Bruce Watson and Tom Reber established Jalapeno Paint Werx four years ago in a Chicago suburb, after each had run their own contracting businesses for a combination of more than 20 years. They figured they could be more successful together than separate. So far, they are right.
In 2005 they surpassed their revenue goal of $500,000 by $107,000, and more importantly, created their company’s hot Jalapeno pepper logo and tag line: Adding Spice to Your Space. “From the outset, we saw our name and visual identity as a way to differentiate our business from all the other contractors who, we thought, had interchangeable and easily forgettable names like ‘Bob Smith Painting,’ or ‘Champlain Painters,” says Bruce Watson. It took them nine months to come up with this colorful, and definitely unforgettable signature.
Strategic Decisions
In mid-2006 they made the strategic decision to move from their highly competitive business marketplace to Yorkville, Illinois, in Kendall County, the third-fastest growing county in the United States. It not only had tremendous growth potential, but no other quality-painting contractor was yet established. This helped them over-achieve their second year revenue goal of $650,000 by $151,000.
“Marketing is an issue for everybody. Even the larger companies that have been around a lot longer are trying to find what has worked and what hasn’t for others,” Tom Reber says. “There is no guarantee, of course, that something will work for you, but it helps expand your knowledge base and open your mind up to different ideas.”
Before much of the country began experiencing the housing downturn in 2007, the partners had made a third strategic decision: to focus on repaints, forsaking their new homebuilder business. Although new construction is still strong in Kendall County, JPW is targeting people who have been in their homes for more than a year. “That’s when they get tired of builder’s white, and begin craving some color in their life,” Watson says. This focus enabled them to keep business steady and still achieve 6.5 percent growth in 2007.
A Formal Marketing Plan
Between advice from the Summit Group and a close working relationship with Tom Haydeu, their Benjamin Moore marketing representative, in 2007 they formalized a marketing plan. “Now we know what we are going to do, when we are going to do it, and when we need the money for it. This is done based on a thorough market analysis—looking at our competition in a SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis. We are finding our competitors, and describing and narrowing our sales targets. We do this by looking at demographics to determine who the folks are in our area, how we can find them, and how we want to market to them,” Watson says.
In the Summit Group, Reber and Watson work with painting contractors in non-competitive areas who have annual incomes ranging from under $500,000 to above $5 million. “We learned that, at different levels in your business you apply different amounts of marketing monies. When you’re first starting out and really have to get your name out there, some people will spend up to ten percent of their sales in marketing. After you’re more established,” Watson explains, “it runs between five and seven percent. Some of the larger companies—over $2 or $3 million—spend two to three percent. It depends on the size and at what stage you are in your market.” The Jalapeno Paint Werx 2008 Marketing Plan calls for an expenditure of six percent.
Having an annual plan enables a company to recognize the times during the year when it needs to build business. “It’s too late to start marketing, when you have no business. You need to anticipate,” says Watson. JPW has two surges: August, September, October to bring in business during their coldest and slowest months—November through February— and January, February and March, in advance of their busiest months: April through October.
He admits that, “this is a learning period and we are working on our cash flow timing learning curve, so that, when we are making money, we are setting it aside for the marketing surge that takes place during our slow revenue period.”
Reber admires how, “Bruce has worked countless hours putting this plan together. We know that if we send a piece out in September, the chances are good nobody is going to call until November. And,” he stresses, “this is important—it all hinges on people seeing our logo three or four times. That’s when the, ‘we need to paint, and oh yeah, that’s the company I see all around town AH-HA,’ moment comes.”
No Silver Bullet
The plan operates on the concept that no one marketing piece is the silver bullet that brings in business. Consequently, a multi-faceted approach is used so prospective customers will get to see the logo at least three or four times, if not more.
To this end, JPW has begun a Proximity Program. When the company goes into an area to paint a home, not only is a yard sign put out, but door hangers are placed on all the houses on the street. Then neighbors see the brightly painted truck. Finally, JPW is working with a company that pulls the names for 100 houses within the neighborhood and sends a mailing to them.
