We are entering a new decade and it seems appropriate if not necessary to share with you our predictions for the 20s. The construction industry has historically been conservative regarding changes in products, distribution, sales and marketing. Many of the changes we can point to looking back are the result of larger business and cultural forces. As we look forward, we predict these forces will be even greater and facilitate faster, more dynamic changes in the construction industry. With this in mind, we are pleased to share our predictions for the 20s.
Globalization will return to address climate change and all of its implications simply because of the sheer size of the challenge. The gravity of the implications of climate change will force the construction industry to change products, materials, building practices and codes faster and with more urgency than ever before. Taking a traditionally conservative approach to change by the construction industry will lead to changes being dictated by third party forces. There will be several businesses that will see globalization and the demands of climate change as an opportunity and will be strikingly successful.
The Wall Street Journal recently reported 21 million boomer homes go on the market in the next twenty years creating a potential glut in existing housing for Gen XYZ. The challenge is these generations are seeking smaller homes with more convenient integrated systems. We predict this will lead to a remodeling boom with an emphasis on systems updates to integrate HVAC, water and smart products like appliances, security and communications.
May I Take Your Order?
The construction industry will finally embrace the ecommerce business model. Online ordering, logistics, payment, order history and customer service all go online to meet the demands of the customers. Today’s distribution partners will focus on delivery which will increase their margin and profitability by reducing their sales and customer service costs. Social media purchasing will become a new normal for several areas of the building products, appliances, home décor and furnishings businesses.
Putting the Social Back in Social Media
Social media is here to stay, like it or not. The platforms may change but the desire of people to share, research, learn, recommend, remark and buy will not change in the 20s. The desire for more personal connections will continue to grow and dedicated groups and communities with shared interests will be the new avenue for connection. Micro influencers will help to create and grow these communities and groups that will develop significant purchasing power and influence. Video will continue to grow as the preferred media on social media with the opportunity for marketers to create and publish video influencer campaigns to reach both targeted and general audiences. Businesses will need to acquire the skills and experience to be professional self-publishers of meaningful content for their targeted groups and communities.
The Cheshire Cat
The Cheshire Cat in Alice in Wonderland got it right when he said, “If you don’t know where you are going, any road will get you there.” Whether it is circular or a funnel, knowing your customers and their journeys is paramount to your success. It is a critical tool for personalization which will become the norm in this decade. The idea of delivering the right message at the right time to the right people will be realized on a one to one basis. Geo and persona targeting will advance to direct personal connections. Privacy will give way to convenience and the need to work together to address the bigger global forces.
Bird in the Hand
The best business people will recognize, embrace and focus on their existing customers. Today the top 10% of your customers spend 3x more per order than your average customer. The top 1% of your customers spend 5x more than your average customer. We predict there will be a dedicated effort to embrace existing customers as a source of preferred business growth. No longer will it be an afterthought. Existing customers will be the focus of growing businesses.
As we enlist technology to assist or even lead our outreach as businesses, our customers still value a personal connection. You may have read and heard us say that “People buy from people.” At the end of most all meaningful transactions is a personal interaction. Giving your employees the best tools to share the advocacy with your customers and the marketplace allows others to see and experience a personal connection with the people that are your company. We predict making your employees accessible to your customers through these advocacy programs will be a leading means of building relationships with your customers. It will also help galvanize the relationship of employees to their employers. Most people want to be associated with success. Look at all the logo wear in the market today.
No More ‘Good Intentions’
We have written about this earlier in the year. The construction industry will finally wake up and embrace the Hispanic workers and business owners that represent more than a quarter of the professionals in the industry. Diversity and inclusion will be more than good intentions. The best businesses will talk to and work with the Hispanic customers directly with respect for their culture and language of choice. Diversity and inclusion will be more than an inward focus of leading businesses, it will be differentiating commitment that will growth revenues and profits significantly.
Banner Advertising is DEAD
Marketers will come to their senses and stop buying digital banner advertising. Period. Media reps sell it knowing it is worthless, but it is a revenue stream media buyers continue to provide. Paid social media advertising is now and will continue to be far more effective at targeting your desired audiences.
We mentioned before, we believe to connect with people on a personal level is the most desired and important part of business. We have faith that the construction industry will recognize and fully embrace the importance of the people they employ and serve. Wages, benefits, health care, benefits, education and the well-being of the people we touch will become increasingly important to all involved in making decisions. Customers will purchase from businesses that demonstrate this commitment to all the people they serve. Sales and customer service will recognize the advantage of a personal connection and foster all relationships. Marketing will leverage the power of this emotional connection to make people laugh, cry, cheer and share the best of what this industry does every day.
We are fortunate to be a part of the construction industry. The new decade is filled with incredible possibilities for remarkable innovation and growth. We look forward to joining you in being an important part of the new 20s.