In last month's column, we discussed the strategic planning necessary to either launch a new installed sales initiative or move an existing program to the next level. This month, I want to explore those options more deeply.
The first question you need to consider is: why are you going to offer installation services to your customers? Regardless of who your customer is, why are you willing to change your organization's direction simply to offer labor? You've done well enough to date just selling product–why complicate the issue? If the desire to go into installed sales is merely a reaction, stop here and help your customers find labor on their own. If, however, you want to get into installed sales as a way to boost your business, secure a strong market position, and increase both net sales and margins, then let's move forward to the next questions.
How are you going to offer the program–via in-house installers or subcontractors? Who is going to manage it? What business structure are you going to follow? How are you going to manage your financial profile? What products are you going to install? What supplier support can you expect? Are you fully committed to this program? If so, are your employees?
I know I've covered all these topics before, but every time I meet with a client, regardless of whether it's a new client or a long-term partner,
I face similar questions. Even well-established organizations struggle with these issues.
Let's discuss your installed sales manager for a moment. Perhaps no other position within this new endeavor is as critical to your success as having the right person manage the program. There are two distinct groups within the installed sales manager cadre: those who manage the entire organization (including financial performance) and those who are managers in name only.
Offering installed sales as a way to boost sales and margins is far too important a business decision to have someone manage this department in name only. You need a dedicated manager who has total responsibility for operational and financial performance. This person needs the authority and ability to make decisions, act on them, and move this department forward; the manager should not be hampered by internal politics or by having too many other things on the plate.
In addition, within the professional ranks, we have two types of projects: new construction and remodel/retrofit. These two require totally different skill sets. A manager who is responsible for new-construction installation service must be able to oversee multiple sets of subcontractors; interact with a general contractor, building inspectors, and other subs on the job at the same time; and ensure an efficient, steady flow of material to and from the jobsite.
Remodel/retrofit, on the other hand, requires a patient individual who is comfortable working solo while visiting a customer's home, evaluating a complex remodeling project, and working with the crew to ensure a smooth, seamless project completion. At the same time, this manager must act as a go-between for customers, ensuring their lives aren't overly disrupted. Many of today's homeowners don't understand the procedures and processes of a major remodeling project. A manager who can interact with both the homeowner and the labor force is a valuable asset.
As you can see, just one question–who will manage your program–requires a lot of thought and effort to answer. But it is essential to evaluate each question thoroughly before jumping in, if you want to build a profitable division.
Mike Butts is president of LBM Solutions, a DeWitt, Mich.-based LBM supply consulting and training firm. 517.668.0585. E-mail: email@example.com