Most building material manufacturers settle for single digit growth and allow the customer to focus on price. You can achieve double-digit growth and take the focus off of price by taking a different approach.
Three manufacturer beliefs about building material sales:
1. If the biggest customers use my products, the rest will follow.
2. If a big box, distributor or dealer stocks my product, they will sell.
3. You have to follow the 80/20 rule.
When everyone is following the same rules, they are usually overlooking a big opportunity.
Most companies use the same building materials sales strategy. They have a few sales people calling on a few large customers. Because they are so similar, they end up competing on price. That keeps the power in the hands of the largest customers. The big box buyer, big builder, and big distributor can play one manufacturer off another for the best price.
The commonly held belief is that you can’t afford to call on anyone but the largest customers.
There are over 90,000 builders in the US, most of whom never hear from a manufacturer.
Compared to many other industries the building material industry is fairly unsophisticated. For instance, in consumer-packaged goods, they know, in live time, where their products are being sold, at what price, in what volume and how it affects their market share. Most building material manufacturers know their total sales volume and their sales to their largest customers. They don’t know much else, including their actual market share. They can think they are doing well when they actually are slipping behind.
Break the rules to grow your building material sales?
Be a contrarian and pay some attention to your smaller customers. I don’t mean to stop going after large customers. I’m suggesting that you add smaller customers to the mix. My contention is that if you are the only company paying attention to smaller customers, you will gain enough sales to make it profitable.
I also contend that when you pay attention to smaller customers, they become more loyal to you. More loyalty means less focus on price and a preference for using a brand of building materials.
How can you balance your attentiveness to your largest customers with new attention to smaller ones?
1. Go old school and hire more sales people. This is really hard to make work, but I’ve seen it done. Hilti seems to have a red van and rep on every commercial job site.
2. Set up an inside sales department or outsource to a telemarketing firm. I won’t name any names but I have worked with several companies who do this, and I have yet to see one that works well.
If it is internal, they usually lack the expertise to do it well. They don’t know how to go beyond, “Do you need anything today?”.
If it is external, they usually don’t have enough product or customer expertise to be effective. They just read scripts and the customer know it.
3. Set up a marketing automation program. This can be a very cost-effective way to keep in contact with and convert smaller customers. I have helped several of my clients set up a marketing automation program. They are now converting and selling smaller customers.
The challenges with marketing automation are that it takes a couple of months of serious effort to set it up, an experienced person to analyze the results of which customers are responding to which offers, and a commitment to constantly developing content that is of value to the customer.
Marketing automation can also be overly dependent on email, which reduces its effectiveness. Once again an expert is needed to blend email, phone, online, direct mail and sales calls.
4. I discovered a firm that combines the best of all these efforts, Modern Marketing Concepts. They combine sophisticated technology and the ability to reach customers with a combination of email, direct mail, and phone calls. Their technology enables them to identify the most cost-effective method to grow your building material sales. It may be email or direct mail or a phone call, whatever it takes. Their team goes through the same sales training as a manufacturer’s sales reps so they can confidently communicate with a customer.
What impressed me the most is their ability to show you the actual ROI. Where most companies are satisfied with single digit sales increases, Modern Marketing can frequently deliver double-digit increases in addition to your internal sales increases
To me, they are the greatest unknown sales tool in builder material marketing. The majority of building material manufacturers could benefit from working with Modern Marketing Concepts.
I recommend you have them show you some case histories and discuss how they can grow your sales. Contact Scott Kay at firstname.lastname@example.org 607-744-3304.
If you still want to focus on larger customers, they also can extend the reach of your national account team beyond headquarters and the main buyer. They can also convert distributors from order takers to proactive marketers for you.
Full disclosure – I have consulted for Modern Marketing in the past, which is how I learned about them. I am receiving no compensation for this; I just believe they are a powerful resource every building material manufacturer should consider.
Renaissance Windows & Doors