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About The Natural Stone Sector In The United States

Hasan Kürşad Devecioğlu*
The construction and natural stone sector ranks as one of the sectors that has been hit the hardest by the financial crisis that we are living through in the United States. All natural stone suppliers and producers are feeling the stagnancy within the natural stone sector.
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This stagnancy is causing the natural stone market in the United States, which was already shrinking in the past few years, to get even smaller. With these two factors coming together, an increase in competition and a drop in the profit margin are coming into effect. In the past few months the increasing value of the dollar may have created an advantage for the producers, but the stagnancy in the market has brought down this advantage to the lowest possible level.

CAN THIS CRISIS BE CHANGED INTO OPPORTUNITY?
The most frequently asked question in this economic crisis, as in all other ones before this, is the same: “How can we change this current crisis into an opportunity?”

Whether you are a natural stone factory in Turkey supplying to the market in the U.S. or whether you are a natural stone importer and supplier based in the U.S., what you present your clients is more than just marble tiles or marble slabs. You do not merely provide a product; you also provide a service. For example, your job does not end when you deliver the marble slabs you promised to a construction company in the U.S. This is a point that is often overlooked, but in fact the quality of the service you provide your clients is just as important as your product. In the natural stone market, American clients choose suppliers first based on their quality of service and then on their quality of product. Listening carefully to the client, showing interest with periodic visits, keeping the promises that were made, your attitude when dealing with the client and professionalism in service are important parts, if not the entire concept of service.

Periods of economic crisis all end some day. The important thing is not just to get through an economic crisis period with no harm or with the least harm done; it is also important to prepare in order to operate properly within the market after the economic crisis is over. How can this preparation be executed? During a period of economic crisis, in the period of compensating for the crisis, and in the period of a boom, the key point for natural stone companies is always to have a command over your customers or your customer portfolios. Working with existing clients is always less costly and more profitable then finding new clients in the marketplace. Additionally, existing clients will also recommend you to other potential clients in the market. This means that, especially during an economic crisis, concentrating on existing clients rather than on finding new clients will help natural stone companies not only in weathering the crisis with the least amount of loss but will also help natural stone companies gain an advantage against their competitors in the period following the crisis.

IMPORTANCE OF CRM
A natural stone company can only stay in business and grow as long as it can supply product to customer groups such as contractors, architects and construction companies. Companies should try and keep in hand those customers that they work with most profitably and efficiently. This activity can be executed with CRM, which a marketing implementation that is very popular these days. The CRM application first starts with the analysis of existing clients. Just as one can use different criteria for this analysis, there are also the criteria which are widely accepted in the marketplace: how recently was the customer acquired, how frequently does the customer use the service, what is the average monetary amount of customer’s order?

According to these criteria, who your--meaning the natural stone supplier--most recent customer is, how recently they have bought natural stones from you, how frequently they buy natural stones from you and on an average how much they spend each time they order from you are criteria which are widely accepted. Of course a natural stone company can widen this list of criteria. For example, you may work with a contractor that is much more profitable for you than others you work with or the cost of providing a service for a specific architectural firm may be lower than the cost for your other architectural firm clients. With these specific criteria you can separate your clients in three or four groups, from most profitable to least profitable. There are two different benefits of coming to this point for a natural stones company.

Firstly, with such a grouping you will get to know your existing customers much better and you can clearly see which customers you need to be making your priority.

Secondly, by identifying your ideal customer, whenever you venture out into the market to find new customers in an appropriate market, it will make it easier for you to find that new ideal customer.
In short, within the American natural stones market you know what you want and whom you want. You will know what kind of contracting company or what kind of construction company you want to work with and you will conduct a market search accordingly. In this way you can use your limited resources in the most efficient way by clearly defining your target.

Another important point is the need to constantly analyze the financial risks of your customers. This analysis becomes even more important during an economic crisis. Keeping your existing customers may be your number one goal, but in order to take make wise decisions, keeping constant track of the financial risk situations of customers within the natural stone sector carries a paramount importance for the financial well-being of your natural stones company. You need to keep in mind that even your best customer may have to hand off their business tomorrow due to any number of reasons. Just as you can get information about the reputation of any company, which is your client, from any other company in the marketplace, you may also use financial databases.

The U.S. is rich with database companies which keep records of not only individuals’ finances, but also the finances and reputations of companies. You, as a natural stone supplying company, can, from your own office, learn about the financial risk situation of your customer or a company in any state of the U.S. From existing corporate database companies in the U.S. you can learn the following about the company which is your customer: the names of the owners, the financial risk situation of the company, whether or not they owe money to other suppliers, how many times they have been taken to court for outstanding debts, and the results of those lawsuits. In the natural stone sector, as in the business world, continuity is relevant and the financial risks of your customers may increase or decrease. With a constant watch you can be aware of the financially risky situations of your customers and you can take precautions accordingly.

THE FUTURE OF THE NATURAL STONES SECTOR IN THE U.S.
As the current economic crisis and the stagnancy in the natural stones sector cause a shrinkage in the market, certain suppliers in the American natural stones sector and certain natural stones producers who work most heavily with the American market might withdraw from the market all together. Only those firms with the strongest customer relations and those with long term business plans will be able to weather this economic crisis with the least wear and tear.

Instead of trying to sell natural stones to everyone in the American natural stones sector, concentrating on specific groups of customers will be much more profitable for your natural stone company. You will be able to survive this economic crisis only by holding on tightly to your best customers and by creating tactics in accordance with the financial risk analysis of your customers.

After the economic crisis there will be growth in the American natural stones sector and we will be back to brighter days. Other tactics that can be used now in preparation for the period after the crisis ends is to test new products and do market research. For example, 45% of all known natural stone reserves in the world are in Turkey and new reserves are constantly being discovered. However, it is not possible to say that there is a demand for each new natural stone that is unearthed in the American market. After this economic crisis there will be a growth in the American natural stone market, which had been previously shrinking. Within this new period of growth, natural stone producers who have made it through the crisis can swiftly increase their share of the market before new supply companies enter.

It is in this period that concentrating on strong customer relations with existing clients and on natural stone products which have been tested and that have received positive feedback (this can be marble or limestone etc.) become more valuable. It is important that there is something new or different about the product (like color or surface construction) and these will all help companies increase their share within the American natural stone sector.

* Hasan Kürşad Devecioğlu has been applying his knowledge and experience of direct marketing management for many years to the natural stone sector in the US. He is the author of “Marketing Imported Natural Stone Products” and “Strategic Natural Stone Marketing”.  In addition, he had two books in Turkish, The Direct Marketing Method Which Is The Most Suited And The Most Profitable For The Turkish Market and The American Business World. You may reach the author at This email address is being protected from spambots. You need JavaScript enabled to view it.. (For further information visit www.kursaddevecioglu.com or www.marketingmarble.com.)
 
Last modified onSaturday, 06 May 2017 10:07

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