As a frenzy of consolidation dominates our industry news, it begs the question, “Does bigger produce a competitive advantage?" My answer is no. Your customers don’t care how big or small your company is. They only care about the experience. A good marketing message and lower prices might get buyers in the door, but it’s the customer experience that brings them back.
I define the customer experience as the actual experience minus expectations. If the actual experience exceeds expectations, you create a positive customer experience; the opposite holds true when what you deliver falls short of expectations.
Consider the delivery of red meat. At a fast food restaurant your hamburger will be far from a gourmet treat, but you don’t care because you never had high expectations. Your goal was fast, not gourmet. On the other hand, go to your local steakhouse and you have elevated expectations for service and food quality.
Now consider the local tavern that serves a half-pound burger with your beer. The waiter asks how you’d like your hamburger cooked and you say medium rare. Expectations have been shifted: The expectation that was formerly based only on general reputation is now elevated by a salesperson (i.e., waiter). If your hamburger comes back medium rare, you recommend the restaurant because expectations were elevated and fulfilled. If your hamburger comes back well done, you consider the tavern experience a bad one. This is the crux of the matter for LBM dealers.
Every dealer boasts that it provides great value and service—literally 100%—but it is your salesperson who must manage the customer experience. Success begins with a staff that capably manages customer expectations and then exceeds (or at least matches) them.
The winners in the competition for market share at the local level are those who will consistently meet or exceed customer expectations to create a positive customer experience. Try these keys to success:
- Stop promising fire drills. Too many dealers proudly promise next-day deliveries, some even offering same-day emergency drops. This takes time and resources away from the profitable customers who are organized. It sets a bad expectation your clients will happily abuse. It also creates a tense environment that hurts your image. If you’re going to do put out emergency fires consistently, then charge appropriately to cover your costs.
- Choose the right customers. Salespeople love being the hero to their customers. Problems arise when the cost of being a hero results in custom product inventory, costly emergency deliveries, and special payment terms. You think you’re doing a favor, but it comes back to bite you. Choose customers that buy your standard products (primarily), pay on your terms, and work within the confines of your operational capabilities.
- Fix broken customers … or fire them. If the same customer has a crisis for the third time in a month (and it’s always the same one), then have a planning session with them to fix their problem. If you’re losing money due to poor organizational skills, it’s a guarantee they are also. Consult with them to better run their projects or raise their pricing. At higher pricing levels, they will be worth the hassle—or they will stop buying from you, at which point you can replace them with a better client who buys “what you got.” Either way, you win.
Sales success is based on the experience you can promise and deliver. Your goal isn’t a single transaction. Your goal is loyal customers who buy from you consistently. The best way to earn that business is by delivering a positive customer experience. And just like politics, all business is local. The winners are the local players in a market who exceed expectations with the greatest frequency.