Ryan Paul Adams of PME 360 and guest Josh Long at http://joshualong.co dive deep into building a marketing funnel for local businesses. Josh provides deep insight into the why and how of building a sales and marketing funnel and how to position your local business as the expert in your market. This is one of those pieces of content that can have long lasting impact on your business. 

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Building a Marketing Funnel for Local Business

Ryan: Hey, everybody! This is Ryan Paul Adams. I have Josh Long on the line.

Hey josh! If you wanna say hello.

Josh: Hey, how's it going?

Ryan: He's a marketing consultant, a marketing optimizer and entrepreneur.  I wanted to get him on the call today to talk a lot about building a sales and marketing funnel.

Josh has a lot of great experiences in the business world. I think he can offer a lot of value. So Josh if you wanna take it from there. And tell us a little bit more about your background.

Josh: My expertise is in the real estate business. Just like a lot of people in the early 2000s, I jumped right in. I got an MBA in Business Administration but that's all the training I've got in business and sales. So I was a trial-by-fire, right-out-of-the-gate.

And when the market turned and the industry got right under, I was trying to figure out what I can do for the next stage of my career.

I got connected with a guy named Chet Holmes, a business and sales marketing trainer. And he had a great book called The Ultimate Sales Machine that I really gobbled up. I got connected with him and grew to be the Marketing Director of his organization. We grew about $10 million then at that time and we had a lot of services.

I got to work with guys like Jay Abraham before I worked with Chet. I've done a short tenure with Dean Kennedy a top rating small business marketing guy. So I got mentored by some great people. And I got to see the best practices out there.

And the thing I realized I didn't have in the mortgage business was, I saw a lot of companies struggle with their inability to have anything reliable that they could, again, rely on to provide more business.

It was like, they woke up everyday unemployed, and they hustled and hustled and hustled.

And as Michael Gerber, from E-myth, I really liked his trainings that I've gone through mastery programs. One thing he talks about is the distinction between an entrepreneur, a manager and a technician.

And what we found out was, most of the time, small business owners were great technicians. As Gerber uses in his book the example of a great baker. She made amazing pies but she did not know how to manage companies. She did not know how to be an entrepreneur and lead a company.

So a lot of these businesses and business owners come to us when I was working with Chet. And they'd say, "Man I need more leads. If I got more leads, I'll get more business and everything would be fine."

And we'd say, how are you doing it now?

Man, it was a crap shoot. They're just throwing mud against the wall and see what's stuck. They go to chamber events. They go to mixers. They go to leads group. Or they would do a postcard campaign once, and that's it.

Then, direct mail does not work. Or they get their cousins, uncles or nephews to build them a website over the weekend. But nobody would ever come to their websites because they don't understand the intricacies of the web: how Google ranks things, how search engines work. And then they would get guys to try Google Adwords. The small business world not knowing Adwords Express and they'd spend $2,000 or $3,000 but not get any good leads.

And they'd say, "Oh that doesn't work." So it's really just chasing the new shiny thing. They'd bounce from one idea to another idea. It's very typical. I've suffered it myself by having A.D.D. earlier in my career - of letting that overwhelm my focus and bounce from one new novelty to another.

And so the thing I saw over and over and over, even in Chet's organization was that, having a reliable, scalable and controllable lead source at the beginning of the funnel is vital.

And that this funnel would lead into an engagement process. This engagement process would lead into qualification. And part of that would be qualifying. Then, from qualifying leads to converting and closing. Closing finally leads to fulfillment.

Jay Abraham really opened my eyes to, once you have the client, how then can you have a process for retaining and re-engaging them - over and over and over.

Because the big costs of getting that client have been expended and paid for. And so now, it's pure profit when you can go back to them with more services, with more offers, with more integrations that you have to your existing solutions.

So I know a lot of your listeners and in the market that you are really helping now is involved in the home improvement business - the contractor world. And so a lot of those guys, they suffer from referral syndrome. And that they do great work, those who stay alive that aren't scam artists on Homes on Homes.

Those guys on Homes on Homes are just following scam artists. Obviously, if you're still in the business, you're not a scam artist because those guys can only rip off so many people.

So you do good work and people have friends and family over and they see your great work and it gets talked about. That's how referral gets spawned. But the problem is, they're not controllable.

You can't turn on the faucet for referrals when you need more jobs. And you can't fill in the gaps. It's an awkward situation if you get a lull and you got to go back to past clients and say, "Hey you got anybody who's been talking about remodeling their room or their bathroom?"

It is awkward because you come back in a desperate situation. And it does not bode well at that point.  That's the only way you can think of controlling referrals at that point of getting more leads.

And so for contractors, getting a funnel - something that generates consistent leads is important.

A lot of guys I know go to home shows. And these home shows are mostly in the spring or fall, all over the nation at fair grounds. So the problem is, that you're a little fish in a big pond.

