A few months ago dealers on
LinkedIn group asked their fellow contractor members what they could do better in order to improve the customer experience at their yards. The resulting conversation—combining input from dealers, builders, contractors, and consultants and spanning more than four months' time—turned out a list of best-practices for lumberyards looking to capitalize on the opportunity to grow as business returns. We compiled a list of the major topics, but be sure to check out the
ongoing conversation on our LinkedIn page
to view more or add your own.
- Sell more than the basics. Stock accessory and complementary products while developing a knowledgeable staff that can offer product guidance and capitalize on the opportunity to upsell. You’re also an “information aggregator and operations partner” to smaller customers, says T.C. Feick, sustainable building coordinator at Shelly Enterprises in eastern Pennsylvania. “The greater asset is to be able to offer consultation on product choice, code compliance, value engineering, best practices, and other services that the small contractor has a very hard time keeping up with.”
- Be fast. Turn around bids quickly and accurately while checking historical prices, bulk ordering options, and overstock positions to ensure that contractors are getting the best price without undercutting your own ability to make money off the sale.
- Target customer differences. Treat all customers the same but understand what makes them, and their clients, different. Builders and contractors working with baby boomers, the wealthy, single women, and Millennials all have unique needs and requests that often trump price as the most important factor in a purchasing decision. As do large, medium, and small building and contracting companies.
- Have an expert do your estimates. Don’t leave the estimating process to an employee with minimal experience. “If you do not have the right people meeting with clients,” says Bob Bartunek, who handles window sales at Builders Supply Co., in Omaha, Neb., “you are bound to have mistakes that may cost not only the contractor and homeowner but also your business."
- Keep the numbers handy. Industry consultant and former dealer Scott Williams says he keeps a “report card” on each of his contractors and shares it with them quarterly. What you grade them on—days in accounts receivable, emergency deliveries, sales volumes, returns, depth of purchases—depends on what’s important to your company, he says. Bartunek agrees, adding that it’s an opportunity for dealers to better maintain margins by reminding customers about times they’ve received flexible pricing or special deals.
- Know your customers' business. “Many contractors, including myself, came from the ‘trade’ side of the business and acquired business skills on an as-needed basis,” says Lexington, Ky.-based contractor Larry Shreve. “The decade-plus span of booming construction allowed many contractors to experience success without needing to address business plans, cash-flow projections, branding, and sales closing rates.” Make contractors aware of the value of knowing their own numbers.