1. You will need to constantly demonstrate your value while making your offerings more valuable. Your brand name and reputation are no longer enough.
2. Better customer service and in-house selling so customers can talk to you when they want to talk to you, in the way the way they want to talk to you. Fewer customers will have time to meet with a sales rep and even fewer will wait to get an answer.
3. Being the online leader in your category. Building materials customers would prefer to find the answer online themselves without having to contact you. You need to lead your category with the website customers prefer, strong content, powerful SEO and engaging email and social media.
4. Having technology so third-party apps and providers don’t control your access to the customer. You need to be aware of these tools and learn to work with them. The best defense is to be the online leader.
5. A good plan for dealing with channel conflict. More customers will buy direct and some, like Katerra, will make your products themselves. How can you help your distribution partners justify their value or change their business proposition?
6. Less resistance to change. For example, timber is now being used in place of concrete and steel in commercial construction, even though it costs 20% more. If you are the preferred type of product, watch your back. If you are a new solution, this will be a great year (if you have the right message).
7. Smarter investors and more investors. The investment community now recognizes that building materials is a great place to invest. They see big profits from reducing waste and inefficiency. When you face a new competitor or customer today, they are likely to be well funded, which means they don’t need to make a profit for a while.
8. Adapt to the changing market. Commercial and residential new construction is being held back by a shortage of labor; offsite construction will explode with growth to meet the demand. It’s not just the Katerras and Entekras who will succeed. Home builders are pushing their truss suppliers into the framing business. A drywall contractor is now building prefinished, insulated exterior wall panels for commercial buildings. It is the Wild West and building materials manufacturers need to be part of the solution.
It’s easy to look at many of these changes and simply chalk them up to customers wanting their products cheaper. That’s wrong. The customer’s value equation is changing. They are willing to pay more for some things and less for others.
What parts of your business does the customer now value less?
What can you change to offer your customer more value – value that they will pay for with higher prices, added sales volume or lower cost to service?
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