More About This Episode
The Smarter Building Materials Marketing podcast helps industry professionals find better ways to grow leads, sales and outperform the competition. It’s designed to give insights on how to create a results-driven digital marketing strategy for companies of any size.
Russ Eisenberg is the VP of Business Development for Gold Heat, a custom manufacturer of electric radiant underfloor heating. He talks to Beth about how manufacturers can build incredible relationships with builders, no matter their products’ price points.
Consumer Benefits of Radiant Floor Heating
Gold Heat was created over twenty years ago. For their entire history, they have produced electric radiant floor heat. As Russ points out, “We like to say we take lovely spaces and turn them into luxury spaces.”
While bathrooms have historically been the first place people choose to use radiant floor heat, now there’s no limit to where in the home you can get even heating — from the kitchen and bathroom to the office and living room! One of the big selling points of electric radiant heat is that it turns your entire floor into a heat lamp.
Remember when you used to go to a buffet and stuck your hand underneath the hygiene barrier? Your hand would immediately warm up, along with the food that was underneath. It’s the same principle for your home.
The radiant floor heating not only warms the floor but the heat being released warms the walls and any body part that connects to it, sending that heat directly to your core. This results in losing less body heat, and when you lose less body heat, you’re more comfortable in a lower air temperature. The bottom line for the end consumer is that the small cost in energy consumption, paired with the reduced cost of your main energy bills, becomes negligible.
This is a great differentiator when Gold Heat sells to homeowners, but what about builders?
How Builders Are Differentiating
“Last year, we could sell everything that we could build,” Russ remembers. “If you could build, it was gone. Prices were going up. You really didn't have to think about what features — and that extended well beyond even homes into appliances, into cars. People were buying these things up with all the supply chain challenges. Now, interest rates are up, people are looking, and they're more discerning.”
In a season such as this, where all audiences are becoming more careful about their purchases, manufacturers can be tempted to drop prices to make their products more alluring, especially to builders. However, that can result in a price “race to the bottom, and that doesn't do anything for anyone,” Russ cautions.
Instead, manufacturers should be asking themselves what makes their product unique and valuable enough that it makes builders and homeowners want to work with them. For electric radiant floor heat, there’s a paradigm that it’s difficult to work with. When Russ talks to builders and asks what product they used, their response is often, “Whatever my floor installer is willing to do.”
And he understands that, historically, it’s been difficult for flooring contractors to install most floor heating. “I read recently that 38 percent of new home buyers wish that they spent more on luxury upgrades,” says Russ. When you look at the numbers, the vast majority of floor heating is installed after the home has been built and sold. If so many homeowners want this product, why aren’t builders including it upfront?
“It's this fear, it's this concern, it's risk. ‘If there is a difficult product, why am I going to take on the risk?’ Especially right now while things are going on with interest rates going up and margins going down, you want to protect yourself and have smooth projects — and that's where we come to the table,” explains Russ.
Gold Heat knew installation was traditionally difficult, so they set out to solve that problem. “We wanted to make manufacturers be able to install with confidence, install quickly and just never have a problem.” Their differentiator is de-risking the process for the builder.
Not only can you install an entire room in under an hour, but they have also made future troubleshooting as easy as possible. If the floor gets damaged, they can run radar down the wire to find out exactly where the fault is, and customers can remove a single tile rather than rip out the entire floor.
“Luxury doesn't need to be scarcity. It needs to be easy for the builder. It needs to be low-risk for the builder and the installer. And that means that the homeowner gets this wonderful experience that frankly, because of the historic paradigm, is just not being offered in mass,” Russ explains.
Beth agrees and offers a potential homeowner perspective: “If we would like to own a home, this is how much you are going to have to pay to have a home that you are going to enjoy and not regret. Can you imagine regretting not spending more?”
Experience is a key selling point to homeowners, and builders know that. So manufacturers need to focus on selling experience to builders.
“If you're overloaded on home inventory,” Beth explains, “and your first thought is ‘I'm just going to make these guys cheaper,’ you are not understanding what the homeowner is asking for. This is the biggest expense that they'll make. So make them feel like that expense is the expense that they should make. Go after experience first before you start cutting into your margins.”
