Insights on the Construction Buyer

Key research findings on successfully selling to construction businesses

Contents:
EXECUTIVE SUMMARY ................................................................................................. 2

WHO ARE CONSTRUCTION BUYERS AND WHAT ARE THEIR KEY CHALLENGES?................. 2 THE BUYING PROCESS ................................................................................................ 3 COMMUNICATION METHODS ........................................................................................ 4 CHOOSING A VENDOR ................................................................................................. 6 WHAT DOES THIS MEAN FOR YOU?............................................................................... 10 BONUS INSERT: WORKING WITH A LEAD GENERATION COMPANY11 ABOUT BUYERZONE ................................................................................................... 13

Executive summary
Knowing how potential customers make purchasing decisions is a key to sales success particularly in the rapidly changing world of construction equipment and services. We recently surveyed construction businesses that used BuyerZones Quote Connect service to learn how they make purchases and whats important to them in the sales process. Our key findings include: 1. Determining what method of communication your prospect prefers is critical: the two most popular opinions on cell phones for sales calls are least preferred and most preferred not a lot of gray area, there. 2. 79% of respondents rated responsiveness as very important in a sales representative more than any other characteristic. Other characteristics are important as well, but responsiveness is critical and completely within your control. 3. Word of mouth is the biggest source of new vendors for these construction businesses, (75% of buyers) but general Internet searches are just behind at 71%. If youre not a well-known name, youd better be easy to find online. 4. Not only should your web site be easy to find, it should be easy to navigate and loaded with information including prices. While it can be a challenge to provide pricing, its the number one piece of information construction buyers are looking for on your site. 5. You dont need to jump on the social media train yet to talk to these buyers. Theyre not technophobes but theyre not using Twitter or Facebook when looking to buy, either.

Who are construction buyers and what are their key challenges?
Our sample included responses from 495 businesses that recently made a construction equipment purchase. About a third work for very small companies, with annual revenues under $500,000, about 10% work for larger firms with over $25M in revenue, the rest are in between. We asked an open-ended question regarding the biggest challenges these businesses face today. Predictably, the number-one concern is the economy, an overarching issue that seems to influence almost every other concern. Heres a sampling of the most common answers: Staff. Finding and retaining good staff in unstable times is difficult. Fuel. Prices of fuel and other raw materials arent letting up. Wasted time. Whether its chasing leads that prove invalid, or bidding on a project only to be undercut by price-gouging competitors, wasting time on buyers that dont lead anywhere is a primary concern. Lack of construction jobs and value. Large constructions jobs are few and far between and what jobs do exist are very small and pay less. There is a clear loss of perceived value in the market. Maintaining cash flow. With fewer jobs out there, paying recurring expenses becomes a challenge. Regulations. Banking regulations, government building regulations and safety regulations remain top of mind. Residential housing market. When the housing market slowed down, so did building.

The buying process

How long does it ta ake?
Just over half of the co onstruction bu usinesses surv veyed make p purchasing de ecisions withi one month in ws s. he ctor cent) take bet tween one we and one eek great new for vendors Of these, th largest sec (34.5 perc month to d decide; the re 17.6 perc est, cent, report making decisio within a w ons week.

Who ma akes buying decisions? ?

A little mo than a thir of the comp ore rd panies 36.4 percent lea purchasin decisions t manageme 4 ave ng to ent. Only 16.8 percent of bu 8 usinesses have their own centralized pu urchasing ma anager. Predic ctably, larger companie are more lik es kely than sma aller companies to have a formal purcha asing process Businesses s. s working in commercial construction are also mor apt to have a centralized purchasing structure than n re e d n residentia construction firms. al n The secon nd-most popu method o purchasing is also the most disorganiz ular of zed: on an ad d-hoc, as-nee eded basismo common with the smallest companie ost w es. Only a very small number (6.5 perce work und broad purchasing guide ent) der elines, where decisions are e the ent y ors. made on t departme level or by subcontracto

