Stark, strong, simple: There was no mistaking the critique that executives from three lumberyards gave building product manufacturers at a recent session on what dealers want from their vendor partners.
“Sometimes we don’t even take the manufacturer rep along; they’re a detriment to the brand they sell," said Joel Fleischman, head of Campbellsport, Wis.-based Drexel Building Supply.
“Everybody knows that in the last few years we’ve barely gotten a Christmas card from most of the people we buy from," declared Evanston (Ill.) Lumber president Bob Fisher. “I’ve been in this since’81, and it’s always amazed me how some companies are represented in the field," added Dean Conrad, vice president of purchasing and marketing at Your Building Centers, Altoona, Pa. ".. The person will come in and say ‘How do you think the Steelers are going to do?’ or bring in a dozen doughnuts and [give you] a pat on the back and that’s it. But if you have a problem, they’re nowhere to be found.”
Fleischman, Fisher, and Conrad were just as specific in the recommendations they gave the vendors representatives who gathered in Chicago on Sept. 25 for the Foundations Conference, an annual marketing conference sponsored by REMODELING's corporate parent, Hanley Wood.
Manufacturers need to invest more in field staff and give those people the knowledge and the power to solve problems and make dealers' life easier, the three said. They also called for better technical communications.
“You know what we do a lot of, with manufacturers? Fax things," Fleischman said. "Yeah, it’s embarrassing. We’ll call them, say 'Can’t we just e-mail it, PDF?' [But the vendor replies:] 'We don’t have anything like that. I don’t know what you’re talking about.’ We get a ton of faxes. It’s craaaazy.”
Added Fisher: "Don’t have your reps show up and throw a catalog at us and say, 'OK, sell it.’ Have your reps show [up], bring us a catalog, have them teach our guys, and have them help us make money.” Manufacturers should pay attention to dealers because lumber and building material outlets play a huge role in contractors' product choices--a role created in part, they said, because builders and remodelers lean on dealers so heavily.
“We’re not suppliers any more. We are subcontractors," Fisher declared. "Because all the contractors we’re working with, they’ve got less staff. They don’t have people to pick up at the lumber yard, so they’re calling us. My outside sales people are running the jobs. They’re getting the blueprint as a file. Sometimes the general contractor or the builder hasn’t even opened it. So a file is sent. The contractor sends it to us. We do the takeoff. Four months later we hear from the guy: ‘Hey, guess what? We got that job. Can you call my framer and get us started?’”
“We need to be sold," Conrad told the group. "We have some companies that represent your products very well and are out on the job site with us pitching the product, doing the lunch and learns, the breakfast meetings, the PK [product knowledge] trainings. And we have other companies that just don’t do it. And I can almost tell you the results from the one company that invests in the market, invests in the PK and so on, the results are going to be much different than the other ones. Our customers are very hands-on, they trust very heavily in what we as a dealer select to stock and supply.”
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(Here is a transcript of the session.)
What Building Material Dealers Want from Their Vendors
Foundations Conference, Chicago, Sept. 25, 2013
Sponsored by Hanley Wood
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Participants:
Bob Fisher, President, Evanston (IL) Lumber
Dean Conrad, VP of purchasing and marketing, Your Building Centers, Altoona, PA
Joel Fleischman, Solution Provider (and CEO), Drexel Building Supplies, Campbellsport, WI
Craig Webb, editor-in-chief, ProSales and Remodeling magazines, Washington, DC
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Company Histories
BOB FISHER: To give you some background, my business was bought and purchased by my grandfather in 1948. I’m 3rd generation, I’ve been working at Evanston Lumber since I was a kid, 12 years old, sweeping the floor. I’ve been there for 35 years fulltime. We have 35 employees. Our volume is going to hit about $16 million. We’re one location. We deal mainly with contractors, builders, homeowners. We don’t do any production builders; we don’t work with them for the most part. We might work with someone building or repairing a porch all the way to someone building a 16- or 20-thousand foot custom home. We are located 3 blocks east of Ridge … we’re a mile from Lake Michigan between two El [subway] stops on 2-1/2 acres. For a lumberyard, that’s tiny compared with my friends here. And our metro area is all over Chicago. We get into a little bit of Wisconsin, custom vacation homes. Chicago metro is our area. So the North Shore of Chicago—I don’t know if you would know the housing stock, we really are not geared for production builders and never have been. Our stock in trade really is the professional contractor. We kind of look at ourselves as the opposite of the Big Box. That’s my wrapup.
