I recently investigated the project lead generation programs of two service providers for a large manufacturer in the northern Midwest. The company wants to provide leads to its sales force so that its product can be specified in commercial construction projects at an earlier stage. The goal is to get in at the planning, not bid stage to take the competitor out of the equation.
The Big Dog Lead Generators: McGraw-Hill Construction Dodge and Reed Construction Data
I thought I would share what I learned about McGraw-Hill Construction Dodge (Dodge) and Reed Construction Data (RCD), the two largest lead generators in this area. Most of this information is readily available from their websites or by talking with sales representatives, but I also interviewed a couple of people who had used both systems. It’s hard to assess these services because access to the databases is highly restricted – and rightly so.
During my research, I found that surprisingly, there was an incredible lack of real information about these providers. With most products or services, you can go online and find someone has done a comparative review and other users have posted comments to flesh out the information. The only real source of information about these services are from Dodge (Construction.com/dodge) and RCD (reedconstructiondata.com) themselves. For any person doing an analysis, those are hardly reliable sources of information. I have heard, however, of individual companies that have done extensive testing of both services. One company completed a 200-page analysis for its internal use. The manufacturer I represented may choose to take that next step.
First, a disclaimer. I worked at Reed Business Information, which owns RCD, as editorial director for the residential construction media. During a few months of my tenure, my group reported up to RCD. I sat in on meetings with RCD, but I can honestly state that no information I learned from those meetings – if I could even remember it – is included in this report.
How they work
The most difficult aspect of generating my report was identifying true points of differentiation. For the most part, Dodge and RCD operate in the same manner and provide the same services, although they compete quite viciously. (More on this later. See the subhead, “Tough Competitors.)
Both providers pull much of their data from public sources. By law, public projects and many private projects must be advertised. With that information, the services can identify architects, building owners, municipalities, engineering firms, planners and other groups that are planning or putting out to bid commercial projects. The quality of the data is entirely dependent on the relationship with those people preparing the work. Both Dodge and RCD offer incentives to their providers to make it worth their effort to report the data, such as giving them free access to the database. Dodge has a long-term relationship with Associated General Contractors (AGC), which enables their reporting. RCD has a new partnership with American Institute of Architects (AIA) and leverages the work its subsidiary, RSMeans, does in gathering cost information.
The companies gather this information by employing phone banks of researchers who call their sources to get updates on projects, secure plans, and identify new projects coming down the pipeline. All that data, combined with plans, goes into a massive database, which is organized by project. The database is highly searchable and deep with information. Here are some of the kinds of data that is included in these projects.
- Planning stage, such as proposed, architect selection, schematics, bid stage, etc.
- Category, such as commercial, industrial, etc. Both of those will have subcategories. For commercial it may include medical offices, retail, parking garages, etc.
- Type of work, such as new construction or addition
- Contract type
- Company information for planners, general contractors, major trades, etc.
- Materials specified including company names and models if appropriate
- Value of the project and often value of major subcontracts
Both companies provide an online interface that gives users access to the databases so they can query for their particular needs. And both companies provide written reports based on selection criteria that are delivered to your company. Pricing is the major motivation for restricting selections, since few companies can afford the cost of full access — or have the need for all the leads.
Generally, leads can be coordinated in one of three ways.
- Both Dodge and RCD will link the leads they provide with a proprietary customer relationship management (CRM) software for an individual company
- Deliver the leads to a lead manager
- Distribute leads directly to sales people
In addition, both Dodge and RCD are leveraging the strength of these services to build other businesses, such as consulting, costing data, economic data, and more. For our purposes, we are looking only at lead generation services for building product manufacturers.
|McGraw-Hill Dodge Reports||Reed Construction Data|
|Markets Served||US and Canada||US and Canada|
|Headquarters||New York||Norcross, Ga.|
|Online Interface||McGraw-Hill Construction Network||Reed Connect|
|Print reports||Dodge Reports||Reed Bulletin|
Differentiation and pricing
It should be clear by this point that the differentiation between Dodge and RCD is obscure at best, especially to outsiders. In conversation with sales representatives for both companies and users, I asked this very specific question.
