Give Them What They Pay For: Support

The old saying that “you get what you pay for” can be read a few different ways:

  -  A description of the way life works
  -  A motto for merchants to reassure their customers
  -  A consumer demand

If you’re selling a high-end or advanced product that’s more expensive than the alternatives, you’d better make this your promise to customers.

In today’s market, when people pay more, they believe they're buying more than just a better product: they feel the price includes manufacturer support.  They expect customer service they can talk to.  They believe that they’ve paid for technical support they can reach easily, understand, and get useful answers from.  They want confidence that the high-end performance of the product is assured by the price they’ve paid, and support is an integral part of that assurance.

If I buy a bag of ordinary portland cement and I have a problem with it, I figure I’m pretty much on my own.  If I buy a high-end specialty cement, I expect the manufacturer’s Technical Support will help get me out of any problems I have with the product.

A reputation for good customer support is valuable.  It supports the high price of your product.  It's not that easy to establish, but in today's hyperconnected society, it's very easy to destroy.  You need to get your support operation in top shape, and you need to monitor and manage your reputation online in the social media sphere.

Sometimes you have to go the extra mile to establish that rep.  The most impressive example I’ve seen recently is Apple Computer.  Apple sells the top end of personal computers, smartphones and music players.  They charge a pretty big buck, but they have a reputation for well-designed, well made products and killer customer service.

In November, 2011, Apple issued a recall of the 1st generation iPod Nano, a device they stopped making in 2006.  The recall was based on a (rare) problem with the battery overheating.  They promsied to replace the old Nanos.

I sent my old Nano in, and about a month later, I received a replacement: a new 6th generation Nano, a far more advanced gadget with 4X the memory, a radio and a voice recorder built in, and all in a package 1/3 the size of my old one.

Now, I know incontrovertibly that Apple stands behind their stuff.  I know that if I pay more for an Apple product, I won’t get a piece of crap, and I won’t be on my own if it fails because of something Apple did wrong.  If I’m a value shopper, I know that Apple’s high price is also high value.

All high-end manufacturers need to convert their potential customers into value shoppers.  Educating them about the value of the product (i.e. sales & marketing) is one way.  Creating the confidence that the company will support that value in the future is the other.

Thanks, Apple, both for the Nano and the marketing lesson.

The Ultimate Roll-Up?

I was recently asked about the attractiveness of having a single company provide all elements of the building envelope, including roofing, foundation, exterior walls, cladding, windows, curtainwalls, entrances, storefronts, insulation, vapor barriers, and the rest. The question came from a business strategy firm, suggesting that some group of investors is seriously contemplating such a move.

At least one company is already well on its way to being able to offer complete building envelopes. Oldcastle is one of the company's that is well on its way toward offering a complete package, with strong positions in masonry, concrete, glass and glazing systems, curtainwalls, doors and skylights. Add a roofing manufacturing line, and they have it.*

The past few decades has seen strong trends towards "roll-ups" -- bringing many small producers under one corporate ownership -- in attempts to gain economy of scale and improve competitiveness by dominating an industry and combining related products into package.

Roll-ups are well established in some sectors. In lighting fixtures, for example, Hubbell has acquired over 20 previously independent brands, and electronic giant Philips recently acquired the sixteen brands that had been rolled-up by Genlyte. Assa Abbloy and just a few other firms now dominate door hardware.

While roll-ups do have important competitive advantages, many suffer from the following syndromes:

• They lose the edge in innovation to smaller, more flexible and entreprenurial business.
• Promotion of individual brands suffer from having to follow a corporate model. For example, some of my clients have to use corporate websites that focus on selling to investors instead of to designers and builders.
• Managers, striving to improve the profits of their division, become jealous of and competitive with each business units, to the detriment of the overall company.
• Product offerings become so diverse, that individuals within the firm are unable to cross refer prospects or identify opportunities for other brands.
• Size dilutes the expertise.  What salesman can be an authority on glass AND roofing AND insulation? In smaller companies, a prospect can deal directly with a principal or other senior personnel with true expertise in a field.

Indeed, I have been a consultant to many large firms and roll-ups that crumbled due to their mass, and were more competive when unrolled.

Further, roll-ups have to compete with companies that do not manufacture all parts of a system, but assemble or "package" products from multiple vendors into bid packages that also create economies of scale. Packagers also have the advantage of using the "best" product or a job without the limitations of having to use those from sister companies. They also have the flexibility to take advantage of attractive spot pricing.

In the final analysis, every general contractor is a packager, and already offers all elements of the building envelope.

____________
* Pre-engineered metal building manufacturers do already offer a complete envelope, including walls, roofs, structure, and accessories. But that is a subject for another blog post.

Another Score for Publicity

As we’ve noted before, the real impact of publicity is notoriously hard to track and quantify.  With more and more publicity exposure taking place via the web – exposure that often remains available and searchable for far longer than most print media ever did – it’s harder than ever to know who’s reading what, and what percentage of them act on what they read.

