Building materials companies have a bad habit of all chasing the same opportunities. They focus their efforts on the largest builders, big boxes, distributors, commercial projects and others.
The result of this is that they give the power, in the relationship, to the customer. They put themselves in the position of needing the customer more than the customer needs them. While a win may mean a lot of volume, it also comes at a lower profit margin and other demands.
When everyone is chasing the same customers, everyone is more or less equal. It’s very hard to have a competitive advantage.
When everyone else is focused one target, I recommend focusing on the underserved customer. Focus on the customer that is large enough but is not yet on the radar screen of your competitors.
Why Sell to the Multifamily Market?
No matter what the NAHB, mortgage brokers and realtors are telling you about the growth in housing starts and homes sales, there is a bigger opportunity. That bigger opportunity is rental and multifamily housing.
The demand is so strong that there is a shortage of multifamily housing in many markets.
There also is growing demand for high-rise condos and rental apartments in the most vibrant cities. The young, the wealthy as well as empty nesters are occupying these properties. Each of these customers has different needs. The developer has different building materials needs depending on whom he is targeting.
If you want to sell a big builder, architect or big box, it is relatively easy to find who to call on and what to tell them. The Multifamily market is much more fragmented so it is much more difficult to reach.
I find that most companies aren’t willing to take the time to develop a multifamily strategy as they see how existing sales channels are easier.
First of all, who do you call on? Do you call on the developer/owner, the architect or the contractor? Is it being built following commercial or residential practices? If you are primarily a residential manufacturer, how you approach a commercial multifamily project?
In my experience, multifamily decision makers are finding products and solutions themselves more often than manufacturers are approaching them.
This creates an opportunity for a manufacturer to be the multifamily expert in their product category. Customers are looking for experts in each category to help them make decisions. There are many categories in which there are no experts and that means a lot of opportunity.
If you are interested in Multifamily housing, I recommend that you start by joining the National Multifamily Housing Council. https://nmhc.org/ , attend some of their events, learn and make contacts.
Another benefit of focusing on multifamily is how close it is to two other important markets, hotels and student housing.