JOEL FLEISCHMAN: We have four locations. We started in 1985. We closed on a fifth location this week, a facility up in Green Bay. We serve builders and their clients, saving time, stress, and money. Our buildings supply basically from southeast to central Wisconsin over to Madison, which would be the middle of Wisconsin if you’re not familiar with that. Our volume: We’ll do about $80 million this year. We are a growing company. We grow about 20% a year. We started in ’85 with four people out of one location. Our sales have doubled in the last 5 years, so we kind of doubled down when the market scaled back. So we’re happy and excited about the future. We do sell a little bit differently in one of our locations, in Brookfield, which is in the Milwaukee area. [There] we do sell flooring and window treatments and cabinets … a little softer sell on that marketplace. And in a nutshell, that’s who we are.
WEBB: Why did you change your name?
FLEISCHMAN: Oh yeah: We actually had four different locations operating under four different names. The original location started at Campbellsport Building Supply in ’85. We always liked the local name. We have local builders, small communities. We opened two locations with Berlin Building Supply and Keil Building Supply. Then we bought Drexel, which maybe some of you would know were owned by Home Value Co. out in Minnesota that went out of business, but it has huge brand recognition in Milwaukee. So we kept that name. So we had four different names, which was a little tough to do marketing pieces like this. [Holds up YBC’s brochure.] It was also hard to say where you worked.
WEBB: [Printing] the T-shirts must have been painful.
FLEISCHMAN: Yeah, we ended up like a NASCAR machine. Before we opened up a fifth location we wanted to change our name … so we threw everything into a pot and we came up with the Trex recipe if you will where really Drexel was a soft name but it could have a hard edge if you want get lumber. We went with a name that did resonate in one of the markets, and made that change because the local names only mean something to the local town.
DEAN CONRAD: [Starts a slide show]. This is Pennsylvania. This is YBC. You can see in the white that’s our primary delivery. That’s where the 15 locations are. Philadelphia is kind of down here in the bottom, Pittsburgh is here. So we cover pretty much central Pennsylvania. Many vendors tell us that if you want to sell central Pennsylvania you have to come to YBC. So we have 15 business units throughout central Pennsylvania, 85%-90% contractor base. We deliver to all the area within the red. … In that geographic area where we are, there are only about 800,000 households. We don’t have a lot of population.
WEBB: And you’re an $80 million business?
CONRAD: Yeah, we’ll do $80-82 million this year.
To give you a little history on the company, we started in 1989 as an ESOP. We’re a $100% ESOP, started with seven locations and as time progressed—if you know ESOPs and the way they work, ESOPs need to keep getting bigger to be successful. And we’ve been doing that. Next year will be the 25-year anniversary for the company. We opened an installed sales division four-five years after the company became a company. Acquired the assets of the Klasters (sp?) organization in 1987; that’s where I came from; I started at Klasters in 1981, and then we opened our first design solutions center in 2001. And then we added manufacturing in 2005.
YBC’s Marketing Program
CONRAD: Let’s get to the marketing. We very highly put a lot of value in our relationship with our customers. We’re very, very close to our customers in the things that we do, from our shows that we do, our contractor outings to ballgames to all kinds of contractor breakfasts to different things. [We aim for] Saturation in the market between print and wearables and media. We have … our incentive program, our sales, our print. We have tickets for all the single-A and double-A teams in our market … we have tickets to all the Penn State basketball games. Our employees take potential customers to the games.
We have a wearables program that our customers participate in. These are the different wearables that they can earn, from a T-shirt all the way up to a Carhartt jacket. It depends on the volume of business they do with us. That was new for this year.
We have what we call our “top 12” program. We have approximately 35 outside salesmen. They call on the customer base daily. They build a relationship and maintain it. Every month they have products that they need to be talking about to their customer base, and vendors participate in the program. It can be from siding to cabinetry to windows to whatever.
We do advertising for our contractors. We have a library of 12 TV spots, from remodeling to new construction, to specific spots: building a deck, replacement windows, specific projects like that. And then we tag two non-competing contractors at the end of the spot. We run those on cable as well as broadcast throughout our marketplace. We do contractor outings, golf outings, pheasant hunts and fishing trips. We just took about 150 down to Baltimore for fishing on the Cheseapeake. We took 75-80 up to Erie to go fishing. We have a pheasant hunt coming up next week. We have 100 or some doing pheasant hunting and another 100 the following week. …
We build websites for our contractors. Wehave what we call mini-websites and basically it’s a 3-page site. We host the contractors under the domain of www.mypabuilder.com. And then they are listed under each of the cities that they deal in. Basically, a homeowner can access the contractor’s site by going on to mypabuilder.com/workman, or whatever the builder’s name is. … We say we host some of the premier builders in central Pennsylvania. We help the contractor write the copy that will be on the first page. The contractor gets to pick up to four vendors that will be most meaningful to their business. … Those are hotlinks that go directly to the vendor. We [also] host all the vendors within our e-showroom. … On page 2, they can pick up to five services that are important to their business, and whether it be building new homes, specializing in this or that. There’s a total of 20-some items they can pick from as what was most important to their business. … Last page would be the contact page for the contractor, and how to reach them.
