Netflix, Amazon Prime Video, Disney+, Apple TV+, Hulu—you name it, and chances are, I’m a subscriber. Likely, your living room has become a similar arena where these streaming giants compete for your attention and money.
Choosing whether to watch the latest 'House of the Dragon' episode on Hulu or the most recent 'Hunger Games' movie on Netflix might seem trivial. However, a similar decision-making process plays out in the construction industry. Here, contractors face the challenge of deciding which suppliers will get a slice of their job budget. Much like how you distribute your entertainment dollars across different streaming services, contractors typically spread their spending across an average of three suppliers per job.
Think of it as a business tug-of-war: Are you attracting more of your customers' spending, or is it being claimed by your competitors? This is known as the 'share of wallet' – a critical metric indicating the proportion of a customer's spending that goes to your company instead of to your rivals. It’s an essential gauge of customer loyalty.
The vital questions to consider then are: What portion of my customers' spending am I currently capturing? And, as a dealer, what innovative approaches can I adopt to increase my share of this spending?
Understanding the real struggles contractors face
Let's delve into the daily life of a typical contractor. It's a whirlwind of site visits, a mountain of paperwork, and a relentless race against the clock. Outside of managing construction sites, the last thing they want is to grapple with the inefficiencies of a supplier's operations. Yet, regrettably, this is the reality for most B2B buyers.
Deloitte Digital reports that customers are abandoning suppliers who fail to meet their evolving needs. Frustrated by rigid processes, slow resolution of issues, and delayed communication, these customers are increasingly seeking alternatives. If these issues sound familiar, you might be unintentionally sending your customers to your competitors.
Why ease of business is critical
Switching suppliers isn't always about price or quality. Sometimes, it's about not wanting to pull your hair out. While factors like substandard product quality and high prices are understandable concerns, ease of doing business, often overlooked, is crucial to the modern contractor.
Customers are seeking simplicity. This is highlighted by a Sana Commerce survey, which shows that buyers place high importance on aspects such as accurate stock information, straightforward access to orders and invoices, an extensive product catalog, and diverse payment options. In essence, streamlining your customers' experiences is not just about providing exceptional service; it's a strategic business move.
The digital shift in construction buying
The landscape of construction buying is evolving, with a notable shift towards online interactions between buyers and suppliers. A 2023 survey by the Distribution Strategy Group revealed that email (44%) is the primary channel for ordering in construction, with over the phone (34%) and at a supplier branch (33%) remaining prevalent. However, web/mobile channels (27%) are significantly outpacing traditional face-to-face sales interactions (9%). This signifies a growing preference for digital communication, and as e-commerce sophistication within the industry matures this will only fuel the adoption of online channels. This shift is particularly pronounced among millennial B2B buyers, who now control the majority of buying power and show a strong preference for digital platforms.
Today's contractors are not only tech-savvy but also value convenience and autonomy in their interactions. They expect to manage their accounts with the same ease as their online banking. They want the flexibility to order materials at 3 AM, monitor project expenditures effortlessly, and handle invoices all before the morning coffee kicks in.
E-commerce is more than just sales
E-commerce transcends the traditional notion of being merely another channel for sales; it's a vital tool for enhancing customer experience. Its core purpose is to simplify and improve the lives of your customers. Insightful findings from a Distribution Strategy Group survey of B2B sellers reveal that those most satisfied with their e-commerce investments are the ones who have placed a premium on customer experience. These sellers have not only integrated e-commerce with their ERP systems but have also concentrated on boosting efficiency and productivity.
Those who excel in e-commerce don’t just chase sales; they create seamless, integrated experiences.
The rise of the customer portal
The customer portal represents more than just an online shopping platform; it's akin to a 24/7 digital concierge. This innovative tool, often integrated directly into your ERP, is designed to grant customers unparalleled control, access, and flexibility. Far from being a mere transactional interface, these portals significantly enhance the overall customer experience and play a crucial role in fostering customer loyalty by providing value-added services and enabling customers to self-serve. They empower businesses to achieve more repeat sales without the reliance on sales representatives.
In today's market, a superior web store experience is not just a desirable feature; it has become a critical deciding factor. According to research, 74% of B2B buyers consider it a make-or-break element in their supplier selection process.
Rethinking loyalty: A new playbook
It's time to rewrite the loyalty playbook. It's no longer just about sticking with a supplier out of habit or comfort; it's about who makes it easiest and most rewarding to do business with. Loyalty is an ever-evolving landscape where the easiest path often becomes the most traveled.
Think of it like a pie chart, with each slice representing the percentage of a job's budget that lands at your yard instead of your competitor's. You want the biggest slice, right? Well, the key to nabbing that juicy portion isn't just offering the best lumber or the friendliest service (though those are important, too). It's about making it effortlessly easy for your customers to do business with you.
Ask yourself: Are you simplifying your customers' lives or complicating them? The path you choose is crucial, not only for expanding your share of the wallet but also for solidifying enduring customer loyalty.