BUSINESS INSIGHTS: Sell Systems, Not Products
When a wall is worth more than the sum of its parts…
Many of my business musings here focus on selling value through specialty building materials and customer valued services. The premise is simple: selling a product, especially a commodity, ultimately comes down to price and delivery. But sell a solution that addresses several problems, and you can almost name your price.
Coming off another International Builders’ Show in January, it looks like the message is clear and trending throughout the industry: Manufacturers are focused on selling the value of an integrated wall system, not just individual components. Moreover, this message is echoed down the value chain, from dealers to the architecture and design community, builders and contractors who are specifying and installing these systems.
It’s coming from both directions, as manufacturers look to innovate and find opportunities for existing products and enhanced versions sold as part of a system. Based on recent research from Principia, more than 70% of production builders have formal initiatives focused on product standardization and value engineering while containing labor and material price increases. This current market climate forces dealers to take the time to get smarter on value selling to address customer needs and still make a profit. For example, what’s the value of offering related products (such as insulation, air and water barriers, framing, drywall, structural insulated panels, waterproofing, etc.) as a package rather than individual components? What’s involved to promote an understanding of the full wall design and how these materials work together in an integrated wall system?
Much of the system selling activity is centered on air and water barrier performance, which is supported by evolving energy codes. While most builders and contractors lag behind the latest code changes, widespread industry adoption of codes over the past five years has led to building better performing and insulated homes with new construction methods, improved materials and recognized value of systems comprised of several complementary products that are designed to work together.