Jan 30, 2017
Would You Pass the Test? Takeaways from IBS/KBIS
Header photo: Convention Center Lobby, © Oscar Einzig Photography
Much like the industry as a whole, the IBS/KBIS Show has seen slow and steady momentum. Yet, despite this growth, this year’s show left us wanting more — more energy, dynamic brand stories, and engagement. How did/would your brand perform?
Where’s the Excitement?
Innovations in new products were not as evident as you would think in a growing and rebounding industry. Several companies were introducing the same products they showcased as test products last year. There were no true “game changers” from any of the product companies for attendees to get excited about. Very rarely did I hear someone say, “Did you see that yet?” except for major initiatives like Masonite’s new brand launch and approach to market. The other big innovations we saw came from service companies like Zillow that continue to reinvent and evolve themselves while the manufacturing companies for the most part continue to lean on selling features of their products.
We saw a continued focus on home automation (it seems to have slowed a bit), but it is still a haphazard approach with numerous companies going down their own technology paths, leaving homeowners to have to piece it all together themselves — something unlikely to happen on a mainstream scale. Home automation needs a common platform to gain higher momentum and adoption. Also, virtual reality (VR) technologies continue to grow, but it’s now flooded with numerous unconnected technology options and approaches. VR seems to be in that transition stage where apps were 5 years ago. Everyone has to have “it” but most are still working on how to translate it into viable business value.
Products, No Promise
The show floor for the most part was one big product display and relatively void of any brand promise or answer to “what’s in it for me.” As we walked around, it was hard to understand quickly (or even at all) what each company stood for, or what their overall brand promise was. As I talked with the booth staff, they told a very product-centric story about what they offered and maybe how their features were better than the competition; but even that was infrequent, and when asked, they could rarely even provide comparison data. Unfortunately, rarely could the booth staff verbalize what their product/service or solution would truly mean to “me” as a builder customer.
While there were lots of products present, there was a lack of brands truly demonstrating their value proposition — the unique DNA and story that sets them apart from all others.
The presentation of their brand lacked the brand personality and depth that engenders meaningful connections and loyalty. Only a select number of companies were selling more than the products they manufacture. One of our clients, Masonite, for example, was a standout among companies evolving the relevance of their category — making doors part of a bigger discussion around trend. Meanwhile, other door manufacturers continued selling doors as pretty much one big product display with little-to-no positioning or messaging of why I should buy their products or how their product will enhance my selling process.
There also seemed to be a lack of comparative data, showing one brand’s benefits versus other products. Ply Gem siding was an exception, telling a great performance story versus fiber cement, as was LP’s hands-on product comparison demo for their Smart Side product showing their impact performance. The best example (full disclosure: a client) was probably Huber’s booth with ZipSystem and AdvanTech – it was basically one dynamic comparative hands-on display for both of their products, which helped drive great traffic. However, most manufacturers were in “selling mode” versus “solving mode” — fixating on features of their products rather than demonstrating how they can make their customers more successful.
Are You Being Recruited? Why Not?
However, it’s apparent that the industry is confident in its continued growth, as numerous companies have new headcount openings they are trying to fill. If you haven’t gotten a call lately from a recruiter, you may need to polish up your resume or do something noteworthy in the industry as recruiters are calling others frequently to fill these many open or new positions. Several recruiters were spotted attending and walking the show floor and even interviewing candidates at the show.
Another big trend showing confidence in the market is the momentum around acquisitions. We have had numerous discussions with manufacturing companies and/or PE firms looking for acquisition candidates in the building products space. Case in point, several companies were actively looking for acquisition candidates on the show floor and in discussions behind the scenes. As with recruiter comments above, if you are a mid-size or small company, consider why you haven’t gotten a call yet… is your company positioned and performing to a level to be enticing enough to a prospective buyer?
Take the Brand Consistency Test
A brand is only as powerful as the impact at every customer touch point — and your customer experience takes a hit when those numerous touch points don’t tell the same story. To make our point, the Interrupt team conducted a simple “brand consistency test” at the show. We visited several booths and saw how they were positioning the brand or a new product on the show floor. Then we talked with a couple of their booth staff (usually sales reps), collected any collateral within the booth, and finally we went to their website. In the majority of instances, it was amazing how little connection and consistency there was among those four major touch points. A brand that is not represented consistently across all touch points risks confusion and perhaps abandonment.
Do your own test. Ask your marketing team to pick five touch points of your brand and then have them report back in detail what they see. You may be very surprised.
