I hear these two complaints all of the time when building materials manufacturers try to sell their products to homebuilders:
- “They only want a lower price.”
- “I can’t get them to upgrade.”
However, did you know that there are at least three ways to sell to a builder? Most manufacturers see only one way, so they give up. Neither of the two complaints I hear reflects reality; builders care about price, but they care about other factors too. It’s also possible to get them to upgrade.
The three basic opportunities to selling builders are purchasing, construction management, and sales and marketing.
Yes, purchasing is the gatekeeper.
A builder’s profitability depends a lot on operational efficiency. He wouldn’t be very efficient if everyone could make purchase decisions.
But rather than looking at a builder’s purchasing department as a roadblock, you should look at them as a door to opportunity.
In addition to running the purchasing department, the purchasing manager is also part of a team that focuses on the overall success of the builder. In that role, he is also looking for new ideas that will help them sell more homes, more profitably.
If you feel your product can make a real difference for their sales or construction practices, tell purchasing about it and ask to meet with that department. Don’t ask for this meeting without a good reason. These people are very busy. You can do yourself more harm than good if you end up wasting their time.
How to Sell Builder Purchasing
- Fix problems with current supplier
The key to converting most purchasing departments is not really your product; it’s about making things run smoother for them at a competitive price.
You should first ask purchasing if they are having any problems with the supplier of the product they are using. If they tell you they are not having any problems, then ask him what he wishes could be different or better. Can you and your dealer make it better?
- Better delivery distribution process
If you want to switch purchasing to you, this is the real area of opportunity. Many manufacturers don’t realize how important the dealer or distributor and product availability is to the builder. Many manufacturers make the mistake of assuming that local service is not their business. The builder can like your company and product but not like how they order and receive the product. This is a great place to unseat a competitor as they frequently may not realize it is a problem until they lose the business.
If you already have the builder’s business and want to keep it, this is a very important area to monitor.
- Competitive pricing
They want competitive pricing, not just a lower price. Most purchasing people have made the mistake of switching to a cheaper supplier and have paid the (figurative) price. They realize that they will give up something in terms of quality, delivery, or service to get that lower price, so, to them, it’s not worth it to save a few dollars and get a lot of headaches in return.
It’s surprisingly expensive for the builder to make a change when he is dealing with hundreds of components, suppliers, and trades. He wants things to run smoothly, and changes are never smooth.
You may think you have a better product, but to the purchasing person, they probably see your product as comparable to what they are currently using. Many times the opportunity for you to make a sale has little to do with your product.
What this means is that you are not likely to be successful with a builder based on your low prices, unless you can emphasize that your product offers the best overall package (price plus other benefits).
- Advance notice of price increases
One of a builder’s biggest frustrations with building materials manufacturers is how they announce price increases with no advance notice. The builder sells a house at an agreed-upon price, in large part, based on the costs of materials. When there is a price increase with no advance notice, the builder has to absorb these costs from an already tight profit margin.
When converting builders, identifying their pain points and offering solutions is one of the best ways to succeed. If you can offer a ninety-day advance notice of a price increase, that would really set you apart.
As you see, there are lots of ways to approach the purchasing department of a builder. But perhaps the sale you are trying to make doesn’t offer enough benefit to purchasing for you to get the order. Rather than giving up, the next step is to consider if your product will better meet the needs of two other important audiences: construction management and sales and marketing.
How to Sell Builder Construction Management
- Faster and easier installation
The construction manager is focused on getting homes built quickly, efficiently and correctly. Faster product installation times expedite that process.
A number of builders will tell you that they could sell more homes if they had a larger labor pool. If your product is easy to install and does not require a lot of installation experience, that helps to solve this problem.
- Better lead times and availability
This is a frequent problem area for construction managers. Any disruption can throw off the construction schedule and raise costs. Everyone understands how faster and easier installation will benefit the construction manager, but no one can install a product that hasn’t arrived or build with materials that are back ordered due to market demand. If you can offer consistency, speed, or reliability in this aspect, you will make a sale.
- Fewer callbacks
Builders used to care about callbacks because of how much they cost to repair. They still care about costs, but an even more important factor today is bad publicity. An unhappy homeowner can go online and shout to the world about their problems with the builder on social media. Builders know this costs them sales, as homebuyers read these comments and choose not to consider that builder.
