Volume 46, Issue 7 - September 2007
Pets and Peeves
How to Get and Keep New Customers
What Builders Want from Their Distributors and Dealers
by Drew Vass, assistant editor of Shelter magazine.
Builders and remodelers can be some of the most loyal people on earth, as long as they’re getting what they need, when they need it, at a fair price. That may sound selfish but, the wrong products, delivery delays and even a slight price increase can turn a well planned project into a builder’s worse nightmare. That’s not to say dealers don’t have problems and expectations of their own. Higher fuel costs means an increase in the cost of delivery. And special services aren’t free. The good news is—for many of your customers, price may have less to do with loyalty than you think. For some, the best deal isn’t always with the lowest bidder.
“We will definitely pay more to use [our primary dealer],” says Tim Setter, senior project manager for Loverde Builders Inc. in Tahoe City, Calif. “I mean, their prices are always right in sync with the rest of the dealers, but we would honestly pay more to use them over another.”
So what creates this sort of loyalty? And, before that loyalty can begin, the first order has to come in, so what makes them choose a particular dealer?
James Price, owner of Price Construction in Beaverdam, Va., says loyalty can begin long before the first order is placed, or even thought about, for that matter. “I tell my crew, ‘If a salesperson doesn’t speak to each and every one of you when [he] visits our jobsites, [he’s] not a good salesperson,’” Price explains. “Now, I don’t mean [he] should be taking up our time with chitchat, but [he] should at least speak and network with everyone to some degree.”
“Mitch started speaking to me, on a regular basis, back when I was a framing carpenter for another builder. That was years before I even thought about going into business for myself,” Price explains. Mitch McCallister is Price’s personal sales representative at Roper Brothers Lumber Co. in Petersburg, Va.
“He was smart enough to know, a few of us framing carpenters would one day become builders and the time to start prospecting and creating a relationship was then,” Price says. “You know, whether it be a carpenter, a tile installer, or whatever, you cannot beat a man at his trade. The same is true with a good salesperson.”
Now You See Me, Now You Don’t
Price isn’t the only one who appreciates a salesperson who knows how to both network and stay out of the way. This is a skill that builders notice and appreciate.
“Peter is there when you want him and not there when you don’t,” Setter explains. Peter Stribling is Setter’s personal sales representative at Truckee-Tahoe Lumber Co. in Truckee, Calif.
“When he comes out to a jobsite, he’s coming to make sure you have everything you need and the materials are in good condition. He’s not there to hang around and chat, he’s there to do business,” Setter says.
Setter says a personal salesperson is an important part of the equation. His company needs good materials, but an occasional batch of bad studs is okay, so long as someone is available to fix the problem immediately.
“I would say the most important things to us are quality of products and service,” Setter says. “You’ve got to be able to deliver good, quality materials and you’ve got to be available.”
Bob Lundstrom, owner of Canterbury Homes in West Des Moines, Iowa, agrees.
“My biggest pet peeve with dealers is definitely false promises. If you can’t do it, just tell me you can’t do it,” says Lundstrum.
In addition, Lundstrum values personal attention from his suppliers.
“What keeps me as a customer is personalized service and urgency when needed. If we get into an urgent situation, I need them to respond and handle it quickly,” he explains. Lundstrum has been in the business for 12 years and he’s been dealing with Gilcrest-Jewett Lumber Co. in Waukee, Iowa, for nine.
“[The company] provides a personal salesperson and not all places do,” he says.
Scott Haas is his salesperson at Gilgrest-Jewett. “He visits my jobsites to make sure we have everything we need and that all of our orders were complete and as expected,” Lundstrum explains.
So a good, personalized sales staff and fair prices help create return customers. But what do you need besides that? How about special services?
“Our dealer offers a special service where [the company] assemble[s] your complete order and hold[s] it on [its] yard. When you’re ready for part of it, you just call and [the company] brings it out,” Setter says.
This service is similar to one you may have read about in Shelter’s January/February 2007 issue.
On page 40, of that issue we profiled Shelly’s Lumber, headquartered in Telford, Pa. The company explained how its new distribution center in Quakertown, Pa., offers special delivery and storage options. At builders’ request, it will load orders into box trailers, which are then towed to and left on the jobsite. Builders then have materials when they need them and, in the meantime, they’re stored out of sight and protected from the elements and from theft. Shelly’s says its customers rave about the service, but that system may not work in every area.
“Lake Tahoe is a tough area to deliver to. You can’t get a tractor trailer down into one of our jobsites,” Setter explains. He says having the order stored on the dealer’s site works best for him. Though it’s not on site, the entire order is accounted for and ready when he needs it.
“When we call, they jump,” he assures. “If I call for a portion of the order, it will be there the very next day. No questions asked.”
Premium Has Its Price
So how much are these types of services worth to builders? Could you actually work the cost of provision into the overall price? Setter says yes.
“I look at it like this—the service [the company] provides, both Peter as a salesperson and the storage service, is all part of the overall premium,” he says. “If that product costs us a little more, it’s worth it. I mean, we get the material when we need it and we’re not having to pay for some type of storage.”
“I will occasionally have a client who tells me, ‘I can purchase the material for less money out of Oregon.’ I then raise the point of—‘Great, but where and how are we going to store it?’” he says. “So sure, we might be able to get it a little cheaper, but then we have to find a place to put it. With our dealer, we don’t have to worry about that. It’s there when we need it and not there when we don’t.”
