Lessons learned at IBS
Underneath a surface of fear, a substrate of wisdom
At the International Builder Show, there's so much bluster and showmanship, it’s tough to see below the surface to what’s really going on.
On the surface, there’s a tone of nonchalance. The message is that everything is really OK—we’re just toughing it out. But when no one else is within earshot, people talk in hushed tones about their fear and uncertainty. They worry that the housing market will stay down for some time to come, that the industry may not be at the bottom yet, that inventories will continue piling up.
Beneath that fear, however, I detected signs of wisdom: wisdom about the cycles of the market, an understanding that this is how the industry works. Booms. Bubbles. Busts. Turnarounds. I noted those signs of wisdom, and many signs of vitality, throughout IBS:
There were many new products in the market, and many new companies just getting started. One company, Southwire, showed off its home entertainment system wire—a wire so flat you can paint right over it.
Re-shuffling the marketing mix
Exhibitors need to commit to the show 12 months out, so in some cases traditional marketing investments have remained unchanged. In many cases, however, companies have pulled all ads from traditional media and instead invested in the Internet. Masonite made one such investment in building an extensive product configurator on their website. I couldn't help wondering if the old media buying patterns would ever come back, once the market does, after companies measure the results of such digital programs.
Focus on customer community
US Gypsum and others have turned their attention to building social applications and strengthening customer tribe relations, as reported in Sloan Management Review: Harnessing the Power of Social Applications.
Talking to customers, to see what they really want
Companies are recognizing the importance of customer-focused product development, and putting that focus into practice:
Grabber Fasteners talked to hundreds of contractors before designing its proprietary slotted fasteners and driver tools. Their focus: reducing screw failure rates.
Alternative paths to market
With so much noise and testosterone coming from the big tool houses, Rockwell takes a different approach to the market: delivering great tools at great prices, and selling through such channels as infomercials.
The media has been tracking the housing market for indications of overall economic direction. I’ve tallied the top 5 most featured topics at the conference, listed here in descending order, to get a sense for where the market is going:
1. Going green (21 seminars)
Virtually every exhibitor had a green component to their product line or message. The green seminar themes reached almost a fever pitch, as the title of one seminar shows: Go with the green wave…or get swept away!
2. Active adult housing market (17 seminars)
“Active adult” is the industry’s code word for boomers. Age-focused segmentation is increasing in the marketing vernacular, but builders are clearly tuned to the size and affluence of the peaking boomer market.
3. Turnaround (12 seminars)
From “Weathering the Storm,” to “Upswing” to “Getting un-stuck: Stalled Multi-family Turnarounds" there was a pragmatic optimism at the conference.
4. Marketing strategies for changing economies (10 seminars)
Marketing is becoming a stronger force in this traditionally sales-driven industry. Featured speaker Ken Schmidt, formerly with Harley Davidson, issued a loud-and-clear branding challenge in his seminar, "Make Some Noise." Ken asked attendees: How many of your customers go to their graves with your company's image tattooed to their bodies?
5. Multicultural markets (5 seminars)
The show is behind the curve, given the growing presence of the Hispanic homebuyer market and particularly Hispanic tradesmen. I expected to see more how-to seminars oriented toward these constituencies.
Conspicuously absent from IBS
None of the seminars addressed offshore manufacturing, despite the fact that many companies disclosed to me that they are actively using offshore manufacturing, and are getting over the fear that it means the end of US jobs. They also understand when to keep customization and fast-turn product lines on-shore. However, even the most global manufacturers are just beginning to target the biggest potential markets: India and China.
Agencies are stumbling in their stewardship of client brands
Since the abysmal performance of this year's Super Bowl TV ads, the media has been spotlighting the need for ad agencies to adapt to the new marketing needs. Agencies need to reboot and rebuild their efforts around communities, according to Forrester. I couldn't agree more.
The Bottom Line: Hard-won Wisdom Steals the Show
In the end, IBS 2008 affirmed my belief that bottom line doesn’t tell us everything about our business. Sure, it tells us what we did yesterday. But it doesn’t tell us how we did it, what’s important, or how to do it better. I believe that’s why the leaders of so many companies at IBS show a steady hand during such difficult times, even as middle management quavers. They have their eye on key measures, all right. But they’re not distracted by the bottom line during this down cycle. They are working from a deeper understanding of what drives business, and a bigger vision for what matters and why they are in the businesses they run. They are passionately innovating, creating customers and executing with as much enthusiasm and zeal as when the market was at its peak. They have a vision that they transmit into their businesses every day, leading teams on to great satisfaction of purpose and achievement. They know the market will be back. They know their efforts will be rewarded. In fact they are rewarded even at this show, as they measure the success of the things that drive the bottom line, the things that they can control and that matter most to business and achievement and competency.