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A New Normal for Construction Sales?

A New Normal for Construction Sales?

(This article first appeared in Builders Merchants News).

Coronavirus poses an existential threat to construction sector businesses like none other in recent history. Addressing ‘old school’ sales strategies is one way for building product manufacturers and distributors to tackle the challenge head on, says Joseph Cox.

A lesson from history

After the Great Recession of 2008, the construction products market changed virtually overnight. Customers became acutely cost-conscious in the face of squeezed budgets – chasing orders became more competitive and we saw a race to the bottom in some corners of the industry, with reduced brand loyalty and products increasingly being specified on price alone.

This inevitably brought far greater board-level scrutiny from manufacturers and distributors on the productivity and profitability of their sales teams and, inevitably, reductions in headcount. All of a sudden, sales professionals were being asked to do more with less and embrace a business development-oriented mindset rather than focussing solely on transactions involving the biggest revenue-generating lines.

From low to no tech

Despite these huge changes, the makeup and modus operandi of typical sales teams in modest firms saw far less evolution. While other industries were quick to jump on board the emerging digital age, sales operations in building products largely continued with the same ‘pen and paper’ approach they had adopted for decades beforehand.

Indeed, to this day, paper diaries, physical business cards and quotes and transactions conducted via fax are all still very much the everyday sales tools of the building trade for many companies. What’s more, the vast majority of salespeople in the field continue to carry all the intelligence on their customer relationships and historical transactions in unwieldy spreadsheets or worse still, in their heads.

While this approach may have served these businesses well enough to date, forward-thinking companies who are prepared to embrace technology solutions to facilitate stronger customer relationships, and ultimately, make better sales, stand better placed to withstand shocks like the one we face today.

After all, in a world increasingly awash with data, what customer wouldn’t want their sales rep routinely armed with an array of up-to-date, meaningful metrics regarding their account, enabling them to make more informed purchasing decisions appropriate to their needs?

The personnel premium

However, it is not just sales processes that merit change. Succession planning has long been a key challenge for HR directors in sectors like construction sales, which continue to rely on longstanding, highly experienced and more mature professionals, many of whom are increasingly reaching retirement age and exiting the workplace.

Of course, as the Coronavirus crisis has gained momentum, these concerns have understandably taken a back seat in favour of urgent operational matters, but they will inevitably come into sharp focus once more when furloughed or retained staff return to the workplace in earnest and companies look to their top sales performers to drive revenue.

As things stand, the average sales professional representing a manufacturer today is a far cry from the typical entry-level, tech-enabled sales executive stepping into the workplace for the first time. There is obviously a place for both in the market and in our experience, having a vibrant mix of capabilities and experience is a hallmark of any successful sales team. Nevertheless, this presents a real challenge for manufacturers and suppliers when it comes to future-proofing their sales operations.

No one wants to see experienced personnel leave the business, but, just as in any industry, it is an inevitability, especially so in the current circumstances. Those companies that embrace this reality and proactively prepare accordingly will always be best placed to ensure continuity. That means considering the type of sales staff they actively need to attract in the post-Coronavirus landscape and what type of sales tools these individuals will expect to have at their disposal to manage customer relationships most effectively.

A new economic reality?

The need for agile, technologically equipped teams could not be in sharper focus right now as the world comes to terms with the implications of this once in a generation pandemic. Well before anyone had even heard of the term COVID-19, some economic commentators were already speculating about the likelihood of a slowdown in economic activity this year amid continued Brexit uncertainties and muted demand. With the effects of the pandemic already cascading through economies and supply chains across the globe, that speculation is only likely to intensify during the weeks and months ahead.

Whether the crisis provokes a short, sharp, shock to the sector or something more prolonged and sustained, it is fair to say the pressure on sales teams to do more with less is only likely to intensify, along with calls from customers with inevitably tighter budgets to be provided with richer insights from their suppliers on their ongoing spend.

These circumstances will be hugely challenging for sales operations across the sector. However, they equally present an opportunity for product manufacturers and suppliers to question whether the old “if it ain’t broke, don’t fix it” approach to sales strategy can continue to deliver sustainable returns as we enter a new economic reality.