I was chatting recently with an LBM dealer who was eager to increase his sales, generate new customers, and retain existing customers. So I asked him how he managed his house file, segmented his customers and did source code analysis. With glazed eyes he looked over my shoulder, hoping, I'm sure, to find someone else to talk to and end this conversation with me.

Michael Clapman The dealer might have thought I had stopped speaking English, but actually I was just using different words regarding the same goals. I have spent more than 10 years helping companies in all sorts of industries increase sales and improve customer relations. And it is evident to me that, putting aside the jargon, direct marketing techniques could do the same for the LBM industry, especially in these challenging economic times. Using technology can improve the effectiveness of all the techniques I list below, but what matters first is that you embrace a set of concepts that don't need any buzzwords to show their value.

Here, then, are six techniques used by the best direct marketers that you should use to generate more sales, win new customers and achieve higher customer satisfaction.

  1. Know all there is to know about your customers. The more you know about your customers the more they will buy from you, instead of your competition. But just having the information is only the first step. Being able to retrieve that information easily and quickly and using it to your advantage is more important. That includes not just knowing what and when customers buy, but also personal information. Knowing that a contractor's daughter is in the state soccer finals and sending a good luck email will generate loyalty just as much as good prices and on-time deliveries.
    Good salespeople know these things about their customers. Unfortunately, most keep this information in their heads or in a filing system that only they understand or can access. Keeping track of that information electronically means that it can be retrieved and used more effectively and makes that information available to others in the company. In addition, that information stays with the company if a sales person leaves.
  2. Track sales opportunities. All too often, managers rely on salespeoples' anecdotal reports regarding sales opportunities. Some of the better salespeople maintain an Excel spreadsheet that they bring to weekly sales meetings. Reporting this way is often time-consuming for both salespeople and managers, and it's less than 100% accurate.
    Having electronic access to your sales funnel that is accurate and timely gives you the ability to monitor sales when you want to and reduces the amount of time the sales person is in meetings, giving them more time to sell. Having this information guarantees that your sales people are maximizing their efforts and being held accountable for their time.
  3. Track and analyze lost sales. Knowing what opportunities you lost and why you lost them will help you win in the future. Did you lose the sale because the competition had a better price, or did the customer go somewhere else because of poor customer service? Being able to analyze lost sales to determine patterns as well as knowing which of your salespeople are losing sales and why gives you valuable insight into who is doing what right or wrong. You cannot fix what is broken until you know why it broke.
  4. Know where your customers come from. Far too often, managers only have anecdotal information about how their customers reached them. Knowing exactly where your customers come from and the dollar value of those sources gives you significant advantage in utilizing limited marketing dollars. For example, knowing how many dollars you generated from an ad in the newspaper tells you the value of that ad and whether it's worth continuing.
  5. Know what your sales people are doing. Too many managers monitor their salespeople by measuring outcomes. If they meet or exceed their sales quotas, all is good. If they don't, it's time to talk to them. Successful salespeople are successful for a reason. Knowing what they do and how they do it means you can replicate it across your sales force, but you can't replicate what you don't know.You can't fix bad habits if you don't know what they are.
  6. Work selectively and smarter with your customers. Communicate with your customers about things that matter to them. If you have a special on roofing material, tell that to your customers who do roofing. Know who you haven't talked to in the past three months and have their salesperson give them a courtesy call. Send birthday cards to everyone who has a birthday this month. Follow up with all customers who have called in with a problem to confirm that the issue was resolved to their satisfaction.

A dealer recently told me that in good times salespeople just have to answer the phone and write orders. In bad times we need to do everything we can to generate sales and at the end of the day we have to know that we have left nothing on the table. Software tools exist to help you accomplish these six points and more. But even without a formal process, LBM dealers need to employ these direct marketing techniques and stop waiting for the phone to ring.
Michael Clapman is President of ArrowMark Software, a provider of CRM (customer relationship management) software to the LBM industry. He can be reached at mclapman@arrowmarksoftware.com.