Anecdotal evidence continues to come in, though, saying, “Publicity works.”  The latest installment:

Michael Chusid recently wrote an article in a major architectural magazine about an advanced materials conference he attended.  In it, he mentioned a company that made a presentation, a company that specializes in digital fabrication and has done a lot of work with resin composites.  They weren’t the focus of the article, just one of many things described.

A few weeks after the article appeared – I was going to say “in print,” but with simultaneous web distribution of most magazines, print has become merely the tip of the iceberg ­– the president of the company received a call from one of the largest and most prestigious architectural firms in the world.  They requested him to come and do a presentation to them.   That kind of request was the bullseye on his marketing strategy target. 

Of course, this was only shortly after publication.  Who knows how many more such inquiries he may get from that one mention, over the next few years? The shelf life of articles on the web has become pretty much Forever, and unlike the advertising, they show up in search engines.  We have had numerous inquiries recently, responding to articles we authored for clients two or three years ago.

The Future of Marketing is Being Decided Right Now

Two bills introduced in Congress last week, one in the House, one in the Senate, may well mark a significant turning point in the history of our economy.  Both of them concern Internet privacy.

The House bill, The Consumer Privacy Protection Act of 2011 (H.R. 1528) introduced by Representatives Cliff Stearns (R-FL) and Jim Matheson (D-UT), requires sites to inform users that information is being collected, to offer certain limited opt-out provisions, and the bill creates the concept of approved self-regulatory programs that companies can join to demonstrate compliance.  The law is administered entirely at the federal level by the FTC.  The Senate bill, The Kerry-McCain Commercial Privacy Bill of Rights Act of 2011 introduced by Senators John Kerry (D-MA) and John McCain (R-AZ) goes considerably farther: all information collection must be opt-out/opt-in, clear notice must be provided that info is being collected and more.  It is administered by partly federally and partly at the state level.

The bi-partisan nature of these bills is a good clue to how politically popular this issue is deemed to be.  The topic of Internet information, data-mining, and the disappearance of privacy is a hot one.

What may not be obvious is that either of these two bills could decide the future path of a significant portion of our economy.

The story until now:

1) 1995-2010 – the birth of the World Wide Web leads to the destruction of the Print/On-Air Advertising system, as audiences drift away from old media. Print/On-Air advertising is the marketing system that created the consumer/industrial juggernaut that was America of the 20th century.

2) 2005-2010 – The internet enterprises that were responsible for this destruction discover that they, too, need a sustainable business model to support their continued production of new media.   The business model they turn to is, not surprisingly, advertising online.

3) 2011–  Online advertising agencies and space brokers announce that hence-forth, advertisers will not need to buy “content” as the carrier for their ads, they can "buy audiences."

So, the business model currently being touted by some of the more knowledgeable people in the online advertising field is that the Internet allows advertisers to find individual consumers, rather than simply talking to whoever comes to a likely site.

That means tracking Internet users, based on their data-mined interests.

And here come Congress, ready to regulate that process, perhaps a little, perhaps to the point of effectively eliminating it.

What neither bill contains – although it is one of the most widely-discussed and popular ideas for protecting internet privacy –  is a Do Not Track List, a grand one stop shopping opt-out-of-everything mechanism.  But as the bills get debated, even that might emerge.

Marshall McLuhan once wrote that the newspaper contains two kinds of news: the bad news is the articles. The good news is the advertising; it is news of the commercial world.

In the networked world, product news itself has become split into two types (at least from the marketer’s point of view): controllable and uncontrollable.  The controllable news is advertising.  The uncontrollable is the vast interconnected communication morass that is currently buzzworded as “social media.”  Congress may limit how the controllable news gets spread or targeted.  The uncontrollable news will, of course, remain uncontrollable.

Congress is about to decide how advertisers may or may not find their potential customers.  That will, in the long run, decide the shape of 21st century commerce, and the future of US companies vs. those that fall under different (national) regulations or no regulations.  It will begin to define the shape of the world to come.

Stay tuned.

Looking Big

“He who has a thing to sell 

and goes and whispers in a well 

is not as apt to get the dollars 

as he who climbs a tree and hollers.”

I learned this doggerel from Brian Smith, CEO and Founder of Ecolite Concrete. Chusid Associates began collaborating with him while his business was being run out of the garage behind his house. He envisioned building wall panels that were over twenty feet long, yet his only prototype was just 12 inches square. And he needed either an investor or a large order that would enable him to get a loan to build a factory and begin production.

Brian had founded Ugg Boots, a breakthrough in the fashion industry, and was now working his magic in construction. His philosophy is "we have to look like we are big and successful" before anyone would be willing to take a chance on his disruptive technology. While still working on code approvals and R&D, he also insisted on investing in branding, sales collateral with high production value, and aggressive PR.

