Disrupting the value chain: Manufacturers of building materials can become better at selling their products upstream in the value chain. Here’s five tips to do that.
Building owners, developers and building investors are all willing to spend more costs on building materials if it means an increase in return of investment in the overall economy of the building. If manufacturers of new building materials succeed in showing the overall economic business case to these stakeholders the result can be a disruption of the value chain in the building industry. This to the benefit of the investors, the suppliers and society as a whole.
This was some of the most important learnings from a recent two-day innovation workshop facilitated and carried out by three significant organizations in the building industry; BLOXHUB, the Danish Building Materials Organization, and the Danish Concrete Association.
Price points are traditionally the most important competitive parameters for the Danish construction industry. For this reason, innovative producers find it hard to enter the market with new products. This despite the fact that these new innovations could solve some of the major challenges of the construction industry including, for example, issues of sustainability, optimization of work processes and efficient operation and maintenance:
“Suppliers want to increase sales numbers of new solutions and increase their earnings and exports. While the client wants to create a better overall economy, and thereby improve operational reliability and sustainability. Therefore, we are aware of how new sales and collaboration forms and methods can clarify and strengthen relations and interactions between suppliers and between suppliers and clients”, says Thomas Uhd, director in Danske Byggematerialer (Danish Building Association) and Dansk Beton (Danish Concrete Association).
Three organizations take action
Therefore, three organizations in the building industry took action: BLOXHUB – a community for sustainable urbanization, the Danish Building Materials Organization, and the Danish Concrete Association. Together, they invited suppliers of building materials to participate in BLOXHUB Match Co-Create– a two-day innovation workshop powered by BLOXHUB with the purpose of ideate and develop new business ideas:
“It is well documented that the developer’s early decisions are of crucial importance for the value of a building. But today we see that a number of new products do not reach the construction and building industry, because the overall economic benefit is not articulated well. The winner in the long run will be the one who can document the building’s total value creation from design to execution of the building project and operation of the final building”, says Torben Klitgaard, director of BLOXHUB, about the Match Co-Create sessions.
During the sessions, several important learnings appeared. Here are some of them:
FIVE TIPS on how to sell new solutions up stream in the value chain
- One size fits none
If you want to shake up/break the value chain, it’s all about adapting one’s sales
approach and marketing strategy to different target groups. Out with the generic sales
pitch and presentation! Different subjects matters to different people. - Sell quality of life – and not just technology
The product needs to be sold as a part of a long-term, strategic vision or
narrative that focuses on the value created for the end user. - Create security for quality
The supplier must assure and guarantee quality; this extends all the way to
wholesalers and sales employees. For building owners and developers, the most
important thing is being able to make decisions on an informed basis.
Therefore, suppliers must be honest about the product’s strengths, but also
weak sides. And the suppliers need to be committed to the clients (and
not contractors) in regard to vouching for quality. - Tests and documentation
Words need to be backed up by evidence. Take point in what matters to the costumer or client when deciding which tests, documentations and certifications to carry out. And look to what competing products and companies are promoting as their unique selling propositions. - Team up and collaborate!
As a supplier of building materials, you should attempt to limit or remove
responsibility from the client’s advisers. Among other things, this can be achieved by
teaming up with other suppliers in order to find and sell a system solution. In
this way, suppliers can take joint responsibility and provide guarantees of how
different products and solutions work together.
The companies participating in Match Co-create in BLOXHUB are: Fermacell/Xella, SIKA, Sitecover, Ventilationsvinduet and Rockpanel.
