Archive for the ‘Strategic Marketing’ Category
What factors influence how we choose one brand over another?
As consumers, we all recognise well-known brands instantly, and can feel powerful emotional connections with our favourites.
Although business-to-business purchasing decisions tend to be more rational than emotional the reasons for branding, and its principles, are just as applicable.
Branding turns a commodity into something much more valuable. It helps foster preference and loyalty leading to repeat purchases and often increased profit margins. No wonder branding is such a powerful cornerstone of marketing.
So what is a brand? At its most basic level, it is a practical identification mark so customers can quickly distinguish one product, service or company from another. Colours, fonts, photographic style, shape, lighting and copywriting style all play a part – tangible aspects all within the company’s control.
It’s not been a great start to 2013. The economy continues to struggle with GDP falling by 0.9% in the final quarter of 2012 and with retail sales under pressure; fears of another recession are all too real.
Despite construction output rising by 0.9%, the outlook for the industry looks uncertain. The government’s 2012 pipeline figures show a 33% decline in the number of capital projects from 311.6bn to 2011/2012 to £8.7bn in 2014/2015, private sector developer schemes aren’t fairing much better and financiers still seem focused on their own troubles rather than releasing project financing.
You’d be forgiven for retreating into a dark room with your “Keep Calm and Carry On” mug.
So how can the construction industry deal with this ongoing crisis of confidence? Firstly the world isn’t going to end; after all there are public sector and private sector projects going ahead.
“The reports of my death have been greatly exaggerated.”
These are the words of Mark Twain following the publication of his obituary in the New York Journal. With today’s widespread use of social media and online forums, rumours and reports of company mistakes and malfeasance can spread at the touch of a button. The question is how to deal with them effectively.
Reputation management is a vital part of any business. Often misunderstood simply as public relations, poor practice is fairly easy to highlight and can easily become what a person or organisation is remembered for. PR and reputation management must form part of the overall strategic planning for any organisational after all, the effect of a PR disaster can seriously damage your financial health.
The biggest blunder is not recognising, understanding or engaging with your audience. Look at your projects from your stakeholders perspective and think how they will be perceived.
The Construction Marketing Awards, presented this year on 29th November, give the construction industry the opportunity to recognise its very best marketing campaigns. Winners are invited to contribute a summary of their entry to this blog: today it is Lafarge Cement, Winners of the Best in-house marketing team category.
Judges comment: “This team delivered a wide range of marketing solutions tailored to different customer groups. They managed a range of campaigns and had a great deal of success. Their work was consistently of a very high quality, and always made a positive sales impact and exceeded objectives.”
Lafarge summarises: A big challenge for Lafarge’s marketing team is how to effectively communicate a single brand identity to a diverse and broad target audience.
At one end of the scale Lafarge manufactures bulk cement products for large construction companies, who use cement in hundreds of tonnes for projects such as power plant builds or sports stadium construction, and at the other end of the spectrum Lafarge also produce specialist bagged cement products for Pro-DIYers to buy from their local B&Q outlet.
In-between these very different purchasers, there are smaller construction companies, jobbing builders, sustainability managers, DIYers, architects, civil engineers, technical directors, local authorities and many more. All of these have different purchase drivers regarding building materials.
Strategy, engagement plans and creative demonstrated dynamism and innovation in each of the 2011 campaigns, with results providing sufficient evidence of their effectiveness. Lafarge Cement has also launched many more campaigns over the last 12 months such as an Extra Rapid Cement promotional campaign that provides customers with a chance to win a ride in a dragster, launched a range of ready-to-use products in B&Q with heavily researched Point of Sale communications, and released an iPhone app for DIYers plus much more.
Keeping the customers you already have is, of course, important. After all, it costs between five and eight times more to win a new customer than it does to keep an existing one (opinion varies on the exact number – but whatever it is, it’s significantly more). But there’s a difference between a customer who is ‘retained’ and one who is ‘loyal’.
You might think the difference is academic, as both are continuing to give you their business and pay their invoices. But their motivation for being your customer, and their attitude towards you, can vary enormously – and this can make a difference to the security of your sales figures.
Loyal customers know, trust and respect you, and place a genuine value on what you offer. They might have tried other companies, or might have left and then returned. But they want to be your customer for the right reasons – things that transcend price. This is not an excuse to take them for granted, ignore them, give them second-rate service or push up your prices unreasonably.
It’s a reason to treat them well, so they become ‘brand advocates’ – people who will sing your praises, and give you valuable testimonial quotes (which will help you attract other customers). Treat them as your friends. Make them feel special. Ask for their thoughts when you have new ideas. Nurture the relationship for the long-term.
Retained customers are a very different thing. They may be with you simply because they haven’t found a better option… yet. Perhaps they can’t be bothered to look – perhaps they lack the time to think about your performance as a supplier, or are simply apathetic about what you do. Maybe you’re just one small supplier which is “under the radar”. Or maybe they are just “satisfied enough”… enough to stay, and not question too much; but not enough to be considered really loyal. While it’s tempting to think the business is secure, customers who are only “retained” are vulnerable to predators. Given the right circumstances – such as a swifter competitor or a cheaper price – they will consider their options.
The sad thing is, a retained customer was probably once loyal – or at least actively happy to have you as a supplier. At some point they have started to take you for granted, or question your worth. And as the supplier, that’s your fault. It’s your job to keep in touch – no, in step – with your customers to stop that happening. You must keep reminding them why they chose you, and persist in giving them reasons to keep on choosing you.
So there are three important marketing jobs to be done:
- Gauge where your customers are on the loyalty scale – through regular, well-considered research; and by watching for clues, such as a change in purchasing patterns, or unusual queries over pricing.
- Listen to the research feedback, and take it seriously. If there are genuine reasons why customers are thinking of leaving you, don’t ignore them. Investigate and consider how you need to take action. The problems won’t go away by themselves, but your customers may if you don’t take their feedback seriously.
- Remember marketing is more than just the quest for new customers and new business. It’s also about regular communications to keep the customers you have, and increase your value to them. Think of it as moving customers up the loyalty scale. So remind customers what you do well; what makes you different; what they won’t get anywhere else; how you’ve solved problems for them, and others.
Then it’s back to step 1 – measure again. And repeat.
Annette Harpham is principal of SharpEdge Marketing, a marketing consultancy and outsourced marketing management service which specialises in B2B, manufacturing and construction marketing.