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Building Brand Relationships Seems So Stupid!Premium Member
Posted By: D4Demand on 11/16/2006 10:19 AM (CST) 1500 Points
Home improvement products are once in a lifetime purchases. Many manufacturers make and sell only one product like windows, garage doors, gutter toppers, roofing. Their customers buy them only once in a lifetime. So why should any of these single product companies spend any time keeping in contact with their customers or building relationships with them? It seems like a waste of money . Demand has already been satisfied and they have nothing more to sell them.

So Profs what secret am I missing here?

Posted by: ahunt Accepted Answer
11/16/2006 10:32 AM (CST)
There a couple of key points that I think you're missing in your logic towards this.

No one lives in the same home for more than 10 years now. Since most people buy 2-3 homes in their lifetime, they have 2-3 possible times they might need home improvement products. So it is possible to have repeat business in this market.

Also, for home products, people want a brand they trust and are familiar with given that windows, doors and roofing are all financial investments in their homes. Staying in contact with past customers helps to build that trust and reinforce that they made the right decision in buying your product. Plus, happy past customers are your best brand advocates for new customers.
 
Posted by: Theresa H. Accepted Answer
11/16/2006 10:48 AM (CST)
I will answer this question under the assumption that these customers you are referring to are the homeowners themselves and not contractors.

Many people have the ability and desire to own more than one home in their lifetime, thus giving them the opportunity to be repeat customers for these businesses.

I am an example of this as I am selling my home of the last 10 years, and have put some of the products you mention into my home. I will be buying another home that is not new construction, thus there will be a need for me to replace some of these items and again be a customer of some of these companies. I may replace them out of necessity or asthetics or for construction reasons (room add-on). But whichever way, if I had a good experience with my Pella windows in house #1 and am replacing windows in the new house, then Pella it is.

For those buying home #2 as new construction, having a "relationship" with these manufacturers could lead to the buyer requesting that the builder use a particular brand of shingle, window or door, or the buyer may choose the upgraded feature because they "know" the manufacturer.

In addition, we plan to buy a vacation home in 10-15 years - again, no plans for new construction - and will again have the need up date, or replace some of these products you mention. A maintained relationship could lead to additional sales.

Being that my husband and I usually choose/buy our own materials and then install ourselves or hire someone to install, we are so the type of people that these companies want to maintain relationships with.

The secret is that any customer could be a customer again, even in the home improvement product category. I'm sure there are statistics on the average number of homes a person purchases in a lifetime.

Hope this helps.

Theresa
 
Posted by: Harry Hallman Accepted Answer
11/16/2006 11:26 AM (CST)
I beleive you are missing one important point. Keeping in touch with the end customer provides the manufacturer with information that will allow them to build new success products in the future and helps them ensure dealers and installers are doing the "right thing".

Also remember that dealers and installers are consumers as wella nd can be swayed by "image" as well.
 
Posted by: paca001 Accepted Answer
11/16/2006 11:45 AM (CST)
Two areas of discussion here:

Firstly, a rebuke to your title 'Building Brand Relationships Seems So Stupid'. For this type of 'single product company' building brand relationships helps create a strong brand that millions and millions of (taking your assumption) SINGLE purchases to buy into.

To look at your actual question which I believe is slightly different to the title
'So why should any of these single product companies spend any time keeping in contact with their customers or building relationships with them?'
Do they?? And if so how?? I have never received a personalised-first-name letter/email or a phone call from one of these companies. Yes I have received general marketing literature such as a flyer in the postbox - which I think is move of the issue above - creating the brand.

Anyway, to act as the devils advocate, if such a company does build relatinships or keeps in contact with a single-purchase-customer I would suggest that they do so to reduce any post-purchase dissonance - in turn leading to a perceived great aftersales service - leading to good word-of-mouth advertising...
 
Posted by: KathySmithFilms* Member Response
11/16/2006 1:00 PM (CST)
In order to reach more public on future sales it's good these companies have created a river of brands to flow back to as all of the above posts of experts show.

http://www.forbes.com/management/2004/11/19/cz_rk_1119drucker.html This is a great article from Forbes by marketing legend Peter Drucker that fills the vaccuum as well.

