The BLD Blog

A collection of building materials marketing trends and insights focused on helping building product manufacturers BLD their brand.

Sales Budgeting for Building Materials Companies – Benchmarks, Changes, and New Approaches

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Article Date: March 6, 2021

The “2020 CMO Survey” shows that B2B manufacturers, specifically those in the construction sector today, are spending on average 9-13% on marketing as a percentage of revenue.  

Collectively, when CNVRT’s team of building materials professionals looks back to the mid-2000s to historical benchmarks, as the digital era was just gaining hold, a good benchmark for marketing spend in the building materials industry was in the 2-5% range.

Benchmarking sales spend as a percentage of revenue historically, and still today, is more difficult. Sales spends are driven by a number of factors that can move percentages significantly.  

Are you selling your products direct or through channel partners?

Are you selling into the residential or commercial segments, or both?

Are your products specified in master specifications or on a project-by-project basis?

Do your sales teams cover architectural and/or builder engagements, and then contractor, sub-contractor, installer engagements?

Are different teams needed for different pursuits?

Are you a $5M, $100M, or $1B business?

On average, when you look at the building materials industry, most manufacturers today are spending somewhere between 8-20% on sales as a percentage of company revenues.

If you combine marketing investment as a percentage of revenue and sales investments as a percentage of revenue, these aggregated spend percentages can get high as 33%!

Consumption habits, company introduction, and product selection behaviors are evolving. Nowadays, a large percentage of building material audiences are learning about your business, products, and services digitally, without a direct sales interaction. The role of a sales team is adjusting.

Sales teams are interacting in the later stages of the buying and specification journey and being asked to deliver higher levels of trusted advisement and technical knowledge. 

Personal interaction and relationship building are still vital, but strong sales relationships are being built today through the delivery of succinct levels of product expertise and technical support. Relationships are being built on a foundation of different value propositions.

That being said, connectivity between sales and marketing is essential. New levels of integration and coordination in marketing and sales budgeting is becoming a requirement for success.

As sales roles change, the approach to budgeting and resource allocation has also changed. Selling, general, and administrative (SG&A) expenses for travel, lodging, and company vehicles are now being revisited.

What’s more, the impact of COVID-19 on sales interaction has been dramatic. The traditional, direct, hands-on personal touch is absent. Many building materials companies have adjusted to this new method of remote selling with little impact on sales performance.

Building material business executives and sales leadership today have a challenging paradigm in front of them. What is the new normal approach to sales planning and budgeting?

What do new normal SG&A models look like? Is new training required? Do we need to revisit our sales structure and organization?

CNVRT provides expert-level consulting for the building materials industry through services tailored specifically to C-level, sales, and channel leadership using a bench of building industry professionals with vast experience and success. For decades, the individuals that make up the CNVRT team have led, managed, and executed successful sales, marketing, and channel initiatives using the industry’s latest technologies and best practices.

*Sources – CMO Survey, February 2020 – Deloitte, American Marketing Association, Duke Fuqua – Online Marketing Institute, February 2018 Digital Marketing for the Manufacturing Industry – McKinsey – These Eights Chart Show How COVID-19 have changed B2B Forever October 2020.

BLD Marketing is a results-based, digitally-focused, full-service strategic marketing firm exclusively serving the commercial and residential building materials category.