Another Chusid Associates' client has a nationwide presence selling coatings and chemicals for floor finishes. The company is run by its entrepreneur without staff. All manufacturing is by private label, warehousing is by distribution, and accounting and other backroom functions, including marketing, are outsourced. Even though there is only one person in the office, the phone answering system still says, "Press 1 for Sales, 2 for Customer Service, 3 for Technical Assistance, 4 for Directions to our Plant...," reinforcing the image that the company is a big brand.

Outsourcing marketing can also be used by larger firms. Engelhard Corporation is a Fortune 500 business. Yet its MetaMax brand of a high-reactivity metakaolin, for use in concrete, was such a small part of its operations that it only merited a 1/4 time product manager. Yet by working with Chusid Associates, MetaMax was made to look like a large part of Engelhard's business by getting extensive publicity in the industry press, speaking at industry conferences, participating in standard's writing committees, taking the brand to trade shows, and creating a strong presence on the internet.

Of course, some of our clients want to stay below the radar. By looking like they are small businesses, they limit competition by keeping their competitors from knowing how profitable their market niche can be. But that is the subject for another blog post.

G'day, USA: Australia's James Hardie is making a splash in the U.S. market

This is an encore of an article Michael Chusid wrote almost 20 years ago. Since then, the construction industry has been increasingly globalized. However, most of their observations about the North American market remain the same.

Hardie saw a previous recession as a great time to invest in a new market -- a potential that also exists in our current economic malaise. The firm has sold off its gypsum board and irrigation interests, but has established a solid brand and market leadership in the fiberboard category.  

There is good news about the U.S. construction products industry: We enjoy a productive and flexible work force and an excellent safety record. Our designers are open to new products and techniques. We are adventurous, ambitious, and independent. And, despite the recession, our economic prospects are robust enough to merit substantial investment.

That is the decidedly upbeat view as seen from  Australia, home of James Hardie Industries Ltd., whose U.S. subsidiary is rapidly becoming a major  player in the North American construction products industry. In just five years, Hardie has become a significant supplier here of gypsum board and a range of fiber-cement products. The company has quickly earned a reputation for quality products and efficient production. Sales at its U.S. unit, which also markets irrigation products and sprinkler fittings grew 21% to $145 million (US) in the fiscal year ending in March.

Hardie's trek into the U. S, market has not been without a few bumps, however. Hurt by the construction downturn and severe price-cutting in the gypsum market, the U.S. unit lost $14.5 million last year. The company has had a tough time, especially at first, getting U.S. contractors to try its high-cost fiber-cement products. And it took a few missteps to make Hardie realize it had to Americanize its marketing operations to be successful here.

Things are just now beginning to shape up. Don Manson, president of the Mission Viejo, CA-headquartered unit, says both sales and profits improved "significantly" in the first half of this year, thanks mostly to growth in the fiber-cement business. "I'll be very surprised if we're not profitable in fiscal 1994," Manson says.

If so, the U.S. unit will be on its way to following in the rather large footsteps of its Sydney-based parent, one of Australia's leading industrial manufacturers and a dominant producer of cladding there. For most of James Hardie's 100-year history, the company's chief product had been asbestos-cement board, popular in Australia's hot, humid coastal cities. But when health concerns about asbestos surfaced, Hardie switched in 1980 to a wood-fiber cement board. It retains most of asbestos' desirable properties, but it is stronger and easier to work with.

Coming to America
About that same time, the company began to diversify through a series of acquisitions and product developments. It grew into a billion-dollar company, but its development was limited by the size of its home markets of Australia aid New Zealand, whose combined population of 20 million is less than California's.

"The question then was, do we expand into other activities or do we take our knowledge to other parts of the world? We chose to do the latter," says Manson, formerly head of Hardie's New Zealand unit. "We had extremely good products and technology, so it was a question of how to capitalize on it. We looked to the United States because we saw somewhat similar building practices, an extremely large population, and a relatively common language."

Another factor was the mid-1980s collapse of Johns Manville, a leading U.S. supplier of asbestos-cement products. "We saw a vacuum here for [non-asbestos] cement panels," says Pat Collins, technical services manager for Hardie's U.S. building products division. Also, the U.S. market was not entirely new to Hardie. The company had already made inroads by bringing in its irrigation and sprinkler products in the 1970s.

Hardie's expansion into the United States began in earnest in 1987. That year Hardie bought a gypsum quarry and a gypsum board plant in Las Vegas and another plant in Seattle. It also began exporting some fiber-cement products to the United States, though by 1990, it was making those products at its Fontana, CA plant.