Comm municati meth ion hods

Communication is the grease that m g moves the sale engine thr es rough to closin Construct ng. tion businesses have strong op pinions about the best way to communicate, but thes opinions ch t y se hange as buy yers not only h move thro ough the sales cycle. Vend s dors should de etermine exactly how cons struction buye want to be ers e contacted and when it appropriate d, ts eor even ne ecessarysw witch to a diffe erent method. Email is p preferred over rwhelmingly a the best me as ethod to use as the sale ge underway 82% of buyers ets y: prefer or s strongly prefe to be contacted via email early in the sales cycle. O er Office phone came in a dis stant second, w 44% saying they prefe or strongly p with er prefer it; even fewer want an in-person visit or postal n mail. Cell phones and instant messa aging were th only two methods with th plurality of responses a not he he f as erred, the low west rating. at all prefe

Comm munication m methods pre eferred or st trongly pref ferred by bu uyers

90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
82% 75 5% 55% 46% 4 44% 37% 33% 25% % 36% 40% 25 5% 16% 13% 23% Ea stages arly Fin decision nal

Email l

Cell phone

Office Phone

Ma ail

Instant In-person Message visit

Fax

But wait: with cell phones, its not that simple. Cell phone communication is the reality TV of the sales cyclepeople either love it or hate it. 37% of survey respondents prefer or strongly prefer cell phones, while 39% said it was not preferred at all. The lesson here? No matter what your customers opinion on this matter, you can guarantee its a strong one. Weve already established that early on, the most preferred method of communication is email (except for the folks who adore their cell phones). But as the sales cycle moves along, something interesting happens: the likelihood that your buyers prefer being contacted by phone both cell and office actually increases. Aside from in-person visits, every other method decreases, even email. Email does, however, remain the most preferred method of communication with 75% citing it as preferred or strongly preferred at the end of the sales cycle. No matter what demographic or other data point you use to slice the data, this is true across the board.

What this means for vendors

Throughout the sales cycle, you should be in sync with your prospects preferred method of communication and prepared to communicate differently at various points in the process. Email. As weve established, email is the most preferred method of communication: it allows these construction equipment buyers to store proposals from multiple vendors, respond when theyre ready, and easily share information with other people involved in the purchasing process. Even with the decreased interest in email as you move towards closing, most still prefer it at the end of the process. And, with more and more people leveraging smart phones, we dont see this trend changing dramatically anytime soon. Cell phones. The polarization of opinions on cell phones means salespeople should make it a point to feel out each prospects preference as early as possible and stick to it. Especially at the end of the sales cycle, knowing whether potential customers rely on or avoid cell phones can really help you build a good working relationship. Office phone. Interest in office phone calls also increases slightly as the sales process advances, indicating that direct contact is more palatable the further into the process you go. In-person visits. Construction buyers are more open to in-person visits as they near a decision. That said, there is a slight indication with mid-range sized companies that theyd rather not have an in-person visit even towards closing. Again, this indicates how crucial it is to find out how buyers want to be contacted at each stage of the sales cycle. To sum up: Find out which way your potential customers want to be reached, and when. Make note of it, and adjust accordingly.

More about cell phones

Lets look more closely at cell phones. Are there types of businesses or purchasing agents that fall on one end or the other of the cell-phone spectrum? It seems to be so. Buyers in larger construction businesses, and to a lesser degree, buyers who have been in the industry the longest, seem to have a higher preference for office phone over a cell phone or other forms of communication. And heres a data point to keep in mind: Fully half of the respondents to this surveythat is, half your potential customershave been in the industry more than 20 years. Extrapolating from the data, the dislike for cell phones may be due to larger companies being more likely to employ a specialized purchasing manager, handling procurement from a dedicated office within a traditional 9-to-5 framework. With smaller companies, the individual responsible for purchasing decisions probably wears many hats beyond procurement. Contacting such people only on a dedicated office line might make less sense.

