Alan Gayle is a sales and marketing consultant specialising in the construction industry. In this column he offers advice on how to make an impact in the market you want to reach. So what is marketing?
As promised last month, this article will aim to explain the basics of marketing. I’m going to answer three questions I’m often asked when I talk to contractors, suppliers and professionals in the industry.
1. What is marketing?
The best and most relevant definition I’ve found is from Paliwoda & Ryans: “[Marketing is] the management process that seeks to maximise returns to shareholders (ie business owners) by developing relationships with valued customers and creating a competitive advantage."
2. How is marketing different form sales?
Marketing precedes sales. It aims to increase your potential customer’s awareness of your product or service before the sale takes place. If it’s done well, it will make your sales easier, quicker and more profitable. Look at how Apple marketed the iPhone. Without their (extremely effective) pre-launch marketing it would never have had such immediate popularity.
3. What’s the point of marketing?
It’s important to know what you should – and what you shouldn’t – expect from marketing. Done properly, marketing will help to increase your profits.
If it’s not doing that you’re wasting your money. It’s all about your ROI – return on investment. That means if you invest £15,000 on marketing, say, your return needs to exceed the £15,000 you have spent – and hopefully exceed it by a considerable amount. That’s why it’s so important to know how much you spend on marketing. And before you say: “Nothing, we rely on word of mouth”, think about all those lunches and nights out with your customers that you call ‘corporate entertainment’. They are not free and are a key element of marketing in the construction industry.
In fact, most of the interaction between your company and your customers is marketing in one form or another. Whether you’re discussing a potential order or a specific project over lunch, playing a round of golf or sharing an evening meal, it’s all marketing. Even meeting an architect to discuss a new project, sending out samples and doing an unpaid survey or budget is all part of your marketing effort. You may not call them marketing but all these activities proceed what you hope will be a future order and are actually part of your marketing effort.
As I always say: “If it’s working, keep on doing it.” But beware of putting all your marketing eggs in one basket. In other words, corporate entertainment and relationship building are important for customer retention but the industry is changing. People move on and even your best contacts may need to be more transparent when placing their orders, particularly in the public sector and larger corporate companies. That’s why an effective Marketing Plan will have a mix of different activities to retain your existing customers as well as attracting new customers.
Which leads me nicely to next month, when I’ll cover the bare essentials you need to create an effective Marketing Plan.
l Chris Ashworth’s newsletter on the Competitive Advantage website (www.cadvantage.co.uk) has some excellent resources for marketing in construction.
Alan Gayle is a sales and marketing consultant specialising in the construction industry. He spent 19 years with some of the UK’s leading building product manufacturers and has worked in the stone sector for the past eight years.
Alan now runs Gayle Associates, which provides a range of sales and marketing services for small and medium sized contractors and suppliers. His clients are seeking growth but the management are too busy to do it themselves and they don’t want the commitment of a full-time employee.