Nowadays to be able to influence the specification of a product, it is necessary to be able to understand how to relate to specifiers and build relationships with those in the Decision Making Unit (DMU). Although the construction industry is not glamorous it is responsible for 9% of UK GDP and has a very complex DMU, hence a marketing challenge, and as the government moves to introduce BIM the dynamics of this unit are set to change.
In this blog I look at the three major influences on specification today and evaluate the changing dynamics of product specification.
A simple policy of lowest price is a dangerous one. If your company has the lowest cost it might be successful, otherwise you are courting disaster. With today’s tough market conditions there will be many companies who have priced and won work on unsustainable margins and as they finish these jobs they will be finding that they have suffered damaging losses.
So, when the government is telling contractors that it wants to see a 40% cut in the cost of construction programmes like the school renewals, how to survive and make a profit? The answer is to adopt an innovative approach which delivers value to your clients while allowing you to operate on an acceptable margin.
In a recession the best companies change for the better. They take out cost but they also look at what they can improve, how they can keep their best customers and what they can do to gain competitive advantage over competitors.
The clever companies deliver value by delivering extra benefits to their clients. These benefits have to be real and worthwhile and include saving money in other areas: less time on site, reduced scaffolding hire, a single point of contact for several packages, minimal disruption, liasing with building occupants. All of these ideas have been used by contractors to deliver value to their clients.
The chances are that the obvious ways of delivering value, like the examples above, have already been claimed. So, make time to look at your strategy. What are the threates and opportunities you will encounter in each sector and how will your business deal with them?
Despite the problems of the recession, indicators are that sustainability will remain high on the agenda of both government and major clients. Sustainability is no longer a “gimmick” it is part and parcel of product credentials.
It is essential to demonstrate how your sustainable products meet government regulations and standards. Think about Part L compliance, BREEAM, BES6001 and any other proven certification or test data. And it is also important to think outside the box. Think about other sustainable schemes you can participate in, or indeed how you can provide the product credentials yourself in an easy to understand layout. Sustainability should be at the heart of the business, not an add-on. For inspiration why not read: how to market your sustainable products – a lesson from those doing it right.
In the residential sector the major influence will be the Green Deal. The Green Deal is part of the Energy Act 2011. The policy framework was approved by Parliament on 27 June 2012 and it will come into force on 28 January 2013. The government predict that this initiative will create a workforce to fit energy efficiency measures of 100,000 people by 2017.
Like every new initiative, while it is seen as an opportunity by those who will take advantage of it, those that ignore it will find it is a threat. With the Green Deal new supply relationships will be established and you can be certain that over time these will evolve into the installation of more than just energy-efficiency measures.
In the last 150 years there have only been a few innovations in construction which have significantly contributed to the efficiency of building construction. The first of these arrived in the mid-1800s, was what we now call the Traditional contract, and it fundamentally changed the way projects were priced and built. Another was in the 1960s when Design & Build evolved combining the process of design and construction in response to the need to build large numbers of high rise flats. Most recently we have seen the adoption of Building Information Modelling or BIM, giving the potential to change the way the construction team shares information, avoid component conflicts and reduce operating costs for the client.
Our industry is starting to (slowly) appreciate and recognise value and BIM provides the opportunity to escape from the downward spiral of lower costs and earn a reasonable margin.
For those manufacturers and specialist contractors who invest resource in specification selling BIM will be great news as once their specification is incorporated in the design the chances of it staying firm will be much greater.
To take advantage you need to understand BIM, how your products should be presented and the information that will be required. Then just as standard specifications are provided today, you will need to create files which can be emailed or downloaded from your website and imported into the different proprietary systems.
Although very cost focused,the industry does buy on value and recognises that a more expensive product can often deliver value in terms of greater speed of installation, lower building operating costs or longer building lifetime.
The sales process is complex, requiring the presentation of product benefits far beyond the simple ability of the product to do its job. These benefits also vary depending who you are talking to. No longer is the same sales message suitable for everyone on the project team, they need to receive tailored messages with relevant benefits. But the growth of digital marketing means we can do that.
Competitive Advantage has been conducting construction market research since 2000. Our research team have construction industry experience, are familiar with the industry’s language and practices and understand the challenges you and your customers face.
Our commercial experience means that as well as reporting market research findings we are able to interpret these effectively and make sound business recommendations.
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