In addition to that, we have Contractor Profile or “Looking for a Contractor.” We have on many of our delivery trucks our website is listed there and the caption “Looking for a Contractor?” You go into our website and if you’re looking for a contractor you click on that link and click on the project—we have 20 pre-determined projects, from home additions to remodeling, and so forth—you click on the project you would like to do and then you click on the YBC location that’s closest to you, and that’s what will come up. They come up on a rotating basis, and we [show on the search result] contractors we have relationships with, and the vendors that are meaningful to that project. If a customer was willing to build a deck, it would be all vendors that would be related to decking. There are hotlinks. Again, we’re trying to drive business to our contractor. As they become successful, we’ll become more successful. We leverage our relationship and build upon our relationship very heavily.
Next, print for contractors: We do statement stuffers. We do jobsite signs for our contractors. We give those out like candy. We have a little production shop back at the corporate office. Again, we have the corporate logos on there from TimberTech to Bostitch to Stanley to ThermaTru to whatever. We do a newsletter. Most everything you see here we print and do in-house. We have a small but mighty marketing department. With our newsletters, we write them all in-house and develop content. But we also take and personalize the newsletters. We put the picture of the outside salesman that calls on that account on the back, where the address label is. If they’re not an assigned account, we put the people who work at the contractor counter, the crew that services them. In addition to the outside salesman, we also put the store manager on there. They recognize the picture and the name and hopefully they’ll see some value in opening the newsletter up and reading about some products that we have or programs we have. Postcards, we do direct to the home.
We like to get the wives involved. We do over 300 trips per year. Again, my marketing manager and myself do all that. We do all-inclusives, cruises, hunting trips. We typically have five to seven trips for the guys to choose from every year. The wives really like trips. Most of the wives are in the business one way or the other, whether she’s helping to put together the quotes and estimates, doing the billing and so forth. So we put these postcards out and in addition we have in here our contractor catalog. 400pages, the first 100 all in full color, so whenever the contractor is sitting across from the homeowner and they’re making choices on—if they don’t have a sample and the customer doesn’t have the right literature, they’re sitting across from Mr. and Mrs. Homeowner, he can go through and we have a lot of nice colored photos for them to pick from. So we do that catalog. We survey our contractors very often and, much to my surprise, we’ve done the catalog for 14 years and I thought that print was dead but our contractors still say they love it and want it.
We’re now doing text messages and e-mail blasts. Whenever there’s market moves going on in lumber, whenever there’s some type of opportunity on roofing, we’ll send them a text message.
WEBB: So if one of your vendors decides to have a new program … and they want to work with you, you can help spread the word that the product is available at a different price than they’ve traditionally been used to paying for?
CONRAD: Right. We can blast that out through text and e-mail.
Co-Op vs. Marketing
QUESTION: You’re using a lot of product manufacturers’ logos. Are you using co-op funds?
CONRAD: Basically everything we’re doing is above and beyond co-op. We go out and solicit our vendors to participate in the program to help offset the cost of the trips or the cost of the catalog, to be on our website, to help pay for some of the TV advertising.
The other thing is that we really believe in building the value. We see the thing as a three-legged stool. We have the end user—the contractor. We have us, the dealer. And we have the manufacturer. We believe all three of those people are an important part of that process. We like to associate our company with quality brands and quality names that contractors and homeowners identify with. We like to leverage those names as much as we can, because some of those names are big deals to some of our customers and some of their customers in the end.
QUESTION: That brand recognition works both ways.
CONRAD: Yeah. We’re not an inexpensive lumberyard or a cheap, inexpensive house. We keep good brands, good quality. We believe that whenever we go out and do our due diligence, interview a vendor, bring a product on a lot of our customer base knows we’ve already done our job. They have enough trust and enough confidence in us that if we take on a new line, whether it be windows, decking, siding, whatever, they’ll give it a shot because YBC has done their thing.
Does YBC’s Program Benefit Vendors?
QUESTION: Do you have examples of how vendors have used your programs and what you’re offering to the vendor community to actually grow their share with you vs. other vendors?
CONRAD: Well, one of them would be in our kitchen cabinetry. We had a line of cabinetry that we were doing very well with, and they had a new sales manager. It happened right around the time the economy was going into the tank. They decided to quit participating in our marketing campaign. I’ve always been pretty hard-nosed that if you don’t participate in our marketing campaign you’re not going to be in it. So consequently, contractors didn’t get points any more for trips, they weren’t being able to be put on TV for that particular brand, and their logo wasn’t on our website. And that wasn’t our choice. It was just that our contractors found reasons to quit buying and buy the other brand that we have that offered similar types of custom finishes, custom cabinetry and so on. Because they wanted to get the points or they wanted to be able to advertiser their business and TV, and so forth.
