6 Steps to an Effective Construction Marketing Plan

Use these six steps to create a simple, efficient and effective construction marketing plan that will help your construction business grow.

Developing a construction marketing plan and strategy is critical to the success of your organization.  The term “marketing” is often misunderstood and used incorrectly.  Marketing is much more than selling or advertising.  Marketing is the strategic plan that you develop for your organization that looks at your construction company’s strengths and weaknesses; the areas in which you have a competitive advantage; the market(s) that you will target your sales focus on; the demographics of your chosen market; and the pricing structure that you plan to use.

While advertising is often confused with marketing (as is strictly selling), it is just one piece of a solid marketing plan.  To use a farming analogy, if I may, marketing is akin to analyzing crop prices, field conditions and determining what crop to plant-advertising  and public outreach nurtures the seedlings, and selling harvests the results.  Each component is a part of the larger strategy and depends on the other for success.  As with most issues involving a construction business, planning and preparation are paramount, as well as measuring the results.  We can’t take a break from fundamental business practices.

It’s important to understand the general steps necessary to create and implement a construction marketing plan for your business.  The size of the marketing budgets will vary, as will the intended target market.  Ultimately the development of a marketing strategy comes down to similar steps that can be used for any size organization.  It doesn’t need to be expensive, but it must be thorough and thoughtfully analyzed.  And it must be articulated to your staff and stakeholders. Your marketing plan, just like your financial plan, must be monitored and adjusted as needed, andit must also be adaptable to changing competitive environments.  The construction market looks very, very different today than it did two or three years ago.  Our construction marketing plans must change accordingly in order to capitalize on potential avenues of revenue.

1. Determine Your Objective

What is the goal of your marketing plan?  Is it to increase market share of a particular product or service(such as performing 10 percent of all window replacements in your locality)?  Is it to grow gross revenuewhich means you have to determine what your highest grossing service is and adapt the plan accordingly to sell more of the higher grossing product or service)?  Whether it’s market share in a particular industry (healthcare, schools, kitchen and baths) or based more on pure dollars, a solid strategy must first start with a measurable objective that you can quantitatively discuss your results against.  If you have a company with multiple revenue streams, such as a commercial construction group that specializes in healthcare and a residential unit that specializes in historic preservation, you should have a distinct marketing plan for each business line.  They may overlap in places and actually should – but your market for each is very different and should be treated accordingly.

2. Perform a SWOT. Analysis – Strengths, Weaknesses, Opportunities and Threats.

Performing a SWOT. analysis will not only help in developing a marketing strategy and plan, butit is also essential for keeping any eye on the competitive landscape that your company operates in.  The overall steps of an analysis are as follows:

Strengths
What does your company do well?  Where do have a competitive advantage?  How strong is the core of your organizations? (People, processes, etc.)

Weaknesses
Where do you need improvement as an organization?  Where are you at a competitive disadvantage?  Are you lacking key team members or processes in your core business?

Opportunities
Where do you see opportunities in your core business?  What services could you begin to provide as add-ons that are tangential to your core business and appear to be a natural fit?  What competitors are weak in process and staff areas where you are strong?  Can you go after their clients? Brainstorm for opportunities and get the entire staff involved-you  will be amazed at some of the ideas field staff sees in the marketplace that you don’t see in the corner office.

Threats
What market conditions exist to challenge your current business?  Is your core business in danger of becoming obsolete or replaced with new technologies? If so, are you developing strategies to counteract these changes and offer revised services?  What other potential problems exist(financing, overall economy, changing demographic)?

3. Analyze the Current Market

Creating a marketing objective and performing a SWOT analysis provides you with two important pieces of the puzzle:1. A result you want to achieve, and 2. An analysis of areas that you see as potential avenues for new markets or strengthening current markets.  This point in the process of developing your marketing plan involves melding the two together.

