Many contractors we work with believe that their marketing and sales efforts are the weakest link in their organizations. When we probe a little deeper to understand their concerns, we find that most are stuck in an “old school” marketing frame of mind. In an old school firm, which ended a decade ago for most industries, the line between the “get work” and the “do work” sides of the business was much more distinct than it is today. Unless the backlog became dangerously low, all management effort was spent on improving the operations side of the business. Selling was typically the responsibility of the company president and a few staff people. Operations people were interested only in building the project, not in building the business. It wasn't uncommon to hear project managers and superintendents claiming that they could get more work done if the clients would get out of their way and leave the construction to the professionals! Those statements should never be heard today as contractors realize that their future depends on the entire organization adopting a customer service attitude. The whole company “reports to” and depends upon the customer.

The customer service attitude must start at the top and spread throughout the organization. Contractors must realize that they are not selling concrete flatwork, a wall, a foundation, or even a building; they are selling services. Once that's clear, it becomes apparent that customers aren't even buying just services. They are buying a place to do business, or a place to live, or a way to get from one place to another. Adopting a company-wide customer service attitude means working closely with the customer to achieve his or her goals. For the contractor focused on the customer's needs, the result is more repeat business from delighted customers who are willing to pay a premium to get what they want; so profit margins improve and backlogs grow.

Changing schools of thought on marketing

Not all contractors have made the move to the “new school” of marketing. FMI's 2004-2005 Business Development and Marketing Report revealed that only 36% of contractors responding felt they were able to differentiate their services from competitors'. For the concrete contractors answering the survey, only 17% were able to differentiate their services. Another result from that survey indicates how far contractors have to go to move into the “new school” of marketing thought: only 24% said that their sales force was “very effective” at picking the “right customers to call on.” For concrete contractors, that number was only 16%.

Are you able to give customers a solid reason to pick your company besides low price? (FMI 2004-2005 Business Development and Marketing Report, all contractors)
Are you able to give customers a solid reason to pick your company besides low price? (FMI 2004-2005 Business Development and Marketing Report, all contractors)

The first step toward a customer-centric approach to marketing is recognizing the symptoms of the “old school.” For instance, is the company trapped in a “low-bid mentality?” Realizing that the sales force is not calling on the best prospects is another telltale symptom that old-school thinking is in effect. In the not-too-distant past, only the company principals were trusted to sell projects. Their efforts were often driven by specific project announcements. It was a “lone ranger” mentality with no real strategy or plan of attack. Operations people seldom were involved in the sale, and most companies tried their best to keep the clients from seeing the superintendent until they were ready to mobilize. In those days, the largest share of the marketing budget was allocated to customer entertainment to help achieve a preferred position with the customer. The primary sales inquiry question was, what's coming up?

“Best-of-class” marketing

How effective is your salesforce at picking the “right” customer to call on? (FMI 2004-2005 Business Development and Marketing Report, all contractors)
How effective is your salesforce at picking the “right” customer to call on? (FMI 2004-2005 Business Development and Marketing Report, all contractors)

“New” construction marketing is the “execution of organizational strategies in a culture that truly believes everything your company does as seen through the eyes of the customer—existing and potential—is marketing.” It elevates the old “beat-the-bushes” sales concept to a business development approach that is a strategic component of the organization with the same sort of bottom-line responsibility as operations. In the new-school approach to marketing, a substantial percentage of business development resources is devoted to proactive activities. Team selling is a significant part of the business development process. Most importantly, everything the company does focuses on delivering value to the client.

— Brian Moore is a consultant with FMI, management consultants to the construction industry. Brian works with contractors and construction materials producers on various strategic, financial, and operational issues. Specifically, his work at FMI involves in-depth market analysis, strategic and business planning, and market planning for clients throughout the nation. He can be reached at 919-785-9269 or by e-mail at bmoore@fminet.com.