An Executive Digest of the Industry: Changing How We View Our Customers in 2010

The Construction and Development Blog

Changing How We View Our Customers in 2010

1. Most Construction Firms Have Very Few Repeat Customers

* just because a potential customer keeps calling for preliminary
budgets, cost estimates, and bidding does not make them a regular customer

* in 2010, a regular customer is one that you sign construction
contracts with in continuous years, not periodically

2. High Volume Customers Are Not Always Great Customers

* if your highest volume customers continue to yield the lowest gross
margins, it may not pay to provide them with pricing preferences

* it shows a lack of mutual respect when your best customers do not
allow you to earn reasonable profits, often it's best to hold your ground on
profits or just say no

3. Stop Chasing Customers Away Because of Some Perceived Conflict in the
Past

* construction firms can quickly come up with lists of why they
shouldn't be doing business with certain customers faster then they can
think of reasons why they should be doing business with them, while
forgetting the specifics of what may have caused some conflict

* people change their behaviors within companies and also people
simply leave companies so it pays to not remain estranged from a past
customer, always stay in touch

4. Do Not Wait for Customers to Call

* in the 21st century, the construction industry remains mired in
sitting by the telephone waiting for opportunities

* construction firms need to turn their aggressiveness within other
areas of their business toward work acquisition efforts, now is not the time
to be timid

5. Make Customers Aware of Your Capabilities

* oftentimes opportunities lie right in front of us but companies do
not approach customers about the services that are being offered

* construction firms can grow revenues by expanding their scope of
work, GC's can self-perform work, subcontractors can expand into other trade
work, and architects & engineers can conduct Needs Analysis, let your
customers know

6. Stop Pounding Away in Areas Where There is No Work

* construction firms have a tendency to go to the well once too often
with customers, but if a market segment is down 80 % or if a city/state is
down 50 %, you might want to check elsewhere for opportunities

* in 2010, companies need to be adaptive to where opportunities are,
and should look for the top 20 states, top 20 cities, or top corporations
for new opportunities

7. Do Not Box Your Company In When It Comes to Project Types

* interestingly enough, construction firms define themselves too
narrowly by project types they have built whereas customers may be building
other types of projects

* one company defined themselves by religious facilities and
overlooked the fact that the houses of worship were built on campuses with
schools, offices, gymnasiums, and recreation centers; keep an eye out with
what the customer's overall building program goals are

8. It's Okay to Market to the End-Users

* in this topsy-turvy world of the construction industry, there are
protocols for everything, but which customers your company markets to does
not have a protocol

* don't wait for influencers and other contacts to deal directly with
customers while your company sits on the sidelines waiting to be informed
about your involvement, go directly to the decision-makers to acquire your
work

9. In Every Construction Downturn Remodels, Alterations, Additions, Repairs,
and Maintenance Work Surges

* as construction firms seek only new project opportunities, they
often overlook the fact that their customers have significant construction
budgets for everything but new construction

* companies need to open their eyes to these marketing possibilities,
and perhaps create a new Division to handle these types of work;
surprisingly enough, remodels, alterations and additions are actually more
lucrative than the profits earned on new construction

10. Public Sector Customers Should Be Marketed to Along With Private Sector
Customers

* historical hard-bid involvement with public work does not mean
construction firms should wait for bid notices

* construction companies can acquire public work through marketing
efforts; companies can influence public works qualifications & limit
competition; they can acquire smaller dollar work that do not require bids;
they can propose work to public entities with specifications that ensure
your company's selection; and companies can influence the list of alternates
so their company is selected

11. Customers Value Responsiveness

* construction firms tend to want to hide in a corner & avoid
customers when mistakes are made on projects; this lack of communication
hurts them

* customers do not expect their projects to run perfectly, so they
place their greatest value on how companies respond & react to project
problems & challenges; the level & intensity of responsiveness will override
the original project problem

Written by: Terry Kramer

About Kramer Management Consulting
We can help your company with its Work Acquisition plans & efforts on a
number of different levels and through a variety of approaches !

1. Advising your company's Management Team in the development of your
Marketing Plan.

2. Coaching your current Marketing Department to create a Marketing
Plan.

3. Serving temporarily as your Marketing Department via an outsourcing
basis.

4. Identifying & qualifying project leads for your company.

5. Locating financing for stalled & delayed projects.

6. Implementing the Marketing Tools that drive business to your
company.

About Terry:
Terry has been consulting within the construction industry for over 22
years. He has served on the Board of Directors for an ENR 100 company; has
worked as a VP for an ENR 200 firm; and was employed as a Senior Consultant
for a national consulting firm. Terry's expertise is in successfully
growing companies through work acquisition to allow Owners to exit their
businesses at maximum value.

About Aaron:
Aaron has consulted with numerous companies within the construction industry
ranging from general contractors, a variety of specialty trade contractors,
architects, and heavy/highway firms. His expertise focuses on the profitable
strategic management of construction firms, and in locating the right mix of
customers & financing to expedite projects start-ups.
Email: Aaron Kramer

Kramer Management Consulting
"Specializing in the Construction Industry"
15849 N. 71st Street, # 100, Scottsdale, AZ 85254

Phone: 480-824-8194, Fax: 480-281-1500
e-mail: tkramer@k-advise.com website:
Kramer Management Consulting Website

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