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Don’t lose heart, or future profits

Wherever you look, the construction press and websites are full of doom and gloom: Connaught going into receivership, Arup laying off staff, the Construction Products Association forecasting decline from now into 2011 and the Chartered Institute of Purchasing and Supply reporting a slowdown in the housing sector.

Together with the government’s abolition of the Building Schools for the Future programme and regional house building strategies, it seems that we will be in straitened times for a while yet.

So what is the beleaguered construction marketer to do? Well first of all don’t lose heart, there is still stuff going on, some buildings are being built, refurbished and renovated and all buildings need to be repaired at some time.

Budgets are undoubtedly tighter so keeping existing customers and specifiers on board will be under threat from cheaper rivals, plus winning new work is harder as there is less of it and persuading people to switch to your products will be difficult without resorting to price cutting.

And we should never forget that good marketing is about maintaining profitability and increasing turnover - throwing away profitability has sent many companies bust, don’t join them. The key to profitability is differentiation, which allows a profitable premium to be charged for the differentiated product. And achieving differentiation is the main purpose of all marketing activity.

At CIMCIG, we never tire of pointing out that marketing is even more important during a slump so that your company is better placed as the cycle improves. However, it might be time to rethink your marketing message to better fit the current economic outlook. Now is the time to stress value for money in your product range and the importance of appropriate quality at a reasonable price, rather than out and out price cutting.

Cutting or even removing profit will not work; once your products or services are trapped in a commodity pricing battle, it will be very much harder to differentiate your products when construction picks up. Better to offer a different sort of product or a cutdown service rather than simply cut the cost of your principal products.

Waitrose has launched an essentials range, other supermarkets have similar basic ranges, but they are carefully differentiated from pre-existing inhouse range so as not to damage the core products image.

So don’t cut prices; value engineer your products and services to give customers and specifiers a lower priced product, then you won’t find it so difficult to differentiate your more profitable products when times are good.

As well as being a CIMCIG committee member, Rick Osman is a director of Highwire, a design and marketing agency specialising in the construction industry and a judge at the Construction Marketing Awards.

You can follow Rick’s marketing tips on Twitter @highwire_design every Tuesday and find details of CIMCIG’s events, including this month’s Marketing to Architects conference on September 22 and the CMAs, along with news and much more about marketing in the construction industry, at