In the first issue of this installed sales special, I laid out a method by which you could quantify the value of your services to your builder customer by tracking callbacks and the cost associated with correcting them. While this is still valid and many of my clients use it, I may have jumped the gun a bit.
There are three best-practice issues on which to focus.
The right manager. You need a good, well-trained installed sales manager whose sole responsibility is to run and manage your program. This is not the time nor the position for a part-time employee wearing a dozen different hats. Focus this person on one single program and provide the tools and support needed to make this work. The skill sets this position requires will vary depending on your market segment, be it new construction or remodel and retrofit. The key is to have a dedicated manager who will oversee the functions within an installation services operation.
The right system. This means something more robust than your point-of-sale system, including procedures documented and people trained to recognize the difference in simply selling and delivering product and installing that product. If you can, invest in a good database management system that will provide accurate job cost accounting, assist in contract management, and provide valuable management reports to analyze your business. There are systems available as add-ons to your POS system and some that stand alone. Whichever you choose, realize that tracking an installed job is more complex and has more moving parts than tracking the receiving, warehousing, and sale of products.
The right team. I'm talking about an installation team hired or identified with proper documentation (insurance, licenses, etc.).
I see these issues as the legs on a three-legged stool. If you miss one, you won't sit too comfortably for too long, and you'll find yourself on the floor, looking around wondering what happened.
Now, let's look deeper. Beyond these three issues, there are several other critical questions that you need to answer.
Have you done a thorough market survey to determine where you fit into the overall picture of product installation and service? You must do this. Don't scream that you lack the discretionary funds to throw at this right now. You have a sales force in the field, jumping foundations every day that can conduct this survey for you. Put them to work. They can uncover what you need by being observant while visiting jobsites–or worst-case, by asking questions.
Identify the basic need for installation, either through a formal survey of your customers or through informal conversations with them. If the need exists in your community, then the next step is to define the need. What products are your customers buying on an installed basis? What products are they not buying or installing? Who is doing the install: another local LBM dealer? A national player? A specialty installation/service company (specialty cabinet shop or window and door store)? Or is another entity offering product and installation to your customers?
Next, find out what the competition does well. You may be good, but somebody else may be better. Also find out where the competition drops the ball. What services can you provide that no one else provides? You want to look for a way to clearly differentiate yourself, your company, and your services from the competition, not become just another player in an already crowded field.
Now comes the hard part: can you make any money at this? What products are you going to install, how are you going to price the product, what will it cost you to install it, and can you do this efficiently and not hold up the jobsite? If you can do all of this, can you generate sufficient margin to make it profitable and remain competitive in your marketplace?
Here's another issue: against what standards to you measure yourself? What financial and performance benchmarks will you use to evaluate your program? Don't just look at product moving in and out of the yard and assume that if you're busy, you must be making money. And don't laugh: I can cite several owners and managers who've made this very comment. Most of them are out of business now.
Lots of work, this. But the results will be worth the effort if you pay attention to the details. And you absolutely must pay attention to the details of this endeavor.
Another critical issue is focus. When you initially launch an installed program, everyone is excited and focused on this new initiative. The danger comes in the first 90 days to six months. Business happens, and you lose focus. This can spell the end of a program. The operation is still too young to run without constant assistance and review. If you lose sight of your objective now, it will become difficult to re-energize the program later.
These steps seem simplistic at first, but believe me, they are more difficult than you might imagine. If you are unsure where to start or lack the tools or expertise to accomplish this task, please consider contacting me. I can provide any level of assistance necessary to launch a successful installed sales campaign.
What you don't want to see is your competition preparing for the market and leaving you wondering what the rush was all about.
–Mike Butts is president of LBM Solutions, a DeWitt, Mich.-based LBM supply consulting and training firm.