(Originally published in Construction Executive’s Managing Your Business eNewsletter)
Positioning is a marketing strategy that is foreign to most general contractors. However, it plays a major role in their ability to generate the right leads, differentiate, and win new business. Most general contractors discuss aspects of positioning along the way, but lack a comprehensive approach. This ultimately leads to time and money wasted on pursuing the wrong clients and project types.
How Positioning Impacts Lead Generation
The Business Dictionary defines positioning as “a marketing strategy that aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the customer.” This concept, as discussed in the classic marketing book “Positioning: The Battle for Your Mind,” is about being noticed in a crowded marketplace.
A firm’s positioning doesn’t just affect its ability to procure work; it often determines whether the company gets invited to compete in the first place. Consider this scenario: A small college wants to build a new auditorium and it has a limited budget. A firm is positioned in the college’s mind as a high-end retail-focused general contractor. This puts the contractor at a competitive disadvantage, regardless of the contracting method.
Clear positioning can also help with leads generated from third parties. Companies want to be at the forefront of architects’ and engineers’ minds when a design-build team is forming, or a project is almost ready to go out to bid.
Positioning as a “General” Contractor is Hard Work
General contractors face a difficult challenge when it comes to positioning. We live in a world of increasing specialization in which micro-businesses cater to the tightest niche markets. This fragmentation plays right into the hands of specialty contractors.
There is a perceived expertise that comes with being a specialty contractor as opposed to a general contractor. If a developer calls on a plumbing contractor, the assumption is that the firm has probably encountered every possible scenario. That same client likely will assume that same situation isn’t the case with a general contractor because its work is spread across multiple project types.
Further complicating matters is the low barrier of entry in the general contracting field that has allowed anyone with a pick-up truck and a toolbox to be labeled a general contractor. The unscrupulous few have created a stigma around this otherwise honorable profession.
How Are You Positioned?
In addition, it’s always important in marketing to ask the age-old question: “Where are we now and where do we want to go?” The challenge in establishing your true positioning lies in your ability to take an honest look in the mirror. How are we positioned? Is our positioning consistent with the firm’s long-term marketing goals? It also helps to solicit outside opinions.
Following are some ideas on how to gain a competitive edge with positioning.
The bottom line drives the construction industry. In this cost-driven environment with heavy competition, a firm must carve out a clear position as it relates to price. Is the company a scrappy low-bid firm, or a high-end, value-driven general contractor? If it’s the latter, the company must be able to earn and maintain that position by exceeding customers’ expectations. Being clear on the price positioning strategy is especially critical for value-driven firms that don’t want to waste time competing in a low-bid environment.
2. Client Type
What type of clients does the company serve? Many general contractors will take on any client. The problem is that the firm will never become associated with a client type. For example, when a health care client goes looking for general contractors, make it clear that the company serves that market segment. It’s fine to serve multiple client types, but position the firm to clearly reflect those that it serves.
3. Project Types
What types of projects does the company work on: industrial, commercial, or residential? Being clear with the positioning is arguably even more important on project types than it is for client types. Most clients are adamant about general contractors having worked on similar projects, because that’s where the hammer hits the nail. Make sure the positioning breaks out the project types the firm works on. Clients shouldn’t have to dig too deep to find relevant projects.
4. Delivery Methods
What delivery methods do you prefer: design-build, design-bid-build, multi-prime, or construction management at risk? Some owners are married to a certain delivery system. Make it clear how you work. Some general contractors have gone as far as to incorporate design-build into their names. While naming is a critical positioning tactic, most established firms can’t capitalize on that opportunity. Consider also that a company slogan is a way to carve out a position when it comes to delivery methods, or any of these areas for that matter.
Technology is an effective way to create differentiation in positioning in the Internet age. BIM is an obvious example of the technologies transforming the built environment. There are two types of firms in today’s construction industry: those on the cutting edge that constantly seek and adopt new technologies, and luddites that do things the old-fashioned way. Positioning should reflect that the company is a modern, forward-thinking firm. Most clients don’t know or understand new construction technologies, but they do recognize firms that invest in technology are usually focused on improving the customer experience.
There was a time when many construction firms served a 100-mile radius, but those geographic barriers have been lowered to some extent. Positioning is important when it comes to the coverage area. How else will prospective clients determine if the firm is a candidate for their project? Positioning as a national firm is self-explanatory, but regional firms should spell out their territory (e.g., serving the Mid-Atlantic).
Positioning has a direct impact on the bottom line. In an industry flooded with competition, nothing is more important for a general contractor than understanding, clearly defining and owning the space it occupies in the mind of potential customers.