Blog for Building Materials Companies

4 Biggest Challenges Facing Building Materials

  |  Posted in Strategy

4 Biggest Challenges Facing Building Materials

I’m not just a teacher at my Whizard Summits, I’m also a student. I show up to each event ready to share my knowledge, but I also learn a lot from the companies who attend.

The major thing I learn about at each of these events are the biggest challenges building material companies are currently facing. These challenges fall into four categories:

  1. Challenges I was already aware of, which validate my thinking
  2. Challenges I was not aware of, which educate me
  3. Challenges my attendees are aware of but don’t know how to deal with
  4. Challenges my attendees don’t see, but that is so obvious to me, I can barely understand how they don’t recognize them

Some of the companies that attend the Summit also surprise me by being ahead of their competitors in some unexpected areas.

Let me start with where I was most pleasantly surprised, and then we’ll dig into those challenges everyone is facing.

A Pleasant Surprise: Building Material Companies Are Taking Action

For over a year, I have been advising building material companies about the growth of off-site construction. This major development is going to bring huge changes to the way they do business and it’s going to bring them very quickly.

When I write about this, I get more interest and comments than when I write about any other subject. Still, I have felt that most building material companies don’t recognize how important this is to their future.

I was expecting the attendees to tell me they were aware of these coming changes and were starting to think about them, but because business is so good today as they really haven’t put serious thought into it and certainly have no concrete action plan.

I might have underestimated a lot of these companies. I was pleasantly surprised by the number of attendees who not only recognize how the boom in off-site construction will change their business but have already taken action by meeting with Katerra and some of the other major companies leading this change.

A Building Material Company Challenge I Was Aware Of

One thing that did not surprise me was the shrinking importance of product differentiation. What differentiates one product from another and makes one a little better than the other just doesn’t matter all that much to customers these days.

Customers can see a difference between a product like house wrap and an alternative like the ZIP system. But they don’t see much of a difference between one house wrap and another.

New customers are also less likely to see the value in a building material company’s brand name.

So, what do they care about? You might think it’s an expected level of performance and a competitive price, but those are table stakes.

The deciding factor, one that is becoming more and more important, is how easy is it to deal with your company.

The attendees were aware of this shift and the rising level of customer dissatisfaction when customers are dealing with their companies.

A Building Material Company Challenge I Was Not Aware Of

One of the challenges I learned about was social media.

I was already aware that building material companies have a hard time getting their salespeople to use social media.

I’m not the only one who noticed that trend. Builders, architects and other customers are contacting manufacturers to ask why their sales reps aren’t following, liking or commenting on their social media pages. Even with direct requests like these, sales reps are still reluctant to get on social media and engage with their customers.

But what I didn’t realize is that some companies are directing their employees not to do anything on social media. This happens when their legal departments are concerned that if the company or their employee is deposed, the opposing legal team will use anything they can find on social media against them.

I get that to some extent. I can understand not wanting employees to make product claims online. What I don’t understand is why they can’t even go on LinkedIn or Facebook to wish a customer happy birthday or congratulate them on a promotion.

Companies who don’t face these restrictions can interact with their customers more directly, and their customers are noticing the difference it makes. That gives them a real advantage over their more cautious competitors.

A Challenge Attendees Are Aware Of (But Don’t Know How to Deal With)

The industry has sped up and everyone is aware of this. The amount of change and the speed, it’s coming in are unprecedented. New products are being accepted at a much faster rate than ever before. Some of these new products can replace or eliminate the need for your product.

The traditional methods of sourcing and distribution are being changed to improve efficiency and eliminate unnecessary costs. But there are many players in this area and it’s difficult to know who is going to win and who you should align yourself with.

A Challenge Attendees Don’t See (But Seems Obvious to Me)

Talk to most building material companies about their sales and marketing and you’ll think you’ve stepped into the past.

What it takes to be a successful field salesperson is very different today than it was when a lot of these companies got started. Most companies, however, haven’t updated the way they make sales. They still have a traditional view of field sales and, as a result, they’re getting lower and lower returns from field sales every year.

It’s the same with their marketing. Companies are still clinging to traditional marketing methods, even though they’re costlier, less effective and much more difficult to track and measure than new approaches to online or digital marketing.

Building material startups have the right idea. They’re coming into the market with a clean slate. They’ll use the sales and marketing strategies that will work best because they’re not held back by the legacy of a successful past.

The Future Ain’t What It Used to Be

Every Whizard Summit gives me a bird’s eye view of the building materials industry. Hearing directly from so many companies shows me exactly what challenges they’re facing, what is going to disrupt the way they do business and how they are getting ready (or not) to face these changes.

One of the biggest challenges these days has to do with the way building material companies think about the future. A lot of companies still act like they have time to wait for the coming changes in the industry – they don’t need to update their digital marketing strategy or throw out their old customer relations playbook just yet.

What they don’t realize is that the future ain’t what it used to be. The future used to be slow and distant. Companies were able to take their time. They could wait a few years before reacting to the changes they saw coming. Now, the future is coming at us fast. Changes are happening so quickly that the whole industry is shifting right before your eyes.

Dealing with the future can’t be low on a building material company’s to-do list anymore. If you’re not taking steps to adapt to coming changes today, you’re waiting too long and you risk getting left in the dust.

It’s my hope that more building material companies are staying one step ahead of these changes. And with any luck, I’ll get another pleasant surprise at the next Whizard Summit.

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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.