Marketing Challenges Within the Construction Industry
By Terry Kramer

Before construction companies decide to take on the challenge of implementing a marketing function, becoming more formal and serious about the marketing function, hiring a key management individual, or increasing awareness of their company within the marketplace, it is healthy to take a step back and acknowledge the looming pitfalls and obstacles that will likely plague companies over the next few years as they proceed with implementation.

The formal attributes of marketing have been know for some time and are well-documented. They can include drafting a Marketing Plan, conducting Market Research, building databases by Market Segments, developing job descriptions for the Marketing Department, creating Marketing Proposals and Presentations, collaborating on Advertisements, and general deployment of the full array of Marketing Tools. Basically, construction companies know what they want to do. That has not been the obstacle to implementation of successful marketing within construction industry.

What tends to block contractors from instituting a successful marketing foundation that becomes sustainable are unrealistic expectations, company culture issues, internal communication needs, and a general lack of understanding from all quarters within the company. An outline of common pitfalls and obstacles that have been observed over the years has been listed below:

1) Mis-Guided Implementation: Product vs. Service
a) the vast majority of marketing literature stems from manufacturing/product-type industries
b) contractors must determine what service marketing techniques apply to their company and what efforts to deploy within a service industry

2) Internal Marketing Requirements
a) Owners & management make the mistakes of oriented all marketing efforts toward external
success and excluding other non-marketing personnel from participating
b) because marketing is a new & foreign business function, the development of internal educational
efforts must parallel external activities, all or most employees should be included in marketing
frequently, and reports & project/customer information should be shared

3) Behavioral Conflicts
a) marketing personnel have significantly different hours, schedules, and activities than Estimators
and PM's
* most construction industry employees resent that their roles are about saving
money, but the marketing personnel roles appear to be about spending money
b) marketing activities should be conveyed to employees, such as 8 pm association meetings, weekend trade shows, and early morning customer meetings

4) Marketing Budgets
a) the first few years will be more about budget experimentation to discover what works among an
array of marketing tools, which will frustrate just about everyone in the company
* Owners, management, and employees will think that all dollars listed under the
Marketing Budget are new dollars spent, when about 50 % of the budget already exists,
but in other categories
b) once marketing activities are sorted out, the annual marketing budget may be as high as 1 %
(includes everything), but it should drift to a lower percentage of revenues as marketing
successes increase and ineffective marketing efforts are eliminated

5) Expectations
a) despite many areas of frustration in regard to marketing, there is general euphoria that grips most
companies when marketing is embraced, which artificially inflates the short-term expectations
about leads, opportunities, and name recognition
b) companies should be prepared to invest in marketing fro 2-3 years before the return-on-
investment begins to exceed the costs
* even highly-experienced marketing personnel will take time to fill up the project
opportunity pipeline

6) Marketing Focus vs. a Broad-Market Approach
a) when marketing efforts begin, wild stabs are made at just about anything that moves, especially if
a project is something that doesn't usually flow toward a company
b) companies need to resist opportunities that do not fit into their strategy, market niches, or
expertise
* contractors should conduct an Internal Past-Job Review to categorize projects by market
segments
* marketing tools should be aligned to these market segments
* customer databases should parallel these market segments

7) Marketing is a New Business Function
a) establishing marketing in a construction company is the equivalent of starting an estimating,
human resource, safety, or accounting department out of the clear-blue
b) companies must acknowledge that new business functions get developed in fits & starts
* in the early stages of development, many marketing efforts are truly trial & error attempts
to see what works, given that there is no other way to discover what will be successful
* marketing activities also do not always provide the black & white answers that everyone
initially thought they would find, such as market research that proves to be inconclusive

8) High-Powered Marketing Directors
a) the Owners quickly discover that they were fond of being the rainmaker heroes, and often feel
that this important role is being taken from them
* high-powered marketing personnel are often not team-players, and this offends company
personnel
b) the bottom-line is that the Owner's desire for influence dictates the strength of the Marketing
Director to be hired, as well as the overall company culture
* most Owners will settle for lower expectations & less results to have a Marketing
Coordinator fit in versus a high-powered Marketing Director that rubs people the wrong
way

9) Evolution of the Marketing Role
a) typically the first marketing individual needed to establish the marketing function is far different
from the marketing personnel need to sustain the marketing function
b) companies have to sort through what works in marketing, consequently finding that changing
personnel in mid-stream is far more effective in expediting a successful marketing function

If construction companies can keep an eye out for the above-noted marketing obstacles to avoid or
confront each item, Owners and Management will find that the usual undertow will be counteracted. As
a result, marketing successes will be expedited, which speeds them on their way to greater market recognition, increasing numbers of project opportunities, and higher profits.

Terry Kramer is a principal with Kramer Consulting. He can be reached at 480-443-0859 or tkmgmtinc@aol.com