As someone in the arts I have had to work out of other's production companies as freelance and the tools you mention we pretty much take for granted, but as I look back I'm glad they are branded and we can continue to trust these brands if ever they are broken or change, to keep the arts & science of business progressing so people can have new homes.

Thanks for reminding us how important this is.
Kathy
 
Posted by: jeffmucci Accepted Answer
11/16/2006 1:11 PM (CST)
I agree with everyone here. However, what is most important from the manufacturer perspective is budget. This industry runs on very thin margins and is not known for consumer advertising. Some competitors do such as the faucet folks and some of the other interior product companies. However, based on your question it appears as though you are referring more to exterior type of products.

Either way, the key word in your title is "relationships". Most consumers are unaware (or have very low awareness - unaided and aided) of most home improvement brands (excluding the 3 or 4 major companies). Can most of you name the top 2 siding companies? Roofing? Decking? Probably not.

Another point is that there are several different types of home improvement customers: DIY (do it yourselfers), BIY (buy it yourselfers) and hire a pro (there can be combinations such as BIY and hire a pro as well). The mix depends on the product. Most people hire a pro for siding, decking and window jobs (most exterior products) where there are higher numbers of DIYers for the interior jobs.

The point is that brand building (relationships) starts with who ever the end user is - pro or consumer. Being that most home improvement jobs involve some aspect of a professional, building that relationship and reputation with the professional segment is key to creating referrals. Referrals are the number one method of growing business by professionals. Word-of-mouth is key.

So to answer your question: if you are going to survive in the very competitive, low margin home improvement business, you better have a great reputation at the pro level and work on trickling down from there.

Hope that helps.
 
Posted by: D4Demand Author Response
11/16/2006 2:06 PM (CST)
Please, jeffmucci,

There is no such thing as low margin home improvement business

Average cost of goods is 35% at every step of the distribution chain. The margins are huge.
 
Posted by: D4Demand Author Response
11/16/2006 2:24 PM (CST)
I am seeking some dialog with everyone on this question so..

Hey Harry
You write I beleive you are missing one important point. Keeping in touch with the end customer provides the manufacturer with information that will allow them to build new success products in the future and helps them ensure dealers and installers are doing the "right thing".

How much is enough? What form should the followup take? Over what period of time?

Only ahunt seems to have touched on a rationale so far: "Staying in contact with past customers helps to build that trust and reinforce that they made the right decision in buying your product." Please remember that all mass advertising will continue to reach people AFTER they buy as well as before they buy.
Will this advertising not accomplish the same goal of reassurance?


Ah, let's stick to the point. We cannot change the parameters of the question by creating a river of products. I am asking about one product specialists.

At an average cost of $225 to $250 per lead,HI retailers contend that it makes little sense to to spend more money to keep in touch with their ultimate consumers.

My contention is that customers DO NOT DESIRE RELATIONSHIPS WITH BRANDS. No one is so lonely as to 'date' their toothpaste. The customer's purpose is to gain utility, not make friends.

Anyone want to disagree?
 
Posted by: mcsten Member Response
11/16/2006 2:28 PM (CST)
The relationships the manufacturers are building are not just with one direct consumer. They are building relationships with contractors, builders, that one consumer, that one consumer's new home, that one consumer's third home, that one consumer's brother, mother, friend, collegue, bank teller, car pool friend, son, grandchild...
 
Posted by: Harry Hallman Member Response
11/16/2006 4:46 PM (CST)
Well that is the real problem, when you go through dealers and installers it is difficult to know who the end client is. If you have a warranty program or can come up with another compelling reason to get information from the end user you have the ability to send them relevant information. Information that demonstrates you care. It doesn't have to be often, once or twice a year.

A happy customer becomes your best advertising and WOM is powerful. So not only can you get information that helps you compete but also fuel the WOM machine.

Harry
 
Posted by: mbarber Accepted Answer
11/16/2006 4:55 PM (CST)
Gidday - the reason they would keep in touch is so that they have something worthwhile to bring to the table when someone decides 'hey wouldn't it be a great idea to form a group that can feed off each other's customers?'

And yep, it sure would be a great idea - so even if done informally, companies selling just one product can share marketing dollars to expand their reach or position themselves for a more lucrative sell to a potential buyer.

A second thought - home owners continue to renovate. Some like staying but expand their home size, some work through a redesign, some have been renting their property out and need to refurbish. A simple follow up contact point (even if done by email) can do wonders.

