Building Product Marketing: February 2010

Substitution Story - Sand Between Coats

A sales rep working for a major paint producer, recently told me this story:

Our Company was not named in the project specs. The contractor submitted a substitution request to use our products, and our brand's reputation made it easy to get a change approved by the architect.

A few months later, the contractor called asking for help. The spec said to sand surfaces lightly between coats. This is a reasonable requirement with most brands of paint since sanding typically improves adhesion.

However, the contractor was using our newly introduced line that was especially formulated to adhere without sanding, and we had plenty of test data to substantiate the claim. In fact, our product literature recommends against sanding. The spec clearly said to follow the manufacturer's application instructions, yet the owner's rep still insisted on sanding between coats as specified.

The contractor had paid a premium for a labor saving product, but still had the expense of sanding.

The sales rep felt the owner's inspector was being unreasonable. The conflict could have been avoided if the request for substitution had disclosed how the proposed product affected all the specification requirements. Too often, a substitution request deals with Part 2 - Products requirements, without addressing Part 1 - General and Part 3 - Execution of a spec section.

Greenwash of Week

"Because a concrete masonry unit is 80 percent air by volume and is composed of 90% plentiful inert material, it has naturally low-embodied energy. It is already an ecologically sound building component." Brochure for Pixel Blocks, a new decorative concrete masonry unit.

First, the math doesn't make sense. Unless the air is included as part of the inert material, the total of the air and the "inert material" would be 170 percent.

More, in California, where the brochure was distributed, CMU is usually filled with mortar, so the product as used has only a small air content within the concrete's voids.

Next, I can't imagine what part of a CMU is not inert. I have watched cured concrete, and it usually just stays in one place and is not very chemically reactive. Are they referring to calcium hydroxide that can form akaline deposits on the surface of concrete?

Finally, the brochure does not address the real ecological footprint of the product -- both detriments like the high CO2 emissions associated with portland cement, and positive features like the durability of the product.

Mobile Showrooms

Some building product samples are just too big to carry from design office to design office. Other companies have product lines that are best experienced in a controlled environment. For these firms, a mobile showroom may be a viable sales tool.

An example is Assa Abloy's "Innovation Showroom." A specially outfitted tractor trailer, it travels the country with a class room on wheels where they present continuing education programs for local architects, facility managers, code officials, and others.

A firm does not have to be a giant like Assa Abloy to make this concept work. One of our clients, the owner of a much smaller company, outfitted a motor home as a demonstration and training facility. He happily spends the winter months crossing the southern tier of states calling on potential applicators, school district facility managers, and architects. A ten minute demonstration of his system is more convincing than any amount of advertising.

Mobile show rooms can be wheeled right onto trade show floors. And when they aren't in use, they make great billboards that can be strategically parked.

Strategies from Social Media

From ConcreteConstruction.net.

I particularly like her closing thought:

"Don't let fear or lack of the unknown drive your decisions. The best way to determine what is right for your company is to participate and engage in social media and assemble a strategy that fits your culture and goals."

That's a Wrap!

I recently learned about WRAP ADS while working on a new magazine ad for a client. What is a wrap ad?.....No, I don't mean wrapping your vehicle in advertising.

The type of wrap ad I'm referring to can be explained in this simple equation:

Main Advertisement ( junior page)
+
Additional material (eg. product spotlights or advertorial copy)
=
WRAP AD (full page)

A wrap ad is usually a full-page ad. However, instead of one ad that takes up the entire page, the wrap ad includes a main advertisement, in "junior page" size; plus additional material that wraps around the advertisement - such as new product announcements, short case studies, or other advertorial copy.

The wrap ad I worked on with designer Vladimir Paperny turned out like this:

Wrap ads can be particularly effective when placed in tabloid sized publications; then the main ad (junior page) is actually the same size as a full page in a standard sized magazine.

Consider using wrap ads to get attention for your building products. They are great ways to showcase your products and communicate your company's message and style.

10 Tips for Advertising to Architects

Architectural Record publishes these tips:

Successful advertising gets attention, whets architects’ appetites for more information, and leads them deeper into your sales and marketing program. Over and over again.

1. What’s the One Message you want Architects to Hear?
Choose one main message, or drive home a few key points... which readers will remember.

2. Tell the Story.
Immerse the audience in the experience and bring the product to life. But don’t try to tell the whole story. Use only your most important, differentiating details for the ad, and invite architects to learn more.