Your team should ask themselves what market(s) (opportunities) align most closely with your objective?  Where does your firm have a competitive advantage?  Does this area of strength align with your strategy?  You may find out at this point that your strengths don’t necessarily fit into your initial marketing objective.   Don’t be afraid to adjust your objective accordingly.  At all times, compete in the areas in which you see potential for growth, that you are strong in and that your company has a competitive advantage.

This approach doesn’t mean you shouldn’t begin to work in areas you see as having potential for growth that don’t yet have an advantage. Your goal should be to develop an advantage quickly. It is also important to considerthe cost and barriers to entry.  If it will cost you tons of equity and take years to implement for a small payback, this market may not be for you.  However, if the Return on Investment (ROI) is fairly quick and the initial investment can be comfortably absorbed by your company, don’t be afraid to challenge new markets.  If you see an advantage to building custom cabinets and over the years you have accumulated an entire cabinet shop worth of equipment, go for it.  If, however, you would have to spend tens of thousands of dollars and weeks of training for a few custom jobs a year, then it probably isn’t worth it this go around.  The goal of a construction marketing plan is not to stifle growth but to strategically allocate capital to its most efficient use.

4. Create a Marketing Budget for Your Construction Business

Creating a marketing budget isn’t easy.  I have heard of companies using anywhere from 0.5 percent to 4 percent of revenues as a starting point and then adjusting accordingly.  If your plan is for radio and television spots, then it will probably be toward the higher end, but you will reach more people.  If you don’t want to commit that many dollars, you will have to be creative and efficient and will probably promote to fewer folks.  You must set a solid dollar figure you are willing to spend and developing the mix within your budget.  It is important to develop and use estimated budgets for your increased sales – if your marketing plan works, do you have enough people to handle additional work?  Do you have a backup plan for hiring just in case?

5. Develop a Strategy and List Tactics  to Market Your  Construction Companys (The Marketing Mix)

Once you have created your marketing objective, performed a SWOT analysis on your organization, developed a core list of opportunities that you feel confident in marketing and created your budget, the object at this stage is then to determine the avenues that you will take to achieve your objective.  Community outreach, writing articles for the local paper, an internet radio show-the  list is nearly endless.

The takeaway in this session is developing a mix of strategies to reach the target market.  Magazine and print advertisements; your website; local radio station ads; local tv station ads; sponsoring a hole at a golf tournament or sponsoring the local high school or college–these are all methods of getting the word out to potential clients.  It is very important to understand your target demographic when creating this mix.

If market research (a composite client created from your current and past clients; Google Analytics; a PR firm, etc.) has helped you determine who your target market is, then allocate your strategy and tactics to most efficiently reach that market.  If your composite client is in his early 50’s, think of not only what he does, but also what his children and grandchildren do.  At first, it may seem foolhardy to sponsor a half-pipe at the local skateboard rink, but you never know who sits on the city council or brings their grandchildren there to skate.  Analyze, analyze and re-analyze your target market, and plan to promote to them accordingly.  Your current and past clientele are a wonderful resource for developing your “average” client and creating a mix that will bring you to them as often and as efficiently as possible. And don’t be afraid to think outside of the ordinary.  For instance, web videos are excellent low-cost methods of promotion.

6. Monitor the Results

If you planned on gaining 10 percent of the local market for kitchen and bath renovations, youwe have to check it out to see if your efforts are working.  See where you are in relation to last year.  Check statistics with the local permit office to see how many permits are being pulled to get a good sense of the market.  Monitor feedback from clients.  Just like job costs, marketing must be measured as well.

Creating a marketing plan in itself won’t magically bring results.  It won’t repair a poor record of client service or fix a modest reputation.  Conversely, it won’t make a great company better.  But, if created faithfully, it will allow you the opportunity to truly get to know your business and how best it fits into the competitive marketplace.  It a very competitive landscape, and a well–constructed and thoughtful marketing plan will assist your construction business in working to allocate resources most efficiently and earn business in markets where you have a competitive advantage.

Construction Business Owner, 2010 October