Know the Trends, Seize on Opportunities

As a building materials manufacturer, you face a complex set of circumstances as the calendar prepares to turn to 2024. The lingering effects of a global pandemic continue to impact the building and construction industry – both residential and commercial – creating new norms. Talk of a potential recession has not gone away, although there is no firm consensus as to what it might look like or when it might evolve.

Have you begun developing your marketing plan for next year?

BLDer Dave Sladack, president of BLD Marketing, offers some counsel on how to get started and what needs to be considered.

What is the first step a building products manufacturer should take when implementing 2024 planning?

Setting objectives is always at the forefront, but there is a critical step to take even before that. We laid this out in our 2024 Marketing Guide. First, you need to rediscover your building and construction industry customer. Your customers have experienced significant disruption over the past few years, particularly as it relates to the global pandemic.

Use the remainder of 2023 to learn more about these customers and how they may have changed. In our guide, we recommend developing a method for gathering their current sentiment and perceptions of your brand, their own market conditions and confidence, and their expected level of activity for the coming year.

At BLD Marketing, we offer a suite of planning tools to tackle these issues and uncover critical insights to ensure our clients are responsive to the changing wants and needs of their customers.

What key market forces need to be considered for building products manufacturers as we head into 2024?

The pandemic changed everything, and those changes must be factored into any planning exercise for next year.

On a macro level, inflation and economic conditions have created uncertainty about the strength of the building and construction market in 2024. While supply chain pressures have subsided, it has forced more manufacturers to consider stronger domestic sources and relying less on a single supplier. Manufacturers are now establishing a portfolio of suppliers to maintain reliability.

In the commercial space, even with more companies returning to three days in the office, downtown vacancy rates for office buildings remain high. Many companies are not renewing leases. Rather, they are looking for smaller footprints or leaving downtown areas for the suburbs and communities that make it more convenient and attractive for their returning workers. As a result, many downtown areas across the country are faced with looming defaults on commercial mortgage debt with existing office buildings. These property values are declining as vacancies are decreasing revenue streams. Combine that with tighter bank lending restrictions and higher refinancing rates, and we have a considerable challenge on the horizon.

Despite this, there are still many opportunities for commercial construction in 2024 beyond the office segment. Our recent take on the commercial construction forecast provides a pro and con for each commercial segment.

On the residential side, interest rates continue to be the issue. At the same time, there is still a shortage of housing inventory, so home prices have held steady. There still are opportunities for new construction as consumers adjust to the concept of an 8% mortgage.

On a micro level, customer needs have changed coming out of the pandemic – everything from how they structure their work schedule to the experience they expect from a brand. Immediacy is a growing expectation. Marketing technology is continuing to play a large role in how to effectively reach, influence, and connect with new customers as well as the ability to measure the performance of these connections. Artificial Intelligence is swiftly moving to the mainstream and is something building product manufacturers need to understand as it relates to delivering on immediacy needs.

How critical is audience mapping and analysis when it comes to developing a plan?

Everything starts with your customer. Know what makes them tick, and plan around those insights. Customer needs change continually. Some changes are based on macro forces, while others are driven by the needs and values of the specific customer.

Generational influences also impact how customer needs change. Baby Boomers, GenXers, Millennials, and GenZers all behave and consume information in different ways. Each also holds a unique set of values. As new generations climb their organizational ladders and become decision makers, expect them to value different things. For example, younger architects and designers will continue to embrace digital solutions that are transparent, easy to use, and offer real information for them to self-select. However, not all younger generations are fully embedded as the prime customer decision-maker. GenXers are in the prime of their careers, many assuming leadership posts. There is still a segment of young boomers in these positions. The point is to examine your audience closely and create personas based on demographics, purchasing behavior, media consumption, and values.

At BLD, we moderate client-customer workshops and conduct regular customer qualitative studies to maintain a constant pulse on the needs and issues that our clients’ customers face.

How should a building materials manufacturer go about settling on a budget for marketing spend next year? What should brands prioritize? 

At BLD Marketing, we recommend our clients take an objective/task budgeting approach. This means taking a step back to set clear, measurable objectives and related strategies to achieve those objectives. Then, apply necessary tactics and a corresponding budget for each tactic. At BLD, we use a planning tool called the Strategic Decision Map as a guide for this approach. It looks at marketing based on each stage of the customer buying process and assigns goals, activities, KPIs and budgets for each.

There are three other important points about budgeting that can also be found in our 2024 Marketing Guide:

1. Activate an “always on” foundational level to budgeting.

Traditionally, building materials brands take an annual approach to marketing, which often result in a 12-month spend that is paused until the new annual budget is approved. In today’s dominant digital environment, it is both effective and low risk to plan for affordable, evergreen tactics that maintain a presence until new budgets are approved.

2. Deploy a nimble, test-and-learn approach.

Digital marketing is quite fluid. New channels, new technologies and platforms emerge constantly. Find the right balance between proven tactics, those that have shown early promise, and emerging new opportunities.

3. Establish an attribution mindset to measure ROI.

The better measurement process that is in place, the easier budget decision-making becomes. Ideally, your brand can connect the dots with first- and last-touch marketing performance and actual attribution to sales activity.

How should building products manufacturers go about measuring the success of the plan they put into place as the year progresses?

Ultimately, it is about getting to an attribution-based approach. It starts with setting both industry and brand benchmarks and goals for each activity. Those goals should then roll up to broader-based objectives with primary KPIs assigned to those.

For the reporting itself, find a way to create strong visual topline summaries. Provide analysis, insights, and recommendations. Most importantly, connect the dots and have the data tell a story for both the successes and the areas that need to be improved or discontinued. Meaningful and transparent reporting gives the marketing function immediate credibility with the C-suite.

It is not always about demonstrating a 100% win rate with all the metrics. Rather, it is important to invest more in what is proven while being open to taking calculated risks with new initiatives and emerging technologies. If you are regularly achieving all your benchmarks, perhaps you are not challenging your marketing enough to explore, to learn, and to stay relevant in the future.

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