I often say that successful LBM salespeople are bilingual communicators. They are able to see the difference between the information that they receive from suppliers and the way it should be communicated to customers. If you’re able to distinguish the difference, you will quickly begin your transformation from a price-oriented sales representative to a consultative sales leader.
Mick is one salesman I recently observed who committed two costly sales mistakes in a matter of minutes. First, he emailed a price for a window package to a builder rarely who purchased windows. Second, when the builder requested an estimate for delivery lead time, Mick regurgitated the quoted time he received from his manufacturer. As you might expect, the builder told him that the price was too high, resulting in Mick trying to negotiate a few points on his behalf.
Mick successfully earned the sale by reducing the price to an unprofitable level. He later invested countless hours trying to correct a delivery delay that could have been easily avoided. Mick got the sale, but it’s safe to say that he slipped up in the process. The problem he encountered is one that occurs daily for LBM dealers that fail to translate manufacturers’ information in a way that makes sense to builders.
I’ll offer two common ways that this phenomenon occurs.
1. The Commodity Perception. During my travels, salespeople frequently argue that products are commodities. They defend price concessions by asserting that numerous dealers in their markets are selling identical products. Therefore, they conclude that price is the primary criterion by which contractors select suppliers.
Dimensional lumber is the perfect example of a product that is purchased by LBM dealers as a commodity, but later delivered as a value-added service. It’s true that lumber is purchased by dealers at market prices as a featureless commodity.
However, strategic sales leaders recognize that it’s sold to builders as anything but a commodity. The value of the product you sell is based on the total cost of doing business. This means accurate take-offs, pricing, delivery scheduling, and prompt pick up of returns.
Remember that every product you sell is only a commodity when you buy it. It becomes an asset when you use it to help your customers profit.
2. Lead Time Calculation. This is the biggest production problem that we face in our industry. The manufacturer promises a three-to four-week lead time, but the builder hears three and gives you two. The ensuing fire drill could be prevented by recognizing that a manufacturer-quoted lead time is not the same as a working lead time for the jobsite.
The real lead time is padded out with time for review and accurate placement of the order. It includes the consideration that a cutoff deadline for the manufacturer’s lead time could be missed. It also includes time for staging at the dealership and delivery scheduling. The next time a client asks you to quote a lead time, take the manufacturer’s promised delivery and add two weeks. Better yet, ask your customer for the exact day that he or she needs the product and then plan accordingly.
The most successful salespeople in our industry today are the ones who properly set and manage expectations. This begins by translating the information you receive from suppliers into meaningful communications that enhance planning and boost the profitability of your clients.