In order to stand out in the competitive construction market, contractors must show potential clients how they are different from their competitors. This process of identifying and highlighting a business’s differences over its competitors is called differentiation.
Construction contractors should focus on differentiation because it helps them gain new clients, recruit talent, and build their brand. This article will look at why differentiation matters for contractors, the types of differentiators, and the benefits of using this technique.
What is differentiation?
Differentiation is a strategy used in marketing that is designed to distinguish a company’s products or services from its competitors. It succeeds by identifying and communicating the unique qualities of a product or company and highlighting the differences between the company and its competitors.
When its successful differentiation creates a competitive advantage for the company. They become known for their differentiators. For product sellers, common differentiators include price, performance and reliability, and location and service. For service providers, there may be more subjective differentiators, like quality and customer service.
Why differentiation matters
Construction company differentiation is a marketing strategy whose purpose is to show how your company stands out from others competing in your niche. Construction is a crowded marketplace, where everyone provides a similar service. This means as a contractor you have to rely on your differences to attract new customers. Without focusing on differences, potential clients may rely solely on cost as their selection factor.
Advertising your differences helps clients select the best fit for their project. For example, a restaurant owner will look for a contractor who has worked on restaurants before. He is assuming that the knowledge the contractor gained on previous projects will be beneficial to his project.
What factors should a business consider when choosing a differentiation strategy?
When selecting a differentiation strategy, a business should consider several key factors to ensure it stands out effectively in a competitive market.
Target Audience Needs
Understanding what your target audience values most is crucial. Are they seeking innovative features, superior quality, or the lowest price? Pinpointing this will help tailor your strategy to meet specific customer expectations.
Competitive Landscape
Analyze what your competitors offer and identify gaps you can fill. This might involve offering better customer service, unique product features, or enhanced user experience. Differentiation should highlight qualities that set your business apart.
Company Strengths
Leverage your company’s existing strengths. If you excel in technology and innovation, use that to create advanced, cutting-edge products. If customer service is your forte, enhance this aspect to build loyalty and trust.
Market Trends
Staying attuned to market trends can provide insights into emerging demands and opportunities for differentiation. Businesses that adapt quickly to trends can seize a competitive edge.
Cost Implications
Consider the financial aspects of implementing a differentiation strategy. Some strategies may require significant investment, so ensure that the chosen approach aligns with your budget and financial capacity.
Long-term Sustainability
Examine the long-term sustainability of the differentiation tactic. It should not only give you an edge today but also be viable in the future as the market evolves.
Brand Alignment
Ensure that your differentiation strategy aligns with your brand’s core values and mission. This consistency helps maintain brand integrity and builds customer loyalty.
By evaluating these factors, businesses can craft a differentiation strategy that not only sets them apart but also aligns with their overall vision and market positioning.
Types of differentiators
There are lots of ways that contractors can differentiate themselves from their competitors. We’ve provided a few here.
Project experience
Contractors can differentiate themselves by amount and type of project experience. They may focus on the types of buildings they’ve worked on, project types, materials used, or even the types of owners they’ve worked with. Specializing in one or two project types is a great way to showcase your expertise and create your own niche.
Team members
Similar to project experience, contractors may highlight specific talent on their staff. This can include both experience or specialized learning that a worker or group of workers has acquired. For example, a contractor with an architect on staff may highlight their ability to perform design work as well as construction. Or a company may highlight their experience in sustainable building, and specifically a worker’s accredited professional status.
Processes
Contractors may choose to highlight one or more processes that they perform differently than other contractors. This may include things like communication methods or frequency, project management techniques or software, or cost-saving problem-solving. These processes are all important to potential owners when selecting a contractor and can be highlighted in marketing materials.
Geography
Contractors can choose to highlight their office locations or service area to attract projects located in specific areas. Location becomes important on a project-by-project basis. Owners want local contractors because they are familiar with the codes and requirements of the area and have market familiarity.
Benefits of identifying differentiators
Differentiators are useful for inclusion in requests for proposals or statements of qualifications. They are often critical to help project owners and their committees choose a contractor. Often RFPs will spell out the qualifications they are looking for, giving contractors an opportunity to highlight what is most important for the owner.
Identifying differentiators is also important when recruiting new talent. Prospective employees often use the marketing message to determine if your company is a good fit for them. They will want to know how their skills and knowledge will be used to profit the company.
Differentiators also help with building your company’s brand. Over time and with a consistent message, your firm will become known for its differentiators. This is why it’s important to have a consistent message in all your marketing materials.
Conclusion
Contractors can use differentiators to create their own specialized niche. This helps reduce competition and increases the chance that the company can convert leads into projects. In a competitive market where project owners have several contractors to choose from, differentiators can lead to successful marketing, and ultimately business success.
