January 2016 Newsletter

• Prices for most of the products we distribute remained unchanged in January and few manufacturers have announced price increases for February. For the first time in months the price of scrap steel posted up by $30.00/ton on the Chicago Metal Exchange the first week in January. Prices on some foreign metal exchanges also posted up by $10.00/ton or more in January.  Nucor and Gerdau announced the second week in January that they will increase prices on wire rod by $30.00/ton effective February 1^st citing their increased cost for scrap steel as the reason.

• On December 29^th BASF Construction Systems notified there distributors they would adjust prices on February 1^st. Prices for most items will increase, but prices for some items will remain the same. The percentage increase will vary by product group with increases of less than 2% to 5% for most items, although there will be double digit increases on some items. If you have projects you are bidding which specify BASF Construction Systems products, we suggest you ask us for a current quote.

• Domestic rebar mills in the southeast continued to hold the line on prices in January and indications are prices for February shipments will be unchanged. Availability of less expensive imported rebar increased as some shipments arrived at ports in the southeast in January and several other shipments are due to arrive by mid-February. Most analysts expect imported rebar prices to hold at current levels into March.

• Prices for polyethylene sheeting where basically unchanged in January, although a few manufacturers offered a discount of a few percent the third week in January to book orders for February shipment. Despite oil and natural gas prices being at historic lows, some resin manufacturers announced a price increase for February shipments. If resin manufacturers are able to get the February price increase expect polyethylene prices to increase 3 to 4% in March. 

• Due to the announcement by Nucor and Gerdau that they will increase prices on wire rod February 1^st, masonry reinforcing manufacturers notified their distributors that they will increase prices March 1^st, if the wire rod price increase holds. If you have projects which require masonry reinforcing we strongly urge you to buy out these projects in February to avoid the expected March 1^st price increase.

• Concrete reinforcing wire mesh prices have held steady for the past few months; however, if the February wire rod price holds, expect wire mesh manufacturers to increase prices in March. As with masonry reinforcing, if you have any upcoming projects which require concrete reinforcing wire mesh, consider buying out these projects in February.

• The producer price index (PPI) for final demand in December decreased 0.4% from November on a not-seasonally-adjusted basis (-0.2%, seasonally adjusted) and 1.0% from December 2014, the Bureau of Labor Statistics (BLS) reported on January 15. AGC posted tables and an explanation focusing on construction prices and costs. Final demand includes goods, services and five types of nonresidential buildings that BLS says make up 34% of total construction.

• Click here for the latest update on the construction economy from Ken Simonson, the chief economist of the AGC.

• Wells Fargo just released their updated construction industry forecast for 2016 and it is largely positive.  The full report and summary graphs can be found at http://mail.wellsfargoemail.com/constructionforecast

James “Leroy” Holden

Our associate profile this month is of James “Leroy” Holden a warehouse associate/CDL driver at our Myrtle Beach branch. Leroy is a native of Conway, SC and a graduate of Conway High School. He and his wife Nancy have been married for 19 years and have one son, Trystan. When not working Leroy enjoys playing golf with his family, fishing and hunting with his son and friends, and he loves to travel. Prior to joining us he was a restoration technician with Full Steam Ahead and was a foreman for Carter and Gordon Construction. Leroy has been with us since June 2014 and has made a great addition to our Myrtle Beach team.

Our management article this month is entitled, How to Successfully Market Your Brand. It has been my experience that a lot of construction companies don’t give much thought to “branding”. If you are one of those companies I suggest you read this article. You might decide to put more emphasis on your branding in future.

JANUARY’S MANAGEMENT ARTICLE

HOW TO SUCCESSFULLY MARKET YOUR BRAND
By Katrina Olson

Think about the Office Depot brand. Until its recent merger with Office Max, the company’s branding message was “taking care of business.” Back in 1992, they even ran a commercial featuring the song by Bachman Turner Overdrive.

In 2001, Office depot replaced “Taking Care of Business” with “”What you need, what you need to know.” What?

Then in 2005, they returned to “Taking Care of Business” because research showed the new tagline didn’t resonate with customers. D’ya think?

Since the merger between Office Depot and OfficeMax last year, they’ve been using the tagline, “Gear Up for Great,” accompanied by both logos. This may just be a temporary advertising slogan. But then, why do store employees (sometimes) answer the phone by saying, “Office Depot, this is Susie. How can I help you take care of business today?”

Clearly there’s some confusion, both internally and externally, about their brand message.

To save yourself from the same fate, follow these guidelines when developing and communicating your brand.

Do your homework.
Find out how customers currently perceive your company. Fix anything internal that needs fixing to change or support perceptions. Rebrand if necessary.

Create a persona for your brand.
Are you approachable and friendly, businesslike and professional, helpful and accommodating? Define the character attributes that describe your brand and reflect that voice of that persona in all communication, especially social media. For good examples of this, check out Taco Bell’s or Groupon’s Twitter account.

Develop visual branding standards.
Use the same logo, font, color scheme, and type of imagery to reflect a specific look and feel—in all of your advertising, marketing materials, and sales literature. That doesn’t mean all your ads will look the same; that would be boring. However, customers should easily be able to identify the ads as yours.

Share your brand image widely, internally and externally.
Use your logo everywhere—not just on your business cards, envelopes, letterhead, and website—but on your bills, statements, email signature, shirts, jackets, trucks, notepads, pencils, pens, presentation binders, iPad cases. Put it anywhere customers and employees will see it.

Write and liberally use a tagline.
Choose ONE tagline and use it consistently across all platforms and media including your ads, recruiting materials, trade show displays, sales materials…everything. Make it clear, concise, memorable, meaningful, and reflective of your personality and brand essence.

Be faithful to your brand identity, personality, messaging and promise.
Fail to keep your brand promise, and customers will get angry and not come back. Only 4% of customers who have a bad experience will tell you about it; 96% will not say anything and 91% will never return, says a study called “Understanding Customers” by Ruby Newell-Legner.  And according to the White House Office of Consumer Affairs, a dissatisfied customer will tell twice as many people about a bad experience as they will a good one.

Use the brand consistently.
You will get bored with your logo, tagline, color scheme, etc. long before your customers do. Avis Car Rentals used the “We try harder” tagline for 50 years before replacing it with “It’s your space” in 2012.

Here’s the good news: if you develop a strong brand and back it up with superior performance, 3 in 5 Americans will try a new brand for a better service experience, according to a 2011 American Express Survey. The same survey revealed that 7 in 10 Americans are willing to spend more with companies they believe provide excellent service.

Another 2010 study by Harris Interactive/RightNow revealed 9 out of 10 Americans would pay more for superior customer service.

So, in the words of Abraham Lincoln, “Whatever you are, be a good one.” Create your brand personality and image, communicate it with words and images, and support it with performance. Then, promote the heck out of it.

You have to go all in, because 80% won’t cut it in today’s competitive environment. And those who don’t commit 100% to their brand will be left behind.