Developing a Marketing and Sales Strategy
Developing a Marketing and Sales Strategy
Understanding the Market
A construction company will be more successful when it can align its expertise with what people want. By understanding changing demographics, builders are able to tailor their products to match the needs and wants of prospective customers. Surveying prospective buyers, recent customers, and monitoring general market trends will help give a better picture of the true market – what people want, need, and can afford.
One of the best methods of developing business is through word of mouth references and referrals by previous customers, architects, suppliers, trade contractors, and other associated people or groups. Marketing effort will be improved by building relationships with prospective buyers and with groups and organizations involved in the development of projects in your area of expertise. Join and support organizations with members who are influential decision makers in projects in which you might be interested.
Make a customer list and keep up-to-date on upcoming projects. Get as far ahead in the pipeline of prospective customers as you can. Meet with architects and engineers to discuss constructability and timing issues. Spend time in the legislature to see what projects are being discussed and which bills are funded.
If possible, find a niche where your company can stand out, and develop expertise unique to your company. Your reputation will spread and referrals will come, in many cases, unsolicited.
Advertising budgets are typically considered expenses and not investments. Many construction companies do little more than post a sign on a job site to advertise their company. Advertising includes erecting signs, but likely your company will reach more prospective buyers and be more effective through a well-developed website. It can be fairly expensive to create a good website and develop a good Internet presence. A website is usually a customer’s first introduction to your company, and first impressions will go a long way to forming a positive perception of your company.
Your advertising should help customers envision what life will be like when they are in their new home or building. Highlight the benefits that will come to them and help customers feel that their problems are being solved, that someone cares about them and is helping them to make their life better. Customers want to see value, and they want to be respected.
A customer wants to have his or her expectations met. Your success, to a large extent, will depend on your ability to meet those expectations, or at least help set the customers’ expectations.
Customers’ confidence that their anticipated project will meet their expectations is strengthened when customers recognize the brand of the company. Some businesses have had problems because they take on any job they think they can handle. Potential customers can become confused because they don’t know what the construction company actually does. Companies who serve different sectors of the market are wise to brand each sector differently.
Brand marketing influences the decisions of a variety of customers. Marketing a brand is most effective for developing repeat business, as any customer’s perception of a brand is going to be largely informed by their previous experiences with that brand. For customers, the company’s brand represents instant knowledge of that company.
Working with Sales Agents and Brokers
Sales agents and brokers are specialists who can save contractors time and hassle. They can filter incoming phone calls and identify serious customers from those who are “just looking”. They understand the local market and market conditions. They know what upgrades and features customers want and are good sources of demographic information. They already have helpful networks of other professionals in place and are skillful at negotiating on your behalf. Their fiduciary responsibility is to you. They keep up with changing real estate regulations and take care of transaction paperwork for you. Agents follow up with customers after closings, and most agents rely on repeat business and so will develop relationships that lead to repeat business.
A good, qualified broker and, especially, agent are difficult to find. About 20 percent of the agents do 80 percent of the business. Referrals work well and can be very helpful in finding good brokers for your needs. Check the backgrounds of prospective agents to see what experience they have in retail, office or other commercial, residential, or other relevant market sectors. Attend open-houses and meet with the brokers who are showing the properties. Ask other professionals, such as mortgage brokers and commercial or investment financiers, for their recommendations.
Build good relationships with a variety of brokers and agents. They may be involved in deals where their client needs referrals of good contractors for some of their projects. They will refer their clients to contractors they like and respect.
Value Engineering (VE) is a systematic method used by a team or group to improve the value of products and services by assessing their functionality. Sometimes referred to as Value Management (VM), Value Engineering is an approach which generates alternatives that function or serve equally or better than the existing method or process. The goal is to maintain or improve the quality of products and services at lower costs.
Value is defined as function divided by cost. Recommend a VE session with the owner and architect where you can influence the design or methods of construction that will save time and money on a project and also improve functionality. A VE meeting before a project starts can greatly enhance the success of the project. A contractor’s practical experience and purchase options can often generate substantial savings for a project. You can also use your knowledge and expertise as a marketing tactic in a VE meeting to strengthen your position as the selected builder of a project.
When construction contractors propose VE changes to construction requirements, materials, or methods, the contractor should share in the savings. The change may reduce the cost of construction or the life-cycle cost of the building but must not lessen building performance, design quality, safety, appearance, or ease of upkeep.
This chapter is an adaptation of Utah Construction Business & Law publication written by Mark Hutchings and Jay Christofferson, published by iContractor.net Bookstore.