Choos sing a vendor v

How pot tential custo omers find you
When its time to find a vendor, word of mouth is still king bu just barely. Reputation is powerful, at least d ut s t ese However, com ming in just be ehind word of f to three-quarters of the buyers of construction equipment. H 1.4 s arches, particu ularly with sm maller compan nies and peop newer to the ple mouth (71 percent) is Internet sea industry. T Theres a sign nificant drop t the next ba to atch of answe listings in trade publica ers: ations have a slight edge over quote reque services (4 r est 47.9 and 42.9 percent, respectively). Ne in line are trade shows, 9 ext advertisem ments, online directories, a the Yellow Pages, in th order. e and w hat

What co onstruction buyers look for in a ve k endor

We asked buyers to ra the overall attributes th consider w d ank hey when choosin a vendor. O ng Once we take e everyone favorite crit s teria, price, ou of contentio what stan out across the board is a reasonably ut on, nds s s y equal mix of factors. What this tells us: instead of one sweepin considerat x W ng tion influencin their decision, ng buyers we eigh a few important factor with almost equal import rs t tance. These imp portant factor include: rs respon nsiveness of t company the compa reputation any n trust in the brand na n ame

veness is vita If youre no prompt abo fielding qu al. ot out uestions, your missing ou on sales a re ut and Responsiv thats the only one of th hese three fac ctors that is c completely wit thin your cont at all time trol es. gly, e uyer is far mo likely to tru a brand name or a ore ust Interesting during the purchasing process, a bu companys reputation than a single recommenda t ation from a peer or a colle eague. This is particularly true
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for people new in cons e struction. The fact that a co ompany has b been around f awhile isn necessarily as for t relevant a it might hav once been to someone with less indu as ve n ustry experien nce. On the oth hand, individuals that h her have been in construction the longest lo for reputa ook ation first; they y want a bu usiness they know well and can trust. k d Still in the mix, but less critical to this level of dec e s cision-making is the technology surroun g, nding the purchase. An informative, easily nav . vigated web s and innov site vative, techno ologically adva anced produc cts and servic shouldnt be dismissed ces d.

Evaluating your pro oducts and services

When eva aluating what youre offerin trade show and profes ng, ws ssional public cations are slightly more important to long-timer People with less than fiv years exp rs. ve perience are m more likely to turn to the particularly wh it comes to using onlin reviews. hen ne Internet, p If youre w wondering whether you sho ould jump on the social me edia train, est tablish a blog or hop onto Twitter, th hese buyers probably wont care. Only 1 percent sa any sort of social media was useful - and p 11 aid f a those who did were ne o ewest to the in ndustry. So w while its impor rtant to pay at ttention to trends, social m media need not be a priority at the momen a nt.

Improvin the odds of repeat b ng s business

We also a asked how the vendors buy e yers have pre eviously worked with could better meet t d their needs. Putting pr rice asideev veryone would like to pay l lessimproving customer service after the sale got the most positive response almost 40 p e: percent includ that in the top three. C ded eir Construction buyers also like ohere it is againbe mo responsiv Better maintenance and warranty op a ore ve. d ptions are also high o vendors to on the list as are impro t, oved financing options.

What ma atters most on your we site eb

A theme t that pervades the survey re s esponses is t transparency. Buyers want to trust their sales rep to be t open and honest enough to give the the complete story. em me s r e ey nts e e This them also carries over to your web site. We asked surve responden to indicate the top three most impo ortant aspects they looked for in a vend s dors web site. What matter rsparticular as theyre rly making th final choic heir ceis being a able to easily find the information they n need: spec sh heets, a full ra ange of your pr roducts and equipment with descriptions of each, pric h s cing, and eve contact info en ormation, which 21.7 perce of buyers thought was important. No surprisingly pricing was in the clear lead (55 perc ent ot y, s cent included it in their top three). t al our ate. duct demos a and The actua design of yo site is unimportant, as long as its easy to naviga Even prod videos we helpful to only 9 percen of responde ere nt ents.