Because all of your competitors are standing up side by side.  You've got to try and figure out some offer that engages people. It's really the most cut throat place to try and get more leads.

Ryan: And home shows are expensive. They are not a cheap place to get your business some exposure.

Josh: Exactly. In the marketing world, we talk about the cost per 1,000 exposures. In any advertising medium, you can put a price point on a cost per a thousand views. In that case, you are paying a premium premium pricing for those views - for people to walk by and see your names.

Take note that it's not captive. You've also got to try some gimmick and shenanigans to get people in.

Ryan: Well, it's amazing how many clients and prospects that I talk to on a regular basis are investing money in marketing right now. But, their engagement with their prospects ends after the initial one touch: phone call, email with the usual message, "Hey! You requested more information about doing X, Y or Z." And it ends there.

They've invested all this time and effort. Their marketing people have invested all this time and they make one phone call. And when they can't get hold of them. Move on, next one.

Josh: Again, building a funnel…

If we look at a funnel it really is a conveyor belt. You get leads coming in and you get them into a conveyor belt.

To visualize this since we aren't on video and I can't use a whiteboard like I always love doing. You get a conveyor belt and you move them from stage to stage. And so I would say, to find at least 4 stages that you can get your prospect in.

From the first point of contact, whether that's calling you or they come to your website or they find a review of you online. Then, what's the next stage. What is it that you do to engage them?

Dean Kennedy gave me a really good analogy and I use it all the time in the sales process. Back in the day, when pay phones existed and they cost a quarter, if you got stuck and you didn't have a cellphone or you didn't have a change on you. I'd say, we can get that since that request is pretty low, pretty painless.

We look like respectable, trust worthy guys, we're not going to get a quarter and ask for $10 like scammers on the street or whatever. So, getting a quarter is pretty easy but when we go on and say that we need a bus fare and it was a dollar. It's another story.

Getting a dollar is not four times harder, but it is harder than getting a quarter. Because you're asking somebody to get into their wallet and get some cash out.

And then, if we were really hard pressed for some reason. We had to go ask somebody for $10 for like a cab fare. Because you were stuck there, stranded, something happened in a big city and you needed a cab - you need $10.  The chances of getting somebody to give you $10 is really hard and you need to give a sob story.

You're going to have to give a commitment that you'll pay them back. Or tell them how your family is in need or some big drama story.

So it's just like in sales. The first engagement tells you, when somebody first contacts you, to try ask them for their budget or for a visit. You can get away with a walk-through in their home but they probably want to get some basic info.

So there's something in exchange online. What we do a lot of times is we give a free report. Something that helps educate them in the process that they're undertaking.

In the case of remodelling a bathroom, if I were remodelling a bathroom and I came across a contractor's website that said, "Looking to remodel? Before you get started, download our free report on the 7 black holes where you can get ripped off or the 3 black holes where you can get ripped off and how to avoid them.

In that case, the contractor would be asking you for a quarter. Which would be in this case is a name and an email address. Pretty low risk. They're not asking for a phone number. They're not asking me to fill out a long form on the details, the budget, the size of the space, the time frame when I want it done.

It's just a simple exchange. It's like, "I'm more than happy to give you my name and my email address. And get that report."

So that would be the beginning of what I'd say is the first step of a good funnel.

It's something that you give value away. You help the person in their decision making process.

Ryan:  If you're doing that, if you took the time to put together a report like that and once they downloaded this, and a couple of emails to follow up, you'll probably be the only guy or girl in your market that is offering that. So it's a huge differentiator.

I mean, you are putting yourself 10 notches ahead of what you consider competitors. And it was so simple, you did it by just offering great information and getting rid of all the negative fears that these people have about making this big buying decision.

You're getting them right out there. Like you said, The 7 Tips to Avoid for Not Getting Burned. 

We talked about this last week, which is getting the negative out there.  Like, we won't leave cigarette butts all over your yard. Or we have a professional crew and we make sure that we have our belts tightened.  You can even make it a little funny, like if you're a plumber…

Josh:  …You don't have ever to see our butt cracks.

Ryan: All these fears of people about hiring home improvement contractors, get them right out there.  Get it into a report. Get them into a backend email funnel, articles or whatever.

Josh:  What happens too, what we found when I worked with Chat, because we did a lot of education-based marketing. And that is what this is, offering this report is education-based marketing.

And the thing we found out was, some obscure research report done by some sales organization found that the company that provides the client with the most education would be successful. Companies that are willing to help clients learn and take away the imbalance of power, of ignorance would get 67% to 70% of consumers were predisposed to go back and hire that company.

It is a trust thing. It builds so much trust. And in any transaction, trust is key. And if you don't have the trust of your prospects, you'll never close them.

