Some business-to-business marketing managers seem to think that a product must have significant technological advantages in order to achieve preference among consumers. Too many resign themselves to commodity status because, in their minds at least, “customers can’t tell the difference.”
Well, just because a customer can’t articulate a product’s features and benefits doesn’t mean he or she hasn’t developed a definite preference for it. Or a decided aversion to it.
Perceptual differences are often just as important as technological ones. And one company that understands this very well is Acme Brick of Ft. Worth, Texas. Acme has been doing brand development work for its line of residential and commercial bricks for several decades now, and not just to its building trade audiences either. Much of what Acme does is directed to its customers’ customers.
In addition to the customary ads in architectural and construction industry trade magazines, Acme does lots of direct mail in its 6-state market area, plus a few trade shows and other things you might expect from a b-to-b marketer. What separates Acme from the building materials pack is that more than half of its $1.5 million annual budget goes into consumer media such as television ads and outdoor boards.
The broadcast media program has grown from something even more unexpected: celebrity endorsements. About seven years ago, when Troy Aikman was just getting started with the Dallas Cowboys, Acme offered to furnish the brick for several Aikman family homes if he would lend his name to some modest promotional programs for Acme.
It was a handshake deal, and Acme has nurtured the relationship since that time. Now every time a home is built with Acme bricks, Acme makes a contribution to the Troy Aikman Foundation for children. This year more than 100 million advertising impressions about Acme’s partnership with the Aikman Foundation will be made via television, billboards and point-of-sale materials.
Not only does this generate a truckload of goodwill for Acme, but it creates numerous P.R. opportunities as well. “We’ve found that cause-related marketing opens many avenues for us on the public relations front,” said Bill Seidel, Acme director of marketing. Not only does it reach potential residential and commercial building customers, but it strikes a positive chord with editors, government officials and other important audiences.
Acme’s newest celebrity partnership is with Texas Rangers slugger Juan Gonzalez. Under its “The House That Juan Built” program, Acme is donating brick to build 30 homes through Habitat for Humanity. Eller Media Outdoor Company has donated dozens of billboards in the Dallas/Ft. worth area to carry the Acme/Gonzalez message at no charge.
The results of these and other communication programs are easy to see. Last year, a telephone survey of new home buyers in four major Acme markets revealed 84% preference for Acme bricks. No other supplier had more than 10% preference.
“We’re kind of like the 900 lb. gorilla as far as builder company purchasing agents are concerned,” said Seidel. “They’re afraid to specify anything else.” Words that would make any brand manager weak in the knees.
But the bottom line results are measurable, too. Seidel estimates the Acme brand is worth an extra 10 cents for every dollar’s worth of Acme brick sold. In a typical home, this amounts to about $250 in incremental revenue to Acme.
Put another way, you could also say that approximately $20 million of Acme’s annual $200 million brick sales is a return on the investment that Acme makes each year in brand building. Using their current budget of $1.5 million, that’s a 13-fold return.
Of course Acme does a lot of other things right, too. You don’t stay in business 108 years without a firm grasp of the fundamentals. They make high quality products and stand squarely behind them. In 1995 Acme introduced a 100-year guarantee, which was a huge leap from the 3-5 year industry standard for most exterior building materials.
They also have aggressively promoted creative applications for brick, including the use of brick sculpture in homes and office buildings.
And they never miss an opportunity for publicity. Just about everyone in the Dallas/Ft. Worth area knows that Acme is the official brick of the Dallas Cowboys. Recently TIME Magazine credited Acme with the title, “Official Brick of the New Millennium” (the category was prosaic objects). And a political cartoonist in Denver once dubbed an Acme brick as the “Official Basketball of the Denver Nuggets.”
On a more serious note, however, the company’s involvement in worthy causes has its managers and employees popping up in newspaper stories all the time. Through the use of an outside PR specialist, Acme manages the public relations component very well.
One problem Acme hasn’t figured out how to manage yet is that some builders are using the strength of the Acme brand as a profit center. It works like this: you can buy generic, Brand X bricks for your new home for about $2,500. However, if you want the top quality Acme bricks, it will cost $3,500.
Now Acme only charges $250 more than Brand X, so the builder gets to pocket the rest. I guess that contributes to an exceptionally strong builder loyalty factor.
In Seidel’s experience, there are three key benefits of building a strong brand image:
1. Better prices (Acme bricks command about 10% more).
2. Larger market share (Acme has a 50% share in its major Texas metro markets, 30-40% in other regional markets).
3. More profit to expand and improve your business.
That’s the kind of vicious cycle we could all get used to: advertise aggressively, out-perform the competition, make more profit, do it again.
For managers who view advertising as an expense (vis-à-vis investment), and especially those of you who view it as a discretionary expense, are you listening to this? If someone can elevate the lowly brick to the status of “must have” product, it’s time for the rest of us to get with the program.
And I mean now.