3. Get Technical.
Support any campaign claims with technical data that represent key measures of your service or product line. Use charts, graphs or schematics to lend impact to a credible technical claim. The text should be succinct, clear, valuable – and honest.

4. Use Simple, Strong and Memorable Images.
Architects are visual people and respond better to dynamic images. To be remembered, you must first catch the architect's eye.

5. Use White Space.
Strategically use white (open) space to allow important images and words to pop. Keep the color palette limited, and the layout clean and open – with room for thought.

6. Show the Product.
Architects love to see products “in action,” proving that they work as claimed. In conventional settings or unexpected places, help architects see your product in ways that inspire imagination and creativity.

7. Show the Project.
If your product is in a noteworthy project, use it as a testimonial in your ad. Show the project, identify it, and credit the architect behind the design... even a great project by an unsung architect can work.

8. Consistency.
Words and pictures common to all of your marketing communications may include logos or corporate signatures, phone numbers, street addresses, key contacts and website address. Put them in the same place every time.

9. Call to Action.
You got their attention. You educated them about your products. What do you want them to do next? Call, write, visit? If you have an incentive to offer, your ad is the place to put it.

10. Think Young.
Architectural magazine readers tend to skew younger, while older and more accomplished architects tend to think young. You should think young too, building campaigns that appeal to the youthful, optimistic minds of today’s architects.

Generalizations such as these do not apply in all instances. However, some of the most effective ads Chusid Associates has produced followed these rules.

(Download pdf)

Six Words

Saw a post challenging ad agencies to describe their firm in 6 words.

The benefit of the "Six Words" is the same as an elevator pitch, but in more condensed form. It really forces you to identify your core message and target.

We had fun thinking about this; here's a few of our favorites describing Chusid Associates:

Helping you help architects build better
Get your product noticed by architects
Spread news about great building products
Construction product marketing idea innovators
Inspiring design professionals with your story
Telling your product's story to designers
Architects of Building Product Sales
Get your product noticed by architects
Spread news about great building products
Construction product marketing idea innovators
Helping you sell your building products
Getting your building products into markets
Making sure your products are noticed

Of course, we sometimes carry things to extremes:

Building Business for Building Product Manufacturers (6 words)
Building Markets for Building Products (5 words)
Building Building Product Sales (4 words)
Building Product Marketeers (3 words)
Marketing Mavens (2 words)
! (0 Words)

What are your six words? Leave them in the comments below.

Congress to Hold Hearing on Location Data and Privacy

Important news from ReadWriteWeb:

"Geolocation is quickly emerging as a big new platform to build all kinds of cool services on top of. While there's a whole lot of potential - there's also growing concern about the privacy implications of this flush of data about where we are. Thus it's timely that a committee of the US House of Representatives is holding a hearing next week to investigate the issues between commercial use of location data and consumer privacy."

This is important for two reasons. First, it serves as a good reminder that we need to protect ourselves while taking advantage of these new high-tech tools. Location-based computing has a lot to offer and is getting tons of attention. But the same technology that lets you find your way around a crowded trade show, locate broken parts on the jobsite, or see where your children are going after school also potentially can provide this information to others who will not use it in your best interest, even if that just means spamming you with ads for the store you just walked past. Protect your privacy; learn how to adjust the settings on any new program or device you start using.

Furthermore, this strongly underscores how much mobile computing is growing. Ruder Finn reports that mobile social networking is more popular than desktop. "91% of mobile phone users go online to socialize compared to only 79% of traditional desktop users."

This is good news for the construction industry, and especially for product manufacturers! The Ruder Finn report also says that, "Mobile phones offer users the chance to immediately respond to breaking news, whether it is a new piece of legislation or even the latest ongoing development of a corporation or politician under siege." Likewise, they can allow you to instantly learn about and respond to jobsite problems, unmet needs, requests for information, and other opportunities.

How is your company taking advantage of mobile computing?

Webinar Questions

In preparation for leading an continuing education webinar, I created a list of questions and sent it to the host of the program... Just in case no one in the cyber-audience asked any questions. In a live presentation, I can usually use eye contact to elicit a question from someone in the audience. But it is difficult to generate a connection with an audience I can't see.

