Facebook Dangers and Successes

There’s a lot of crap I hate about Facebook. Farmville. Mafia Wars. 1 million strong for just about anything. So much of it is so meaningless. 

But I do think contractors with fan pages have real opportunities to differentiate themselves from their competition. So, I’ve been searching fan pages, and I come bearing good and bad news. 

First the good news. They are bunches of really strong fan pages out there, with great content, lots of fans, and quality discussions. Those business owners really get the power of what Facebook can be. 

Now for the bad. For every good page I find, I see a dozen that suck. Here’s the worst-case scenario for a contractor on Facebook. You’ve got a bunch of fans, but haven’t posted anything in two months. My question? Are you out of business now? That’s the message you’re sending. You’ve shuttered the shop, and you no longer offer services. Or, you’re too busy and don’t have time for posting. That translates into don’t have time for my project either. 

There’s nothing good that can come from a Facebook page that isn’t kept up to date. If you’re going to jump into this arena — and I recommend doing so — you’ve got to see it through. Want to see a great example. Go check out my buddy Mark Elia’s company fanpage. 

Mark of Excellence

 

Mark of Excellence does regular updates, posts videos, offers specials, has a ton of project pictures. Plus, they’ve got bunches of fans. If I’m a homeowner looking for something special from a company, seeing a company with that many fans would put a huge tick on the good side of the ledger.

Look at the Big Brain on TED

Are you a curious person? Are you fascinated by ideas that challenge your perceptions?

If so, go to TED.com. This site offers presentations on some of the most interesting research and information out there from people who think in new and exciting ways. TED is a non-profit organization whose expressed purpose is to distribute “Ideas Worth Sharing.”

I recommend setting aside an afternoon for watching. Filter first by “Rated Jaw Dropping.” Then move into areas of your particular interest. If you haven’t discovered this site, you’ll thank me and curse me for stealing so much of your time.

My most recent favorite? Hans Rosling presents historical data on the differences between developing vs. industrial nations over the last century. Watch for the the sword-swallowing dénouement.

Post links to your favorites in the comments below!

The Spring Home-buying Season

The early-season buds rising from suburban lawns this year won’t be crocuses. Instead, I anticipate a bumper crop of “For Sale” signs. James Hagerty of the Wall Street Journal offers a fabulous analysis of the Spring home-sale market. (See Here.)

I would characterize his assessment as generally positive with significant reservations. Chief among those is the concern that foreclosed and distressed properties that have been held back by banks in anticipation of a rising market are going to flood the scene. The potential is to drive down prices further. (Think back to those lessons on supply and demand from your economics courses.)

In addition, if the employment (or unemployment) situation worsens, we may find more increases in available properties due to layoffs and more families unable to meet mortgage obligations. Over the last several months, inventory has dropped considerably, but the potential for an influx of inventory from the shadow foreclosure market and newly laid-off workers can change that scenario quickly.

My guess? Demand has increased. The $8,000 tax credit is helping. But what no one seems to be factoring in all this analysis are the families who feel pressure to move because of high mortgage rates but have struggled on in their current morass because there is no way they could sell their home. For the first time in 18 months, those families see a glimmer of hope, and I would guess that they will be testing the market to see if they can unload a property (and mortgage) that is straining them financially.

The result? Perhaps, we’ll see a higher rate of sales. But we’re also going to see a higher number of available properties across all price points. In the end, prices will remain stable but in some markets we’re going to see more declines. What do you think is going to happen? What do you see in your market?

Energy: Our Biggest Threat

I attended the Builders Show in Las Vegas last week. Once again, the National Association of Home Builders had a “Green Day.” Much to my chagrin it did not mean the band was performing, but rather that home builders were focusing on green issues.

I guess that’s good, but I have to lament that the focus is — at best — cursory. In discussions with a couple of people, they expressed concern about what would happen to home building, remodeling, and the economy if the cost of oil rose to $100 barrel. My concern is that the cost of oil is going to rise to $500.

 Am I Chicken Little? Give me a moment to explain myself.

I’m currently reading a fabulous book: “One Minute to Midnight.” It’s about the Cuban Missile Crisis and delineates that week in October 1962 on an hour-by-hour basis. We learn from primary material research what Kennedy, Khrushchev, and Castro were all doing at any given time. One of my favorite parts is about a U-2 spy plane flight and the difficulties of operating such a craft. Here are the facts. Flying at an altitude of 72,000 feet, a U-2 plane has a very narrow tolerance for success. Fly too fast, and the fragile craft will break apart. Fly too slow and it will drop out of the sky like a stone. The speed range between failure and failure is a mere 6 knots.

That’s my metaphor. Our oil consumption currently has that slim range of tolerance. If China or India’s economies get overheated, and demand soars, then the price will soar. We’re not ready for alternative energy systems to take over for us if oil becomes too expensive. I mean, how many Priuses are out there?

We are taking some steps. There’s a new government program called “Cash for Caulkers.” It helps our energy problem but is really the same as putting our fingers in the dike. We need to invest in significant changes in alternative energies or the spiral downward for our economy could be the same as a U-2 plane going too fast. Or going too slow. Or not going just the right speed.