What co onstruction buyers look for in a sa k ales rep

When it co omes to evalu uating sales r reps, respons siveness, again, is at the to If youre not responding to op. g emails and phone calls from prospe s ective custome quickly, y ers youre missing out on sales Almost as g s. ng s y yers dont feel they important is establishin a trustworthy relationship. Openness and honesty is key. If buy your rep, youre not doing the best job y can. you can trust y Its also vital that sales reps be easy to reach and available to field questions, especially as the sale s y d o y ward closing. Actually, sale reps have their work cu out for them none of the characteristics es ut m: e moves tow we listed w were rated an nything less th very imp han portant overa A good sales rep is one of the all. e cornerstones of a succ cessful sale.

Evaluating choices for a final d decision

Construct tion buyers ar like all buye they con re ers nsult various sources as th make fina decisions. N hey al No one sourc rose to the top. What this means: it h ce helps to have your compan informatio nys onthe produ ucts and servic you offer ces accessible in multiple pla aces. While n one source won the rating of most no e useful (5 out of 5), com ming in at a ra ating just belo that were f ow four almost equal sources: professional tes, Internet s searches, and word of mou In the sec d uth. cond tier of publications, manufacturers web sit ss s e dealer visits. usefulnes were spec sheets, online reviews, and in-person d At this fina stage, onlin reviews fared highly com al ne mpared to pe ersonal recom mmendations. People seem to m trust the u unbiased revie of anony ews ymous strange on the Internet who h ers have nothing to prove by th heir choice and may have a personal sta in being h ake honest more than they do recommend e o dations from es. colleague

What does this mean for you?

Vendors and service providers who sell to construction businesses can take away several important findings from this report: 1. Social media is not a priority when selling to construction equipment buyers. Despite what you might be hearing, construction businesses arent turning to social media channels when making a purchase, so you shouldnt either. 2. Cell phones remain a polarizing form of communication. Some construction buyers love them, some hate them. And some change their opinion as they approach a purchase. Make sure you find out how your prospect wants to communicate (cell phone or not) and stick to it. 3. Responsiveness is critical in establishing a relationship with a prospect. Once you determine how to communicate, always be available to answer questions and provide information to help move the sale along. 4. Your company reputation can be a key factor but dont fret if youre not a big name. Internet search is a close second, so while you may not be able to compete with the big boys on name alone, you can focus on ranking highly for relevant search results to attract the business you covet. 5. Your website isnt only about looks its really about being easy to navigate and providing product and/or service information to help facilitate a purchase. As they say, its about the substance, not the style. Selling to construction buyers like anyone is an evolving process. While implementing these findings wont likely change your business overnight theyre a good, holistic approach to increasing your sales.

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Working with a lead generation company

For your construction business to grow, you need to increase your sales. Either your existing customers must startpurchasing more, or more often, or you need to tap in to a new group of customers. So how do companies generate more business? Send direct mail or email to customers already in its database Offer incentives to current customers for referring new customers Purchase advertising: print, television and radio ads, online targeted advertising, or any combination thereof Cold call new customers that fit their target demographic

While you may see some results from these types of lead generation programs, they may not be the most efficient way to generate new leads for your business. One of the best ways to reach new prospects is to work with a lead generation company. Lead generation companies deliver prospects at various points of the buying cycle that need the products and services you offer. Working with a lead generation company can provide qualified prospects with a smaller investment and better ROI than typical advertising vehicles like billboards or radio and TV ads. It also lets you leverage a providers expertise in search engine marketing, optimization, partnerships, and other lead generation techniques that you may not have in-house.

How lead generation companies generate leads

Understanding how a lead generation company compiles their leads is an important part of choosing a lead generation company to work with. Lead generation companies create lists of potential customers many different ways. Two common approaches are: Compiling data from public records of those who fit the general profile a company is trying to reach. What to watch out for: The contact information might be stale or out of date and you dont know for certain if the company is interested in what you sell. Finding customers who are looking for a product and enticing them to provide their contact information. What to watch out for: Make sure that the lead generation company you work with is honest with buyers and doesnt trick them into sharing private information. At BuyerZone, our team of search engine experts captures leads through paid (SEM) and organic (SEO) search programs, industry partnerships, and other sources. In addition to requesting contact information, we ask prospective buyers specific questions about their purchase requirements so we can provide our sellers with as many details as possible.