At first, the company combined the gypsum and fiber-cement operations, but it later reorganized them into two divisions. "They are separate businesses," Manson explains. While gypsum board is a price-sensitive commodity product, the high cost fiber-cement products are more proprietary and require missionary work to sell. And while Hardie's gypsum boards are marketed on the West Coast and exported to countries such as Korea, the fiber cement products are sold in the Sun Belt.

The company makes three types of fiber-cement products: siding, backer hoard, and roofing shingles. They are sold mostly in niche residential markets where their unique properties can be marketed at a higher cost. The backer board has shown the most market growth and potential. It can command a small premium because it provides the smooth finish necessary with vinyl flooring, and its water impermeability makes it ideal behind ceramic tiles in wet areas.

The roofing shingle has had a relatively high penetration in California, but Hardie won't be able to expand the market North until it perfects the shingle's freeze/thaw properties. The siding, which has had slow growth, has faced tough competition from other cladding, mostly wood, because of cost and aesthetic reasons. Its main selling point is its long life, and that's not as much of a concern in the United States as in Australia.

Though the Fontana plant is now running at only half its 100,000 tons per-year capacity, Hardie sees  enough market potential to warrant buying land near Tampa, FL for a second fiber cement plant.

Hardie has met with some frustrations, though. It has had difficulty getting U.S. contractors to get past their low-cost mentality and try Hardie's fiber-cement products. "The acceptance has taken a little longer than we anticipated," Manson says. "Even though our product may be clearly superior, if the tradesman has been used to doing things a certain way for 20 to 30 years, he's not going to change quickly.

"It has taken until this year. But now it's really coming on." U.S. sales of Hardie's fiber-cement products grew 14% in fiscal 1992 and that division cut its losses 15%. "And that's being achieved against a depressed economy," Manson says.

Fitting in
Hardie's initial projections underestimated the U.S. demand for fiber cement shingles, mainly because shingles are not popular in Australia. Such predisposed outlooks are one of the hazards of transporting a business from one country to another. Despite their similarities, Australia and the United States have much different marketing environments.

"It's taken five years to come to terms with and fit into American culture," Collin says. "The slowness in getting to that stage was due to Australian attitudes and traditions trying to be imposed onto American culture. It doesn't work. We had to become an American company run by Americans."

And that is exactly what Hardie became. The building products division, for example, is now run by an American, vice president and general manager Louis Gries, and a management team recruited from U.S. firms. Collins is one of the few Australian expatriates still in the United States. Both he and Manson, a New Zealander, see their roles as transitional and temporary.

One adjustment Hardie made after a few years in the U.S. market was to decentralize its marketing organization by putting senior staff in regional offices, rather than have them manage from afar. "That's made a powerful difference," Manson says.

As Collins explains it, a decentralized structure is not a necessity in the smaller Australia. But in the United States, it's a must. "This country is so large that we can't talk about just one country from a marketing or manufacturing point of view," he says. "In each place it has to be carefully done to fit the local requirements and culture. It's 50 different countries really."

Another difference Manson has observed in the U.S. market is its cavalier attitude towards quality. Australians, by contrast, are a less mobile people and tend to use higher quality building materials to build homes for a lifetime. "It surprised me that the expectations of consumers are not great here," he says. "I see enormous homes with high prices, but the quality is not dramatic.

"Our backer board is an excellent product, but it gets covered by tile and is out of sight. It's hard for the builder to justify an additional cost. How do you [charge a premium] when it's coming out of the builder's profits?'

The answer, says Mike Going, Hardie's U.S. marketing manager until his recent return to the New Zealand unit, is aggressive marketing that will convince contractors and home buyers that quality is worth the extra cost. "Hardie must foster an aggressive and creative marketing vision while at the same time doing all the small things that have to be done to carry out a successful marketing program."


Have a question you'd like us to answer?
Send an email to michaelchusid@chusid.com 

By Michael Chusid, Originally published in Construction Marketing Today, ©1992

Use long-term cost benefits to your advantage

This is an encore presentation of an article Michael Chusid wrote about 20 years ago. It's message is still current.
 
I often encounter price resistance when selling my company’s top-of-the-line building products. Even though I explain that the product lasts longer and has lower operating costs, many customers can’t see past the initial costs. How can I overcome this sticker shock?—D. N. S. , sales manager

Developers and building owners think of their projects as an investment. In addition to construction costs, they analyze operating costs, potential income, and resale value. To overcome price resistance, present your product as an investment instead of an expense.

In some cases, this can be done by focusing on how your product adds value to a building. Developers recognize this principle when they spend extra on building finishes or fashionable interiors. Their investment is repaid by making it easier to sell the property or attract higher rental income.

Other products can be positioned as expenses necessary to protect a property’s income potential. A major hotel chain, for example, invests in backup air-conditioning equipment because they realize their inventory of rooms is worthless if they can’t guarantee comfort.