Sure enough, no one volunteered questions from the audience. Yet the host was able to interject questions into the audience to try to create the give and take that gives a program a live quality. He would say, "One of our participants has just emailed a question...."

What would be the best specification language to use?

Can you do a program for my CSI Chapter or for my consulting engineers?

How much does more expensive are the products?

I have never had the type of problem you described. Is this a very rare occurrence?

Are these a single source item or are there multiple manufacturers?

These were all questions that helped me restate the information being presented, and kept the presentation feeling spontaneous.

On-Body Video and Building Products

Live video feeds from construction job sites are fairly common now. Mounted on poles, they provide reasonable overviews of jobsites. The next step in "videolizing" construction may be the use of small cameras mounted on the bodies of the people working on a site.

An exhibitor at World of Concrete earlier this month showed such a system; a small video camera mounted on a hardhat transmitted signals to a netbook sized computer carried in a pouch on the person's back or hung from a tool belt. The result is a record of what the person saw (or should have seen) on the project. A different version of the same idea was featured recently in USA Today and is being tested by for use by law enforcement officers as a way to gather evidence and to document the performance of officers.

The following are speculations on how such systems may be used by building product manufacturers:

There is a natural use for video in project inspections. Many roofing warranties, for example, require the manufacturer to make a project inspection as a condition of the warranty. A high definition video may be able to capture more information about a project than could a still camera, including panoramic sweeps of the roof or a walk along the length of every joint.

This information could be useful to defend against a warranty claim, for example, by proving that the original installation had been modified. However, such extensive documentation could also backfire if a review of the video indicated a defect that the inspector should have noted but did not.

More, I wonder if a body camera provides a better record than would a tripod mounted (or even hand held) camera. Recording while walking could present a bouncing image that is harder to review than footage taken with a stationary camera.

Perhaps a better use is for training and quality control. Are your installers using the right techniques? Are they skipping steps? Checking via video could cost less than sending your tech manager onto each project. It could be especially useful for watching items of work that are not visible after subsequent construction is in place.

Will trades people be willing to wear the camera? Most trades people are professionals and take pride in their work. They might feel that the cameras show a lack of confidence at best and an invasion of privacy at worst.

Could on site video capability give your firm a promotable benefit? Would the architect, engineer, or owner like the ability to eavesdrop on the work while it is in progress? My guess is that the footage would be endlessly boring. It could also be a liability issue for design professionals if they miss catching an error that should have been obvious from the video.

Finally, there are many locations where it is difficult for inspections or supervision to take place, such as in a crawlspace or on top of a mast. Here, video could clearly be helpful, enabling the person on the spot to confer with an expert or colleague in the job trailer or other remote location.

While I am uncertain about the current generation of body mounted cameras, It seems pretty obvious that video in one form or another will become an essential part of the job site tool kit. As it is now, many of the people working on a construction site are already carrying telephones with photographic capability. Stay tuned for more developments.

What Happens when a Product Rep Loses a Line in a Down Economy?

“Losing anything is an unwelcome surprise, especially in the construction community, where we're struggling to find different ways to manage our time and work,” said Stirling Morris, CSI, CDT.

Morris led the January meeting of CSI’s Product Representation Practice Group. Hear a recording of this meeting. Join the group! It’s free!

Many believe the U.S. is still a year or more away from a recovery in commercial construction, Morris said. Product representatives are losing their jobs, losing sales, and losing parts of their networks as more and more designers are laid off.

Right now, manufacturers are cutting deals that do little more than keep their staff employed, several group members said. Estimators, contractors and project managers are pressing for cut-throat deals as they struggle to keep their own companies afloat.

"There are fewer commercial projects out there, so everyone knows everything out there,” a Dallas rep said. “The competition is fierce, and there's a lot of price undercutting. They're not making money -- they're just keeping the doors open.

“It seems like people swoop in at the last minute with a better deal.”

Generic products that can be bought in bulk are being selected over more unique choices, another added.

Layoffs Changing How Reps Work:

Layoffs are leaving some reps without jobs, and others with huge territories to cover.

A few see opportunities in the misery.

"It's the relationships that you've built over time that are going to pay off,” said a California rep, who was laid off several years ago. "Instead of looking in your own industry, you want to look at other ways to bring in an income. All of us are going to have to think differently about our jobs."

“You could team up. You might take part of an area for a stipend. Many times the company that laid you off needs your services. They just can’t afford to pay you full time. You can contract with them for services.”

