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A Slow Climb: Construction's Complex Move Into IoT

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It’s no secret that building product brands are attempting to reposition themselves from traditional product manufacturers to technology-centric solution providers specializing in the categories they offer. Today, many manufacturers are embracing the Internet of Things (IoT), allowing users to send and receive data, often in real time, in addition to leveraging a product’s automated and connected features.

While this presents a wealth of opportunity, building product brands struggle to evolve their marketing communications strategy for tech products. Here are some reasons why:

Audiences are slow to change. According to a 2016 KPMG report, roughly two-thirds of construction and engineering professionals surveyed say they don’t use advanced data analytics to monitor project-related estimates and performance. If trade professionals don’t see value in technology and data for their own work, it can be difficult to grow adoption rates for new technologies that often come at a higher cost for their clients.

They aren’t in control. Building product brands face a unique challenge compared to other industries in that they have very little control throughout the sales and installation process. Think two-step distribution, independent sales reps and value engineering substitutions on specified products. Maintaining a consistent product and brand message throughout the various stages can be daunting, particularly when it requires educating buyers and influencers on new tech features.

Product differentiation is problematic. Building products brands are entering the IoT world all around the same time, and many of them don’t have a rich history of marketing the technology over the product. In addition, brands may struggle to find a balance between communicating the value of their shiny new objects while not ostracizing their legacy products that still serve a large user set.

The category and industry are complicated. The IoT category has been dubbed the “next industrial revolution” and with that comes an enormous amount of complexity from which no one is immune. Even tech giants like Google have experienced their share of IoT bumps in the road. In addition, building product manufacturers are increasingly pressured to deliver on environmental construction demands and cater to a fragmented audience with many needs and wants. With added technology in the fold, it can bring another layer of varied and often unpredictable changes and demands.

In order to be successful in this new climate, building product brands entering into the technology space must consider the following:

  • Pre-existing product demand. Brands that seek to revitalize a struggling product line by integrating a technology platform will ultimately be unsuccessful. According to a recent article by Harvard Business Review, “A great platform starts with a great product — one that claims a critical mass of customers and provides enough value to keep them from defecting to competitors (in other words, is defensible).”
  • Third-party appeal. Along with preference from trade professionals, it is critical for building product manufacturers to leverage third-party appeal. Manufacturers should seek opportunities to partner with technology-based companies who can deliver an optimized approach for physical product and digital integration. Examples of this include Siemens’ partnership with IBM Watson> and Johnson Controls’ partnership with Microsoft.
  • R&D lift. In connection with slow adoption practices, building product trade professionals largely ignore research and development opportunities. According to McKinsey & Company, “R&D spending in construction runs well behind that of other industries: less than 1 percent of revenues, versus 3.5 to 4.5 percent for the auto and aerospace sectors, even though a number of new software solutions have been developed for the industry.” For brands hoping to capture mindshare with architects, contractors and building owners, it’s essential to educate and communicate the opportunity for innovation as a means for growing the entire category.
  • Brand consistency. Brands who have a strong culture and maintain authenticity as they scale will successfully market new technologies while others will simply create confusion for their customers. Brand consistency for new technologies is especially important in the building product space as a strong brand will be able to overcome an audience’s lack of trust and help to provide clarity and comfort.

If you’re searching for the right approach to go from product to technology, let us know, and let’s discuss a strategy for your needs.

Topics: Building Products Manufacturing