Good sales leads can mean the difference between success and failure.

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What to look for in a lead generation company

A company offering thousands of leads for $199 doesnt have your best interests in mind. They likely compiled a list of names from the Web containing people who have no idea theyre going to be contacted by companies like yours. That will not only waste your time and resources, your prospects may think you are a spammer! Its important to make sure the lead generation services you work with are reputable and dependable. Below are some important qualities to look for in your lead generation provider: Up-to-date/validated data. Having up-to-date information is critical. Simply mining data from public records can lead to huge gaps and old contact information. Relevant data. Simply producing a list of names, addresses, and phone numbers doesnt mean the list is full of potential customers. Sure some leads may close, but providing buyers that are in the market for your specific construction product or service is just as important as including several names. Relevant experience. Your lead generation company should have experience relevant to the construction industry and your market. Honest data mining. In addition to accurate information, the way that information is collected is important. Was the customer somehow tricked into revealing private information to receive a prize? The more the potential customer is anticipating your call, the more likely they are to be a happy buyer. Purchasing information. Your lead generation provider should collect purchasing information from the customer so that you have a clear idea of customer expectations.

In additional, your lead generation provider should also provide credit policies to make sure you dont pay for any problem leads that slip through the cracks.

Quality leads
If youre not getting quality sales leads from your lead generation partner, youre wasting your money. Quality leads can mean different things to different providers, but here are the essential characteristics to look for: Pre-screened When comparing different sources of leads, ask about the screening processes they use to weed out incomplete or junk leads. While no screening process is 100% accurate, these steps help make sure your leads are as high-quality as possible. Detailed In addition to all the essential contact info, the lead provider should collect information about what the potential customers are looking for, including details about the type of construction project they are planning, the budget, timeframe, and specific requirements. Timely Sales leads should be delivered to providers within hours of capture. The longer they sit around, the greater the likelihood that the prospects continues their search and finds another provider. Targeted The final component to qualified lead generation is making sure the leads youre given match your products or services and your coverage area. You should have the option to filter out prospects that are interested in construction equipment purchases too large or too small for you to handle.

A final word
When comparing different sources of leads, be sure to research the pros and cons of each model before selecting a company to work with. Of course, theres no reason to pick just one. Try multiple lead providers simultaneously to find out which offer the best quality and highest ROI for your company. As with any sales and marketing program, tracking your leads is the key to measuring success.
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About BuyerZ t Zone

Since 199 BuyerZone has helped thousands of sellers win m 92, e f more custome by connec ers cting them qu uickly and easily to their targe buyers onli y et ine. Our suite of online pro e ograms provid sellers with cost-effectiv de h ve, easy to im mplement, and results-focu d used solutions that deliver leads from bu s uyers at every stage of the y e purchasin cycle. We generate lead for thousan of clients, ranging from Fortune 500 companies t ng g ds nds , m 0 to local businesses. ellers connec with more th 3 million buyers in 150 equipment product and service ct han 0+ t, d Helping se categories we have fa s, acilitated over $13 billion in purchases. n BuyerZon is a division of Reed Bus ne n siness Inform mation.

Conta us act
Wed love to hear from you! e m ne BuyerZon 225 Wyman Street Waltham, MA 02451 5000 888-393-5 sales@bu uyerzone.com m www.buye erzone.com

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Follow us on Twitter: @Bu uyerZone

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About the aut t thors:

This report was resear rched and writ tten by a num mber of contrib butors, includ ding freelance writer and fo e ormer ne S e, current Buyer rZone employ yees Jeff Gord don, Liz Slatte ery BuyerZon employee Sandra Hume as well as c and Jerem Sacco. my Do you ha comment youd like to share with u If so, drop us a line at content@buy ave ts o us? p yerzone.com.

2010-2011, BuyerZon ne.com, LLC.

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