Layoffs are also affecting the relationships reps have with some firms. Specifiers and architects with whom a rep has built a relationship over the years are suddenly gone. People with less understanding about a project or product are stepping in, and have little time to get up to speed.

"Because of consolidation, the players are changing,” the Miami rep said. “Because you’re consolidating, the roles of individuals are changing. They're adding responsibility, which means they have more balls in the air."

Manufacturers Gambling On Smaller Workforce:

Manufacturers fail to value the networks their reps have, said one rep. “The manufacturers are companies,” she said. “They're not people. They're not in the valuing relationships business."

Manufacturers are deluding themselves into thinking more information on their websites will cover some of the work. "There are some companies that believe the internet is going to be THE source,” a caller said. “There's a lot of garbage out there that doesn't answer the questions reps take."

Manufacturers also expect an out-of-town rep – whose workload doubled when co-workers were laid off – to easily step in to a territory another rep had built over the years. It’s even harder when the territory is a different construction climate – how a product behaves differs between Vermont and Texas.

One caller described installers who are being pressed into pitching. "They weren’t hired for that reason -- they're not technically proficient, they don't have the relationships. When you send him into an architect’s office, he's a sacrificial lamb."

"Manufacturers are about to find out how valuable their reps’ relationships were," said Nina M. Giglio, CSI, CCS. The designers and specifiers who are still employed are doing more project management than in the past, and need the expertise of good reps.

"(Rep layoffs) definitely hurt our ability to get the information that we need,” she said. "If we can't get the information we need, we move on to the next manufacturer where we can get what we need."

"A lot of these questions are coming out of architect offices because of the reduced staffing. They need a specific answer to a specific question. A lot of manufacturers have cut back on that, and now they're sorry for it."

Morris knows a rep who lost his job with a manufacturer, but saw the value in his construction industry knowledge and network. He got his LEED AP and began working as an independent.

"With his experience and his know-how, he's been able to pick up the ball and run, even though he lost a job,” Morris said.

Suggestions from the group included:

* Independent reps with large, valuable networks can pick up a new product that needs good exposure fast. "These new companies are not affected by the downturn because they don't have any sales to loose. They're able to pick the best reps in the territory,” one caller said. “Keep your eyes open for new opportunities."

* Some reps are evaluating their lines, and cutting back on weak ones to focus on the lines with the most potential.

* Reps who are out of work can form alliances with employed reps to help them cover their suddenly huge territories.

* Make a copy of your contact database NOW – before you loose your job. "Do it now, even if you have to save a hard copy,” the California rep said. “That’s what makes you valuable to a future employer. All you have is your reputation and your Rolodex."

* Telling your contacts at a firm that you have been laid off is a delicate matter, especially if you’re going to start a business of your own. You want to get paid, so you can’t give your advice away for free, and you don’t want to make a bad impression on your future clients or former employers.

Reposted from: http://blog.csinet.org/default.asp?Display=192

Basic Email and Forum Netiquette

Lifehacker posted this list of basic online etiquette with users' personal lives in mind, but the list is equally important, or more so for use in your online marketing campaigns. Their etiquette rules include:

Learn the rules and read the archives.
Don't rehash old issues.
Avoid "me-too" posts.
Quote relevant text only in replies.
Take care with "out-of-office" replies.
Not everybody will agree on everything.

Read the full article to get more detail on each of those points.

Excellent advice, all of it. Many companies looking to enter or expand their online profile will turn to forums and email lists, and the increasingly net-savvy users are even less tolerant of "improper" behavior from companies than from other users.

What other netiquette rules have you discovered that should be on this list?

The future of augmented reality.

Imagine if an architect could see your brand pop up all over a new job site like this:

Augmented (hyper)Reality: Domestic Robocop from Keiichi Matsuda on Vimeo.

How to measure PR results

Measuring the real significance of a single press release is notoriously difficult. If we were doing a large, consumer oriented PR campaign, it is much easier to measure results. For example, a big PR campaign about a new record shows up almost instantly in iTunes downloads. Most building products, however, have a much more diffuse and slower path to market.

We can share anecdotal information: For example, a contractor told one of our clients that he had just finished comparing two bids, and our client's was high. The very same day, however, the contractor saw an article about our client's product and remembered how much more efficient it was to install than the competitor's. The article inspired the contractor to accept our client's higher priced bid. When people call or email you, do you always inquire where they learned about your company? Doing so, and tracking the information, can provide valuable data.

