By late 2004, Bob Lucas, president of family-owned Contractor Express in Oceanside, N.Y., knew a slowdown was due in the then still-sizzling housing market. To head off the trend, he went to his co-owners and brothers, Jim and Jack, with a bold plan: spend $100,000 on a new marketing program to attract new customers to the one-yard operation, build loyalty among existing clients, and bolster brand support from vendors while business was still good. But the reaction to the proposal was less than enthusiastic, especially from Jack, the most fiscally conservative of the three.
“My brother looked at me and completely flipped out,” Lucas says. “He said, ‘You've got to be kidding me.'” Indeed, the six-figure number seemed daunting, especially for a $13 million company. But when Lucas presented the sum differently, his brothers began to reconsider. “I pointed out that [$100,000] was less than 1 percent of our revenue. I mean, if we couldn't budget that much, how much were we supposed to spend on marketing our company?”
The tactic was effective, and with the go ahead from his brothers, Lucas got to work. Impressed by the professionalism and image of Wolf Distributing Co., one of his new vendors, Lucas inquired about the firm's marketing strategy. “I noticed that when you called Wolf, everybody knew every product they had. They got back to you, their trucks were clean and on time, and the drivers were professional and courteous,” he says. “I figured these guys must be doing something right, and we needed to figure out what it was.”
With that insight, Contractor Express hired Baublitz Advertising, Wolf's marketing firm, and embarked on the development of its own marketing program. Two focus groups with customers and prospects reaffirmed a slogan the firm had used in the past to set it apart from DIY centers: “Where the Contractor Comes First.” The message was reinforced with a multifaceted branding campaign that employed customer testimonials to tell the firm's story in direct-mail pieces, newsletters, in-store displays, and online. Go onto Contractor Express' Web site, for instance, and you'll see Kevin Akner, of Rockville Center, N.Y.–based Akner Contracting Co., peering out from behind wire-rimmed glasses and saying that when an issue comes up, “they make it right, no matter what it takes.” Not only does Akner's declaration speak to Contractor Express' dependability, it goes to the heart of the firm's slogan by putting the 17-year customer, as well as other long-time clients, at its center.
The company then tapped into its vendors, and with their support launched a series of product promotions aimed squarely at contractors, including 10 percent discounts on Integrity Windows from Marvin, AZEK Trimboards, and James Hardie siding. During the summer, appreciation events such as weekly barbeques gave the brothers face (and grill) time with customers. “It's really just a party where you stand there and flip burgers and talk to your guests,” Lucas says. “Customers like that. They like to see you getting down and dirty.”
So far, the marketing program has worked. Through the first three quarters of 2005, Contractor Express added 121 new customers, who spent $200,000 at the company, a nice double on its allocated marketing budget. Those new accounts came with an average acquisition cost of just $200 each, a small price for the thousands in new cash they've already spent at the company. Finally, overall sales for the year grew by 11.5 percent, compared to a gain of 8.9 percent in construction spending nationally during 2005, according to the U.S. Census Bureau. And with sales still trending upward in 2006, it's no wonder Lucas and his brothers are glad they decided to make the marketing push early on. “I wanted to take a proactive stance on what the future holds for us,” Lucas says.
Worthy Cause What happened at Contractor Express is a perfect example of how discarding traditional, negative attitudes toward marketing and assuming a more proactive approach can lead to greater bottom line success. In an industry dominated by 2x4s and executives who sometimes wear Carhartts to work, marketing is often perceived as little more than fluff. More often than not, it's tagged as a flamboyant, almost crass expenditure, a “shortcut” to building a good name in a business where hard-earned reputations are only supposed to come from years of honest toil. While many industries—think automobiles and beer—routinely spend 5 to 10 percent of revenues on marketing, few in the lumber industry allocate more than 1 percent to the area. In fact, 76 percent of the dealers participating in the 2005 PROSALES 100 Annual Survey of Leading Construction Suppliers planned to spend less than 1 percent of revenues on marketing and advertising last year. Just 20 percent said they would spend 1 to 2 percent on marketing, and only 3 percent planned to spend more than 3 percent.
Experts say the prevalence of a step-child attitude toward marketing in an industry so heavily built on commodity items is paradoxically why pro dealers need a well thought-out marketing program to set themselves apart, particularly in 2006. “If all you've got is the same sticks as six other guys down the street, then all you have to compete on is price,” says Jim Groff, president of Baublitz, which specializes in marketing for the building industry. “But if you can enunciate those things that differentiate you from someone else, whether that's your takeoffs, delivery, or other packages, then all of the sudden you can move the negotiation to a different plane.”
In a 2005 industry white paper targeted to pro dealers thinking about adding some marketing muscle, Groff suggests starting with solid, measurable goals, developing a distinct, consistent brand message, and then delivering it to as many potential clients and influencers along the supply chain as possible, including architects and specifiers, as key strategies to set the plan in motion (see “Steps to Success,” page 74).
Indeed, pro dealers who place an emphasis on marketing tend to see results. Take Livermore, Calif.–based ORCO Construction Supply, which gave itself a complete corporate makeover in 2004, embodied by a staunch-looking bulldog mascot and the in-your-face slogan “Bring It On.” The campaign, which garnered a 2004 PROSALES Excellence Award in marketing and customer service, went far beyond a superficial recasting of billboards and company letterhead.