info provided is actually decent, but most of it is crap.
(Or worse … thinly-veiled pitches to try to get you to buy some shit.)
So this post is about the #1 thing you need to do to ACTUALLY recession-proof your business.
Now before I get to what that thing is, let’s go over the problem to establish a sense of context.
1. The main problem is that it is hard to differentiate yourself in this industry.
Because though you may be a master at your craft, the customer expects that. And let’s face it, a lot of us are damn good craftsman. And besides, work quality and attention to detail are not that visible during sales calls … so homeowners usually can’t tell your skill before you do the work.
Now most contractors can get by just fine during a normal economy, but here’s the kicker:
2. That problem of differentiation becomes a critical point of failure during an economic downturn.
This is because during a recession the construction market splits in half. (See picture.) As leads start to dry up, the middle of the market disappears.
This is because:
(1) while upper-tier customers (who are least affected by economic volatility) will continue to buy premium services at a similar rate, and…
(2) the lower-tier customers will continue to buy based on price and price alone,
… the middle-tier customers usually must reduce their spending. They will either wait until later to do their project, or they will reduce spending by shopping for a lower price.
As the middle-tier customer base disappears, a lot of the contractors in that middle 60% price point range have to move either up or down in order to chase the shrinking lead base.
So…
3. When you need to compete for a shrinking number of total leads, AND you need to compete with the other middle-of-the-road contractors who are also being forced up or down the price scale … contractors who can’t differentiate themselves get crushed.
So now that we understand the problem, what’s the solution? How do you differentiate yourself based on something valuable so that you don’t have to differentiate based on price?
The solution is to double down on customer service.
Now here’s what I mean by that.
Whenever you are interacting with a customer or prospect, always ask yourself…
“What ELSE could I do?”
“How do I go the extra 2 inches here?”
“How do I give them something that they don’t even know they want yet?”
I’m talking little things.
Send the damn thank you card when you get back after the initial consultation.
Don’t just tell them to go look at floor or fixture selections, MEET THEM THERE.
Actually go out and meet with the prospect even if you know you can’t provide a decent quote until they get architectural prints.
If your prospect answers the door in socks, ask them if they want you to take YOUR shoes off too.
When a customer sends you an email asking you what brands of railing you would recommend for their deck, don’t just tell them the brands. Take the 4 minutes to pull the links off the manufacturer’s website and send them the links. Include a list of the top 3 pros and cons of each railing. It’s not hard. We’re talking 4 minutes.
Overcommunicate! If today is Monday and you’re planning to get a quote to someone on Thursday, don’t just wait until Thursday to say anything. Email them and tell them that it’ll be done on Thursday.
Tell them what’s going to be included, and what the next step after that will be. Never leave them wondering what you’re doing or what the next step is. This will make them feel taken care of.
Take your time. Make their lives as easy as possible. Make them feel special.
DO EXTRA.
In my remodeling business I always ask clients why they went with us, and recently about 60% of them have been saying a variant of “You ACTUALLY did _____.”
The ____ varies, but stuff like… “actually came out to look at the job”, “actually responded quickly”, “actually answered the phone when I called”, “actually tried to help me”, and “actually seemed to care” come up a lot.
Now there’s other stuff that you should do in a recession too, like reducing waste, preparing safety net capital like a line of credit with the bank, increasing ad spend, etc.
But if you just double down on customer service, you’ll be fine. You’ll probably even end up GROWING your business during the downturn.
Strive to thrive, not just survive.
(Okay that last bit was corny as hell, but whatever, I’m leaving it.)
(P.S. – If you want to download the exact strategies and scripts I use to actually INCREASE my revenue during economic downturns, check out Markup & Marketing Mastery!)