Another way we can measure is by adding up the cost of buying an equivalent amount of advertising space. For example, a trade magazine article will probably be six or more pages in length. Purchasing the same amount of ad space would cost about $20,000 plus the cost of designing the ad, much more than you would pay to write and place the article.

PR generates awareness, and awareness is accumulative and builds slowly. Our clients still report inquiries from publicity we placed a decade ago. This is even more likely to happen in the new online era, where documents remain in circulation indefinitely. A Google search on your building product after sending your press release will now show your site in the top 20 hits. With continued PR, we may be able to raise its ranking to the top 10.

PR is never meant to stand alone, but to work in conjunction with other marketing efforts. For example, Wikipedia may not allow us to insert your company's URL directly into its website; but we can now link http://en.wikipedia.org/wiki/(your building product) to one of the online postings based on your press release.

In advertising, you control the schedule for when an ad reaches its audience. With PR, you surrender much of this control. While many online news outlets pick up wire service stories almost instantly, other editors file press releases away for later use -- and this could be as little as two months from now or as great as one year from now.

Finally, don't discount the possibility, even the likelihood, that your product had an immediate impact. Some building owner or designer may have seen the press release the same day it went online, and forwarded the post to his project architect to use on the project where they are just beginning the landscaping plans.

These are some of the reasons we recommend establishing an ongoing PR budget to keep your product visible, continuing to build brand awareness, planting seeds that will bloom in their own season, and continuing to improve your search engine standings.

World of Concrete's Visit Tracker

World of Concrete just introduced a new feature for attendees, a "Visit Tracker". I just got the email with my results today:

Dear Aaron,

We hope you found your time at World of Concrete 2010 a valuable and important experience.

To help you gain the maximum value from the event, we invite you to make use of a new attendee service – ExpoCard Visit Tracker –
which contains the contact information for the exhibitors you visited. This information was compiled from your use of the
ExpoCard during the show.

This service will allow you to be proactive in following up with those exhibitors you spoke to during the event. This service is brought to you free of charge.

Included was a link to my personalized results.

My first response was, it sure felt like I visited more booths than that! It really brought home to me what a small percentage of booths I visit actually scan my card. Beyond that, this is an excellent new tool for attendees and exhibitors alike; attendees have extra incentive to scan their cards now, potentially helping exhibitor collect more prospects.

Tech-industry prognosticators are predicting that one of the big trends in 2010 will be a shift from the internet as a "Web of Documents" to a "Web of Data"; this is a good example of that shift. Hanley Wood already had the data; by making data into a usable tool, rather than keeping it in a walled garden where only a few people could view it, they created something new and useful.

Cement Masons and Plasterers Training Center of Washington

I recently visited the Cement Masons and Plasterers Training Center of Washington, and was impressed by their facility, faculty, and curriculum. I was reminded, during the visit, of the importance of crafts education programs as opportunities to promote your brand. The importance of training the trades can be especially important if you are introducing a new product; no one wants to lose a bid because contractors don't have experienced mechanics.

The Training Center I visited had recently conducted hands-on training with eight different types of cementitious toppings with dyed and polished finishes. This is a relatively new and growing product category where the training attracted journeymen as well as apprentices. Seeing the results side-by-side indicated some clear winners and losers: the concrete slab used as a substrate for the toppings had cracks that telegraphed through most of the toppings, While some of the toppings may have been innately better, the toppings that performed best were installed under the watchful eye of a manufacturer's technical director who was on site during the training program. The biggest losers, however, were the manufacturers that had not donated time or trainers; they may have missed out on an entire generation of brand awareness and loyalty.

Consider providing incentives for your local reps or distributors to help locate and participate in educational programs. Programs are typically sponsored by unions, community and technical colleges, and other industry organizations. Chusid Associates can help you locate these organizations and to design curriculum materials you can offer. - Michael Chusid

FTC Turns Greenwashing Into Fraud

From a New York Times online article, "FTC Moves May Signal Start of 'Greenwashing' Crackdown":

The agency's Guides for the Use of Environmental Marketing Claims, or Green Guides, define terms such as "recyclable" and "biodegradable" and explain how businesses should back up environmental assertions. Though FTC cannot force businesses to adopt greener practices, Section 5 of the FTC Act authorizes the agency to intervene when businesses are misrepresenting their practices to clients -- in other words, turning greenwashing into fraud.