J.D. Power Is Bad for Customer Service

J.D. Power is hurting our ability to improve customer service. Why? Companies such as car dealers and banks are gaming the system to get customers to rate them highly. They focus more on the system than the improvement. Usually it works something like this.

You interact with someone who is on the J.D. Power radar, and he or she will ask, “Sir, please let me know if there is any reason you wouldn’t rate this service a 10.” If it isn’t a 10, they promise to make amends to make it up to a 10. Then they ask that you make sure to rate them a 10 when you receive the questionnaire. Man, I hate that. Here’s why.

1. Does anybody really deserve 10 out of 10 on customer service unless he has just completely wowed you? No. And wowing me means you have to deliver more than you promise. Even more than I expect. That doesn’t happen with everyday service.
2. Getting to 10 is a one-time deal. If you don’t make it on the first try, by definition you can’t get to 10. If it takes more than one try to deliver highest quality customer service, then you have failed. They need to try harder the first time.
3. Nine is pretty darn good customer service. I’d be happy going through my life of commerce with people delivering nines to me on a consistent basis.
4. People think if they’re nice to you and remember your name, they deserve a 10. No. That level of quality demands more service.
5. Employees of these companies hate asking for these ratings. It undermines them, and gets them focused on the wrong thing.

The result of this gaming of the system is that customer satisfaction has actually decreased because there’s no incentive by the J.D. Power acolytes to improve it. The only incentive is to coerce customers into admitting they delivered the goods.

Here’s my solution. Never give a 10. Don’t play the system. But, also deliver enough feedback to the car dealer, bank, or whatever so they can improve customer service. That has real value.

Social Media Is Not about Marketing

The new game in town for small businesses is social media. Owners and marketers are exercisiing the same tools that individuals wield on Facebook, MySpace, LinkedIn, Flickr, YouTube, Twitter and the others. The problem is too many businesses are applying marketing strategies to their social media approach. That won’t work.

What will? Editorial strategies. Social media is about managing content. You’re trying to engage an audience and build a community. In this era of cynicism over any overt marketing message, you will absolutely fail if you try to engage your audience using the marketing tools of the past. Is anybody else tired of seeing message boards and comment areas on blogs being overrun by people trying to sell their product or service?

Let’s take a new approach.

1. Engage the audience with content that has value.
2. Respond to your audience’s needs.
3. Build your community on a meaningful exchange of ideas, where you contribute with your thoughts and time.

To do that you need to plan out what topics you’ll cover and how you’ll cover them, put together a schedule, and execute that schedule. I advise not trying to do it yourself. There are business owners who are good bloggers, tweeters, and Facebook users. But the truth is they are probably the exception. Plus, you don’t have time. Once your audience sees your blog or video blog go dry for a few weeks, they’ll go find their information fix elsewhere.

Hire the talent to help you. The good news is that there is plenty of editorial talent available, looking for work.

One other thing. For those of you who don’t see the value in social media, let me make this prediction. Within 3 years, not having a social media strategy will be seen by your prospects with the same disdain that not having a website is now. Social media will be table stakes to play the game.

Beware: Builders Doing Remodeling

The home building industry has dropped into the dump. What’s a builder to do? Go into remodeling.

I’ve been hearing that all over the country. Boyce Thompson, Editorial Director for Builder magazine, recently suggested this strategy in one of his blog entries. (See Here.) The article and links outline some of the opportunity and dangers that await builders in the remodeling market.  I have no doubt builders can be successful doing remodeling, but it requires a significant reset in company culture. To Thompson’s suggestions, I’d add a couple more.

1. Service Business. The construction process of home building is essentially a manufacturing facility on site, where raw materials are trucked in and put together. (Okay, it’s a tad more complicated than that.) Remodeling, though, is a service business. No doubt, the construction side is complicated, but remodeling is all about serving the client. Just getting the construction right is table stakes.
2. Margins. I hear lots of remodeling contractors who lament that when builders come in to the industry, the margins decrease. The pros understand that if you estimate a remodeling project on the same mark-up used for home building, you’ll soon go out of business. Why spend all that effort chasing leads for small projects just to get the pricing wrong.
3. Crews. One of the strengths of the best home builders is their trade relations. The problem when they move into the remodeling market is that those trades are not set up for working on occupied homes. In the industry, people call it being ”housebroken.” Crews can’t smoke, need to keep the music turned down, and have to be sensitive to children and pets. It’s not for everyone.
4. Reputation. The remodeling industry has a horrible reputation. (We won’t argue whether it’s deserved or not here. Just recognize that it exists.) Builders entering this industry risk ruining their reputation. If they think the strength of their brand in the community will get them past consumer’s feelings about remodelers, they need to look very carefully. Screw up one project — disappoint one demanding homeowner — and your reputation can take a huge hit.

Remodeling activity is a great place for builders to move. The builders I know are more than capable of managing this kind of business. It involves less risk than home and, therefore, less return on investment. Nevertheless, the rewards through higher margins and diversified revenue streams can offset the dangers.