I just received the latest edition of the NAHB newsletter Eye on the Economy, and the headline is, “Some Good News on the Housing Front.” This is followed by:
- Housing starts continue to rise
- Some positive house price reports
- Inflation remains flat
- The financial market remains calm
All this promising reporting makes me wonder if we’re ready to return to an active housing market. Have we learned anything during the crunch that we should be applying to better ourselves, become stronger, more efficient, and more profitable?
For building products manufacturers, the economic pressure of the past two plus years has changed the distribution partners in a number of outlets and capabilities or services being provided. This can be a cause for concern, or an opportunity for the manufacturers if they are prepared. With updated technology and services, the manufacturers can move one step closer to the builders, remodelers, contractors, and DIYers to form stronger relationships. The “multiplication of efforts” argument for distribution is being challenged by those manufacturers that have looked at how they do business, how their business can be done better, and who is making the change to improve success moving forward. Many of these improvements are occurring within their channel programs; specifically, they are conducting third party audits of the following programs:
- Lead generation and fulfillment
- Co-op advertising
- Loyalty
Have you taken inventory of these programs to determine how you can improve them to increase engagement and conversion to sales?
When was the last time you looked critically at your lead program? Ten years ago, twenty years ago, or longer? It’s unusual for any organization to forego a review of process or program for a period greater than three years. Are your lead sources current and complete? Reader service is dead and social networking is producing big numbers of well-qualified leads; are you connected? Trade show attendance is declining, so lead qualification and conversion is even more important to justify this big investment. The sales force, from corporate management to the field reps, need be trained and given a proper incentive to engage and convert these sales leads. Poor leads, plus poor follow-up, produces limited conversion to sales, which accelerates the lack of performance throughout the lead program. Completing a thorough, unbiased audit of your lead program will provide you with much needed insight to update and improve one of your fundamental sales generation tools.
The same critical look of the co-op advertising and loyalty programs will help your company be more competitive and capture greater share of sales as the market improves. Co-op advertising is typically a large budgeted expense that is significantly under utilized by the sales team, distributors, and customers because:
- The program does not reflect local market needs
- The people responsible for using the program have limited training or experience in using it effectively
- The administrative costs are too high for all involved
Even though accounting may like it when the co-op advertising fund is under utilized and helps bolster the bottom line at the end of the year, the top and bottom lines suffer from the lack of related sales. A complete audit of the co-op advertising program can identify the means by which the program can address the local market needs. It can show all parties involved how to best develop and deliver these programs so they help drive sales. The recommendations from an impartial audit can demonstrate new and better ways to make the program easier and more effective in converting the investment into direct sales.
Loyalty programs during the recession have taken a big hit, as it is difficult to remain loyal and engaged when you’re simply looking for work. With the market improving, now is a great time to help your customers and prospects get back on their feet through a simple and effective loyalty program. These programs have changed significantly the past two years with the increased involvement of the web and social networks. These new channels of communication give loyalty programs more access to customers – trade and consumer – outstanding speed, impressive flexibility, and measurement that will make the C-suite happy. New loyalty programs now include stronger, more effective loyalist tasks and assignments that expand the program of “refer a friend” to far greater lengths and return on investment. Pepsi is a good example of how they’ve updated their loyalty program to reflect the times. They’re using location-based marketing.
The use of a third party to conduct these audits and make recommendations is critical to real success. You need an unbiased eye and ear to review the internal and external processes, insights, and results. Conversations with your distributors and builders will yield more open and honest opinions of your programs and create ideas for other programs that may work better. The secret to success (and more reasonable costs) is to work with a vendor that specializes in the home and building industry. They know the marketing, sales, and distribution model, how they all work together, and the importance of a strong channel marketing program. Home and building specialists have the practical experience and credibility you need for success.
If the Eye on the Economy is right, you’re about to get busy again. Are you ready to be more effective and profitable this time around?
