DWM - 2008 - November

Volume 9, Issue 10 - November 2008

T R E N D T R A C K E R

Serving a Smarter Customer
B Y M I C H A E L C O L L I N S

Most of you know that I receive requests regularly for information from manufacturers and distributors for various pieces of market data. Recently, though, I received a request from a group that should be of particular interest to all of you—one of your potential customers. I don’t get a lot of these requests, but the exchange with this potential window buyer confirmed that customers are becoming much more savvy and that winning their business in the future will require a redoubled effort to sell in a way that complements the way these new, wiser customers will be buying them.

Meet the Highly Knowledgeable Consumer
The request for information came from a condo association, some of the members of which were trying to make a group decision regarding replacing their windows. The windows in these units were at the textbook replacement age of 25 years and the residents were considering vinyl and fiberglass windows as replacements for their single-glazed bronze aluminum windows. The starting point in their inquiry was a potential color change, from dark to white, but that was only the beginning of the investigation. In addition to energy efficiency, the members of this condo association understood that making the wrong decision about their patio doors or windows may affect the desire for others to buy or upgrade a condo in that association.

In order to make this decision, the group had already made themselves aware of the manufacturers in their area, as well as the proximity of the closest manufacturing facilities of these companies. In subsequent e-mail exchanges, this group asked me a variety of questions. They wanted to know about the future relative price movements of vinyl, fiberglass and aluminum. Further ,they wanted information regarding the comparative energy efficiency of these materials.

In looking at products in these various categories, they were watching not only price but ENERGY STAR® and other energy efficiency standards. This group had peeled the onion further and was trying to consider which type of windows were manufactured in the most energy-efficient way, since those would be the windows whose future price increase would be the least driven by continuing energy price increases.

What’s Wrong with this Picture?
This group, a potential customer for droves of DWMreaders, didn’t start their search for information about windows with an investment banker. They started it on the Internet, scouring the websites of companies that they thought might be appropriate providers for the current, and future, business of the homeowners in their association. The truth of the matter is they should never have had to ask me these questions. The fact that a group of consumers had to research this issue so broadly that they found me is, to be frank, an indication of a problem with the way that door and window manufacturers make information available to a technologically enabled buying public. The industry faces a continuing problem with the ways in which it makes information available to today’s customers. These condo association members told me that they have contacted several companies directly and that the sales professionals with whom they spoke were not able to give a coherent explanation of how the energy efficiency of their products compared with those of competitors. Some of them were unable to discuss price differences in a helpful way and the condo members gave up before asking the questions that were several layers deep. These buyers reported that none of the companies they contacted had an easily located spot on their websites that would give a buyer a clear picture of how that company stacks up against competitors in terms of price and energy efficiency.

I’m not suggesting that every manufacturer lead with price so we can have a race to the bottom and end up with terrible margins. What I’m suggesting is more of a relative view that plots price versus energy efficiency and performance and gives customers an idea of where a company’s products fall. Not only do customers not expect a free lunch, they’re suspicious when offered one. If you sell value and let customers know that your product is more expensive than another one but outperforms the alternative in energy efficiency, structural strength and other key areas, the right customers will continue to purchase your products. Alternatively, if you think a competitor’s product is overpriced relative to the modest energy efficiency gain over your own, pitch your product in that way.

How to Fix It
The key lesson in this highly professional process of information gathering undertaken by the customers who contacted me is that they won’t be kept from assessing the right characteristics of products, even if the decision not to make that comparison easier is not accidental. Manufacturers would be well-advised to take advantage of what are, hopefully, the waning days of the doldrums in this industry to revamp their websites and promotional materials. Companies that provide easy access to a more technical and rigorous level of information about their products than has been typical in the past will be the ones best positioned to win business from the shrewd buyers in today’s market.