And otherwise you are right - staying in contact with someone who you don't expect to buy from you again IS a complete waste of time - it's the model that dishonest used car sales people use all the time!
 
Posted by: telemoxie Accepted Answer
11/16/2006 4:56 PM (CST)
Yes, I want to disagree - in one specific case. (Sounds like a fun topic for a phone call.)

To me, long-term marketing and building relationships makes the most sense when you have a unique product. If you are selling the same thing as everyone else... and you have invested $100 or $500 in building a relationship over time with a customer, the next fellow can easily undercut your price. Evey time.

It also makes sense when there is an issue of "trust" involved. If my "axe to grind" was that I needed to convince a home improvement manufacturer that they should "change their ways" and implement relationship oriented marketing - I would help them develop tools for their distribution channel - and have the manufacturer provide training, marketing materials, and so forth which can 1) help the fellow in the field more easily cultivate relationships and build his business, and 2) develop closer working relationships with contractors, etc.

As a person who has spent ten years focused on long term cultivation of pipelines, I would say the one case which makes sense is the unique and totally innovative product. If a company has very little or no competion, then it can make sense to spend the time and money to educate customers over time. However, I doubt there are many such situations in the home improvement business.

A long term approach might also make sense in approaching 'centers of influence'. For example, folks who might routinely recommend one product or another (e.g. landscape architects) might be excellent and appropriate targets for a long term campaign.
 
Posted by: D4Demand Author Response
11/16/2006 5:48 PM (CST)
Let's clarify the question.

I am talking about the case of the final customer and the company who sells the product to that final customer. In HI, sometimes it is the manufacturer (gutter toppers, replacement windows, replacement doors, garage doors) who sells direct, or, in this case it is a one product specialty retailer.

The customer is known. "I" have satisfied his needs for the product. If he is over 55, he is not going to move. (According to AARP 87% of homeowners over 55 intend to stay put forever; if over 50 the number is 82%.) Why should I spend anopther dime on him?
 
Posted by: ASVP/ChrisB Accepted Answer
11/16/2006 8:41 PM (CST)
If I buy a HI product that may be a once-in-a-lifetime purchase, you're right, I don't need a long-term relationship.

What I do need is a really smooth sales negotiation, no-fuss installation and prompt after-sales service, if required.

And that is what is going to gain referral sales. Which I would have thought would be the NUMBER ONE aim of the HI marketer. Which will help reduce the cost-per-sales-lead.

When people upgrade something major around their home, their friends and neighbours always notice and many, especially those in the market for a similar HI product or service, will ask about it. That buyer-satisfaction can make or break the next referral - so it is a critical issue to nurture.

Hope that helps.
 
Posted by: telemoxie Member Response
11/16/2006 9:20 PM (CST)
Some folks use the word "customer" when I believe they mean "prospect".

If by "customer" you mean someone who has already spent their money on your only product, I see no reason to continue to market to or build relationships with "customers".
 
Posted by: shghosh Accepted Answer
11/17/2006 12:55 AM (CST)
1.Single products companies offer guarantees, warranty, Annual maintainance Contracts. There is some money to be made from the customer from AMCs.

2.Customer WOM will help them get new prospects.

3.Continuing a one-on-one relationship reduces post purchase dissonance that most of these high value once-in-a-lifetime purchase entails.

Well- is there copious amounts of money being spent on building these direct to cust relationships- No. Just enough to balance out the 3 positive aspects mentioned above.
 
Posted by: KathySmithFilms* Member Response
11/17/2006 3:12 AM (CST)
So Profs what secret am I missing here?

Look at another viewpoint if a concept is missing. There are more building contractors in the U.S. and building suppliers. They have your HI product in mind and buy in bulk.

New properties and buildings are going up all the time. This is more your target market that would buy more than once in a lifetime.

Consumer public want to make sure they can open and close a window/replace it if broken or redecorating or lock the door; it's the builder that uses
HI over and over for their product completions.
 
Posted by: ceitliong Accepted Answer
11/17/2006 5:32 AM (CST)
D4Demand,

Your point of view is quite sound. Why should companies continue a relationship with a customer whose demand is satisfied? As a former accountant I could not agree more. A cost-benefit analysis might show that we can save X amount of dollars by no longer continuing a relationship with a client. Corporate america's logic of "get in and get out - finish the sale."

