Get out and promote the value of precast – you may be surprised at the impact on your bottom line.
By Bridget McCrea
Roman Stone Construction Co., Bay Shore, N.Y., is doing business a little differently these days. Blame the economy, changing customer preferences or any other number of outside forces, but the picture is pretty clear: it’s no longer enough for precasters to answer bids then sit back and wait for the awards to roll in.
“The pie that we’re all going after is a lot smaller, which means the piece we end up with is also smaller,” says Layne Urbas, Roman Stone’s executive vice president. “It feels like we’re all grabbing at the same piece, in fact, where in the past there was a lot more to go around.”
The fact that there are fewer projects to bid on and more competitors to stand apart from has put pressure on precast manufacturers who for years enjoyed the niche markets that they had carved out. With the recession not expected to let up significantly until at least 2012 for America’s precast manufacturers, now is the time to grab a seat at the drawing board and figure out how to prevail, despite the challenges.
That’s exactly what Urbas and his management team are doing. For example, the firm recently joined the NPCA Precast Concrete Pavement Slab (PCPS) Committee, and participated in an open house in July to convey the value of PCPS for the Federal Highway Administration, the New York State Department of Transportation and the Strategic Highway Research Program.
At the open house, NPCA members discussed PCPS and how useful it is for rapid rehabilitation of roads and highways. Due to the longevity of the product and the short installation timeframe (which allows little roadway impediment in high-traffic areas), precast slabs have gained steam in recent years. Urbas says his firm’s participation in the committee has helped to promote its products, and also helped spread the word about PCPS in general.
“Through the conventions and meetings, we’ve gained an effective platform for speaking to groups like the Federal Highway Administration, among others,” says Urbas, who has also gleaned valuable government-oriented information from the interactions. For example, he learned that the federal government amended the Clean Air Act in 1990, and in doing so paved the way for the current Safe, Accountable, Flexible, Efficient Transportation Equity Act (SAFETEA).
SAFETEA was signed into law in 2005 and guaranteed funding for highways, highway safety and public transportation totaling $244.1 billion. It represents the largest surface transportation investment in the nation’s history, and supplies the funds and refines the programmatic framework for investments needed to maintain and grow the county’s vital transportation infrastructure.
As part of SAFETEA, the Federal Highway Administration specified precast concrete as one of the solutions for reducing road congestion and repairing the nation’s deteriorating roadways, according to Urbas. “The government found that by using precast, the work can be done quickly, and during the night, without disrupting traffic patterns,” he explains, “whereas ready-mix would require curing time.” A reauthorization of SAFETEA is one of the items on Congress’ to-do list for 2011.
Armed with this newfound knowledge, Roman Stone has been able to secure large government bids for roadway repair, despite the doom and gloom of the economic times. Currently, the firm is working on a large, local project that was originally specified for cast-in-place but that is now being finished with PCPS.
In another move intended to offset the drop in business brought on by the slow economy, Roman Stone hired its first full-time engineer last year. “We realized that in order to stay ahead of the game, we had to come up with our own designs, rather than relying on another agency that specified products,” says Urbas. “We took the proactive route and formed an engineering department.”
The new engineer assists with the approval process for the firm’s precast road slabs and works on projects that range from spot repairs to continuous pavement repairs. As a result, Urbas says Roman Stone has gained leverage when approaching customers like electric service provider Con Edison. “We’ve talked to them about using precast buildings,” says Urbas, “and in subsequent meetings covered the value of using precast barriers for containment projects that the utility is working on.”
Finally, Roman Stone has also stepped up its quality assurance program to include post-pour and pre-pour inspections, as well as concrete testing. Urbas says the firm is also using electronic sensors (and touting that usage when bidding, as “there is no counterpart to this in the ready-mix industry,” he says), and a highly automated batch plant. “We make sure that every contingency is pre-calculated,” says Urbas, “and that every situation is covered before we start working.”
Tackling the new world
Jody Johnson, CEO at Action Coach in Miami, is a business coach who has seen more than her fair share of struggling manufacturers during the last two years. Hit hard on various fronts, these firms come to Johnson for help shoring up their bottom lines, finding new customers and expanding into more profitable areas of business. “Everyone is looking for more clients, higher revenues and better profits right now,” says Johnson, who sees sales skills (which in turn create more leads and better conversion rates) as one of the biggest areas where manufacturers are currently lacking.
