Blog for Building Materials Manufacturers

How You Will Lose Your Building Materials Customers

  |  Posted in Strategy

How You Will Lose Your Building Materials Customers

Most building materials companies aren’t prepared to deal with, or prevent, a competitor from taking their customers.

They guard against losing customers by providing consistent product quality, customer service that’s good enough and charging less than they’d like to. When they start losing customers, it frequently comes as a surprise. They just weren’t expecting it. There’s a philosophical reaction of, “This isn’t fair!” Or there’s an angered one of, “Who do they think they are?” They don’t think the other guy is smart; they think he’s evil or dishonest. But that type of thinking won’t lead to an effective response.

This is one of the times when clients call me. They’re losing sales to a competitor and need an objective assessment and recommendation from an outsider.

They almost never call me when things are going well, so they’re not prepared for a new competitor showing up in the market or for an existing competitor to change. They assume that, for the most part, all is good in their world and they have a solid place in the market. Unless the economy takes a nosedive, they assume there will only be small changes in their product category.

If they are a market leader for businesses of their size, they rest comfortably. The idea that they could face a major competitive threat is not even on their radar screen. And if they’re a smaller business, they are too focused on the larger competitor to see the threat of another small-sized operation.

As long as the economy is good, everything’s is good and the only things they see as threats are the loss of a major customer or a competitor lowering their prices. In other words, it’s not that they don’t expect any competitive threats; it’s that they’re looking for them to come from somewhere expected and predictable.

The biggest competitive threat is the one that comes from where you least expected it to. You have an idea of how to react to the most common threats, but you are probably not prepared for the unexpected.

I met with the marketing leader for one of the largest building materials companies. I asked him what his biggest concern was. He told me he was most worried about being outflanked.

That’s smart thinking. In military strategy, you are constantly watching and defending your flanks. If you want to attack someone, you try to outflank them. It is usually not too smart to make a frontal assault—that’s where they’re expecting to be attacked and where they’re most prepared to defend.

When companies hire me to help them grow their sales, I always assess their competitor’s strengths and weaknesses to look for ways to outflank them. No matter how successful a competitor is, no one is great at everything, so I can always find at least one weak spot that can be exploited.

How to Protect Your Business

Military generals stay prepared by imaging all the ways they might be attacked. Building materials companies should do the same thing. At least once a year, you should do a competitive threat assessment.

To do this, you’ll need some outside perspective, someone who can tell you:

1.  Where you’re vulnerable?
2.  How they would attack you if they were your competitor?

Your annual sales and marketing plan and budgeting process is a great time to do this.

Early Warning System

Another part of being prepared for competitive threats is making preparations on an ongoing basis.

I have two clients who make me a part of their weekly group sales conference call. My main job is to listen in and figure out what is working and what isn’t. I’m also listening for what competitive issues the sales people are facing each week.

We are also using tools like Google Alerts to gather all the information we can about competitors.

Based on this, we make regular reports and recommendations to their sales and marketing leaders.

You need an outside perspective because you’re too close to your competition and tend to underestimate them. You also don’t usually recognize totally new competitors until they have already built enough sales for your customers to accept them as a viable alternative to your company.

Not seeing it coming and not being prepared means the successful competitor will continue to grow while you’re still figuring out how to respond. You’re also giving them time to work out any problems they may be having with their new approach.

In a world where products are going to be delivered by drones and Donald Trump can become President, you need to be prepared for anything. The impossible is now possible, and these changes happen very quickly.

A competitor can turn you into yesterday’s news overnight.

The best way to compete is to make yourself a better informed and nimbler competitor. Watch your flanks.

 

Mark Mitchell

Do You Want to Know Who Will Steal Your Customers and How They Will Do It?

If you’re looking for how I would advise a client to take business from you, contact me for a free 30 minute mini-consultation. I’ll give you at least three recommendations about how you can be better prepared to defend your business.

If you’re interested in discussing how you can improve and protect your sales, reply to this email and we’ll schedule a call.

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What is the biggest challenge to your sales growth?

Contact me for a free 30-minute mini consultation about your sales challenge. We'll review your specific situation and I'll provide you with 2 or 3 strategies to help you solve your challenge. This call is all about you helping you solve your problem. I will not be selling you on why you should hire me.  You decide whether you'd like to learn more about working with us. Calls are available on a first-come-first-served basis, to request your free call contact me at 720-775-1184 or mark@seethewhizard.com

About The Author

I am the leading sales growth consultant in the building materials industry, I identify the blind spots that enable building materials companies to grow their sales and retain more customers.  As I am not an ad agency, my recommendations are focused on your sales growth and not my future income.

My mission is to help building materials companies be the preferred supplier of their customers and to turn those customers into their best salespeople. Contact me to discuss your situation.