It doesn't matter how great power remodels look, if you can't build trust.  And you do it in a multitude of ways.

One is the very first engagement of giving something of value. Even if they don't read the whole report, even if they just scan through it and only look at the bullet points, you are educating them. You are being transparent.  You're being,

"Look we're not gonna scam you this way. We're not gonna require 100% payment upfront or just all the other ways people get scammed in projects. We're not gonna recommend the most expensive fixtures because we marked them up. It's not goona produce an ROI on the resale value of your home"

Things like that.

So back to what you said about a lot of contractors who only follow up once, leaving just a voicemail - or they never follow up at all.  So again, this is Sales 101 stuff. The average time or frequency of contacts - total quantity of contacts, I should say that it takes for the average transaction to take place whether it is B to B or B to C (Business to Consumer) which your contractors are in is 5 to 7 times.

What it means is that 80% of the sales happen after the 5th or 7th contact.

So we used to play a game where we would be following up with the companies that contacted us. We just made a game out of it. We'd have fun voicemails. Chat was brilliant. He said, look at the voicemail as a 30 second personal radio advertising.

Position it that way. Write something that's compelling. Don't just say, "Hey Steve, just returning your call. Just seeing if you are ready to make a decision or if there's anything else I can help."

We would also change it to something like, "Hey Steve! This Josh from ABC Contracting. You know you contacted us. And the next step in our process is to meet and bring our portfolio book and show you all the homes that we've done. We'll give you a list of referral sources or references that you can call - that are just in your neighbourhood. You can even go, see and talk to the homeowners about their experience with us. There's no pressure. We just wanna move forward in the very next step. So give me a call back and I'd like to schedule something with you. I got some time free, Tuesday in the afternoon or Friday morning. And here's the number."

So it would be a clear, again, you can do them as radio ads. But it must be specific to that consumer and situation. Moving them forward. And the game was, who could leave the most voicemails in the course of a week. We would call sometimes day after day.

There's nothing wrong with that.  The more squeaky wheel gets the grease. People are busy. You don't have to think that "Oh, they're not returning my call. They're afraid of me." 

We get to think of all the mental head games we go through as business owners.
Not wanting to hold call or follow up call or pester people.  I just learned that, after time, my job is to disqualify people as fast as possible. In that way, I wouldn't end up wasting time. Then I'd mentally psych myself out, going and pursuing other leads.

And so by getting into the mental process of how many voicemails can I leave that are different, that are unique, that are very engaging and then, how can I disqualify this person as fast as possible. So that I'm not wasting my time with them, is a really powerful shift in mindset.

Now on follow up systems.

So you have initial engagement, how they get hold of you - whether it's your website or it's finding you online through some review sites. Whether it's Google places or like, Yellow Pages - something like that.

They find you and they come to your site. Or they leave a voicemail. Then they get a follow up call. What's the follow up sequence? Then, what's your sales process?

I had a friend and he was an audio-video contractor doing home theatres, sound systems, automation systems and stuff. One of the things we identified as part of his sales process were two things: if he can get clients or prospects to come into his showroom and take a tour of the showroom and see all the whiz bang tools, features and gadgets, his close rates went up, sky rocketed as supposed to going and doing in-site visit in their homes.

If he'd go in their homes and they'd never come in the show room. I think he'd close 1 out of 20. But if they come into the showroom, he'd close 8 out of 10. So what's that, a 16 times better close rate?

Then for him, he would charge a design fee and this was his engagement. These are baby steps if you go back and you think about Bill Murray in What about Bob.

Josh: Taking baby steps, what he'd do was he would charge a design fee of $500. Because in his industry, unfortunately, Best Buy, Amazons, all those guys were competitors.

Homeowners would think, why do I need Dave, why do I need to buy a $3,000 TV from Dace when I can get a $2,500 one from Best Buy. It wasn't though as if Dave was ripping them off, it's just that Best Buy has volume pricing.

And so what happened when he charged a $500 design fee, was that the retention would go up. Even if they bailed, he was profitable. He was making money because it was taking 2 to 3 hours to do the design layout and the all the stuff to get them on board.

And then it would go into a bigger contract. So again taking it back to baby stepping it, don't go asking for a thousand dollars from some stranger because you need a new transmission.

Ask for a quarter to get a payphone call so you can go have done what you have done. Change that mindset or adapt that mindset of baby stepping with a funnel approach.

Ryan: That works really well.

My background was on the custom home market before I started my Internet Marketing business and one thing I learned early on was that chasing a ton of prospects around or the big homes would end in a realization that they'd say the right things to you but eventually they would lie to you.

It was my fault. I didn't control the process. I didn't have a process.

Josh: It took me a few years before I realized everybody lies in a sales process. I even catch myself doing that. I don't do it often because I don't want the sales person to be running around in a wild goose chase.

