Two new milestones for BMBI and the industry
In February, the first milestone, the Sunday Times asked how Builders Merchant Builders Index (BMBI) Experts saw Brexit affecting the industry and how they were preparing for it.
In July, a second milestone, the Department for Business, Energy & Industrial Strategy (BEIS) Monthly Construction Update included highlights from the latest BMBI report. BMBI was in good company. It was alongside highlights from the ONS, IHS Markit CIP Construction Purchasing Managers Index, Experian and Construction Products Association forecasts, Consensus Economics, the Office for Budget Responsibility, the OECD, BEIS’s own Monthly Statistics of Building Materials and Components, and the Bank of England’s Agents’ Summary of Business Conditions.
It was there because BMBI is a remarkably good proxy for RMI which until now has been an elusive and crude estimate. BMBI isn’t based on estimates, or a survey of part of a market, like the ONS, whose figures tend to be heavily revised over the next 12-18 months as more data becomes available. BMBI is practically the whole market – with over 80% of the value of generalist builders’ merchant sales to builders and other trades throughout Great Britain providing sales data to GfK’s ground-breaking Builders Merchants Panel.
MRA Marketing produces the Builders Merchant Building Index, a brand of the BMF, to communicate to the wider market as the voice of the industry. Individual Expert Brands explain their markets, market trends and issues, and speak for their markets.
Achieving national recognition and a national audience in and beyond construction for merchants and the Expert brands was always one of BMBI’s main objectives.
Compared to most industries and sectors I know, there was surprisingly little construction research and market data available before BMBI. Some markets and categories were almost completely bare of research, and what was available in others was patchy or poor.
A small number of more sophisticated companies – some of them BMBI Experts – have always invested heavily in bespoke research and insight because research and insight feed their marketing, and marketing feeds their profits. Relative advantage and profitability are what marketing is for, and there’s a high correlation between investment in marketing and profitability.
Market research is a market like any other. Without steady demand from businesses that are used to using it to develop their strategy and marketing, there’s no point in agencies investing time and effort in producing it. And because they don’t regularly invest in it, most companies in the builders’ merchant supply chain haven’t allocated specific budgets for research and data. Nor have they invested in the people or help to use it in their marketing. As a consequence, this negative feedback cycle left the field clear for companies who do invest in it.
But, over the last five years, I’ve seen an increase in awareness and an appreciation of the value and power of market data and insights. For most it’s still early days, but marketing is very much on the map. The BMF now holds regular, well attended marketing forums, and in the recent conference in Croatia, the marketing workshops were the best attended, filling the main conference room. And where marketing goes, research and quality data are never far behind.
Strategy without facts and market forces is a leap in the dark. Are the assumptions that underpin your marketing in a changing market still valid?
For market insights, and the facts and forces to help you grow profitably in a changing market, call Anna Eriksson on 01453 521621 or email Anna@mra-research.com.