Tout up-front savings
Another approach is to emphasize the “first cost” of your product. In addition to purchase price, this includes the design, construction, and financing costs necessary to put your product into service. You can sell the first-cost benefits of your product if, for example, it costs less to install or enables faster completion of a project.

A still broader view of costs is a lifecycle cost analysis, which considers the cost of owning a product, not just purchasing it. This is significant because the total of a building’s maintenance, energy, insurance, tax, interest, and other ownership expenses usually exceed construction costs.

Life-cycle affordability is key
Life-cycle cost analysis has long been used by mechanical engineers; it is fairly simple to compare the cost of additional insulation or more-efficient equipment to projected energy savings. But in recent years, life-cycle affordability has become increasingly important. Environmental concerns, for example, have shifted attention from construction costs to issues such as energy consumption and building materials disposal. Institutions like the Army Corps of Engineers have begun to require life-cycle cost analyses of proposed projects. A recent publication from the American Society for Testing and Materials, ASTM Standards on Building Economics, establishes procedures for investigating the life-cycle costs of building materials. And computer programs have simplified the extensive number crunching required for life-cycle cost calculations.

Many manufacturers claim life-cycle benefits in their advertising, using bar charts to show how their products’ costs compare to competitors. Such claims have more impact if your customers can examine the supporting data. You can use computerized presentations to show them results for a specific product.

USG Interiors is one company that uses computerized life-cycle cost analyses to position its relocatable office partitions against lower priced conventional drywall partitions. The program considers such variables as the client’s tax bracket, material and labor costs, project size and complexity, mortgage terms, and the accelerated depreciation allowed to relocatable partitions. It also asks the customer how often remodeling will occur. The program then compares the life-cycle benefit of USG’s reusable partitions with the demolition costs of removing drywall partitions. This gives USG a powerful sales tool to use with financially oriented customers who may not perceive the product’s technical or aesthetic benefits. In addition, getting the customer to say yes to all the input data increases his acceptance of the program’s conclusions.

From a life-cycle cost analysis prepared by Chusid Associates.

Are your products priced right?
Conducting a life-cycle cost analysis for your product can be a fruitful marketing exercise. For example, do you know what factors most affect the affordability of your product and your competitors’ products? Can you substantiate product durability or quantify maintenance costs? Would your products be more affordable if there were more demand for salvaged or recycled components?

A life-cycle cost investigation I once conducted for a water-conserving plumbing system helped the manufacturer establish a competitive price for its product. Another time I compared the life-cycle costs of 12 roofing systems. Even though my client’s roofing system had outstanding durability, the study showed its high initial cost was not offset by low life-cycle maintenance costs. This insight helped clarify the manufacturer’s marketing alternatives.

While life-cycle costs can be an important sales tool, you must still tailor your presentation to each individual customer. Many price objections are simple requests for more information or reassurances. Other objections may be based on unquantifiable concerns about performance, appearance, or reliability. Bringing out a technical looking spreadsheet could confuse some customers or miss their main concerns.

For some customers, delivering a job for the lowest initial cost will always outweigh life-cycle considerations. But in other cases, a life-cycle cost argument may be just what is needed to close a sale. It can help customers justify to themselves or to their clients the decision to use a more expensive product. Or it can be a subtle way of pointing out a competitor’s shortcomings. Most importantly, it can change the focus of a sales presentation from the cost of your product to the value of your product.


Have a question you'd like us to answer?
Send an email to michaelchusid@chusid.com 

By Michael Chusid. Originally published in Construction Marketing Today, Copyright © 1994

Positioned for the Upturn?

The Upturn in construction is coming.

Eventually.

The McGraw Hill-2011 Construction Outlook predicts “modest” improvement in 2011, with an 8% increase in construction starts, as compared with a predicted 2% decrease in 2010. Robert A. Murray, Vice President of Economic Affairs at McGraw-Hill Construction, commented, "We're turning the corner, slowly. 2011 will be the first year of renewed growth for overall construction activity, and 2010 becomes the final year of a very lengthy and unusual construction cycle."



Which means that now is exactly the time to ask yourself, “Is my company positioned to succeed in the coming upturn?”  When projects start ramping up again, some companies will be well-positioned to attract business and prepared to do business.  Their products will be top-of-mind when specs are written and bids are solicited. Other companies, who have not used their down-time wisely, will be playing catch up.

During the downturn, many businesses slashed marketing budgets.  As things turn around, it’s time to revise that strategy.  Marketing communications is the only thing that will keep your brands visible during a period when both planning and actual construction are down and the products themselves are not actively being spec’d or used.

If you cut (or eliminated) your marketing budget, now is the time to re-build it with a solid strategy.


Step One: Marketing Materials

When you slashed the marketing budget, you probably stopped keeping marketing materials up to date.  As thing start to improve, you will need them in your hands and ready to go.  When you reach out and get the attention of a spec writer or a contractor, they’re going to say, “Send me something.”  Are your materials ready for action now?

