Gordon Van Wechel’s Alchemy Consulting Group began in 2003 as a marketing and business growth strategy firm. At that time most of the work done for clients was offline. Now it is 80% digital marketing and 20% standard ad agency work.
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Alchemy Transitions has been added most recently to help owners prepare their business for selling and having an exit strategy plan. They guide and demonstrate the best ways to enhance business value, therefore putting it in a better position for sale.
The best part of his job, Gordon says “working with people from all across the country, those with different businesses from (small and inexperienced) to those who’ve been in business 15-20 years. It has been a great run!”
Reputation Marketing
An often-overlooked marketing strategy for contractors is reputation marketing. It is critical to your reputation these days to ask clients for their review. It has become increasingly important because 85% of prospects now look for reviews online to make the decision whether to hire someone.
Google is also looking for those good reviews and gives preferential treatment to companies with good ratings. And, keep in mind, any average star rating under 3 has translated into a substantially discounted business when selling, even by 50%.
Website Improvements
Another essential is website improvement. You have roughly 3-5 seconds to capture the attention of a website visitor, so be sure to convey your value proposition. Display why you should be paid that much money to do work for them, and why you are better than competitors.
Most people only have 2 or 3 roofs installed in their lifetime. They don’t know proper terminology or know the latest techniques and products on the market. Answer those questions for them on your website and you will stand out.
Consider your website your main salesperson. The salesperson who is available 365 days per year. Don’t build and forget! Update your website every couple of years. Add fresh photos, new information and keep contact and about pages up to date. Consumers have become sophisticated; they don’t want to view a website that screams 2003 with its old design. Put in the effort to make it effective! Remember, it is your 3.6.5 salesperson.
Paid Ads and Social Media
In the roofing industry it is unusual that someone looking for a roof will go to Facebook to find a roofer. However, paid ads are different. With only the top 3 on Google and then the Map pack, Google can keep raising prices on this pay-to-play situation. Your return on investment for paid ads is not always there.
While a properly designed paid ad campaign can be the best marketing strategy for effective advertising in the current market, realize it may not be one year from now. At this time, you can profit quickly when done correctly.
Bing, Yahoo and other search engines are 25% of search volume opportunity. For the foreseeable future, Google still reigns supreme as the major search engine.
Alchemy Consulting has been helping roofers since 2013 construct the proper paid advertising strategy to get an effective ROI for success. Using someone experienced only makes sense so you don’t burn through client money while you’re learning the game.
Prepare For Sale
Most businesses today do not sell, and there are numerous reasons for this. A lack of preparation, the owner has overvalued its worth, bank financing falls through, but the most frequent reason is an owner deciding not to (at least temporarily). For instance, said owner gets initially pitched 3x the annual revenue and is excited about retirement, by the end of the due diligence period that number has decreased to 1.6x revenue, and the current owner is expected to stay on for a couple years during the transition. It becomes discouraging and the owner just continues as is until he or she is no longer able to.
Gordon and the Alchemy team recommend looking at your business through the lens of the acquiring entity. An acquirer uses a different set of glasses than the owner. Most owners are looking in the rearview mirror of all they have put into their business, but in the end this has no meaning for the acquiring party. The buyer is looking only at future potential. How many people will stay on, what is the profitability of this business, do I need a job or is this an investment only….etc. Begin to view your business as they do to prepare properly for its sale.
Ratings and Models
Gordon explains the Switzerland structure. Sadly many businesses are overly dependent on one customer, employee, vendor and so forth. Delegate and diversify within your business model. Not an issue for most roofers, but it is still important to make sure you are not more than 15% dependent on any one thing or person.
In this episode, Gordon also warns of the hub and spoke: the owner being the hub and all avenues of the business branch off only or mostly from him/her. When the owner is the focal point for all aspects, there will be problems. And, in terms of selling, it’s a drawback for the investment-only buyer when the central hub leaves the business. Buyers are future minded and success driven. If it seems the whole business is leaving when the one owner does, the buyer wonders if this is a wise investment.
This Scale Matters
“On a scale of 1 to 10: How likely are you to recommend our company to family and friends?” This question is the only real one Alchemy asks. Based on extensive research, this question among an adequate number of customers answers it all. If you have a strong base of those willing to recommend you, then your foundation is strong.
Implementing proven strategies that add value to your company will have benefits for many years down the road. Whether you are just beginning, ready to retire, or somewhere in the middle, a plan that has been proven helps. The young person can gain all the benefits, the retiring gentleman will have a suitable and profitable exit strategy, and the 40-year-old can scale back from 60-70 hours per week to run the business to 30-40 hours per week and not be exhausted (leaving time for all the other things that matter as well).