What Can Building Material Companies Learn from CPG?


This is a reblog from Whizard Strategy that I co-wrote.

blog_cpg

To make your building products company a better marketer, take a page from the Consumer Packaged Goods (CPG) new product powerhouses:

  • Know the user
  • Support your new products and your brand
  • Measure the results

Three things building material companies can learn from CPG marketers.

1.   CPG marketers focus on meeting consumer needs when they develop a new product.  Most building product companies focus too much on themselves.  They usually limit their thinking to utilizing their technologies or manufacturing capabilities to avoid any large capital expenditures.  This limits the possibilities.

If building product companies would start with the end-user, they would develop products that solve problems, reduce frustrations and drive sales for themselves. Consumers didn’t ask for the Swiffer because often, customers don’t know what they need either.

2.  CPG marketers give new product introductions the best chance of success.  If the first launch fails, they don’t abandon the idea.  Instead, they continue to invest, improve and believe in their product.  They don’t have a “fail fast” mindset.

Most new products fail.  Recognizing this, CPG companies put an A team on new product introductions, where most building product companies put a B or even C team.  I look at new product introductions like taking your money to Las Vegas.  I would want my best players at the table.

Instead, building product manufacturers use their A team as baby sitters for their cash cow products.   And the babysitter will not only not help the new product, but, in many cases, will try to sabotage it.  He doesn’t want it taking sales from him.  And even if it doesn’t compete with him, he doesn’t want to share the spotlight with anyone else.

This doesn’t happen with CPG companies because they have different measurements.

3. Brand or product managers are charged with increasing the value of an asset in a CPG company along with delivering ROI.  Building product managers are usually charged with delivering short-term profit with no responsibility for the overall value of the product or brand.  If they trash the value of the brand, who cares, as long they made their quarterly numbers.

This results in building product managers focusing on the short-term.  There is no reward or cost for them to ravage the value of the product or brand for the short-term.  By the time someone recognizes that the value of the brand has been reduced, they will have been promoted and it’s easy to blame the next guy.

There are a few companies like Kohler and recently Elkay that act more like CPG and they are benefiting from it. Challenge your company to think like CPG powerhouse Johnson & Johnson and you’ll really clean up.

Good Selling!

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