Stop Substitution Abuse

Develop strategies to convince specifiers to 'just say no.'

This is an encore of an article Michael Chusid wrote nearly 20 years ago.

I work closely with architects to get my products specified. I don't mind when they take "or equal" bids, as long as I'm competing apples to apples. But most of the time, contractors use cheaper products that don't meet the spec, and the architects let them get away with it. Does it make sense to call on architects when they allow so many substitutions? - UH., sales rep

Once upon a time, architects thoroughly researched building products and specified only those promising the highest performance for the lowest price. Contractors then dutifully furnished and installed the specified products, fearing that to deviate from the construction documents would incur the wrath of their clients and increase liability. At least that's the mythology of the construction industry. In the real marketplace, architectural specifications are frequently challenged by contractors and vendors hoping to make product substitutions that put them in better financial or competitive positions.

Occasional substitutions are a sign of a healthy competitive marketplace. When the substitution process is not abused, it makes buildings more affordable, stimulates product innovation, and responds to fluctuating market prices and availability. In fact, most bid documents even spell out procedures that encourage the orderly submittal and review of substitutions.

Frustration like yours, however, is very common. Every sales rep has horror stories about projects they lost because architects did not enforce the specifications. Indeed, many architects have assumed an unprofessional stance on substitutions. By doing so, they undermine the authority of their profession, increase the likelihood of product failures, and diminish their firms' stature to little more than that of contract drafting services.

But focusing your attention on the few architects who abuse substitutions will not help you increase your sales. Specifications remain an important key to selling many types of building materials, and most architects make a conscientious effort to enforce them. Furthermore, it is your responsibility, as a professional building product salesperson, to guide your specifications through the treacherous shoals of substitutions.

Your marketing strategy
Excessive substitutions could be a sign that you need to re-examine your marketing strategy. If yours is a commodity-type product, it may be especially sensitive to competitively priced substitutions. In general, commodity items are sold based on price, availability, or dealer service, not a designer's brand-name specification. While you may still have to call upon architects to provide support for your distributors, the onus of presenting commodity products to designers should generally be left to manufacturer's associations or industry promotion councils.

Products that are the most resistant to substitutions typically have proprietary features and benefits that differentiate them from other products in the field. One of my clients calls these "spec-locks," and prepares sales-training aids identifying the features his competitors can't match. By attempting to get these spec-locks written into the specifications, he has been able to lock many of his competitors out. Developing new spec-locks is an ongoing process, since successful proprietary products are soon copied and may eventually become commodity products. An increase in the frequency of substitutions may be a warning sign that your products are losing their competitive lead.

But even products with unique features will have substitution problems promoted on the basis of features that were of questionable value to me as a specifier. So before pricing your product, you may want to conduct market research to find out how specifiers assess your product's worth. Remember that specifiers are less concerned with your product's unit price than they are with the cost of the product in place in their building.

Gain allies where it counts
By blaming substitutions on weak architectural enforcement, you may be overlooking weaknesses in your distribution channel. Make marketing allies out of your contractors and distributors since they have access to lower priced fines and are frequently the ones initiating substitutions. Be sure they stand to gain by using your product instead of offering a cheaper one.

One way to strengthen their commitment to your product line is to make them part of the team selling to specifiers and owners. For example, invite contractors to join you when making major architectural presentations. Many contractors will appreciate the exposure and will be less likely to break the spec if they understand why an architect chose your product.

Make sure your pricing and promotions enable your client to make more money by selling up to your product. I remember one project where the HVAC contractor proposed a more expensive air-conditioning system because it was more efficient. And the roofing contractor took advantage of pricing changes that allowed him to sell a better grade of roofing for just a few cents more per square foot. In both instances, the architect persuaded the owner to accept the substitution upgrades. But on that same project, an electrical contractor missed an opportunity to increase his sale when he submitted substitute light fixtures of a lower quality.

In addition to assessing your product and your customer and dealer attitudes, you must also look at your own strength and limitations. Specification selling does not offer the instant gratification of other forms of selling, and many companies and individuals do better with a different approach. some vendors play offense: They keep possession of the ball by finding and developing good prospects, getting specified, and becoming well-positioned to make a sale. Others play defense: Their strategy is to intercept a sale during the bidding or purchasing process.

By knowing your company's game plan you can field a sales team trained to play like winners. But if you do initiate a substitution, remember that the principles of fair play should still govern your efforts.

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By Michael Chusid, originally published in Construction Marketing Today, ©1994