Plumbing contractors invest the vast majority of their advertising budgets in direct response advertising, i.e., Yellow Pages and direct mail, as they should. For most it would be a waste of money trying to build name recognition. In fact, Plumbers' Success International co-founder John Youngtold members at their "Success Summit" in Phoenix in January, "Most contractors are lucky to have ineffective marketing, because otherwise people would find out how bad they are."
PSI's first priority is to help members' shore up operations to the point where they can benefit from powerful marketing. Those who qualify will have an opportunity to go beyond direct response advertising into the realm of branding.
Young introduced a PSI program called Mind Share Marketing aimed at helping member firms - and ultimately a PSI consolidated entity - achieve market dominance as a brand name. He defined market dominance as achieving at least 30 percent unaided recall of the firm's name by consumers in a given market.
Nobody at present comes close to that, according to Young. PSI research has found that 67 percent of people in the country cannot name a single plumbing company when asked. The most recognized name in plumbing is Roto-Rooter, which achieved 19 percent response. The other 14 percent of those surveyed split their responses among the nation's remaining 50,000+ plumbing companies.
PSI's branding strategy rests on the power of audio cues in radio and TV commercials. They are developing it in conjunction with marketing guru Roy Williams, author of the acclaimed book "The Wizard of Ads." Member firms will have three options if they choose to pursue the branding concept.
They can do it independently using PSI guidelines but developing commercials and purchasing media time on their own. Or, they can do it as an independent company using the services of Roy H. Williams Marketing Inc.
The third option is to work with other PSI companies to establish a distinct brand identity. This would require changing the company name and, in effect, getting a head start on the consolidation planned for the group within the next couple of years. Only those with well-developed operational capabilities would be allowed to participate. No matter what the option, Young told members PSI would have the capacity to institute branding with no more than three
to five companies per quarter.
Step At A TimeThe Phoenix "Success Summit," held Jan. 13-15, was the second of nine planned gatherings of its kind. In conjunction with these meetings, PSI parcels out manuals and other information to members in a step-by-step approach to implementing its program.
The Phoenix meeting featured sessions for two different groups: the "Founders" who were the initial PSI members to join after a recruitment drive last summer; and the second group deemed PSI "Charter" members.
On the agenda for both groups were programs explaining PSI's "Straight Forward Pricing" system. It is a flat rate system with simple formulas to develop prices for both defined tasks and jobs with too many variables to assign a flat rate. The more advanced Founders group received a series of manuals containing sample PSI rates with an option for customizing the prices to a firm's own experience.
PSI members also were exposed to vendor incentive programs for truck bodies and insurance. Other topics covered during the meeting included:
"Immediate Impact Imaging," a comprehensive image-building system based on practices developed by PSI co-founder and PHC contractor Mike Diamond.
- Charter members received booklets on Yellow Pages advertising and direct response advertising containing copyrighted PSI ads. (Several members reported generating calls by running these ads as coupons or, in one case, in a local newspaper. Ad developer John Young said the latter was unheard of in his experience.)
Results of PSI research on how customers view plumbers.
A final day idea sharing session attended by both groups.
Co-founder Jim Abrams addressed both groups and told them that, despite consolidator woes on Wall Street, PSI has not veered from its plan to move ahead towards its own consolidation and IPO within the original three-year time frame. Abrams' thoughts about this other subjects can be found in the "Newsmakers" interview beginning on page 34.