If the builder is having callback problems with the product he is using and you feel your product will reduce callbacks, you will get their attention. And don’t forget—a callback can be caused by the design, the product or the installation. Find out which one it is and see if you can fix this costly problem.
- Help with code changes
Another area where you can provide value is in helping the construction manager stay informed about the latest changes in building codes. First, make sure he is aware of the change and when it will take effect. Then show him how your product meets the code. Builders hate change as change means ‘problems.’ The more you can ease the change, the better.
Bonus tip: If you really want to impress the construction manager, get your shoes dirty and ask to visit some job sites.
How to Sell Builder Sales and Marketing
- Be the expert in your product category
A builder’s sales and marketing department makes a strong contribution to the products that are used in their homes. They are the ones who will say, “If you give me this product, I can sell more homes at a higher margin.” That’s pretty powerful.
They hear directly from the homebuyers about their interests, questions, and the changes they are seeing. They know when customers are asking for new features like a deck or a greener home or for a specific brand name.
They also depend on manufacturers to be the expert in their product category. Lighting companies tend to be very good at this, putting together lighting packages that are up-to-date and appealing to the homebuyer.
Building materials companies should be experts in their product category. If you sell kitchen cabinets, what are the latest trends in kitchens? That means that companies have to know more about the product category than just why their product is better.
- Differentiate our homes
A builder is competing with other builders within a price range. They need ways to stand out. If they all have granite countertops, fireplaces, and extra insulation, how can they create preference? How can they make their home stand out from all the others? How can they compete other than price?
Perhaps your product can provide the answer. Aesthetic products and performance-based products with a good sales story are the most likely types of products to make homes stand out.
When making this sale, realize that in order to add or upgrade to your product, the builder will probably have to make a tradeoff—that is, he will have to give something up in order to afford your product. You should be able to help him make this decision by suggesting products he is using that may be less popular.
- Explain the value of your brand
If your product has a recognized brand name, help the builder understand its value. You should be able to show the builder how he will benefit from using your brand. If you have conducted market research, share it with the builder. Show him how many consumers recognize your brand and the opinion they have of your brand. Chances are homebuyers will associate brands they recognize with higher-quality homes.
- Sell more homes at higher margins
Finally, the sales and marketing departments are interested in how your product will help them sell more homes at a higher margin. They don’t want just to keep up with other builders; the good ones want to lead their market with changes that will make them more successful. Can your product do that? If so, tell them how.
As you can see, a lot of selling builders is salesmanship 101. Lead with benefits and not features. Identify their pain points and solve them. Your product is only part of the equation. Areas like delivery, service, brand, installation, and others may be more important.
One final piece of advice: learn the builder business. I frequently see overconfident, “I can sell anything to anyone” salespeople charging after builders. More often than not, the builder feels an encounter with this type of salesperson is a waste of time.
Ideally, you take some time and learn how a house is built and what makes a builder successful or unsuccessful. Most builders will help you. It’s OK to say, “I’m new to this and I’d like to learn more about your business.” Builders recognize that most salespeople don’t have comprehensive knowledge.
When they encounter a salesperson who sincerely wants to learn, they are usually more than happy to help. An educated salesperson makes their life easier.
As you can see, there are many opportunities with builders to get beyond price and to sell an upgrade.
I partnered with Builder Partnerships, one of the most respected organizations in the industry, on this poster. They have over 550 members building over 75,000 homes each year. Their builder members rely on Builder Partnership’s expertise to improve their profits.
Manufacturers can also join. It’s a great way to arrange contacts with builders or research and test your products or programs. If you’re interested in learning more about how Builder Partnerships can make you successful, contact Stephen Crouch at Stephen@builderpartnerships.com
I’d like to thank BDX for the beautiful poster illustration. BDX is the builder’s leading resource for online marketing, website design, and graphic content. If you’d like to learn more about how BDX can help you execute builder marketing, contact James Honeycutt at JHoneycutt@thebdx.com
If you’d like to read more about selling to builders I have a number of other posts about selling to builders on my website.
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