Have you improved any products or introduced new ones? If you have introduced new products over the past three years, you might need to re-introduce them in 2011. 

Do you have any new competitors?  You might need to revise your selling points to counter their strategy.

Have there been changes in code that affect your products?  Do your selling points refer to LEED, which has been changing?  Your sales literature needs to reflect current conditions.

Does your sale literature look outdated?  If you haven’t revised it for two or three years, the answer is probably Yes.

Do you have any news that might get you editorial space in magazines or online?  Refresh your press kit.  (Or perhaps, create a press kit?)

You still have time to prepare company to attract business when things start to move again.  And if business is slow now, it makes sense to use your current downtime to prepare for a better future.



Next Time:

Step Two: Reaching Out to Idle Architects, Engineers, and Specifiers

Hyperbole vs. Credibility

I received a bit of spam from an individual named Stephen Sands, who made me an offer I could so easily refuse.  His spam began:

“With stronger web placement on the major search engines, your online results could be infinite.” That was all I needed to read to know that I never want to do business with this guy, even if he’s right.   I have a kneejerk reaction to people who toss around promises with the concept “infinite” in them: I figure they’re probably just blowing smoke in the first place.  They’ve got nothing and they’re trying to hype into something, so it’s no worse a lie to hype it into ‘everything.’

Perhaps Stephen Sands actually has a lot to offer, I don’t know; but his opening line made me certain that I’ll never find out.

In an atmosphere of so much competition for communications channels, the temptation to speak ‘louder’ is more intense than ever.  But we also live in an atmosphere of consumerist defensiveness and distrust, where hyperbole often has a negative impact.  That means we need to be both careful and thoughtful about what we claim in ads, sales literature, and other statements about products. 

Careful, because some statements may have legal implications such as an implied warranty. 

Thoughtful, because inflated claims create a credibility problem.

The first job of advertising and sales literature is, certainly, to get attention.  But we all know from grade school that there are both productive and unproductive ways to get attention.  Don’t choose a way that torpedoes the second job, which is to create the foundation for trust.  If the nature of your claims is too good to be true, people won’t believe them.  If the tone you set is over the top, people will  be suspicious.  If the crafting of the message impairs your credibility, it doesn’t matter how good your product is.

If, on the other hand, you can state some significant truths in an interesting manner, readers may trust you long enough to find out more.

Resist the temptation to hype, for truly, it is a fate worse than death.  (Oops!  I mean, resist the temptation to hype because you’ll probably do yourself more harm than good.)

The simplest test is to step back, look at your literature, and ask yourself, “If my competitor were saying this, would I believe it?”

Goodbye Green Wash - Not Quite

UL Environmental is a new division of Underwriters Laboratories and offers "independent green claims validation, product certification, training, advisory services and standards development."

In their exhibit at Neocon, they were giving away bars of soap emblazoned with the slogan, "Goodbye Green Wash." The slogan and the soap create a strong and memorable image that explains the benefit of the company's services.

Still, they missed valuable opportunities to "walk the talk":

• The packaging does not list products ingredients, place of manufacturer, or whether sustainable paper and printing were used -- important information that can help a consumer assess the environmental impact of the product.

• More, the fragrance in the soap, while pleasant enough, could irritate show attendees with chemical sensitivities, and does not support environmental goals for indoor air quality.

The point I am trying to make is that claiming an environmental benefit for a product can act, ironically, as an invitation for greater scrutiny of all aspects of the product.

A Neocon publication from Interior Design, written by Penny Bonda, put it this way:

Remember, as you engage with showroom personnel, to ask the right questions: Where did this product come from? What is it made of? How is it made? How is it maintained? How does it affect the well-being of the building occupants? How much energy does it use? How do I know you're telling me the truth? Knowing whom to trust in this era of greenwash is a huge challenge, sorting out the science is difficult for those not schooled in technical matters.

On the positive side, the soap is one piece of trade show swag that I will probably use, unlike the plastic gizmos that will sit on my desk for a week and then wind up in a recycling bin or trash can.

Where will your next great marketing idea come from?

If you are reading only the design and construction trade publications, you will usually be following the market rather than creating them.

I was thinking about this while reading Journal of Healthcare Protection Management, Vol 25 No 2, a journal published by International Association of Healthcare Safety and Security. Its articles are written mostly by healthcare facility management professionals and discuss concerns that may still be below the radar of designers and the building product manufacturers that serve the industry.

For example, an article by David Corbin, "Designing a 'Safe Room' on a Medical Nursing Unit Floor" describes an experiment at Faulkner Hospital, Boston. They observed an increase in violence by "at risk" patients. Following
extensive planning, they remodeled a patient room so it could be used with patients deemed to be a security risk, but without the sterility of a prison or psych hospital room. The table below identifies some of the changes. (Click to enlarge.)Note that it the changes affect hardware, cabinetry, communication systems, plumbingware, specialties, and other types of building materials. While this was one room in one hospital, it could mark a trend that may expand to include the hardening of walls, lighting, finishes, etc.