The partners believe that their biggest marketing success is the logo. “We only have two trucks, but people say to us all the time, ‘I see your trucks all over the place.’ That tells us people remember it when they see it and then, when they see it again, it hits home.”
Another major marketing effort is a focus on the Internet. “We still advertise in the phone book and newspaper, but it’s minimal, because the number of people who are using those as a source is diminishing,” Reber says.
JPW has contracted with an IT professional to update its web site monthly with new photos and information; to regularly perform search engine optimizations in order to keep the company on the first page of Google or Yahoo when “Illinois painting contractor” or some similar phrase is requested; and to send E-mail blasts to the database of former customers when they have news—special offers or other notices of interest. All E-mail has the web site embedded so the home page immediately comes up. “And,” Reber says, “we are about to start writing a blog because it will place us higher in the listings of the search engines.”
The E-mail Blast was used to announce the new Painter Today Day Program. Going on the assumption that many people have a small room or job they need done but hesitate to call in a professional painter, thinking it’s too much trouble -- JPW offers a fully-trained painter to do as much work that can be done within the day. It might be painting a couple of bedrooms, tackling a to-do list of things that need to be patched or caulked or touched up. “It’s too soon to know how successful it might end up being,” Watson says, “but in the past couple of months we’ve gotten some bites and I think it’s gaining in popularity.”
Every lead is tracked in order to determine the best return on their investment. Every phone caller is asked, “How did you hear of us?” “Yet,” the partners agree, “sometimes marketing can be very frustrating. You do all kinds of research—look at demographics, buy a list based on home value, income, and stuff like that—and you still cross your fingers and hope something is going to happen. It’s often very hard to verify.”
Is it working? According to Reber, of the 22 jobs in January, four or 18 percent were from the Internet and eight were referrals. “That’s why we stay in touch with our past customers,” he says. “They are the best marketing tool we have.”
Giving Back to The Community
Community Outreach or Goodwill Mar¬keting is the part of the plan the partners enjoy most. Last year, they started the $5,000 Paint Project Giveaway. Through press releases and paid advertising they solicited recommendations from the public for non-profit organizations or in¬dividuals who would benefit from receiv¬ing a complete paint job. In the Fall, the winner was selected and the work com¬pleted during the company’s least busy season. It was so successful that they’ve already announced the 2008 Giveaway.
This year the marketing plan calls for the owners to make more personal appearances and to speak at different events. “For example,” Watson says, “a local fabric store held a Designer’s Night Out, and we spoke to the interior designers about how to select and work with a contractor. Tonight we have an event in a subdivision clubhouse where we, and our color consultant will speak about new color trends, and how, as painting contractors, we can help you make ‘goof proof’ selections.
Outreach includes taking a booth at the local Home Show, where two colorful, yet inexpensively produced, banners were created that can also be used at events later in the year. According to Reber, a couple thousand people walked by the booth, and about 1,000 marketing pieces were distributed. “We got 15 leads from the show, and proposals are now pending, some of which we expect to shortly convert to sales.”
Watson and Reber believe the professionalism of their printed materials play a large part in the success of the overall marketing efforts. From business cards and refrigerator magnets, to a folder designed to contain various insert sheets, which can be included when appropriate.
These inserts include 13 FAQ’s About the Jalapeno Paint Werx Experience, a Contractor Comparison Checklist—13 questions to ask painting contractors to see if they measure up to Jalapeno Paint Werx—a super idea! There is an 8-1/2-inch by 11-inch, three-panel general brochure, Watson developed a Color Trivia Quiz, with the answers appearing on the web site. The company also includes the PDCA Code of Ethics and the PDCA’s information about Hiring and Contracting with a Professional Painting and Decorating Contractor, which shows the company’s professional affiliation off to its best advantage.
Jalapeno Paint Werx’s marketing plan is very much a work in progress, just like the formal business plan Reber and Watson developed. The key to their success, however, is that they have developed plans, continually track the results, and work with outside professionals to help them be pro-active in this quick changing economy.