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Last Update: Sunday February 25, 2018

Key Idea: Let Customers See What You Do

Founder Mike Neary learned the hard way that marketing takes time and money.

Key Question:

A: 

Spend some money telling your market that you exist.

Q: Should we set aside a certain percentage of our gross sales for marketing and sales efforts?

A: John Wargo said we must commit specific dollars to all of the marketing efforts. He believes the amount should be a percentage of your gross sales. And it should be as much as you can afford, not as little as you can get away with. Most small businesses succeed because they sell.

The smart way to use your marketing dollars is to test ideas before you roll them out on a big scale. Test telemarketing, direct mail, community involvement, print and radio ads, a referral and a customer retention program.
 
Continue to test and continue to add money to your selling budget to see if you're getting more than $1 back. John cautions us, "Don't predetermine you're going try to get away with just a couple bucks because your competitor will clean your clock."

As we have said here before, there are eight functions of marketing: (1) creating awareness, (2) building traffic, (3) generating leads, (4) qualifying leads, (5) selling directly, (6) providing service, (7) customer dialogue and (8) building loyalty. You need to be doing all eight! Mike struggled because he was completely dependent upon referrals. This strategy was OK at the beginning when he was tweaking his product and processes, but it was not enough to grow him into prosperity.

Q:  Why does Mike think that moving to a busy highway helped him so much?

A: He learned that most people don't understand the complexities involved in building a handcrafted log home. With his crews working in full view of every car that drives by, people become curious and stop to hear about how these homes all come together. The education process then becomes the selling process.
 
People who are curious are wondering if they can afford a log home and how long it takes to build one and what type of location is suitable. The new location has turned many dreamers into owners!
 


 

Think about it

Are you actively engaged in all eight marketing functions? Where are your weak spots? what can you do to improve? What about your location? Does it attract attention? Does it attract employees? What about your location on the web? Does it attract attention? Does it win you new customers?

Clip from: Oregon Log Homes - they're building beauty.

National Home Builders'  "Best in America" Award

Oregon: As a young ski instructor on Mount Hood, Mike Neary built his first log home for himself.  When friends and family all bragged on it and wanted a log home too, he knew he had stumbled on to his life's work.

Today his company, Oregon Log Homes, builds the most beautiful log homes in the world.  The National Home Builders Association gave it "The Best In American Living" award and that won the attention of Disney.  Oregon Log Home was given the opportunity to build the Fort Wilderness Lodge in Orlando.

While much of the work is done by hand, Mike invented a way to automate some of the process which keeps the company competitive while still thoroughly unique.

Go to all the key ideas and video of this episode...
Go to the homepage of this episode of the show...

Oregon Log Homes, Inc.

Mike Neary, CEO, founder

1399 N. Highway 197
Maupin, OR 97037

Visit our web site: http://www.oregonloghomes.com

Business Classification:
Construction

Year Founded:

Let Customers See What You Do

MIKE: The growth of this company has been steady but slow. One thing we've always tried to do are in-house sales.

We've always tried to do in-house marketing, so we've never had a good firm come in and do these things that would really probably boosted us above that level sooner. And we went on reputation only for a lot of years.

HATTIE: But let's talk about that. You must have wanted it that way.

MIKE: You know, it just never seemed like we had enough money to really go out and find a good marketing firm to do the marketing for us.

HATTIE: (Voiceover) John Wargo suggests that Mike could have grown quicker with a stronger marketing effort. Should we set aside a certain percentage of our gross sales for marketing and sales efforts?

JOHN WARGO: That probably is the most difficult question any business has. And the answer is yes, you should set aside a percentage. And it should be as much as you can afford, not as little as you can get away with. For example, a lot of businesses will put their money into the physical goods of the product, then they'll build the infrastructure and the administration and then try to cut back on the marketing expense. Big mistake, because you bought the goods to be sold. Most small businesses succeed because they sell.

HATTIE: We shouldn't be afraid to say, `For every dollar, I'm going to spend 20 cents on marketing and sales.'

JOHN: Right. I don't believe you should be afraid, and I think you should continue to test and continue to add money to your selling budget to see if you're getting more than $1 back. Just watch it. When you get less than $1 back for $1, then start cutting back. Don't predetermine you're gonna try to get away with just a couple bucks, 'cause your competitor will clean your clock.

HATTIE: (Voiceover) Mike told me the most important business decision he made was moving the business to this busy highway which runs between Bend and Sisters. Showing people what he does has helped him solve the mystery of selling.

MIKE: They saw the work going on in progress.

HATTIE: OK, so that was a good decision to get visible...

MIKE: That was probably the best decision as far as, you know, the company growth.

HATTIE: And isn't that a marketing suggestion? Isn't that something any small-business owner should listen careful...

MIKE: Oh, sure. Without a doubt, the exposure. You need the exposure.

HATTIE: People have to know what you're doing, see you. And you didn't put up a billboard. You put yourself up and...

MIKE: Yeah. This is an interesting business, and people always have been interested in seeing these log homes go together, so the attraction was there.

HATTIE: Don't you think it's a romantic business?

MIKE: Oh, I think it is, yeah. I think it is.

HATTIE: I mean, as opposed to other things, you know.

MIKE: It really is. And, you know, it's fun to go back to the homes after they're totally finished and talk to the people and, you know, they're in love with them. And you don't see 'em come up for sale a lot. You know, they keep 'em.
 

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