Another article in the same issue, "The SEO (Security Entrance Officer): A Wave of the Future of Healthcare Security," by Edward Panell, describes efforts by a hospital in Seattle to provide better control of entry into its facility. By the time a phenomenon becomes a TLA (Three Letter Acronym), it may well be on its way towards becoming a wave. While the Seattle Hospital solved its problems with aggressive staffing, it is possible to imagine that future hospitals may require different types of entrances, hardware, controls, monitoring equipment, and other building products.

When Chusid Associates did an extensive healthcare market research project in the 1980s, it was a time when the trend was to make hospitals "warmer" and more accessible. Perhaps the pendulum is swinging. One of our clients is already profiting from the increased security in healthcare.

Trends like these are occurring in all building types. Building product manufacturers who want to be leaders in their market segments should monitor leading indicators, and conduct fresh market research on a regular basis.

Anti-Microbial Treatments - Benefit or Risk?

At Chusid Associates, our first obligation is to stewardship of the environment. With that in mind, we are concerned about the possible hazard posed by "antimicrobial" treatments on building products. The following are excerpts from market research we conducted several years ago:

There is worldwide concern in the increasing use of antimicrobial-treated products. This trend is most apparent in consumer goods. In architecture, antimicrobial treatments are offered for door handles, toilet seats, HVAC equipment, countertops and some other products. Companies may feel the need to compete by adding these products to their lines but are these actually good products or could they be backfiring, resulting in severe health concerns?
U.S. pesticide regulations severely limit health-related claims that can be made about the use of an antimicrobial treatment. Under US regulations, a manufacturer can claim that an antimicrobial makes surfaces easier to clean and reduces the potential for odor. It cannot say, however, that it will reduce the spread of infections. Since many building materials are already easy to clean and do not promote odors, the benefits of an antimicrobial treatment are based on the public’s fear of “germs” and its faith in aggressive hygiene. As a point of reference, consider that millions of dollars are spent in the U.S. every year on chemicals to make toilet bowls clean enough to drink from, even though no one drinks from them.

European regulations appear to be more lenient. I am aware that of an international manufacturer that says, on its EU website, that their antimicrobial-treated products provide "antibacterial protection that helps fight the growth of micro-organisms such as mold and harmful bacteria such as E.Coli, Salmonella, Listeria, Staphlococcus and the MRSA superbug." However, they do not give data saying how effective the surfacing is against these microbes, and this type of language is absent from their US site.

There is growing concern that long term and widespread use of antimicrobials may breed antimicrobial-resistant microbes and pose an even greater danger. Some antimicrobials weaken organisms but allow resistant populations to survive and reproduce.

Market segments most likely to be interested in antimicrobial treatments include residential and healthcare. In the residential market, interest in an antimicrobial product is driven by a consumer’s generalized sense of concern for “giving their family the best protection there is”. Few consumers will be aware of concerns about the breeding of pesticide-resistant microbes.

In the specification-driven healthcare sector, the keys are regulatory approval, serviceability, demonstrated protection against contamination and the spread of disease, and cost.

It would be logical for the food service industry to be interested in antimicrobial treatments. We believe, however, that it will be years before that industry moves beyond the NSF requirement as its standard of care.

Ultimate acceptance of an antimicrobial product is dependent upon being able to demonstrate clear mission-specific benefits (lower infection rates or reduce housekeeping costs) due to the use of the treatment. Ultimately, a record of proven benefits to be derived from antimicrobials may lead to regulatory requirements or industry best practices requiring antimicrobial surfaces. The potential this type of research seems remote at present given 1) most health care construction is regulated by state agencies and could possibly require an expensive and time-consuming process of getting on the approved products list of these regulators as well as selling to facility managers and design professionals, and 2) current U.S. laws that demand costly proof and registration before claiming health-related benefits. More, the health care sector will be sensitive to concerns about breeding of pesticide-resistant microbes.

In many cases, a manufacturer's move to add an antimicrobial appears to be driven more by promotional considerations than by gains in product performance. As the first in category to introduce this product, a manufacturer would have an opportunity to get excellent press and salesmen have a new feature to discuss.

In our limited discussions with architects and other design professionals, there was limited awareness of antimicrobial treatments. Most respondents expressed interest but felt unable to make any reasonable assessments about the value of antimicrobial because of the lack of meaningful technical data presented. Healthcare architects were generally of the opinion that an antimicrobial treatment would not negate the need for stringent cleaning and sterilization, and thus were skeptical about the benefit of antimicrobials without data substantiating performance benefits.

We found no credible, independent source that recommended antimicrobial treatments as a prudent measure to improve health or housekeeping concerns.

