How to Beat the $3 Million Revenue Threshold
Steve McKenna
North Star Productions
Most stone fabrication shops struggle to grow past $ 3 million in sales. The main reason? It’s not because of the production capacity or output. It’s easy to find a new CNC that will make your shop produce another 100 square feet daily. That’s the sexy part of the business. Every owner loves a new toy in the shop, and who can blame them?
Stone fabrication shops can’t grow beyond $3 million because most shops fail to systematize the front of the house, specifically their sales and marketing systems. When shops try to grow before implementing sales and marketing systems they hit a glass ceiling. Speaking from experience, this means key people work extra to compensate for the lack of systems, and that will eventually end poorly.
New equipment doesn’t get the owner out of the weeds. It takes well-organized systems that will allow the key person to go from being involved in every transaction, to fine-tuning the systems so that their staff can keep the sales and cash coming in predictably, and the owner can focus on key accounts and running the business.
As someone who owned and operated a stone countertop shop for 16 years, I know what ups and downs are all about. Hoping that the local economy will continue to grow and business will keep walking in the door is not a strategy. A pretty website where customers can find information about you and your business and see some past projects is not a sufficient marketing strategy.
The key to growing past $3 million of revenue in 2024 is a sales and marketing strategy that encompasses all aspects of lead generation (we refer to this as Traffic), converting leads to sales (Sales) and post-sale reputation management (Referrals and Reviews). Each stage has a well-defined process (customer journey) with measurable metrics so that you know how it is performing, and can make adjustments as necessary.
Traffic
What is your lead collection system?
Most stone shops I talk to have a very ad hoc approach to marketing before they experience rapid growth with consistency. When the local economy is hot or competition is thin, you can get away with just having a website and a Facebook page that you update twice a month. Most shops I talk to don’t even consider these to be primary sources of leads. They have them, and they know they need them, but if you ask them why, it’s not to generate leads. You absolutely do need those pieces in place, but they are not the foundation a marketing plan should rely on.
Here are some of the pieces that you should be putting in place before expecting rapid growth: A marketing plan (written!) for the next 12 months, including posting schedules for Facebook and Instagram (yes, they are still the best platforms), budgets for monthly ad spend, and a plan for a few promos for the year. I suggest 2 to 4 promos yearly to help smooth out seasonality throughout the year.
DO NOT RUN ADS
Please, do not run ads that send prospects to your website! Invest in landing pages and funnels for each campaign, and watch your lead quality and conversion rates soar!
Also, be prepared to test a few different offers simultaneously to see what performs the best. Every local market is a little different. Do not run ads if you are not offering something of value. Your offer should compel people to visit your showroom because of something valuable that nobody else in your local market is offering! Once you have these offers dialed in, you can expect a consistent flow of traffic in the showroom and quotes being sent out.
Sales
We are quoting more jobs, but why aren’t we selling more? Converting leads consists of 3 phases: Engage (warm up the relationship), offer (quote/bid), and close (ask for the sale).
You’ve invested money to generate the leads but your sales team isn’t closing them? Do you know what your cost per lead or conversion rates are? Your cost per lead is usually a lot different from Google to Facebook to other sources, but the close rate should also be different because the quality of the leads generated by each channel is different!
Automate your follow-up and watch your close rates explode!
Most small business owners have heard that leads need to hear your message 7-12 times before they buy. Do you know how to achieve that many touches without being annoying or “salesy?” Very few small businesses spend enough time to engage their leads before or after they make an offer. Making an offer over the phone without a “design consult” (sales presentation) is a sure way to end up in a race to the bottom.
Map it out and measure each step for the best results. Optimizing your close rate starts with having a well-defined sales process where all your traffic can be measured. This sounds complicated, but it can start very simply and grow as your team gets better at it. Using a CRM (Customer Relationship Management) strategy is highly recommended rather than tracking in a spreadsheet or on a whiteboard, or worse, relying on operating software not built to manage this process. A good CRM should allow you to automate several steps in the follow-up process and drastically improve your close rate. It can also allow you to see every communication that your team has had with the prospect so that you can coach and continually improve your process. CRM software can be very inexpensive to start, many now offer a free, basic version which is sufficient to get started. This can become a large change management project, so be prepared to start slowly and plan for long-term success. Many experienced sales staff will resist at first, so it is very important that they understand how much the project will help them and make their jobs easier while benefiting the company as a whole.
Reviews and Referrals
Your best salespeople are not on your payroll. Believe it or not, Reviews and Referrals are the most important part of your sales and marketing process… and almost nobody in small business gets it right. Having a system to capture reviews after a successful installation is a no-brainer for stone shops. You can’t have too many reviews… EVER! The business with the most positive reviews gets the most new business. This isn’t a new concept and it doesn’t matter if you’re selling countertops, pizzas, or baseball gloves. Most new customers’ journey still starts at Google. By the time they arrive at your showroom, they’ve already started researching your business, and many have an idea of what they are looking for.
The best way to get a referral? Just ask.
In addition to automatically capturing reviews, you need to have a referral program in place for your happy customers. The funny thing is, many customers are happy to give you a referral when you ask them, but do you ask them? This can be as simple as a couple of automated emails that start a week after the job is invoiced.
After all that… Don’t disappear.
Finally, after completing the job and the reviews and referrals have been requested, please, keep in touch with your clients. This doesn’t need to be annoying or pesky. It doesn’t need to cost much, either. A monthly newsletter is more than most businesses do to stay top of mind with their past customers. I still get birthday cards, Christmas cards, and a new calendar from a realtor I used 12 years ago! I’ll never forget who we used because he’s hanging on my wall. It probably costs him $10 a year to stay in touch with me but I’ve given his name more than 10 times since our positive experience. That’s 10 warm leads – think of the ROI!
Steve McKenna is CEO of North Star Productions.