Increasing gross margins and profitability and improving customer service are the issues that continue to rank first and foremost on the minds of pro suppliers, while the hubbub surrounding installed sales may be fading from a roar to a rumble, according to the PROSALES Reader Profile, a survey of PROSALES readers released in January 2004.
Conducted by Readex, a nationally recognized independent research company located in Stillwater, Minn., the stratified mail survey polled PROSALES readers on top industry issues, future pro dealer business strategies, and the importance of different customer groups, among other things. Based on a mailing of 875 surveys and 414 usable responses—a 47 percent response rate—the survey reflects the values of some 36,005 PROSALES readers with a margin of error of ±4.8 percent at the 95 percent confidence level.
Overall, the survey results mirrored many general industry trends observed over the past several years among the nation's leading companies. For example, the customer base of most interest to PROSALES readers is custom home builders, the year-over-year mainstay of pro dealer business for the PROSALES 100, the magazine's annual May ranking of the nation's largest dealers by pro sales. When ranking which markets were most important to read about in the magazine, custom building scored No. 1, with 74 percent of survey respondents ranking it 4 or 5 on a 1-to-5 scale, with 5 being "very interested" and 1 being "not at all interested" (see Figure 1). Remodeling came in second at 67 percent, followed by multifamily building at 48 percent. Additionally, the results showed that readers also were very interested in learning more about specialty and two-step distribution (46 percent and 40 percent, respectively).
Issues and Strategies
In addition to the focus on custom building, 39 percent of PROSALES recipients are considering diversifying their customer base into new segments during the next year (see Figure 2). However, expanding product lines and developing new marketing strategies, at 56 percent and 54 percent, respectively, both outstripped the quest for new markets. Interest in installed sales, on the other hand, was only lukewarm, with 29 percent of survey respondents indicating they planned to expand their existing installed sales programs in the next year, and only a mere 12 percent without installed sales programs expressing an inclination to get into the arena at all.
Regardless of their divergent business strategies, an overwhelming majority of PROSALES readers still have revenue growth directly in the crosshairs. When asked what primary concerns were facing their firms, improving gross margins/profitability was at the top of the list, with 89 percent of respondents ranking this issue as either 4 or 5 on a 1-to-5 scale, with 5 being "very concerned" and 1 being "not at all concerned"(see Figure 3). While competition didn't hit the radar until sixth place (at 61 percent), it's clear that pro suppliers are gearing up for battle in markets across the country. Rounding out the top issues mentioned by respondents were improving customer service (86 percent) and hiring qualified employees (80 percent), proving that the time-tested pro dealer adages of "it's all about the service" and "it's all about the people" continue to ring true.