For more on this topic, see www.buildingproduct.guru/2009/12/var-gajshost-https-document.html

The Art of Explanation Explained

Every product has a story, the story of why it’s the best choice for the job. That story is most difficult to tell when it involves new or advanced technology, because often a wealth of new information has to be conveyed in order to make the case. But those are the cases where explanation is most crucial.

We recently got word that a professor of Engineering requested permission to use an article we wrote in his course. The article concerned Hydrogen Assisted Stress Corrosion Cracking – a serious and dangerous problem that most people don’t know they have – and fasteners that resist it. (The Construction Specifier, Aug. 2008, page 64) Explaining HASCC was especially tricky, because it is a byproduct of another slightly better-known process, galvanic corrosion, but only occurs under certain circumstances and only affects certain types of fasteners. There was a great deal of ‘informational foundation’ to be laid before the real subject could be discussed.

When approaching the most complex stories, we apply a simple rule:

“You can explain anything to anybody
if you can figure out what they don’t know.”

How far back into basics do you need to go for a specific audience? What knowledge can you safely assume? Building an explanation becomes a bit like constructing a building, and you start by examining the soil to determine what foundation you have to lay.

It is worth the effort, too. The more unfamiliar or novel a technology, the more it will benefit from being explained, demystified. One of the key factors in getting products specified or purchased by contractors is confidence in the product. Understanding how something works enhances confidence in it.

Once you know where to start explaining, you just build the informational blocks. I once explained quantum physics to a six-year-old, but I spent the first half of the explanation figuring out what he knew and didn’t know.

In the case of HASCC, we had to explain galvanic corrosion, fastener fabrication, case hardening, hydrogen embrittlement, and HASCC before we could get to the solution to the problem that was the subject of the article. It seemed like a very long journey. We were keenly aware that holding our audience meant keeping all the pieces tied together as we went along, and keeping alive the reader’s hope that we would reach the goal.

Apparently we succeeded. Shortly after the article was published, we got the aforementioned request from a professor of engineering at Florida International University. He said it was the best explanation of galvanic corrosion that he’d come across. That’s our idea of “news you can use.”

The "Internal" Customers

"Until now, I never really understood what we were selling."

That comment came from a senior manager working in the financial department at a building product manufacturer. Chusid Associates had just finished design and production of a new catalog for the company, a catalog that focused on positioning the firm instead of just listing products.

The manager explained, "I have been with the company for decades. I know every client we have, can tell you to the nickel what each contract was worth and how many pieces we delivered. But until I saw the new brochure you created, I never understood what what business we were really in or why our clients came to us."

Her comments reminds me that every company has both external and internal customers. The external cutomers -- including contractors, dealers, and consumers -- may make the purchases. But the internal customers -- staff, sales reps, suppliers, bankers, and other stakeholders -- also have to "buy the goods", They have to understand the company's mission and the value it brings to customers in order to know how their contribution fits into the whole.

Sure, the financial manager may spend most of her days poring over charts of accounts, but at night she needs to go home feeling good about the company and its image.

Repositioning

It's not just a roof drain - its a Rainwater Harvesting System.

This is an example of a creative repositioning of a product line to gain a foothold in a growth market. Before, roof drains were primarily of interest to plumbing designers - now, they are the key to LEED points.

Disaster Resiliance: A New Trend in Construction Market?

I detect a groundswell of activity addressing ways to mitigate disasters through better design, construction, and building operation. While the symptoms are embryonic, they may yet emerge as a major movement that impacts building product marketing.

The genesis of the movement appears to be in three issues:
1. Growing cost of recovery from major disasters such as hurricanes, earthquakes, wild fires, and terrorist attacks.
2. Concern over the impact of climate change. And,
3. A maturing of the "green building movement" so it now sees that disaster survivability is also an environmental concerns.

Here are just a few recent data points suggesting a nascent movement:

• Structural Engineers of America sponsored a recent webinar on "Disaster Resilience as Sustainable Design."
• The Federal Emergency Management Administration (FEMA) publishes "Holistic Disaster Recovery: Creating a More Sustainable Future".
• Builders groups are creating Sustainable, Disaster-Resistant Concept Houses.

Initially, a marketeer can respond by taking a look at existing product offerings and determining if they can be repositioned. For example, we recently discovered that one of our clients had a project that complied with FEMA requirements for flood-resistant construction. We were able to include this finding in new sales literature, and it help open up new markets for the product.

Disaster-resistance may change the economic justification to favor products that may have higher initial costs but offer getter survivability. This calculus is already well established in the design of blast-resistant facades for government buildings and other likely "targets."

Ultimately, regulatory responses will dictate the terms of what and how we build.

As with any new trend, we do not know how or even whether these isolated factors will coalesce into a market maker. Stay tuned so that further shifts do not catch you unprepared and create a disaster in your marketing programs.