Building a Future for Distributors and Dealers of Building Products
Volume 44, Issue 8 October 2005
How to Gain Profits
You Don’t Know Until You Ask
How Research Can Enhance Your Marketing
By Jim Groff
Ask anyone in the building industry: marketing budgets are tight. We’re all working harder than ever to maximize the value of every marketing dollar we spend. Unfortunately, many companies neglect the most critical step in designing an efficient marketing program: good research.
Research comes in many forms: focus groups, surveys, customer interviews and more (see sidebar for details). Without a doubt, every form of market research costs money. But companies that spend a small percentage of their budgets on research typically reap a huge benefit. They’re able to develop a far more efficient marketing program—one that reaches the right audience in the right way with the right messages.
Simply put, properly designed research enables you to base your marketing on what your customers and prospects say, not simply on what you think might work. Asking the right questions of key audiences gives any company a better understanding of how to reach and motivate prospects. Metrics-based evaluation can provide marketers with a concrete way to measure results and adjust future approaches.
Properly designed research enables you to:
• Tell where you stand. Of course your customers know about you, but what do they really think about your product? And what about prospects—are you even on their radar screen? The answers might not be what you want them to be, but they can help you craft a program that helps you achieve your sales goals.
• Use marketing budgets more effectively. Research can reveal your prospects’ preferred method of communication or the attributes most important to them. Or, just as important, what they don’t like. Knowing these answers before you start marketing prevents the waste of precious resources.
• Develop the building blocks of a campaign. Research results provide insight into design, copy and other elements of a marketing program.
• Evaluate your program. You’re still in business, so your campaign must have done something right. But what was it? The direct-mail piece, the full-page ad or the way your receptionist answers the phone? Unless you measure, you don’t know.
A few real-life examples demonstrate how this process works in practice and how a relatively small investment in research can yield big benefits.
Boosting Sales through Research
Contractor Express is a family-owned lumber and building supply retailer in Oceanside, N.Y. Most of its customers come from within a 10-mile radius of its single location on Long Island, one of the densest markets in the United States. The company wanted to expand its reach and boost sales after ramping up its facilities and delivery fleet, so it needed a professionally-crafted marketing plan—its first ever.
The first step we recommended? Research. We assembled two large focus groups that included customers and potential customers. After intensive, professionally moderated sessions, these groups provided critical feedback: the best medium for reaching busy contractors (direct mail and in-store displays, not the internet) and the key reasons Contractor Express keeps its customers.
Based on research, Contractor Express developed a preferred customer program with sign-up incentives and product discounts. Builder loyalty led to the development of a testimonial campaign, further highlighting the bond with long-term customers. Because the retailer had secured input from real customers, they were able to secure vendor-partners to underwrite portions of the campaign.
The initial results? After the first of six planned mailings, more than 10 percent of recipients—five times the response for a direct mail program considered “successful”—had joined the program. Nearly half of these respondents were new customers. Contractor Express also grew its marketing database and increased sales of its vendor-partner’s products, and the campaign has yet to reach the halfway point.
Knowing Your Market
Research clearly helps create an effective sales program, but it can also help an awareness campaign. The Mid-Atlantic Precast Association (MAPA), a trade group representing a dozen manufacturers and 75-related companies, needed to determine how much its market actually knew about precast concrete and about MAPA’s programs.
A 2003 survey showed that MAPA faced a huge challenge, according to Monica Schultes, MAPA’s executive director. For example, only 2.5 percent of respondents said they were “very familiar” with the association.
Fortunately, the response also offered guidance on how to improve awareness. Those under 40, for instance, identified the Internet as their top source for information. That led the association to revamp its website and develop richer content for visitors. MAPA also developed a direct-mail campaign and educational programs to increase awareness.
Follow-up research this year showed that MAPA succeeded in raising the profile of the precast industry. Recall of the direct mail was nearly 21 percent—double the overall average across all industries. Nearly 50 percent of respondents reported they were “very familiar” or “somewhat familiar” with MAPA.
Research has become integral to MAPA’s approach, so the organization plans to follow up with periodic surveys.
As a marketing firm that provides service exclusively to the building industry, we see the unremitting pressure placed on marketing budgets. Any company that cuts corners on market research to save money does so at its own peril.
Jim Groff is president of Baublitz Advertising, a York, Pa., marketing firm that has worked exclusively with clients in the building industry since 1976.
© Copyright Key Communications Inc. All rights reserved. No reproduction of any type without expressed written permission.