We have commented on FTC guidelines previously, but this article highlights several new developments regarding the Green Guides, the FTC's environmental marketing policies:

7 new cases were opened in the last year, out of 42 total since the Green Guides were implemented in 1992.
At least two states (CA and IN) have adopted the FTC guidelines as part of their state marketing laws.
Other regulatory agencies, such as the SEC, are also getting into environmental issues in their jurisdiction, suggests these agencies are moving an environmental agenda forward while actual legislation languishes in Congress.

Most of these guidelines seem to point towards transparency and full disclosure as key issues, which has always been a key part of our environmental marketing strategies. Creating a transparent framework now makes it easier to add specific information down the road as regulations continue to progress.

Understanding the Specifier

Specifiers are researchers, quality assurance managers, and mind-readers. CSI's Specifier Practice Group recently discussed what is expected of specifiers, both in-house and consulting, as part of their everyday practice. The discussion is summarized on CSI's blog in a post titled "What is Expected of a Specifier?"

If you've ever wondered why we at Chusid Associates advocate selling to specifiers, this blog post is for you. It's a great insight into how specifiers see their work; as such, it's also a good way to discern how product representatives can become essential partners to specifiers. Product reps can provide information to specifiers that's clear, concise, correct, and ready to pass on to designers. When a product rep makes a specifier's job easier, everybody wins.

Tax Benefits for Designers

Tax benefits can be a powerful tool for promoting certain building products. Chusid Associates, for example, has worked with producers of demountable partitions and access flooring systems to explain how the accelerated depreciation of these products can create bottom line benefits for a building owner.

The following article, reposted from the Xella (producers of Hebel autoclaved aerated concrete) website, explains a little know tax benefit that can accrue to design professionals:

The Federal tax laws provide a significant tax benefit for designers of energy-efficient commercial buildings for public entities, such as government buildings and public schools. A designer such as an architect, engineer, contractor, environmental consultant or energy services provider who creates the technical specifications can deduct the cost to the public entity of “energy-efficient commercial building property expenditures” up to a cap of $1.80 per square foot of the energy-efficient commercial building property expenditures that are made.[1]

The deduction is allowed in the year in which the property is placed in service and is in lieu of depreciating the amounts qualifying for the deduction over 39 years.[2] .The tax laws define energy-efficient commercial building expenditures as property:

Installed on or in any building located in the United States that is within the scope of Standard 90.1-2001 of the American Society of Heating, Refrigerating, and Air Conditioning Engineers and the Illuminating Engineering Society of North America,
Installed as part of (i) the interior lighting systems, (ii) the heating, cooling, ventilation, and hot water systems, or (iii) the building envelope, and
Certified as being installed as part of a plan designed to reduce the total annual energy and power costs with respect to the interior lighting systems, heating, cooling, ventilation, and hot water systems of the building by 50 percent or more in comparison to a reference building which meets the minimum requirements of Standard 90.1-2001 (as in effect on April 2, 2003).[1]

This deduction generally is available to owners of buildings. However, because the owners public buildings, such as schools and government offices do not generally pay taxes, the tax laws provide a special rule allowing the owners to pass the benefit through to the designer. If there is more than one designer, the governmental owner of the building can allocate the full deduction to one designer that is primarily responsible for the design or, at the owner's discretion, allocate the deduction among several designers. The governmental owner of the public building is not required to include any amount in income on account of the deduction allocated to the designer, but is required to reduce the basis of the property by the amount of the deduction allocated. Note that a person who installs, repairs, or maintains the property is not a designer.[3]

Hebel AAC’s energy-efficient properties help meet their requirement for this tax-deduction credit level. Its unique closed cellular structure and thermal mass contribute to a high R-value and air-tightness, which reduce heating and cooling costs and improve indoor air quality. Buildings using Hebel Autoclaved Aerated Concrete have seen up to a 35 percent decrease in cooling costs.

In the case of a building that does not meet the overall building requirement of a 50-percent energy saving, a partial deduction is allowed with respect to each separate building system: (1) the interior lighting system, (2) the heating, cooling, ventilation and hot water systems, and (3) the building envelope. The maximum allowable deduction is $0.60 per square foot for each separate system.

