Market / Customer Fragmentation
Where have all the jobs gone?
This question is the one that gets asked the most often when we speak to Contractors about their business. The answer for most contractors is two parts. The first part is obvious to anyone trying to run a construction, building or home maintenance business at this time. The slow economy has reduced the number of jobs being generated. Home equity, the fuel of the market for the past 15 years has all but dried up. The jobs that are available seem to be smaller and much more practical in nature. Repairs and replacement are at the top of the work to get done list for most home owners. This part of the equation will improve slowly as property valuations increase and excess inventory is brought back in line with housing demands. There really isn’t anything that a contractor can do about this macro economic situation except wait it out.
The second part of the answer is market / customer fragmentation. Over the past 15 years we have seen an incredible shift in the size and scope of the media with fragmentation occurring at an ever increasing pace. The building industry only began to feel the effect of fragmentation when supply and demand shifted in favor or the homeowner starting in 2008. At that point the phone stopped ringing for many contractors and the process of acquiring new jobs became a mystery, and has been ever since.
What was television, radio, newspaper and the yellow pages, now includes the Internet. The online world is not just another piece of the media pie. The Internet has replaced major parts of the old and created many additional pieces that now dominate specific media access. Television, radio, newspapers and the Yellow pages are now all available online because this is what the majority of users demand. Google, Yahoo, BING and YouTube dominate the online media world so newspapers and the Yellow pages now reach far less viewers and influence a much smaller percentage of consumers. As if the current fragmentation were not enough, social media is rapidly becoming a major player and will cause another shift.
What this means for contractors and other businesses that depend on acquiring new jobs or making sales is that being in the right place for prospects to find you at the exact time they are looking just got a lot harder. Going from three or four media sources to hundreds has multiplied the need for great Marketing. There are less jobs coming your way because local customers can’t find you where and when they look, easy as that.
Even with a slow economy and a heavily fragmented customer base there are contractors that are able to acquire new jobs and work everyday. The difference is usually the quality and the amount of Marketing being done by these companies. Get help, hiring a professional Marketer that understands your business and the type of clients you need to survive and prosper, this is a necessity. There is no business function more necessary and urgently needed then Marketing. Do it well and your business will prosper and grow.
Norm Denroche
CEO Contractor Power