But I catch myself in Best Buys which now is a show room for Amazons. I want to check out a laptop. I want to hold it and type on it. So I go to Best Buys.

If the sales person comes up to me, I don't tell him "Yes I'm researching for my purchase in Amazon."

But I don't try to mislead them in wasting a bunch of time with me. However, everybody lies. It's an unfortunate process or result of capitalism, consumerism and aggressive sales people.

Ryan: I, flat out, stopped doing estimates anymore. And I just package it into a complete project consultation and estimate.

And here's what I'll do for you for $1,500 or $2,000 or whatever is I'll help you get your plans done. If your plans are already done, we'll consult and make sure that you're saving money.  We'll be building this home the right way.

The other stuff of my process is we'll get you ready to build. We'll give you a complete open estimate of all of our fees and all of the contractors. We can show you how much your house is really costing, where we can save you money. Really, a consultative approach.

I think most home improvement contractor can do the same thing. If all you're doing is selling windows, that is probably not the right strategy.

But again with that initial content piece of "The 5 things to know before you hire a window contractor" and go through that stuff - that's your free introduction. The 25¢ that you were talking about.

Josh: Thinking about consultative sales, there's a guy named Andy Miller that I've worked with Chet. And he was the guru of consultative sales and he really opened my eyes. What it does when you get a consultative approach.

And he'd always referenced a doctor or a surgeon. When you go meet with a doctor, you're not combative. You're not lying to them. You trust them because you want their opinion and what I viewed as in the negotiation table, is getting on the same side as the client.

And looking at their playbook. And saying, "You know I'm not really going to do that and here's why."

It's all the things - whether they benefit you or not as the consultant or the sales person or the contractor. You don't care because you make your money on the project. You make your money when you get the client on a bigger deal. And so your design fee or your design consultation as a home improvement contractor you can easily charge - up to a couple hundred of dollars perhaps.

The amount doesn't really matter as it's the psychological effect of them looking at you as an expert - of you building something trust worthy. And like my friend Dave with the home theater systems, it was something they could leave and they could benefit. They wouldn't feel handcuffed to home if they wanted to go another route.
And he provided a bunch of value added benefit on the back end that some cheap clients just didn't care about or didn't realize as valuable.  But he still made plenty of money on the big contracts. And it qualified people a lot quicker.

Ryan: It's amazing if you have the process in place - when you have that initial consultation which you can charge for.

Imagine how much higher your close rate will be. Like you said with your home theater guy, it was like 80% of those who took him up on that offer closed.

When I was in the custom home market, even in Internet Marketing, we take the consultative approach and we charge for it. And those people that take the next step, those who want to hear the full details and pay for your time, 98% of the time become clients.

Josh: As a contractor or any business person, especially if the cash flow's tight, you just want to say yes to everything. Just to get the group working, the deals flowing. But it's the minute that you take a stance of prestige, a stance of expertise - the clients are even more attracted to you, like a lighting to a rod.

So going back at the very beginning, I talked about marketing funnel as something you can really rely upon - it's really of a 3 step process.

One, what is the lead source? What is it that's driving consistent lead float to you. We talked about the home shows. These can work. It's a slug. It's like a pit fight. Because you got all your competitors next to you trying to grab people's attention just when they're on a lazy Saturday stroll.

It is hard. You can do direct mail. You can do postcards. You can do referrals. You can have strategic partnerships with other industries that are complementary to yours. You can get online and have social media help you or reputation management stuff help you and get good reviews and be really really easy to find.

I am sure Ryan is educating you guys on what that is. And I'm sure his company offers that stuff.

Getting that one you can rely upon, just stick with it until it works. There's no right or wrong answer to what lead source you get.

It is sticking to one until it works because they all work. It's just the fortitude to stick to it.  And then getting the engagement funnel, what your engagement funnel looks like.

It starts with 3 steps.

Start with giving your free report. Doing a consultation. And then a proposal. Get that defined. Write it down and if you have sales people, get them to work at it together. Train them, review them weekly. Get that done.

And what's the close? How do you close people? You guys already know that. You wouldn't be in business if you didn't know that. But that's the last step of the funnel.

Hope that's helpful.

Ryan: Josh, that was great info. I really appreciate your time. How can people reach you if they want to learn more about what you can offer?

Josh: Just go to my website joshualong.co - that's .co and not .com. It's the new hip thing. I say that a lot so it's easier to remember I guess.

But I do work with B2B companies typically $5 million and up. More on the strategic planning stuff and fixing a lot of broken things. I've got the site and a blog. Get more information there.

Ryan: Great! Really awesome stuff. I'll talk to you later.

Take care.

Bye!

Need more help growing your remodeling business? Take advantage of all the FREE resources I have on www.RyanPaulAdams.com and my download my "3 Killer Ways to Grow Your Remodeling Business" today.