Case in Point 1: 50% Energy Savings A school spends $200,000 in qualifying costs on a new 100,000 square feet, energy-efficient building using Hebel AAC. 100,000 sq. ft. X $1.80 = $180,000 Tax Deduction to the Designer

Case in Point 2: <50%> Same school as above, yet only the Hebel AAC building envelope qualifies. 100,000 sq. ft. X $.060= $60,000 Tax Deduction to the Designer

Certain certification requirements must be met in order to qualify for the deduction. The IRS has published guidance concerning how to meet these requirements.[4] In general, these calculations must be performed using energy simulation models found in computer software approved in the guidance and not by measuring actual electricity usage. Under this guidance, calculations are made by comparison to a reference building that is based on a building that is located in the same climate zone as the taxpayer's building and is otherwise comparable to the taxpayer's building except that its interior lighting systems, heating, cooling, ventilation, and hot water systems, and building envelope meet the minimum requirements of Standard 90.1-2001. Calculations must be certified by a licensed professional engineer or contractor that is not related to the taxpayer and meets certain other tests.

In determining energy and power cost savings for purposes of partial deduction described above for an energy efficient building envelope, the proposed building is a building that contains the building envelope that has been incorporated, or that the taxpayer plans to incorporate, into the taxpayer's building but that is otherwise identical to the reference building.

The deduction is effective for property placed in service after December 31, 2005 and prior to December 31, 2013.[5]

It may be possible to meet the energy efficiency standards set forth above using Hebel AAC.

Please consult your own tax advisor to determine whether your project can qualify for this significant tax benefit. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice that may be contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding any penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction(s) or tax-related matter(s) that may be addressed herein.

Notice 2006-52 can be found: http://www.irs.gov/pub/irs-drop/n-06-52.pdf
Notice 2008-40 can be found: http://www.irs.gov/irb/2008-14_IRB/ar12.html
--------------------------
[1] Code section 179D(d)(4); Notice 2008-40, 2008-14 I.R.B. 725.
[2] Code section 179D.
[3] Notice 2008-40, section 3.
[4] Notice 2006-52, 2006-26 I.R.B. 1175, clarified and amplified, Notice 2008-40.
[5] Code section 179D(h).

COMMENT

The specification of a single building product does not, by itself, qualify a project for this tax credit. The credit requires the design of energy efficiency into an overall building project. Still, building product manufacturers can gain from understanding and explaining how their product contributes to the overall result.

Contact Chusid Associates to explore whether this law can benefit your company and to discuss the best way to incorporate it into your marketing program.

Does Publicity Work?

On the tradeshow floor at world of Concrete, I was talking to a sales executive of a product manufacturing company, exploring the possibility of my doing some publicity work for them. He was very polite and patient, but finally asked me point blank, “Does publicity actually lead to sales?”

I had to tell him, “Honestly, it’s hard to be sure. We occasionally get word that during a sales inquiry, there was mention of having read an article. We sometimes even get email to the authors. But it’s not often. I have the impression publicity helps, but I honestly couldn’t prove it.”

I left that booth and went to see one of my clients, who was exhibiting two aisles over. They were having a fantastic show. He told me that the business they did on the first day of World of Concrete alone would have more than justified the expense of coming to the show. The same thing for the second day, and the third. They had written one immense order, about two containers of a material that’s generally sold in 5 gallon buckets. They had a verbal commitment for another container, and hint that it would lead to about 20 more containers over the coming year. They were giddy with their success, after exactly one year in business.

And then my client said, “If you’d like me to write a testimonial letter for you, I’d be happy to. We know very well the impact of what you’ve been doing. I have guys come in here and say, I read about this stuff, and then I went to your website, and then…”

I went back to the first booth and told him what I’d heard. He said he wanted to visit our office and meet with us. I was grateful.

The harder the times, the more minutely the budget is scrutinized, and every dollar spent has to be justified. Often the bottom-line value of marketing is difficult to track. This may be why marketing is typically the first budget cut when there’s a downturn in the industry.

When articles about your product get published, it’s difficult to track who actually reads them. Being able ton trace a sale back to an article usual only happens by luck. But it happens enough that I believe Publicity works, even though its effect is not instantaneous and is hard to measure.