Stopping the Builder Scroll
A big question we get from manufacturers is how to get builders to stop “scrolling” (literally and figuratively) and actually consider their product. How can you get builders to hear that you have an opportunity for their home to be different and get them to sit for a longer conversation?
First, you have to know your exact target audience, Russ explains. “We don't want to be the company for everybody. You're not going to find us on Amazon. You're not going to walk into Home Depot and find us on the shelf there. We do really believe in partnering with our customers.”
Beth agrees. “Few things build confidence in your customer more than telling them when you're not a good fit,” she says.
Next, you can decide the best way to approach those customers. You may not need to break through with cold emails. For Gold Heat, face-to-face conversations are the best way to convert builders into customers. “Our strategy for gaining those minutes is an event-based strategy. Some of these more executive one-on-one type trade shows, which have especially grown in popularity since the pandemic … these more personalized events.”
Then, you have to hit the right message — this is where your differentiator comes in. “Where we have to communicate is in the paradigm shift of electric radiant heat is a giant pain or it takes a long time or it has to be expensive because it takes a long time and you have to absorb risk into the project.”
Russ explains that the first conversation he has with a builder is the paradigm shifter. He acknowledges their pain points and explains how Gold Heat can give them the benefits they know their customers want without any headache to the builder.
But he says you shouldn’t stop there — you have to build a relationship. “When I meet with a builder, it's not, ‘Hey, what's the next project that we can get in?’ It's ‘What is your sales process? What is your engagement process? How do we integrate into that?’ It's not us telling you how to sell our product, it's us partnering with you to communicate to your customer in [an] effective way why you, as the builder, are delivering a differentiated product. And that goes from sales conversation to collateral.”
That’s how you differentiate yourself to your customers. Find out how you can help them beyond just providing a product. Spec sheets and technical data are still essential, but they aren’t your true sellers no matter what building material you sell.
Don’t forget to ask for their feedback, too. Russ reminds builders that it needs to be a two-way street. “We need to talk to you and understand what works for you. And then you need to come back as the builder and say, ‘Hey, this works. This doesn't work. This is what I'm hearing,’ in order to have those relationships. You've heard, ‘you are the average of the five people you spend the most time with.’ I think that that extends to companies. You are the average of the vendors that you choose to partner with.”
Russ not only builds relationships with their builder customers but their suppliers as well. “One of our suppliers is in Florida, and we have their hurricane plan. We wanted to know what happens when their factory shuts down. We've read their emergency plans, and we know what they're going to do. And that's the kind of partnership we try to build with our vendors, and then we try to be that partner to the builders.”
When you’re trying to differentiate your product, you can’t make it difficult, Beth points out. “You can't go into a builder and say, ‘Hey, this is an opportunity to differentiate, but it's going to extend your project timeline by this amount of dollars and increase your upfront cost by this amount of dollars. But in return, you're going to get this amount.’ Man, that risk is high. So what's really important here is you solved for that before starting the conversation. Essentially, you absorbed that risk.”
Show your audience how you have solved their pain points, risk, install time, expertise, callbacks, homeowner concerns, homeowner replacement needs, etc. “Show them all of those ways that you've solved for that [potential issues]. That's how you get to have those really meaningful conversations and show that you're a true partner, not just in opportunities.”
Want Even More Insight?
Russ’s biggest piece of advice to manufacturers wanting to build partnerships and help differentiate is to be honest with yourself. “Make sure that you really are offering a differentiation. Look for the spots that you truly do differentiate and lead with those so that you don't sound like everybody else and that you don't get engaged in this race to the bottom on price.”
Don’t just say, “We provide great service.” Everyone claims that. Instead, tell them how your service is better. Do your support calls go to a call center? If so, that’s probably not the best differentiator. But if they go to the actual engineers who made the product? That is a meaningful differentiator that stands out.
Lastly, don’t forget to listen. “It's not about your sales process. It’s about your customer's buying process. Understand what your customer, and what their customer, needs — not what you need — and be okay with making those adjustments. Because when you are willing to change, when you adapt, then you can really integrate in a meaningful way and improve and grow.”
To learn more about Gold Heat and how they build relationships with builders, email Russ at [email protected] or find him on LinkedIn.
Remember to like and subscribe to Smarter Building Materials Marketing wherever you get your podcasts.