Value-added customer service. Pro dealers and distributors pride themselves on it—from training and quick problem resolution to availability of product and accurate deliveries to strategic branding and market penetration. And it's exactly what they are seeking from their own upstream building material vendors. “Selecting vendors—it's not just price anymore,” says Bill Scheper, product sourcing manager for four-unit Nisbet Brower, based in Cincinnati. “It's about services like pull-through marketing and sales that bring higher volume and a focus that allows us to leverage greater product expertise when dealing with the builder. We're a very firm believer in value-added services from our vendors, especially as we continue to strive for more customer service ourselves.”
With strong construction activity across many sectors, including national production building, custom homes, and remodeling, dealers and distributors like Nisbet Brower that are focused on customer service, precision, and fulfillment are looking upstream to their building product manufacturers and vendors for assistance and partnership strategies to set them apart. This was one of the primary trends identified in the PROSALES Buying & Selling Practices Study, a survey of more than 900 PROSALES readers released this January that looks in-depth at the dynamically changing relationships in the upstream portion of the construction supply chain (see “About the Survey,” below).
According to the survey, dealers continue to stress the necessity of product availability and timely delivery from vendor partners. And, with the importance of pro dealer and distributor sales reps in product and brand promotion at all-time highs, the study results also show that manufacturers willing to embrace additional services like marketing and business planning have a better chance of securing repeat visits to a yard than those merely updating new product specs. For dealers and manufacturers that have already bought into the partnership mentality throughout the residential construction supply chain, there are signs of loosening up when it comes to manufacturer direct-calls on contractors, with and without a dealer representative along for the ride. Collectively, the data points to a pro dealer network eager to develop closer business relationships and leaner distribution philosophies, especially as companies branch into value-added services like component manufacturing and installed sales.
Many manufacturers are on the same wavelength. “We don't even consider ourselves salespeople to our distributors and dealers,” says Dave Probst, national sales manager, retail group, of Nashville, Tenn.–based LP Corp., of his company's role in the supply channel. “We think of ourselves as consultative partners and we seek to add value to their businesses.”
David Still, vice president and general manager of building materials for Federal Way, Wash.–based Weyerhaeuser, agrees. “Every year they want it now: the right product at the right place at the right time every time. The more we try to satisfy [dealers], the more they want—and we are the same way—we want the same thing,” he says. “We are looking to help them be successful.”
Selling Into Sales Regardless of their primary supply chain role, survey respondents (who do not necessarily include those dealers interviewed herein) confirmed that customer service and seamless logistics reign supreme in a successful relationship between their locations and their building product vendors. “Many factors play into a successful relationship, including brand recognition, quality products, accurate delivery, and inventory turns,” says Don Rowe, sales manager for Omaha, Neb.–based Millard Lumber. Rowe adds that additional value-added services are becoming critical as Millard's market position continues to evolve. “We're just starting to talk to more of our vendors about vendor-managed inventories, for example,” he says. “We have not been a party to that yet, but we are starting to look at it now.”
On a 5-point rating scale where 5 equals “very important” and 1 equals “not at all important,” survey respondents also pointed to accurate deliveries (4.8 average), quick problem resolution (4.6), and product availability (4.6) as the trifecta of customer service must-haves from their manufacturer partners (see “Service Factors,” below).
“The old standard of ‘We've got product, you've got money, let's trade' and that's as deep as it goes is something that we have left behind,” agrees Denny Huston, manager of sales and marketing for Boise, Idaho–based Boise Building Solutions. “If we can improve our customers' profitability and help them grow their business, then we are a more valuable supplier and it is harder for us to be displaced because we have a multi-faceted relationship with the customer.”
With nearly three-fourths (74 percent) of study respondents indicating they have added or changed brands in the last 12 months in at least one of 29 product categories tracked, the PROSALES Buying & Selling Practices Study definitely reveals a building product universe in constant flux. “In any category, look at all the competitive brands that have come up. As soon as somebody finds a product that works, everybody finds a way to bring a competitive product to market,” says Greg Rhatican, an outside salesman for Alexandria, Va.–based Smitty's Building Supply and a 2004 PROSALES Salesperson of the Year recipient for his efforts at upstream partnering. “It absolutely changes the way we relate with manufacturers. The market is so flooded with information, disinformation, and so many choices that you really need to partner up with somebody to get the complete pull-through [of sales and services] to your customers.”