CPD articles

CPD: Marketing for construction professionals

8 June 2012

•  The definition of marketing and sales
•  How marketing can make a difference to your business
•  The 14-step plan to a successful marketing strategy

Click here to be taken to the online CPD test paper for the June 2012 issue.

You've probably got more important things to worry about than marketing. Or so you think, because you can't ignore the positive impact it can have on your business, says Terry O’Mahony MCIOB.

Marketing, selling and business development are probably terms that don’t particularly register that strongly with the average technically-minded construction manager. But love it or hate it, the simple fact is that marketing can make a significant difference to the financial health and prosperity of a business. All the other contributions to a business are vitally important, but it’s effective marketing and sales that can produce the best results for the firm’s bottom line and long term survival, growth and prosperity.

If the most important question for you right now is “how do I ensure my business survives the next couple of years?”, you may not be particularly interested in theoretical concepts and descriptions of what marketing is all about. But the following description by US business coach Jay Abraham will resonate with many business professionals.

“Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.”

Below are my own, very simple, definitions of three key commonly used terms:

It’s worth noting that marketing and selling are universal business concepts and processes that can be applied to any company or organisation in any industry.

It doesn’t matter whether we’re talking about large firms or small firms, highly technical firms delivering complex solutions, or simple trade-based operations. It doesn’t matter whether you’re selling a service, a product or a combination of both, and it doesn’t matter whether you’re serving the public or private sector.

The concept of marketing is universal and, if applied appropriately and effectively, will deliver all the benefits a business or organisation might require.

It’s important to appreciate that marketing and selling is not only relevant to businesses and organisations, but also to individuals themselves. Regardless of whether you’re a designer, a contracts manager or a company director, marketing and selling can positively impact your career and future prospects.

I have one engineering consultancy client who, when carrying out staff appraisals, asks first if the person is person technically competent, and second if they can bring business into the firm. People who go out of their way to bring in business to the firm, usually do better, are more highly regarded and tend to be rewarded better.

Everyone plays a role in marketing, from the very top of the organisation to the bottom — from the company chairman making an annual statement to the marketplace, to the site operative who helps keeps the building site tidy and safe. Both are helping the firm to communicate good practice in their own ways, which is a part of marketing.

The construction industry is like most other industries in that it takes a team to deliver projects, satisfy clients and make a profit. Businesses can be organised in many different ways, often based on custom and practice or the organisational culture, but a typical organisational model that would represent most businesses is shown in Figure 1. Principle functions, usually marketing and sales, operations and finance, are sandwiched between research and development and people.

While the activities falling under operations and finance are driven by legal, regulatory and business criteria, marketing can be viewed as a peripheral activity. Often, this means it is given less attention within the business, with no standard methodologies or success criteria. However, failure to deliver an effective marketing and sales strategy will put the business at risk.

There are three simple steps a business can take to meet its marketing challenges:

A useful way to examine businesses overall, or specific activities within the business, is to split them into three phases — Before, During and After. A client will go through different experiences throughout the three phases, from their very first contact with the company to the completion of their project.

“Before” is the business’s marketing and sales phase, ie all the strategies, tactics and actions that are needed to win new clients and retain and maximise the lifetime value of existing clients.

“During” is where the firm’s operations take place. Operational matters come in all shapes and sizes, depending on whether the firm is a product manufacturer or delivers a professional service.

“After” covers the processes that happen after the product has been delivered and installed, or when the service has been completed. For example, agreeing the final account, commencement of the defects liability period, customer care and maintenance.

When producing a marketing strategy, plan or campaign, you should consider all the key issues that relate solely to the marketing function during each of the Before, During and After phases, as follows:

Another useful framework shown in Figure 2 is to think of the client’s experience as being shaped by the “human interface” and the “systems and processes interface”. The “above the client experience” is essentially what the client experiences in terms of how people deal with them, the “below the client experience” relates to the systems and processes that help guide the client and move their project forward.