But don’t expect Publicity to be a replacement for Sales. It’s support for Sales. They work together. Publicity, advertising and other forms of promotion generate interest, which may become leads. They help create the critical mass of awareness and product knowledge. Then Sales has a chance to do its job.

If Sales is all about closing, Marketing is about opening. It’s a way of getting customers into the door of the store, so that Sales can do its stuff.

Report from World of Concrete

World of Concrete is an annual, mega-trade show event focused on concrete construction and produced by Hanley Wood. Chusid Associates was there, in Las Vegas, in force this week, supporting six clients that participated in the show. Here are some impressions that may be useful to you as you consider your trade show plans:

There was 1/3 less exhibit space used this year compared to last, undoubtedly due to current economic pressures. I have not seen attendance figures yet, but am sure they were down significantly. Yet the show floor felt just as vibrant as ever; fewer people in a smaller space = the same visitor density. More importantly, those attending this year had a higher concentration of buyers (or at least shoppers). In the past, in contrast, some contractors or concrete producers would bring a dozen or so employees as a mid-winter junket; they would wonder the aisles and gawk, but not have any purchasing authority. This year, everyone there seemed to know what they were looking for.

Many exhibitors took smaller spaces. Lafarge Cement, for example, has had 20 x 30 foot island booths in the past; this year they had a 10 x 10 ft booth that was un-staffed when I walked past. It is as if they kept a token participation in the show to preserve their priority ranking in the draw for future exhibit space. Firms that had both inside and outside booths in the past chose one or the other. The quantity of swag being offered was also reduced, and hospitality events seemed less extravagant. For example, last year's reception for one specialty cement producer had a giant roulette wheel that attendees could spin for prizes ranging from t-shirts with the company's logo to $100 bills. This year, guests got only free food and drink, plus a chance to schmooze with the sales team.

Even with decreased construction activity, many exhibitors enjoyed great success -- due either to significant product launches or better booth selling skills. An example of the former is our client, Lythic Solutions. Last year's World of Concrete was the launch of their new business. After a year of planting seeds in the market -- through advertising, PR, a rep network, and effective word of mouth -- their booth enjoyed very high traffic with people now ready to write orders.

Safety Step TD, in the second category, had double the number of qualified visitors. At our suggestion, they made a few minor changes in their booth design, and trained their booth team to work the crowd proactively. It worked.

World of Concrete has a large and active press room, with three rows of tables for press kits. Last year, the table was full. This year, it wasn't even half full. Certainly the decrease was partly due to fewer exhibitors. And some exhibitors probably eliminated their press kits in their struggle to cut costs. But this may also signal an increased reliance on electronic distribution of press releases.

Still, I believe that hardcopy press kits are valuable tools; we used them to introduce our clients to editors. We also made effective use of the press conference room at the show. While only four or five editors attended each press conference we produced, there is no charge for the rooms -- making this an attractive value proposition.

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Want to learn more about trade show sales and marketing? Chusid Associates will be conducting workshops on the topic at CONSTRUCT 2010.

Hanley Wood aligns with AIA

Hanley Wood, already a powerhouse in construction industry publishing
and tradeshows, appears to be heading deeper into architectural markets:

WASHINGTON, DC -- (Marketwire) -- 01/15/10 -- In light of existing contractual agreements due to expire at the end of 2010, the Board of Directors of The American Institute of Architects (AIA) selected Hanley Wood, LLC to begin negotiating development of an integrated media approach for the AIA's official publication and annual convention. The AIA decision was made following a confidential RFP process, due diligence of a Board-appointed Integrated Media Task Force guided by criteria developed by the Board, in-depth discussion of the attributes of the proposals, and thorough evaluation of the responses based on those attributes. The Board instructed the AIA President and Executive Vice President/CEO of the AIA to begin discussion with Hanley-Wood on creating an integrated convention and publication offering that encompasses print, online, digital, and convention/meetings.

This may have a big impact on McGraw Hill's Architectural Record, which is currently distributed to AIA members as a membership benefit.

Steel Industry Greenwash

The American Iron and Steel Institute and other steel industry groups fill their websites with statements about how much they have reduced their carbon dioxide emissions in recent years, and to brag about the research being done that may result in further reductions. These are notable claims. But they are also useless to the architect or builder trying to make informed decisions about building systems today. What is needed is clear information about the current CO2 emissions.

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