As a contractor, I have always dreaded the “winter” because work would dry up, and weather often prevented what types of projects could be performed. As the leaves began to turn, I used to get an uneasy feeling in the pit of my stomach, as I knew what was just around the corner. After the first painful winter, I decided to be proactive and generate the work I needed not only to survive, but also to prosper.
Start Before Winter
The key with developing winter work is to begin generating it PRIOR to the winter beginning. Once Thanksgiving comes, people stop thinking about home improvement projects. It is imperative to contract for and schedule the winter work before Thanksgiving while people are still in a buying mode for home improvement projects.
Budget & Projections
First, start with a budget of what you need both from a break even, and then a full capacity, perspective. For instance, if you need $100,000 of work to break even over the winter months, and the average job is $5,000, than you need 20 jobs to break even. If your closing ratio is 66%, you would need 30 estimates to generate the $100,000 you need to break even. You should do the same for a full capacity projection.
The easiest way to generate the required leads is to start with your past customers. A good response rate for direct mail is 0.5% response rate. Obviously, people you have a relationship with (and whom are presumably satisfied), will respond at a higher rate. Depending on the effectiveness of the offer, it is reasonable to achieve anywhere from a 2% to 5% response rate.
Going back to the original break even analysis, if you need 30 leads, you would need 1,500 customers on your mailing list (30 divided by 0.02). However, if you can generate a 5% response rate, you only need 600 people on your mailing list. The bigger your customer list, the larger number of estimates you will generate.
Next, you need to generate a compelling offer to incentive people to schedule work in the winter. What I have done in my business is give a large percentage discount (usually 30% off our regular rates) for work scheduled between specific dates in the winter. Our most difficult period for scheduling work is December 15th through January 15th, so we set that windows as the “discount period”.
The catch is you limit how many projects you take at the heavily discounted rate. For instance, if you need 30 projects to break even, you limit this discount to the first 30 people to respond to the offer. This will give your past customers the sense of urgency to move quickly and take advantage of the proposed savings.
Whether you send a letter or some other postcard style mailing will be up to you, but I suggest a simple letter. It will give you the opportunity to explain why you are willing to offer such a tremendous discount. Specifically, that you need a certain amount of work to retain your employees during a naturally slow period, and that you are willing to offer a great deal in exchange for scheduling during this slow period.
I suggest sending this letter in late September or early October. Follow up this mailing two to three weeks later with a follow up mailing (this time a postcard) indicating how many projects you have sold, and how many spaces are left.
Two weeks later, send a final mailing stating how few spaces you have left for the promotion, and reminding them that the promotion will end shortly. You will find you will get a flurry of calls at the tail end of the promotion of customers desperate to get the last spaces available.
Email Works As Well
If you have email addresses of your customers, you can send email blasts in between mailings two and three. Again, the focus should be about highlighting how many spaces you have left.
It may seem counter intuitive to have work scheduled say from December 15th – January 15th when you may have openings still in November, but knowing the exact amount of work you have signed and scheduled during your slow period, will give you the comfort level to continue to sign and schedule the “normal” work that will come in naturally.
Mark Osborne owns and operates Manor Works Painting, which services the Greater Washington DC Metro areas and Northern Virginia. His website is: Manor Works Painting. Mark is a leader in the painting inudstry: known for knowing his numbers and running a smooth and organized painting company. In his spare time he enjoys attending local beer dinners and is in the process of creating his own brewing company. Stay tuned!