And we also heard from sales reps in the booths that they didn’t have the training yet or tools to promote new products actually being highly promoted in the booth. If a company is promoting something new and exciting, they need to ensure their sales teams are trained, and marketing efforts and sales tools are ready so they can hit the pavement immediately after the show to drive consistency and momentum from the show.
Are You Being Social Enough
There remain many building product companies that either don’t believe in or are still not leveraging the power of social media to engage customers in their day to day (or at a major show like IBS). However, we did see continued growth in the number of companies, exhibiting or just walking the show, that had constant and near real-time social media updates during the show. In prior years, it was the major exhibitors dominating social media with blog updates and posts. This year, we saw companies at every level. IBS itself. Media properties. And it was more than the promoted marketing- and sales-oriented posts from years past. This year we saw posts that were a bit more informal and adhoc, giving readers the feeling they were actually witnessing the show in real time. Standouts in Social: Murphy Door, Kohler, PlastPro, Roxul, CertainTeed, Masonite, GAF, IBS, Westinghouse, Velux. And the industry is apparently getting serious, as represented by the 18+ education/seminar sessions at IBS/KBIS that addressed the power of social media in the building materials industry.
However, manufacturers continue to be the last to see the value in the business impact of social to engage the channel. Don’t be last. Our successes with social to engage different customers over the last few years have delivered strong business impact.
The Business Side
Interrupt spent a lot of time with various manufacturers and service providers at the show. Here’s a summary of what we heard.
As we talked about the industry, numerous companies described their business and the industry as “a slow but steady continued recovery.” While several companies were hoping for dramatic industry growth, most understand that “slow and steady” is actually a healthier approach to growth. Wild swings in demand only hurt the stability of the industry. As it relates to 2017, overall we heard companies are forecasting and budgeting for an average of somewhere around 1.25–1.27 million housing starts in 2017. There were a couple companies planning over 1.3, but most are being more conservative in their forecasting these days. We also heard a general consensus that by 2020 we should be bumping up against 1.5 million, which may become the new normal versus the 1.6 the industry saw as a historical average in the last 20 years before the recession.
Many companies (including service companies like Zillow) we talked with are also looking more down channel into the R&R side for sales and growth, especially given boomers’ desire to continue investing in their homes. This demographic will be doing more DIFM projects, which will need more remodelers, so these companies are investing in research, product development and operation CAPEX to develop new products focused more on remodeling. Not to mention, investing in the market-facing resources (sales and marketing) to market and sell to this segment.
A growing, but still small percentage of manufacturers and distributors are talking about utilizing big data, including localized market data, to influence their strategies and help their customers grow. For example, Principia has launched new data products designed to help size and segment building products demand at a local market level and drive forecasting based on local demographic drivers. Data itself is plentiful, but the companies that can leverage it in a meaningful way will be able to grow beyond the standard market growth.
One of the biggest issues and barriers to industry growth still being discussed behind the scenes is the availability of labor. Single companies cannot impact this dramatically; what we need are more industry-wide solution discussions and plan development on this issue — not only at the show but ongoing.
Readiness to Serve
Like a business needs to forecast activity and be ready to serve their customers, I was shocked at how ill-prepared Orlando was to host this event, from taxis, to restaurants, to police. Only after several accidents around the conference center, did the city position police in the high traffic areas. Many restaurants were understaffed and ill-prepared. Our team personally experienced meals where it took 2.5 to 3 hours just to get food (and in one case, never receiving our meal at all). It’s a learning experience for our industry and each company: Are you ready to serve the continued industry growth and the new segments you defined in your recent strategic planning process?
However, I was impressed by some companies’ responsiveness, sending us digital information just hours after scanning our badges at their booth. The trick is to make sure you provide information that is not only timely, but also relevant — not just a big bundle of disconnected collateral. I was shocked last year that more than 75% of companies that scanned our badges followed up 4-6 months after the show, or not at all. By the way, that interaction is a brand touch point as well, and is an indication to prospective customers of how your brand will perform in other interactions.
In the end, it was great to see continued growth in the show, additional investments being made in the industry, and hearing about companies exploring new segments and markets. While the industry’s steady growth is healthy, those companies that can envision and execute new possibilities beyond merely selling product will have the upper hand to grow well beyond standard market growth. Take a deep look at your booth or your brand, and make sure your brand promise is relevant and consistent at every touch point. Make sure you would pass the test of a brand that delivers unique value to the market.