Because he's naturally empathetic, Eldrenkamp tended to cave in at the first sign of client discomfort. Because he wanted to please at any cost, too often he charged customers for a Ford and delivered a Cadillac. And maybe, he admits, he was just a little embarrassed. "You don't go to Andover and Harvard to become a remodeling salesman," he says.
To get comfortable with selling, Eldrenkamp had to understand that as the owner of a small company with a handful of production employees, "one of my most important roles was to bring in the work. If I didn't, there was going to be no company."
Selling is not the critical task in every business, but every business has a critical task. Getting that task done is the owner's job. Seeing the logic and necessity of sales helped Eldrenkamp get past his aversion to chasing work. His breakthrough insight was that clients "will pay anything if they feel it represents good value for them." He found he was good at defining value for potential clients. It played to his strengths: empathy, intelligence, the ability to express himself. He found he could ask prospects for a 30% margin and not only get it more often than he used to get his 10% markup but actually feel good about the experience. Selling didn't have to be distasteful, he realized, not when it was really about building relationships, developing trust, managing expectations, underpromising, and overdelivering. Yes, those were catchphrases, but they began to resonate for Eldrenkamp once he understood their place in the big picture. In time, a part of business he used to dread became a source of pleasure and of pride in accomplishment.
And something else: Eldrenkamp stopped feeling so helpless. His sales weren't commodity transactions any longer. There was no more getting hammered on price and then waiting by the phone while the client collected bids. Instead of price, value was the variable. Eldrenkamp had learned the difference between "managing the sales process and just letting it happen."
* * *
Understanding how the business makes money
Building a business, Eldrenkamp says now, is like "trying to do a jigsaw puzzle on top of a giant blower. You've got to work at putting the pieces together, but you've also got to work at keeping them in place so they don't all blow away."
Recession descended on New England in the early 1990s, nearly blowing Byggmeister away. In hard times, Eldrenkamp found it even harder to avoid bad habits. He kept employees on too long after the work ran out, because he feared for their welfare. He sold jobs at too-tight margins because he was desperate for cash. Sales plummeted 25% from 1991 to 1992, and profits disappeared.
In the depths of that dark period Eldrenkamp found himself standing again before his Business Networks peers at one of their semiannual meetings. Byggmeister had just one money-losing project going and nothing else in the works. "I was staring into the abyss," Eldrenkamp says. The topic was marketing -- where to look for new business, how to get it. In filling out his data sheet before the meeting, he had been struck by what a good source of leads architects had been for Byggmeister. He was explaining that to the group, telling them how hard he had worked on cultivating relationships with architects and that his effort was finally paying off, when someone pointed out that although he'd gotten 30 leads from architects, those leads had produced only two jobs. "Almost all your jobs," the other CEO noted, "came from past clients or their referrals."
It was a small truth, but it rang like a gong in Eldrenkamp's head. ("I didn't hear a word that was said after that," he says.) Architects were not his customers. It turns out they weren't even much good at helping him find customers. All that time he'd been selling to the wrong market. Eldrenkamp decided it was time to rethink his marketing strategy, because selling is harder than it has to be when you don't know who your customers are .
"We wrote this letter," Eldrenkamp explains. "I think it went out to 40 people. It was very gentle. It said, 'We're thinking of instituting a five-year warranty. We want to come look at your job and see how it's held up over time." Over the next few weeks he visited former clients in their homes. Immediately, Byggmeister started getting work. "Small stuff, at first," Eldrenkamp says, "and then it built."
The first clue he had that he might be onto something was the sharp increase in leads -- they went up 30% in the first nine months. But the quality of the leads, more than the volume, was what really made Eldrenkamp pay attention. In the past, roughly two-thirds of his leads involved competitive bids. Typically, an architect would recommend Byggmeister, along with two or three other contractors, to a client. The client, trusting the architect, would view the contractors as interchangeable, and the job would go to the lowest bidder. But once Eldrenkamp began marketing his services directly to past clients, the trust was all his, and the ratio flip-flopped. Now two-thirds of his leads were exclusives; Byggmeister was the only contractor in the picture.
