July’s annual SSI Best of the Best Issue includes 2014 Installer of the Year (Small Company) Runner-Up Low Voltage Contractors (LVC). A leading reason LVC was recognized for excellence was due to its strategic business planning and marketing initiatives. Here, President & CEO Bob Hoertsch lends more insight into how LVC is mapping out its success. Be sure to check out my other LVC blog in which Hoertsch addresses how the company keeps its people engaged and also gives back to the community.
How was LVC’s business and practices been affected by the recession?
Bob Hoertsch: The recession was a time of growth for LVC. While many companies in our industry struggled to survive the economic downturn, LVC grew an impressive 45% over a three-year period of time. It was our commitment to being invaluable to our clients that led in part to our growth. We added 11 jobs through this period of rapid growth for our company. Growing came with some pains for LVC. We were excelling in our ability to answer fulfill the needs of our clients, even as they were working with lowered and limited budgets. By staying informed about where needs existed, we were ahead of our competitors in providing solutions to the market. More importantly, LVC understood that through the recession our service had to stand above what our competitors could offer. We had to make ourselves different. The marketplace was filled with other capable providers and we had to stand out. Our clients knew they could count on us to deliver excellent solutions and ideas, inform them of options to consider, and execute installs, upgrades and retrofits without business interruptions, ahead of schedule and better than was promised.
What business practices and strategies does your company deploy its success?
Hoertsch: We are fortunate to have employees with an outstanding length of service record. It’s interesting when you look at length of service statistics for LVC you can clearly see the years that significant growth occurred in the company’s history just by looking at the hire dates of employees; we have times of the year where several people are celebrating a common service anniversary. One of the core business practices that has carried through from our beginning is being the best. The employees that built LVC did so by being the absolute best available provider in the market and always being on the leading edge of technology changes. As a result we have a core segment of our business that is comprised of loyal LVC customers who have grown up through the industry with us. Growing and maintaining our core customer base is a big part of company strategy. As LVC has grown and expanded its product offerings we have worked to align our sales professionals’ technical expertise, relationships and sales strengths with the right accounts, markets and targets. Our thoughtful consideration of these factors has helped to position us in roles where we serve both as design build contractors and as consulting partners for new projects. We customize solutions for our clients by listening to their end result needs and developing plans to help them achieve their goals.
How are those business plans executed and adjusted? What are your growth targets and strategies?
Hoertsch: Each sales individual is responsible for developing their own business plan and presents it to the sales manager for review and the president for approval. The talent and drive that exist in our sales team allow us to rely on them to understand their markets and clients: the strengths of existing sales relationships, the potential each relationship has for growth, and new opportunities that are worth exploring. The performance of each plan is evaluated monthly by the individual and in a team setting. As changes occur in the marketplace, within a vertical or in our competitive landscape, we adjust our plans accordingly. We are also forward looking to coming or emerging trends – making adjustments six to 12 months in advance based on projected changes. We look for economic indicators, business cycles with major accounts, vertical implications, and regional influencers that might have impact on our strategy.
Our growth strategy this year focuses on health care – specifically targeting the expanding senior living market. Supporting our decision to move this direction is a recent study from multifamily executives that projects that independent senior living facilities will be focused on occupancy growth and indicates that Minneapolis will be the top city, experiencing 95.1% occupancy by the end of 2014, a 150% increase from 2013. High occupancy rates in current facilities are driving massive development efforts in our area to provide additional properties in order to meet the consumer demand. Many among the aging population are seeking facilities that provide care and/or are wanting to get out from under mortgages and into communities where they can rent. LVC is establishing relationships with the major developers in our market – focused on those with local presences. In addition to developers, there are several general contractors who are directing their efforts toward the expanding senior housing market: they have been part of our strategy to move into this market, too. We also have a couple of strong manufacturer reps who are serving as partners to help us incorporate their products into the senior living facilities in the pipeline.
How are LVC’s budgets set so as to accomplish your business plan?
Hoertsch: Planning sessions are held yearly three months before year end to determine long range planning and budgeting. Divisional managers input their data and projections and top management then creates the budget for the next year. Budgets are prepared using multiple sources of contribution. To begin setting topline, each salesperson submits a proposed budget for what they will generate in sales for the upcoming year. Their proposal is a comprehensive look at what their plans were for the current year including productivity, projects or job predictions, accounts or verticals where growth was projected for growth and results against that plan. After an analysis of historical and current projections and results, a comprehensive plan for the upcoming year and revenue projections is comprised. The plans of each sales person are rolled up into a master plan and each sales person reviews their plan with the sales manager to identify potential gaps or opportunities not yet covered. The sales manager then works with the president to look at the rolled up plan for a more comprehensive overview of the sales plan overall. The marketing budget is submitted independently and is a comprehensive overview of areas that have been identified to grow the company, including: new markets, deeper penetration into a current account or market, emerging technology, growth in presence and the like. When completed, the marketing plan is reviewed to identify synergy with the sales plan and/or determine gaps that may exist in the sales plan that can be better covered. Operations submits their budgets based on projected revenue results for the year including base operating expenses, added labor or fleet, etc.
What sales and marketing techniques are used to support those business plans?
Hoertsch: The addition of a marketing manager in late 2013 is allowing the company to place focus on expanding our presence and reach through marketing. Traditional marketing is good and has a need and its place for LVC. While exploring some more traditional paths – uniform branding, print literature, basic promotions, Web sites, SEO, participation in local associations and trade shows– our goal is to move above tradition to innovation. We are expanding our focus on key vertical markets, adjusting to market changes and trends. What we really are working toward in our sales and marketing efforts is making bid ideas come to life! As we watch technology change we want to be telling stories that compel clients to innovate, explore and challenge their boundaries. A large part of inviting our current and potential customers to see what is possible has been the creation and implementation of a functional demo room. People can see and participate in demonstrations of some of our most cutting edge technology solutions, making it easier for them to envision how we can help to meet their needs and exceed their current standards of operation. We rolled out this new opportunity with a guided tour and onsite open house for many existing and potential clients. Through this open house, we were able to connect with potential clients in our different target areas.
Our marketing efforts span from traditional print literature specific to the needs of key verticals and E-mail campaigns with new sales targets to improved online presence with keyword focus and interactive trade show demonstrations that include relationship building components. By employing historically effective and more progressive marketing strategies we are helping our sales individuals create opportunities to interact with key clients and providing them with powerful tools with which to demonstrate what the wide expanse of what LVC can do. One of our most powerful and compelling marketing tools is our tagline – Custom Solutions. Personal Service. It really is at the core of what we do and our message to the market. We fully recognize that a single solution will not satisfy the needs of many clients and work to provide the right solutions, custom to each unique situation.
How are these sales and marketing initiatives measured, reviewed and revamped?
Hoertsch: While the logical answer would be increased sales, the more accurate answer is that we want to develop programs that are repeatable with predictable results. We use Salesforce.com as our CRM, and that has some great marketing tools for us to use. As we attend trade shows, run promotions or engage in any kind of marketing event designed to move the needle in a specific area, we run a campaign in Salesforce.com. A campaign allows us to understand what our financial investment is, to create an overview of what the activities are, and to clearly delineate our intended outcomes. We can add contacts based our initial activities and interactions and also track leads and opportunities that came about as a result of our efforts. For us, that will be a key tool as we move forward to help understand what activities produce results for us and in what proportion to our investment. In addition to the mechanical process of tracking marketing results, we also look for feedback from our sales team and field technicians. It really helps to get human opinions, so that we are not simply managing our results on paper.