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For Customer Loyalty in Construction, Focus on the Masses

Updated: Jul 13, 2023


A large group of people - Target market

In Summary

Here is a list of reasons why focusing on customer loyalty to grow a business is flawed:

  • Not likely to purchase any more than they currently are.

  • Not likely to see an increase in purchase rates.

  • Limited growth opportunities.

  • Not changing as the market changes.

  • Become reliant on piggybacking off their success.

  • Pricing in some instances is the deciding factor.

Andrew Ehrenberg’s famous line: “Your customers are really other people's customers who occasionally buy from you” is a stinging truth for customer loyalty in construction. We like to think that what we do builds loyalty and retains those clients that would never be distracted by the competition.


BULL SHIT!


Close this blog post, close the web browser, shut down your laptop, wrap up the company and find a nice place to rest for a while. This is gonna sting a little (I have plasters though so it’ll all be ok in the end).


It’s very easy to be drawn into the old fable that is customer loyalty, focusing on those that are loyal to us to maintain their business at a lower cost than trying to draw new customers in.


This is flawed for many reasons which we will explore below and are mentioned above in the short summary. This reasoning isn’t new thinking and it isn’t down to a change in marketing strategies, tactics or the channels we use to communicate. It’s a marketing truth, constructed on scientific research, scientific research that has been conducted outside of a sterile environment, using real data from real industries.


Now you’re probably thinking, what is all this twaddle here?

Within construction, there is loyalty within independent merchants, localised selling, brand loyalty, long-term partnerships, subscription based-models, large purchase orders and lengthy contracts, but the truth is all of these can be broken and building a business on these types of tactics is more like praying it’ll work out than having a robust strategy.


Here’s why:


Not likely to purchase any more than they currently are

Customers' purchasing behaviour is a critical factor that affects businesses, and this is no different for the UK construction industry. Unfortunately, customers are not likely to purchase more than they currently are. This suggests that the industry may face some challenges in regard to growth and revenue generation in the future.


To address this, businesses need to think creatively about how to attract new customers AND retain existing ones. This requires two different strategies, something that has been lost within construction marketing.


Not likely to see an increase in purchase rate

Similarly, an increase in purchase rate is not expected. Factors such as economic conditions, market saturation, and/or changing customer preferences all pay their part here.


Whatever the reason, the industry needs to be aware of this trend and develop strategies to address it. For instance, businesses may need to focus on improving the customer experience throughout the supply chain or invest in marketing campaigns that target new customer segments


Limited growth opportunities

Increased competition, regulatory changes, and the ever-changing, sometimes declining demand for certain types of projects are all difficult to plan for and can limit growth opportunities.


Exploring new markets or developing new products and services that cater to changing customer needs and the unpredictability of the market in general, is an approach that can generate growth not put a limiting cap on things.


Not changing as the market changes

An inability to change as the market changes can lead to stagnation or even decline. This could be due to a lack of resources, outdated business models, or resistance to change. To stay relevant and competitive, businesses and the construction industry in general need to be agile and adaptable, continuously monitoring and responding to market trends and changes.


The most recent of these are within the digital space (AI and automation) as well as a keen focus on sustainability and carbon reduction.


Become reliant on piggybacking off the success of current clients

Becoming overly reliant and piggybacking off the success of your current clients is a fool's game as you have very little control over this outcome. An even more critical factor in this is that it can lead to a limiting need and ability to innovate and grow, as the focus is solely on replicating past successes rather than exploring new opportunities.


To avoid this trap, organisations need to be proactive about developing new products and services and investing in research and development alongside their list of clients (after all these products and services are to solve your client's problems).


Pricing in many instances is the deciding factor

Pricing may be the deciding factor for customers in many instances. This highlights the need for the UK construction industry to remain competitive in terms of pricing strategies. I use the word strategies as for many it will be a race to the bottom, where no one wins!


However, businesses also need to be mindful of the quality of their products and services and ensure that they are not sacrificing quality for the price (again stimulating a race to the bottom). Striking the right balance between price and quality (and developing your positioning within your marketplace) is key to success in the construction industry.


You’ll never stop them from purchasing from other brands

And nor should you. A competitive marketplace is good for everyone, you, your competitors and the industry as a whole, it’s a sign of buoyancy and one you can ride the wave of.


With this in mind, it’s foolish to think that even the most loyal of customers are not tempted or do indeed purchase elsewhere. The double jeopardy law (where the company with the largest market share will have clients purchasing more, more often) means that unless you are the top dawg, you are probably swimming against a very strong current, one that will have you washed up on the shores of Failed Business Island pretty soon.


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