A lumberyard owner in the Northeast told me recently that he had just hired an installed sales (IS) manager and was ready to take the plunge and initiate a comprehensive IS program. His approach can provide you with some valuable insight if you are considering diving into a similar program.
Chief among the several factors that drove the company's decision to jump into installed sales was the realization that the number of requests from customers for the service wasn't going away—it was increasing. The company had done the right thing and kept track of the types of requests it received from builders and contractors and maintained detailed records.
The yard, which serves builders, remodeling contractors and homeowner/consumers, carries a varied product mix and is located near a significant metro market with a stable economic base. However, there are a number of big box competitors in the market, as well, which impacted the selection of IS categories.
In general, windows, entry doors, cabinetry, and interior doors are rock-solid products to start a pro-oriented IS program. But what about our dealer example here? In this yard's case, the big box presence in the market is actually driving more retail demand for installed sales as consumers look to the dealer for more expertise than they're finding elsewhere. Consumers that have been frustrated by the service they receive at traditional big box stores want to do business with a company that can and is willing to provide good product selection and fair price, with an emphasis on outstanding service. Dealers that find themselves in markets like this may choose to target the remodel/retrofit sector rather than attempting to install for builders.
Replacement windows, entry doors, minor kitchen and bath remodeling, decks, three-season rooms, garage doors, and other products are primary examples of the opportunities in the retail segment. The average age of the U.S. housing stock is more than 30 years, which means an abundance of opportunities for remodeling. Windows installed in the 1970s and '80s can be replaced with more-efficient models, original decks are probably due for a replacement, and new siding can be marketed for the latest advances in color, style, materials, and performance.
So what's best for your yard? You first need to look at what is already being offered by competitors and determine whether you will be installing only for a contractor base or if your business will include retail sales. Then closely examine the current product and labor distribution channels that are in place serving pros and consumers. Compare them with your product offerings and your expertise. Can you install a specific product efficiently and bring a better package to the table? Are there efficiencies lacking on jobsites in your market now? Specifically, what products are you being called back to the jobsite to service after they have been installed by subs. In a nutshell: Where is your customers' pain?
Once you answer these questions, you need to make sure that you are not going to offer customers just another “me too” product. For example, if your market is well served with independent insulation contractors, and your builders aren't indicating that this is a product they need, then why go in that direction? Look for opportunities to provide service and fill a need.
To be successful, you need to do your homework. Figure out who the current market leaders are. Determine where you can fit in. Make sure you have the right mix of people—both management and installer expertise. And, most importantly, unless you can truly offer services and products that are significantly better than what is already on the market—don't jump in.