5 Steps to Market Research Success for Contractors

By Colby Humphrey

Many of us in the construction field have never considered incorporating market research into our operations. There are a number of limiting factors, including time, money and resources. You might be wondering, “Why would I want to spend money doing research? We’re in the construction business, not the research business.”

But contractors need to understand that by not doing any research, they are wasting time, money, and missing out on potential work opportunities.

Market research is a broad term, and it can be incorporated into nearly every aspect of your business. There is, however, a fairly standard set of steps to any research undertaking, whether you are looking to pursue new projects, understand your customers or improve your own work force.

 

Step One: What are you looking for?

This first step, perhaps, is obvious. What are you hoping to accomplish through your research? This step might seem simple but is essential to narrow down – as specifically as possible – what you are looking for before spending time and money in research efforts.

As an example, let’s say you are a paving contractor looking to expand your operations into Texas. If you just show up and start bidding on projects, you’re already a step behind. Questions to ask during this initial phase of research may be:

  • What is the market potential for the residential, commercial, governmental or education market sectors?
  • What cities have the highest potential for future growth?

Once you have the problem defined, you can expand into what you hope to get out of the research project. Let’s stay in Texas and use the example of the commercial construction market in that state. A suitable market research question and goal may be, “What is the current market for commercial construction in Texas, and who are the major players currently?”

Remember: be as specific as possible here to avoid expanding into areas that are not beneficial to you and your company.

 

Step Two: How will you find it?

Here, we lay out the steps necessary to find the answers posed from Step 1. The first step clarifies exactly what you’re looking for. Next, we need to get a game plan for finding and recording the information needed.

There are a number of free tools available to you in this process. For example, if you’re looking at population growth trends, the U.S. Census Bureau provides a broad range of data that will help you understand the population growth patterns in your area. Your local chamber of commerce or economic development corporation may also have this information readily available for you.

If you’re looking at competitor size and recent projects, you might need to look at regional trade journals and browse through your city or county permit history. If you’ve identified problems in maintaining customers, you might need to develop some sort of survey – either mail, online or over the phone – to send out to previous clients to help you better understand your strengths and weaknesses.

These strategies obviously warrant a much further discussion, but the point we are trying to make here is simple: Develop a game plan for how you will collect the information you need.

 

Step Three: Put the Plan to Work

Here, we get into the “meat and potatoes” of marketing research. We already know what we are looking for and how we will gather our information from Steps 1 and 2. Now, its time to go get the information we need.

You might have the ability to assign certain members of your staff to collect this information. You also might bring in a consultant or some third-party entity to help you through this process.

(A quick note on bringing in outside help: If your project is taking up too much of your staff’s time – and forcing them into areas they aren’t trained to cover – it will be time to bring in outside assistance. Hiring out the development of your market research plan might seem a bit expensive, but it can pay dividends down the road and save you and your staff time that could be put into other areas of your business.)

If you’re looking up data online, you will need someone with adequate computer skills to research and record information in a way that is easy to understand and that is applicable to your company. If you’re doing any sort of personal interviewing, make sure the individual is personable and has the ability to communicate clearly with a variety of individuals.

No matter what avenue you choose, it will be necessary for someone to be a “champion” of your market research efforts, with enough time to be dedicated to finding what you need.

 

Step Four: Develop a Report

Once you have all the data you need, it will be time to write a report. This can be as formal as you need it to be, but it should be in a form that you can disburse to various members of your organization and kept for future referencing.

This report should briefly explain what you were looking for, how you found it and what the results were. Results, generally, are easier to understand in tables and charts rather than in page after page of paragraphs explaining the results. Remember, your results should point you toward a solution to your company’s problems. If they don’t, then you may have wasted your time and money with the research project.

 

Step Five: Incorporate the Findings into Your Business

This final step, we hope, will be the one that makes all the time and money spent on marketing research pay off. If the goal of your project was to identify future growth areas, then you should be able to see an uptick in work in those areas in the next few years. If you were looking to identify competitors in your area, then you should have developed a strategy to face the competition - and win, more often than not.

No matter the objective, any market research project should help strengthen your company and get you closer to achieving your goals and objectives.

Colby Humphrey is senior director of the Center for Competitive Intelligence & Development (CCID), a “focused research source” designed to meet contractors’ needs for general industry and market research, market growth analysis, competitor benchmarking, trend identification and analysis, and survey development including customer satisfaction surveys, leadership assessments, and more. Contact Colby at colby@pinnacleccid.com; phone 913-904-4970.

 

 

 

 

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