How to market precast products to the residential building industry
By Bridget McCrea
Bridget McCrea is a freelance writer who has covered manufacturing, industry and technology for more than 11 years.
Sometimes they’re hard to pin down, but once they “get” the value of incorporating precast products into their homes, they become great customers. Who are we talking about? Residential contractors nationwide, many of whom are realizing the benefits of using precast for their single-family and multifamily home projects.
Just ask Dave Altmire, treasurer at Prospect, Pa.-based Specialty Precast, whose entire customer base comprises residential builders who purchase and install the firm’s precast concrete foundations. Altmire says that over the past few years, more of those customers have moved from concrete block to precast in an effort to get their jobs done smarter, better and faster.
“Precast is installed in a day, ready to finish and watertight,” says Altmire. To get the word out about these and other advantages, Specialty Precast uses a Web site, advertisements in the Yellow Pages and local periodicals, and a lot of “word of mouth” referrals. “We don’t use any outside sales,” Altmire adds, “since we generate enough business through the referrals and the printed media.”
Producing at capacity on a year-round basis, Specialty Precast seems to have found the secret to breaking into the residential building market, where customers tend to find a product they like and stick with it for years. That can make it difficult for new vendors to get their feet in the door. Altmire says that instead of targeting the builders themselves, precasters might start with the homeowners.
“We’ve found that if you target the homeowners and get them interested in the product, they’ll bring their contractor to you,” says Altmire, who adds that the momentum snowballs from there as those contractors continue to use the precast products, and spread the word even further to their colleagues and competitors. It’s a fairly inexpensive marketing strategy that can be fruitful for precasters looking to get into the home-building sector.
“We’ve found that most large builders have their block layers or their own system that they’ve been using for years. Unless they’re dissatisfied with that method, they’re just not going to switch and go with you,” says Altmire, whose firm approaches homebuyers at local home shows and through word-of-mouth networking with business associates, professionals, friends and even family. “That’s why we came up with the idea of going to the homeowner directly. We’ve found that once the contractors use our product, they’re more inclined to use or stay with it – over what they were using previously.”
Introducing innovative products to a new customer group is no easy task. It’s also a necessary evil for any manufacturer that wants to continue growing and diversifying its customer base. For precasters, the home building industry can be a natural niche – when done right.
“The big selling point for precast is that it saves time, which means saved labor costs and a quicker completion time for the project,” says Chris Watts, account executive at Andrea Obston Marketing Communications LLC, Bloomfield, Conn. “Unfortunately, precast faces the same challenge that other manufacturers do when it comes to a higher upfront price tag.”
For example, Watts says a customer can go to Home Depot and buy a Chinese-made prybar for $5 or an American-made one for $12. “The Chinese one is made of inferior alloy and weighs three times as much, so it will fatigue you more while working with it. It also isn’t made as well with duller points to pry nails, thus requiring you to do more work,” Watts says. “But it costs less than half as much as the American bar, so you’d see the sales volume probably twice as much for the Chinese bar. But is it a better product? No.”
The same example can be applied in the precast industry, where customers can get great decorative architectural effects and cut build time drastically by installing precast steps, for example, instead of having to use a poured concrete step. Knowing this, Watts says manufacturers need to appeal to the builders’ pocketbooks, time constraints and the need to drive profitability.
Marketing materials, for example, should focus not only on the benefits of precast in the home-building industry, but should also include “real world” examples from clients (in the form of one-page case studies, for instance). Hitting the magazines that target homebuyers is another good idea, says Watts, who suggests using bylined articles and traditional print advertising to reach that audience.
“If the precasters can convince end users to request precast, then the builders will be forced to deliver,” says Watts, who points to the Web as yet another great marketing tool for precasters looking to add more home builders to their repertoire. Create a site that includes all of the information that a builder or homebuyer would want to have when researching their options, including downloadable PDF data sheets, short videos (illustrating how precast saves time and money on a project) and application photographs that show the products in use on residential projects.
“You also have to make sure that customers can find the site. Make sure it is search engine optimized so that when people type in ‘concrete steps,’ they find your site,” says Watts. “And code for the competitors’ keywords too, since you want people who have never heard of precast to find it and be wowed by its benefits.” Exercise caution if you use this tactic, however, as using certain words or phrases – particularly identifiable trade names and slogans – can land you in hot water.
During the nearly three years that Jeff Carboni has worked as sales manager at Manning Building Supplies in Lakeland, Fla., he’s seen more and more home builders warming up to the idea of using precast products in their structures. Credit the active hurricane seasons of 2004 and 2005 with stoking some of that interest, and also credit the new building codes that require better and stronger construction that can withstand the high wind and water events that pummeled homes in the southeastern states.
“When I go out and cold-call builders these days, most of them are familiar with precast. Previously, many of them didn’t know what we were talking about,” explains Carboni, who uses precast’s 296-mile-per-hour load rating and zero water permeability as key selling points for the company’s wall products. “Those two issues have helped open a lot of eyes to our products.”
What also opens prospective customers’ eyes is an annual “reward trip” that the company sponsors. Rather than spend money on advertising, Carboni says the manufacturer takes on vacation (this year a St. Barts fishing excursion) customers who buy $250,000 or more in product in a given year.
“It’s a great motivation,” says Carboni. “Some of our customers try to spend that much just so they can go on the trip, so it definitely works.”
With roughly 75 percent of its customers comprising residential contractors, Manning Building Supplies is looking forward to adding even more such customers to its roster in 2007. And with the nation’s housing market leveling off – and with construction material costs on the rise – Watts says now is a great time to reacquaint builders with the value of precast products.
“With the slowdown in the residential building market and the skyrocketing costs of raw materials such as wood and gypsum board, precasters are in a position to capitalize on their ability to reduce costs and build time on a project,” says Watts. “They just need to make sure they’re taking advantage of all the ways to market those products and focus their efforts on those that really work.”