Volume 47, Issue 2 - March 2008
In the news
by Larry E. Ray, president of the Association of Millwork Distributors (AMD) and architectural consultant for GHDC Inc. in Tupelo, Miss. Mr. Ray’s opinions are solely his own and do not necessarily reflect those of this magazine.
What Will Be Your New Strategies for 2008?
The year 2007—definitely not the desired results included in most strategic planning. Speaking of the strategic plan, has anyone seen it lately? The “dusty” old plan is back on the desktop of most industry professionals for tough cost-cutting measures coupled with the pursuit of new revenue options to compensate for soft-market conditions. Over the past several years, housing starts and the housing industry, in general, hinged on housing demand and mortgage interest rates. Rising interest rates triggered lower housing starts, and, in turn, reduced product demand and sales revenues.
Perhaps we have learned from the current trend in our industry that many more factors are involved in the health of our housing economy. Interest rates are not excessive; however, tighter credit guidelines, energy costs, weather patterns and even the threat of terrorism add new dimensions to the strategic planning process.
Exactly what have we learned from year 2007? Thought-provoking questions such as these come to mind:
Obviously, these questions are intended to provoke deeper insight within our individual planning process and to seek new opportunities for growth. New opportunities may surface from interaction between vendors and potential clients. For some, opportunity might include more services to customers, instead of traditional product-only offerings. Too often the word service translates into installation of product and/or direct service for which we receive payment. The potential client might reveal the need and opportunity to provide many more indirect service(s), which might include: education, installation, training and technique, CAD drawing services, online order entry, electronic catalogs and code compliance advice.
A Competitive Edge
Assuming that competitors in any given market have adequate product offerings, prompt delivery and competitive pricing, would any one or more of the intangible services listed above provide a competitive edge in customer retention, growth within existing customer base and attraction of new clients? Implementation of any one or all of those services listed can be both challenging and expensive.
How can we provide more services and be cost-effective in doing so?
For more than 30 years, my personal experience with the Association of Millwork Distributors (AMD) has demonstrated the effectiveness of sharing information for the benefit of the membership as a cost effective means of providing educational materials and ongoing training for all levels of employees, including professional staff. Current product offerings include, “An Introduction to Millwork and the Building Products Industry,” which involves 80 hours of home study over a period of 12 months.
AMD also has implemented online seminars known as webinars for members to receive counsel on key subjects without the expense of time and travel. This is of particular importance at the professional staff level.
Education and training are but one of many areas of improvement in strategic planning. New strategies, new ideas and resources, like AMD, may offer some keys for new direction in 2008 and beyond.
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