Both companies provide deep information on a great breadth of projects. My user sources tell me that the differentiation often comes within particular material areas. One service may be better for interior decorative products while the other have a stronger electrical product information base. The type of differences may vary from the types of products to the company names included, which would be essential if you are searching for competitors.
McGraw Hill dodge reports reed Construction data Year Founded 1903 1975 Markets Served US and Canada US and Canada Headquarters New York Norcross, Ga. online interface McGraw-Hill Construction Network Reed Connect Print reports Dodge Reports Reed Bulletin
RCD claims to have a stronger group of reporters on private projects. Their claimed strength is built on the back of RSMeans, which is a company that gathers unit costs for building product materials all around the world and has significant interaction with architects who specify those products. RCD uses that information and those relationships to update their information on the harder-to-identify private construction projects.
Both companies quietly admit that their civil and public databases are nearly redundant. The reason is simple. Because, by law those projects must be advertised, finding them is quite simple. In addition, the companies are close on their pricing, which is loosely based on a cost per lead. The best example for pricing that I could find was that RCD’s fully-loaded database would run a company about $60,000 per year. (I’m sure that could go higher if the company were to download more leads, but the governing factor may be not how many leads you can capture, but how many you can handle.)
RCD recently debuted a new interactive program called SmartSpecs (www.smartprojectnews.com), which aims to make the interface for a company more focused and deliver leads quicker and more easily. The same company with this lead program could see a fee of approximately $12,000 per year. Entry fee for the service comes in at $110 per month.
Dodge does the same kind of thing through their hands-on customer service, which they claim as a huge differentiator. By using what they call TargetLeads to pinpoint references and carefully selected keywords, they can bring the costs of lead generation down considerably. As a rule, of course, the cost per lead remains constant. The savings comes in the number of leads and their quality.
Dodge also prices reports on a 10 and 20-pack basis. For $59 per month, you can get 10 reports covering 2 geographic regions that provides the main details of a project. (Here’s a link to a sample report.) The 20-pack version costs $79 per month.
RCD has similar kinds of reports at similar costs. These should not be compared to having access to the database, which you can query. That is a much more robust approach that gives greater control and deeper information to the user.
RCD and Dodge have been fighting head to head since 1975, when RCD was founded. (The company was originally called Construction Market Data, but Reed Business Information purchased it in May 2000 and changed the name.) Recently, the battle on the commerce field moved to the court system.
In October 2009, RCD filed suit in federal court, accusing Dodge of 11 counts of misconduct, which includes corporate espionage. The basis for the suit is the claim that Dodge used subterfuge and false companies to steal RCD’s trade secrets.
In October 2010, RCD put out a press release stating Dodge admitted in court that it paid others to access the RCD database, which is supposed to be available only to customers. The company also claims Dodge shared what it learned with its sales staff.
Dodge responded by denying it has unlawfully accessed RCD’s trade secrets or shared them. They counterclaim that RCD itself hired a consultant to access the Dodge database.
This is pretty good spectator sport, and the stakes are high. In October, a judge dismissed three of the counts, but 8 remain. At this writing, the suit has not gone to trial, and the outcome is still up in the air.
Final Word on the Big Dogs
For manufacturers looking to increase their leads in this tough economy, Dodge and RCD provide great services. Selecting between them is difficult. From the outside, their services are more similar than dissimilar and border on being commodities. When you differentiate yourself on the quality of your reports and the level of your service, which is easily duplicated by a well- funded competitor, you find yourself battling for inches rather than acreage.
On the inside, the user experience will be different for each company. Those firms that have signed on to one service, without testing the other, are doing themselves a disservice. The other might be better suited to your needs, but you won’t know until you try it. And that’s the problem. Would you really want to switch lead generating services (or add a duplicate service) at a time when you’re desperately trying to control costs?
The company I’m working with will now step in and do individual trials with each service to see which the best is suited for them.
This Article is a Part of the larger Lead Generation Best Practices for Construction whitepaper. To receive this whitepaper, please link here.
The Construction Marketing Association would again like to thank Paul Deffenbaugh, Editorial Director at Modern Trade Communications for providing this article in support of Lead Generation Best Practices for Construction. Please contact us to learn more about how you can improve your construction marketing.