In an example outside construction, anyone taking a budget flight will experience the airline’s “below the line processes” on seat allocation, baggage allowances and credit card booking charges, and “above the line” interface with the staff and flight attendants. In terms of the customer experience, either the former or latter can let you down; success in one area can reinforce success in the other; or a good experience in one can offset a poor experience in the other. A successful marketing strategy will seek to identify and align these issues.

The following case study outlines how my 14-step marketing plan (see box above) can work in practice. One of my clients is the owner and managing director of a structural engineering practice. We worked together on a trial basis for three months, which was then extended. We reviewed the business, identified goals and put a marketing strategy and plan in place to achieve these.

We identified the key problems and opportunities, the resources that were available and the available options to fill the resulting gap (Steps 2 to 6). We then defined a vision for the firm and set out some key goals (Step 7), such as delivering value to clients and providing customer service with a passion. For the MD as an individual, we added the aim of gradually moving away from working in the business to concentrating on planning and developing its future.

Over the next 18 months, we implemented a set of new processes, systems and marketing activities. These included (Steps 9 to 12) buying planning data and project leads from Barbour ABI and using telesales to introduce the firm to these new prospects and industry contacts. The company also introduced a customer relationship management (CRM) system (Step 11).

The company developed and ran a range of events to bring existing and prospective customers together to share information and industry perspectives (Step 11); a monthly breakfast meeting for invited guests to swap market intelligence; a more informal monthly “curry club” event; and golf days where the company invited other firms to mini-tournaments.

Other initiatives included producing a range of brochures, case study sheets and capability statements (Step 12) and shortening the company name, changing the firm’s corporate style, appointing more directors and holding regular marketing review meetings (Steps 13 and 14).

The business has achieved some great results in the last 18 months. Profits are up significantly (even in a depressed market) and their risk profile has gone down. The MD now has much more control over his business, while brand awareness is much improved in the local area. The company has gained a host of new clients, and a significant number of existing clients are ordering more frequently, increasing their order size and are happy to pay slightly higher fees.

Another significant change has been a decision to move from rented offices into a property that they will own and manage themselves. The higher standard of this new accommodation will help them attract larger and more prestigious clients as well as better-qualified staff.

Terry O’Mahony MCIOB is a former project manager who now runs Larchwood, a Chartered Building Company specialising in marketing for construction businesses.

Initiatives such as a curry club and golf days can be used to introduce prospective customers to your business or for your staff to swap intelligence and share information about the business

Step-by-step marketing plan: A 14-point plan to help diagnose marketing problems and prepare solutions

Step 1 Select a single target market, sector or segment.

Step 2 Review your existing client base, re-engage with them and make them offers. Think about who they are, whether you can ask them for more business (and if you want to), and who’s best placed to do this.

Step 3 Review your services, quality standards and delivery methods.

Step 4 Establish your ideal prospective client profile.

Step 5 Establish who your main competition is and where they are. What are their strengths and weaknesses and what threats do they present to your business?

Step 6 Establish your prospects’ core frustrations and challenges, and how you can minimise these.

Step 7 Develop your own unique sales proposition. How can you present it as being different or superior?

Step 8 Make your first sale small and easy to accept. Decide on your offer — it could be a free audit, survey or report. A high price tag on a product or service is a major barrier, so a good marketing tactic that takes away that barrier is to offer something free or at low cost.

Step 9 Develop a practical plan. A good place to start is the Before, During and After units (see Figure 2 below). List all the activities you’ll be carrying out in each of the three marketing phases, along with the key issues you’ll need to address at each stage.

Step 10 Find sources of information that will lead to prospects, investing in a database is a good start.

Step 11 Develop your systems and processes, for example CRM, marketing activities, sales processes.

Step 12 Develop your marketing kit, a suite of documents that explains your business and aims to answer clients’ questions. This should include your core message, a client awareness guide, your mission statement, your services, case studies and capability statements. The documents should be available on your website and can also be drawn on when responding to enquiries.

Step 13 Control all your processes. What works, what doesn’t and why? What’s the cost? Is there a better way of doing things?

Step 14 Review all your processes — create, test, measure, review and refine them all.

CPD test paper: Marketing for construction professionals

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For the first time, I have understood the difference between Marketing and Selling!

Syed Hussain, 19 June 2012

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