Sell more products to the existing customer base. We all have too many customers who buy one or two product segments. In 2011, I see our professional customers looking to consolidate vendors to simplify their lives and focus on the ones that they know will be there to back them up in the future. At this point, all of our cost structures are so well-managed that, with just a little more sales, we can make a very nice impact on the bottom line.
–Hayward is president and chief executive officer at Hayward Lumber, Monterey, Calif., ProSales' Dealer of the Year for 2003.
Plan for the future, but manage your business based on conditions today. Be clear-eyed when evaluating those conditions. Resist managing based on "shoulds," as in "the market should pick up by the end of the month" or "the new salesman should bring in $xxx of new business." Also: Focus on who can pay you! For many dealers, that has shifted from the builder to the homeowner. Control your destiny by going directly to them before they've selected a builder. You may even get the option of directing the business to one of your builders.
–Kellick-Grubbs is president of Kellick and Associates, a management consultancy.
Ensure you are selling the right product to the right customer at the right time. This isn't the time to try anything new. Verify inventory levels to guarantee you'll be able to deliver on time and in full. Work with distribution teams to verify accuracy of orders and delivery expectations. Service levels must be higher than ever before, even in the face of decreased staffing levels. You can't slash and burn your way to profitability. That practice only limits your ability to service your core customer. And it will be those core customers who will be with you in the end–the ones we'll celebrate with when this is all over.
–Butts is director of installed sales at Stock Building Supply.
Dealers must have patience to manage through choppy waters churned up by inflation. Many economists are predicting housing starts to increase by 30%-plus, and even though these numbers will still be historically bad, the supply chain is in such shambles it will probably create pricing chaos. The need to improve balance sheets coupled with outside inflation pressures will require dealers to manage pricing very closely. 2011 will be the wrong year to lock in long-term pricing agreements. Companies that sell builders based on a three-month prior pricing matrix could lose the farm.
–Magruder is CEO of Ro-Mac Lumber & Supply, Leesburg, Fla., and a former chairman of the Florida Building Material Association.
In 2011, a dealer should inject sales throughout the entire organization. From the accounts receivable clerk to the delivery driver, everybody should focus on sales. Why can't these people ask for orders and then direct the customer to the sales staff? Can the driver report back to the yard a conversation he has with builders and subs about what is going on? In 2011, I expect that the companies that go all in on sales and include the entire organization in the process will win the battle. Let's face it: In 2010, we all beat our costs to ground zero and pushed our margins as high as the market would bear. Now the question to ask on any initiative is: "If it does not focus on sales, on closing deals, should I should not be doing it?" When the pie is smaller, you win by getting a bigger slice.
–Rader is president of Rader Solutions, a Lafayette, La.-based technology and management company. He writes ProSales' "Rader's Edge" column.
Assuming business will be better, the No. 1 thing a dealer must do is manage cash. Many businesses that survived the recession will not survive the front end of the recovery because they have a weak cash position. My rule of thumb is that every dollar of monthly sales increase requires three times that amount of additional cash. If you are expecting a $1 million increase sales in 2011, an average of $83,000 monthly sales will require $250,000 more cash than was needed in 2010. Dealers should perform cash needs projections weekly and monitor monthly cash conversion cycles.
–Enter is an LBM consultant who manages more than 25 industry roundtables. He founded the American Association of Roundtables.
The downturn in construction has created an abundance of fear as well as perceptions of scarcity. Salespeople feel vulnerable to combative negotiations and victimized when things go wrong. I say: Stop whining and start prospecting. The sales winners of 2011 will be those who will work diligently toward the one and only sales solution to the problem–prospecting. If you feel your market opportunity has shrunk, work to get a bigger piece of the pie. If you feel your customers are shopping your prices aggressively, then prospect to create alternative clients.
–Davis is president of Building Leaders Inc. He writes ProSales' "Sell Sheet" column.
We need to understand that our most valuable resource is time. I see many companies that know they need to make specific changes but never schedule them. I also am surprised and dismayed that so few companies understand their "Relevant Range of Operations." This is the range of decline or growth the company can profitably manage. Suppose you conclude your company can absorb a 10% decline to 20% increase in sales without changing how you operate. Once you move outside this range, you must totally re-evaluate your business. Be wary of whether your business has the skills to do so; most do not. The failure to understand and react to sales declines has caused many businesses to close. I am equally concerned about their ability to handle growth.
–Bumblauskas is president of PFC Services, a management consultancy. He wrote ProSales' August/September article on internal controls.