One flaw in this logic is the point that ahunt (and others in this forum) brought up: "Staying in contact with past customers helps to build that trust and reinforce that they made the right decision in buying your product."

While it is true that mass media will continue to market a product after it is sold -> It has been my experience that people still want the "personal touch" now and then.

A good example of this was the early advertising campaign of Saturn. Instead of just focusing on the product - the manufacturer focused on the driver/owner of the vehicle. Which gave it an appeal to buyers and potential buyers. I myself remember a statement my brother said "I really want to buy a saturn because it seems these people really care."

If you want to know why you should spend another dime on a customer you have to look at the culture they live in. Especially if they are from HI (the state), (which I am hoping you are referring to in your question). This is because two key ingredients of a successful sale require - "ohana" and "kaizen." Ohana is family and Kaizen is caring after the fact.

In my business relationships, it has been the "kaizen" that most customers appreciate. Ohana gets you in the door to make the sale (in the case of your manufacturing product - my dad uses it, my brother, my 3rd cousin, etc). Kaizen seals the deal (I expect more as well as the best deal/I trust the product and the company/can I get more later). That extra step makes you different from every other product, company, salesman and marketer out there. And will land you WOM sales and referrals. (Clients will utilize the product again or refer it to others)

If cost is a reason why you do not want to continue a relationship with a customer - then factor this cost into the price of the product (markup the product price to account for this future expense). Charge the client and save this small cost to use in the future in a "reserve" account.

Building a brand relationship is not stupid. A brand relationship has "intrinsic value" and is a key marketing and sales tool that companies must implement for long term survival. This is because whenever a company fails to do this - no amount of MASS MARKETING will ever interest the customer again.

In closing there is one point I would like to mention.....If you were the 55 year old individual what would you expect from the company selling you the product? And if your answer is nothing. Then think back to products that you utilized and do not utilize and ask yourself why do I use or not use this product anymore.

The answer is simple: Product marketing and sales is not just about profits. It is also about what I refer to as "WICA" - Will I come again. Human beings are not statistics. We are individuals with "free choice" on what product to use or not use.
 
Posted by: D4Demand Author Response
11/17/2006 10:24 AM (CST)
Okay folks, here is you told me.

If I am selling HI (home improvement) products directly to the customer, it makes sense to follow-up with them to make CERTAIN that they are satisfied and possibly to ask for a referral. Referrals, after all, are a great way to reduce ad expenses.

I also heard that keeping in touch wi help me sell other products or at least make my list more valuable to some other company who wants to sell to my client base. (I do not believe that the writer realized that this is the foundation for all the spam in his Emailbox.)

Prior customer contact also seems to make sense in the case of someone using distributors. The manufacture can use the influence of the satisfaction with his product in order to move people to his distributors for other products. So his distributors may become more loyal to him.

Here is the bottom line from my Point of View.

One-to-one marketing and customer relationship building do not nhave the same impact for durables as they do for consumables. A savvy marketer cannot fall into the trap of believing that brand relationships are essential to all strategies. Indeed, even brand identities are not that critical to all products.

Remember that the purpose of most advertising promotions is to get the product in front of the customer when they are prepared to buy. Timing of the presentation is more important than prior brand awareness.

The so called relationship is nothing more than a post sale reminder of the experience of the purchase so that when the consumer is in the grocery store again and presented with available product alternatives, the prior brand will have an edge in the selection process.

Secondly, no consumer durables manufacturer will take the risk of lowering his advertising expenditures on the hope that his referrals will fill his product pipeline. All expenses aimed at driving referrals will be additional expenses at least in the short term with little guarantee that they will pay off in the short term.

As a result, ceitliong says, "A cost-benefit analysis might show that we can save X amount of dollars by no longer continuing a relationship with a client." Other than reinforcing the positive experience and right decision, there is no reason to invest in these customers. And this reassurance may be as simple as a followup telephone call from the owner of the company.

If you missed the point of the question by introducing the distribution chain or other produccts you did not get points.




 
Posted by: D4Demand Author Response
11/17/2006 10:30 AM (CST)
So sorry for messing up the html
 


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