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What not to do when your market collapses

I read in the press that the Home Builders Federation is in the process of reducing its staff from 12 to 25 because their funding, which is linked to member outputs, is falling. By Chris Ashworth

Initial reaction might be to say that in view of the large number of redundancies amongst housebuilders this is only fair. Many contractors, suppliers and manufacturers in the industry are also taking out capacity and reducing overheads in response to the fall in demand.

The HBF’s stated aim is “to facilitate the growth and success of the home building industry” never was there a time when this was more necessary than now. For its member organisations, which fund the HBF, to allow it to contract is not in their best interests. They have an organisation that can potentially offer economies of scale in marketing over individual company efforts. Perhaps reorganisation and a change of focus would have been a better solution.

Helping housing recover

The HBF should be working flat out to help the housing market recover, creating demand for its members’ products. At a high level this is talking to government to encourage and guide their policy, which I’m sure they are still doing. But other initiatives could also help. Negotiating with lenders to make sure that what money there is available is directed to new home buyers, trying to ensure that valuations do not further undermine perceived values of properties, talking to large companies re-locating staff to enable these people to buy new homes. Or perhaps it’s about entering new markets, working on behalf of members to secure work in the social housing sector or to provide military accommodation. These are just some examples of demand creation.

In tune with customers

In a declining market all businesses need to increase their sales effort using new and innovative ways to identify and create sales opportunities. Understand your customers, what are their problems and how can we solve those problems? Make it easier for them to buy. We should all be thinking like that right now. How can we promote our products and services more effectively? What opportunities are there for a new or different approach which will save our customers money while winning us new business? How can we reorganise our business to run more efficiently? This is at the heart of marketing.

I don’t know the structure of the HBF and the details of how it works, but I hope that not only will they be continuing all of their initiatives but introducing new ones. If the loss of staff will not prevent this, then perhaps this is a good move reducing the inefficiencies that have built up in the organisation during the good times.

Maybe these cuts are a consequence of the HBF’s loss of focus, causing some of its members to move to alternative organisations like the Home Builders Association (HBA) – a reminder to us all of what happens when you neglect your customers.

Chris Ashworth, founder of Competitive Advantage Consultancy, provides market research and training services to the construction industry. He is a CIMCIG committee member, for further details visit