Lundstrum agrees that it’s all built into the price in one way or another. And he’s willing to pay a little extra for what he values in his dealer.
“If there’s ever a difference of a few [percentage points], that’s not a big deal to me,” he says. “I mean, I’m not going to go somewhere else over that.”
But everyone draws the line somewhere. “If [the company was] ten percent over all the other suppliers, then I would have to do my homework. But what you often find is [that] other suppliers are lower, but charge for delivery or personal sales service,” he says.
In spite of all you do, losing customers is an occasional reality. And, if you’ve ever lost one without some clear reason, then you know how frustrating the experience can be. What makes a once loyal customer slip away?
“I have stopped doing business with a particular dealer before,” Lundstrum admits. “Anytime I’ve done that, it was a service issue,” he explains. “Either [the company was] not following through on warranty work, or not delivering as expected—not getting the materials there when [it] said [it was] going to,” he says.
Lundstrum says a good dealer understands that it doesn’t take much of a scheduling delay to create a serious financial landslide. “In general, for most materials, I try to give my dealer a week’s notice,” he says, “but if I’m short on lumber products and order extras on a Monday, I need them to be there Tuesday.”
Setter agrees. “If you’re not there to help us when we have a problem, then everyone suffers in the end,” he explains.
So what about when you’re doing everything right—good service, personalized sales, timely delivery, special services—and one of your customers still wanders off to another dealer?
Lundstrum says it’s often not a matter of what you’re doing, or not doing, but what you have to offer. “I have tried new suppliers,” he admits. “Usually, I start looking for someone new for a particular type of product when I’m not happy with a particular brand and my dealer doesn’t offer any other options.” But, in these cases, not all hope is lost. It might pay to find out what products lured a loyal customer away. “Usually, what happens is, my dealer will change [its] product line and gain me back on those items,” Lundstrum says.
Sometimes Money Is Enough
For some builders though, it is all about the price. This is the case for Jim Santini in Washingtonville, Ohio. He says his primary dealer’s greatest attribute is low pricing. And that’s not because his dealer doesn’t offer great services, as Santini admits it provides him with: complimentary take-offs, placement labeling for doors and windows, pick up service for return materials and in-house truss design and build services. Yet, Santini admits, he prices each package out with typically two to three dealers for comparison and always goes with the cheapest bidder. He says he will not pay an additional premium.
Pricing also is the number-one factor when Santini decides to do business with someone new. But, will he stop doing business with a certain dealer in spite of low prices? Yes. His top two pet peeves are: poor attitude (on the part of personnel) and lack of service. Third on his list, however, is price.
Dan Francoeur of Bellagio Builders in Erie, Pa., says he ends up placing an order with the cheapest bid more than 75 percent of the time. Like Santini, he says he also will “fire” a dealer when necessary. His top three pet peeves are: not receiving follow-up phone calls, general forgetfulness and slow delivery.
Providing builders with what they want creates lasting relationships. Lasting relationships help build long term success for everyone involved. By following the advice and insights of these builders, your sales team could become the best tool in your customers’ belt.
Be Part of the Team
James Price, owner of Price Construction in Beaverdam, Va., believes having a good working relationship with your salesperson is critical to a builder’s success. In fact, he suggests that a good relationship, mutual respect and allowing a salesperson to make decisions allows for a higher level of service. Ultimately, this allows him to be more successful as a builder.
“I depend on my dealer and salesperson to stay informed and keep me up to speed,” Price explains. “I want them to know about the latest products, then think about my projects and make suggestions.”
He says he needs a dealer to do its homework. “Product knowledge is extremely important,” Price says. “I don’t have time to attend the home shows. And I don’t have time to read all the magazines. I’m doing paperwork at night,” he adds. “I need them to bring the home show to me.”
Price says allowing a salesperson to make decisions makes all the difference. He wants his salesperson to form decisions, rather than constantly bother him with the details. “Mitch [McCallister, sales representative at Roper Brothers Lumber Co. in Petersburg, Va.] comes out to the jobsite and measures my trim and door openings. When he is measuring for doors and he comes to one that doesn’t specify right hand or left hand, he will think about it, decide which way it would be best and then make the call on his own,” Price explains.
But trust is the key and Price suggests builders can be a tough crowd. “I think, as a builder, your ego can get in the way of having a good, working relationship. Some builders don’t want a salesperson telling them what to put in a project, or telling them how to spend their money,” he explains.
“Personally, I want input. I want to know what I’m wasting my money on, or, if there’s something other builders are doing and there’s a way for me to make my houses more appealing, I want them to tell me.”
Price says it’s hard to keep an eye on what everyone else is doing when you’re concentrating on your own projects, but a good salesperson witnesses trends as they happen in the field and can help guide a builder’s decisions.
“I want him to say, ‘You know, this product is a little higher than the market you’re in,’ or, ‘You know what? I think you need to put crown moulding in this room.’ I want him to suggest these things,” he says.
Price expects his dealer and salesperson to be a part of the team. And when prices or delivery costs rise due to market conditions, everyone rides it out together. Trust and loyalty are key and he’s willing to pay more to maintain a good working relationship with McCallister.
© Copyright 2007 Key Communications Inc. All rights reserved. No reproduction of any type without expressed written permission.