Capture Sales and Market Share with a Focused Plan

All indications are that we will experience some form of an economic slowdown in 2023. As a building products manufacturer, you are likely casting a wary eye at those predictions and shaping your 2023 budget to compensate for the potential downturn. Consider that inflation and rising interest rates have already negatively impacted the residential construction market.

Before you sharpen your pencil for 2023, make sure you are looking at the whole board.

Recent building industry forecasts suggest there will be strong opportunity for the non-residential market – including commercial, industrial, and institutional construction — with a projected 6% year-over-year growth. Further, spending for home improvements and repairs is expected to be up 14.9% year-over-year for Q1 2023, and 10.1% for Q2. This is well above the historical 5% average and equates to nearly $450 billion (about $1,400 per person in the US) in spending per quarter, as reported by Joint Center for Housing Studies of Harvard University.

While your competitors follow the herd and obediently oblige their CFO's calls for a 2023 marketing budget reduction, be the marketing leader who zags while everyone else zigs.

Make your case for keeping your budget at least at 2022 levels if not higher. Make your competitors silence your gain.

Five Best Practices: Properly Investing in 2023 Marketing Efforts

1. Assess the Market Opportunity

When the market shows signs of headwinds, it is a building product marketer's responsibility to analyze the market and identify both the challenges and the opportunities. There are clear opportunities for business growth in 2023. BLD Marketing's 2023 Commercial Construction Forecast shows promise for several segments, including hotels and resorts, industrial, amusement and recreation, health, and public safety segments.

On the home improvement front, the Q3 2022 Farnsworth Contractor Index reports contractors have the highest confidence in remodeling, exterior, and mechanical projects for the next six months.

In addition, consider the impact that two large government spending bills will have on stimulating both residential and commercial construction investments – the Infrastructure Investment and Jobs Act and the Inflation Reduction Act (IRA).

As a manufacturer of residential weatherization systems, one of BLD Marketing's clients recognizes the significant opportunity provided by these new laws. They are promoting their products to builders as a means of achieving the energy efficiency requirements that qualify a builder to receive generous Section 45L Tax Credits, part of the IRA that has been enhanced and extended. For this initiative, BLD Marketing produced a video for the client to use at a recent builder tradeshow and a companion landing page to flesh out all the details.

Another BLD Marketing client is beginning to explore other opportunities found in the IRA, like Section 25C Energy Efficient Home Improvement Credit and the The Homes Rebate Program.

2. Focus on Only on Your Best Opportunities for Success

Identify the market segments that are expected to grow in 2023, and match them to how well your brand performs in those markets. Develop prioritized plans around a winning outcome for those segment opportunities. This is also a time to evaluate other marketing activities and shift investment from the underperforming efforts toward those priorities. Making the case to keep your marketing investment means more eyes from the C-Suite will be on you. Therefore, marshal your resources around the clearest opportunities for success in 2023.

3. Build an Adaptable, Accountable Plan

The year 2023 is a year where timing will be crucial. Many analysts predict that if a recession were to occur, it will likely happen in the second half of 2023, beginning in the third quarter. Building your marketing plan with a digital-first approach gives you and your organization the flexibility to adapt spending as the year unfolds. Capture business growth early in the year, and adjust spending appropriately based on both the overall business climate and your brand's individual performance.

Identify goals, KPIs, and activities for each stage of the customer buying journey – awareness, education/engagement, conviction, action, satisfaction – and recommend that a percentage of emphasis be estimated for each stage. This fleshes out the entire marketing investment – from top funnel awareness-building through lead generation and post-sale satisfaction activity. Only a digitally-focused approach can deliver on this level of measurement and accountability. Even more traditional activities such as trade shows can be infused with digital elements like QR codes and geo-fenced advertising to create better investment-to-performance accountability.

4. Demonstrate Accountability Between Marketing and Sales Activity

Lack of alignment between marketing and sales has long been an issue in the building and construction category.

At one point, HubSpot reported that “79% of leads generated by marketing never convert to sales. And of the leads that get passed from marketing to sales, 73% are never contacted.” As a performance standard, this is unacceptable. Heading into a challenging 2023, it is critical that every marketing leader takes the lead to fix it.

While there are a lot of ways to improve the marketing-sales alignment, one of the easiest is to create stronger accountability. The smartest marketing plans developed for 2023 will include a spelled-out lead flow process from marketing-qualified leads to sales-qualified leads. This includes regular reporting to sales and C-Suite leadership along with regular updates on lead status. The marketing function in your building product enterprise must initiate and lead this effort, and both sales and C-Suite leadership must buy into it.

A marginal conversion improvement on marketing leads from 79% can make an enormous difference in a brand’s performance. And it demonstrates that the marketing leadership is taking the initiative to connect the dots between a dollar spent and a dollar earned.

5. Continually Monitor, Analyze, Optimize, and Report

At BLD Marketing, we use a combination of planning tools to identify appropriate spending levels at each stage of the customer decision process and align them with appropriate goals, activity, and KPIs. Further, we require our clients to invest in regular reporting where we summarize planned to actual performance, analyze the performance data, and make recommendations for continual optimization. We regularly divest from underperforming activities and shift those dollars to what is generating results. And, when possible, we connect the marketing data to actual sales performance to demonstrate a connection between investment and results.

The best way to justify a higher marketing spend is to prove it is working. It is the responsibility of marketing leadership to continually report on performance to the organization’s management – both merchandising the wins and demonstrating accountability and solutions for investments that are not bearing fruit.

Out in Front

Across the building and construction industry, brands of all kinds will be persuaded to reign in marketing spend in 2023 as a reaction to leading economic indicators. Consider the opportunity your organization will seize if it instead chooses to remain steadfast in supporting its brand and driving business. While your competitors have gone quiet, your brand – and your story – will be even more prominent and discernible in the marketplace, potentially placing you even higher in the consideration set. This has the strong potential to drive business.

A prioritized, adaptable plan built with a heavy focus on digital marketing delivers the accountable performance that will allow the C-suite to ease their recessionary worries. Such an approach conditions your organization to understand that marketing dollars are worth more of an investment than originally considered, especially since a digital-first approach is easily adaptable.

Prepare for what could be a challenging year, and propose a budget that will put your building products brand in a position to deliver big wins.