Positioning: A Powerful, Profitable Concept

Originally written for CFMA – October 2014

We’ve all heard the phrase “Jack of all Trades, Master of None.” Many construction companies don’t realize just how much this can pertain not just to their prospective employees or subcontractors, but also to them.

When you position your company correctly, then your most profitable and desirable prospective clients will come to you instead of you searching for them. For example, if your specialty is building medical centers, then position your company to get more work by showcasing your expertise and not chasing projects that cannot be won without being the cheapest option. Build a specialty niche and position yourself to be the best within that niche.

This method is called the “Blue Ocean Strategy,” a term coined by the book with the same name. I relate it to the construction industry in my recently published book, Construction Executive’s Guide to Brand Marketing. The concept of “blue oceans” is to create an uncontested market that is ripe for growth with few competitors. This strategy juxtaposes most construction companies that fight in “red lakes,” which are full of competition for generic projects. The red lake scenario often frustrates and overwhelms your customers because they do not know who to choose and all choices look the same.

By positioning your company away from the fray, you can attract the clients you want to attract while simultaneously deterring the wrong low-bid projects that just waste your time. Becoming an expert in your specialty will give your company credibility and produce greater profit margins than chasing after low-bid jobs.

Creating a niche in a specific skill or industry is a very powerful tool. You can’t be all things to everyone, but you can be the only one for those looking for your expertise. And just because you specialize in one thing doesn’t mean you can’t take business outside your specialty. It just means you don’t chase after things that you can’t win without being the lowest bidder. My team specializes in marketing and graphic design for large construction companies. Because of that specialty, we have also worked with numerous engineering firms, trade associations, and even a land surveying company.

One of the major benefits of correct positioning is that in many cases you are only competing with yourself – not 50 other companies. My company rarely uses RFPs and never competes on price because we’ve positioned ourselves as the only marketing firm to help construction companies to grow their company and profits.

This strategy of specialization works great in the construction industry. Think of the specialty trades your team regularly hires. I’ve seen companies that specialize in solar and wind farms, pipeline construction, biomedical research labs, and waterfront buildings. Each of these industries has specific needs that a traditional, jack-of-all-trades contractor would not be able to handle. These companies are looking for someone that knows what they are doing and has positioned themselves as the best company for the job.

Your company may also be able to charge more money for your work because of its expertise. Industries with specialized needs are often willing to pay for expertise because they know mistakes will cost them more in the end. Prospective clients are looking for a safe bet. No one likes going with the cheapest option, but often are forced to go with it because construction companies are not differentiating themselves and telling their prospective clients why they’re better and worth more.

Keep in mind diverse specialties may require different brands to make a connection with the right target market. If you build luxury homes, luxury condos, and luxury multi-family housing, then you probably do not need to worry about multiple brands. However, if you build luxury condos, prisons, and dormitories, you will most likely run into a disconnect with those seeking your services.

Take a look at your current project list. What trends do you see? What are the projects that your company consistently does well? What are your most profitable projects? Using these metrics, you will be able to track the markets where you have your most experience. As you build your niche, these projects become even more profitable because your team will know what to expect. Start today to position your company toward your niche markets, eliminate your competition, and build your profits.

You may only have 5-8 projects in your niche, but with focus and positioning, your company will be able to go after and win these projects more consistently. Soon you’ll have 10, 20, and then 50 projects while your closest competitor still has only a handful. Your expertise will make you more profitable and allow you to invest in specialized equipment to make your company more efficient as well as better positioned for the right prospects to start coming to you. Having a strategic focus and positioning your company in specific industries will set you apart, and clients will want to come to you.

So, what are the benefits of good positioning? You will save on client acquisition costs; clients will willingly pay more for your expertise; and your company will be more profitable. You’ll also find that your employee turnover drops, training costs will decrease, and employee recruiting and retention will get easier because people want to work for a successful company.

It all starts by stepping away from the pack. Get out of the “red lake” and into the “blue ocean” and build a stronger company with your positioning strategy.