“Companies need to get in front of more people, and convert more of those prospects into clients,” Johnson suggests, noting that the salesperson who hits 1,000 people a year and converts only 5 percent of them (or 50 clients) probably isn’t the best choice. “Not only will that salesperson be exhausted, but he or she will be using up valuable marketing resources and dollars that could be better spent elsewhere.”
Creating a sales process that instills confidence in the customer (as Roman Stone does through the use of an in-house engineer, for example) and that touts the tangible and intangible benefits of the product in question, can go a long way in helping to boost conversion rates. Throw in the fact that precasters are typically selling high-ticket items, says Johnson, and the need for client confidence and education becomes even greater.
Nancy Mayer, president at Mayer Bros. Inc., Elkridge, Md., concurs. She says that customer education is one of the key components of her company’s manufacturing strategy. The approach is functioning particularly well in a business environment that’s become “more and more complicated,” says Mayer. “The challenge is to work through all of the new layers of complication and position your firm in a way that helps you win projects.”
Customer “pre-education” is especially important when penetrating new markets that haven’t traditionally used precast, says Mayer, whose firm has successfully used seminars to get points across to new prospects. By offering continuing education credits and hiring experts to conduct the seminars, Mayer Bros. has been able to “pull regulators and engineers out of their offices to attend the events,” she says. “We’ve found ways to run seminars and talk about our products in a generic, soft-sell fashion, which I prefer to the hard-sell.”
The fact that Mayer has positioned herself as a “go to” person for all things precast has also helped her firm elevate itself during tough economic times. Active in the NPCA and the precast industry at large, Mayer says she’s often called upon by specifiers and engineers who need help figuring out problems. “People call on me for all sorts of things,” she says, “because of the committees I’ve served on.”
When asked to share her best advice for precasters who are struggling to keep their heads above water as they wait for the economic tides to turn, Mayer says, “Now is the time to come up with a different direction.” In other words, don’t just sit around hoping that the products you’ve always sold are also going to sell well in today’s environment. Instead, educate yourself on what customers are buying, and figure out how to sell it to them.
“Try to ascertain where the money is and what clients are going to spend their money on,” says Mayer, who sees environmentally sensitive projects like stormwater renovations on the Chesapeake Bay as a particularly good target for precasters. “Try to get out in front by looking at what customers are buying and where the funding will come from, and match those elements up with your product line. If you’re not already selling what they need, adjust your line and put yourself in the best position to sell those items.”
Put yourself out there
Urbas doesn’t like to trash the competition, nor does his team spend time cutting down alternative materials. Instead, he prefers to boost precast’s image in the industry by touting its benefits to everyone that his firm comes in contact with, be it government specifiers, engineers or private sector customers. “We’ve really stepped up our customer education offerings in the last couple of years,” he says.
Recently, the company hired a local film crew to create a seven-minute video that is available on the Roman Stone website. The same video was emailed to Roman Stone’s customers and various local agencies, and promotes the use of precast on a variety of large projects. “Now that we have an engineer on staff,” he says, “we’re even more comfortable talking about the benefits of using precast in a wide variety of projects.”
When moving into new markets, Urbas says his team “leaves no stone unturned,” and works hard to get the necessary information into the hands of the true decision makers. When targeting DOTs in New York City and New York State, for example, he says Roman Stone combines its seven-minute video with engineering knowledge and sales skills to “optimize the experience” and make sure the right people get the data and education necessary for making informed decisions.
Johnson says Roman Stone’s and Mayer Bros.’ proactive approaches are a step in the right direction in today’s economy, where it’s simply not enough to just write up bids and hope that the business pipeline fills up. “I see too many manufacturers sitting around, waiting for customers to come in,” says Johnson. “They may send out a couple of email newsletters or brochures, but they’re not doing enough to get through to the people who are making the buying decisions.”
A better approach, says Johnson, is to educate yourself on exactly what market or markets you want to target, and then learn everything you can about them. “Be able to articulate exactly why they should be using precast over anything else, and then get out there and talk to them,” says Johnson. “Don’t wait for them to come to you.”
Bridget McCrea is a freelance writer who covers manufacturing, industry and technology. She is a winner of the Florida Magazine Association’s gold Award for best trade/technical feature statewide.