QUESTION: That’s an example of somebody who lost business.
CONRAD: So you want to know about growing business?
SAME QUESTIONER: Yeah. It sounds like it’s vendor-neutral. If everybody is in the point system and everybody is sponsoring a golf outing, how does one vendor do a better job and get more business through you than another? I think that’s what people are interested in in the vendor community.
CONRAD: Well, most all vendors are in our program. Not all of them, but most of them are. Again, that’s their choice. As far as growing the business, I can tell you that during the downturn our business only dropped about 10%. We didn’t see the great big canyons and falling off cliffs like others saw. We’re a very financially strong company We’re back to where I believe this year we’re going to be back to where we were before the downfall of the economy.
“We Need Better Reps”
WEBB: Joel, you wanted to jump in on this.
FLEISCHMAN: We do exactly the same thing—a lot of different avenues. Not as good as they do, but a lot of similar avenues. [Speaking to the questioner:] I guess I’m going to agree with you as a customer. I’m looking at it—we just spent $25,000 on hooded sweatshirts, right? Super, you guys co-op’d it; Trex and Merrillat, for instance. What’s going to come out of it? You guys know: Nothing. I’m forced to use co-op dollars, so we’re forced to use it up, burn it, put it on, brand it, blah blah blah. Where’s the ROI, right?
I guess I’d challenge you guys—I don’t know if you guys agree—but over and over in our different divisions, our departments, we need better representation. We need better people in the field. And again if you’re one of those people, I’m sure you’re one of those exceptions. [chuckles.] So I apologize.
But we need better people and people that are empowered. We have some good people, but they have no power. Here’s my co-op thing right from the manufacturer.
Here’s what we gotta do. We have what I call rifle-bullet opportunities. I have a builder. He’s going to pick out his decking, his cabinet line. Sometimes we don’t even take the manufacturer rep along; they’re a detriment to the brand they sell. It’s the truth, guys. This is the reason I came, to tell you all that. Take that 12 grand, give him a bonus and a raise and find good people. I don’t need milkmen that are paid $35,000 to $40,000 stretched extremely thin.
You know what we do a lot of, with manufacturers? Fax things. Yeah, it’s embarrassing. We’ll call them, say “Can’t we just e-mail it, PDF?” ‘We don’t have anything like that. I don’t know what you’re talking about.’ We get a ton of faxes. It’s craaaazy.
I need people that are engaged and pushing us. We talked about doing—Merillat just did it and it’s catching up with the builders. You guys have research and data, and I apologize for using Merillat twice but, you guys have research and data that we need, templates that we need. We don’t have great, wonderful ideas and neither do our builders, but we need websites. Tell us, “Hey, this is how we should do an event, with a checklist.” You guys have way more powerful people than we have.
I really don’t want any more co-op dollars. I don’t want any more print advertising with 90% of your name on it and my name this big on the bottom. Run a commercial that’s 60 seconds, nothing to do with my market, and I get a tagline for three seconds at the end on 6 a.m. news. We’ve all seen ‘em. They don’t work, and they’re neutral at best.
WEBB: Bob, you were shaking your head when you heard it.
FISHER: I’m feeling the same way. Don’t have your reps show up and throw a catalog at us and say, “OK, sell it.” Have your reps show [up], bring us a catalog, have them teach our guys, and have them help us make money.
FLEISCHMAN: No agenda. [No] “what’s new guys? How’s the Packers?” They check me off their list and--
FISHER: ‘Can I take your business card?’
FLEISCHMAN: Yeah, “Can I take your business card? so they can show it up the chain.
QUESTION: Will you guys call my company and tell them exactly that? All of us are in agreement that we feel the reps are integral to the value [of the company]. In my personal opinion … they diminish the brand. They add negative value to the equation for all of us—the distribution side as well as the manufacturer. And I don’t know how to make the [case] so they’ll all go away.
FISHER: When they show up, we make them go away because they’re wasting our time.
What Dealers REALLY Do
FLEISCHMAN: And I wouldn’t say go away. Our account managers, they sell to relationship builders. They sell to relationships. So honestly, when you bring a new brand in, you know who they [i.e., contractors] are really buying from? Us as purchasing agents or owners of the company. I see it, the numbers work, it’s a good product, it’s this. Then we have the breakfast, and it’s the outside road salesman [for the company who shows up], and [using Webb as a reference point] they don’t like Craig, “Show’s over. I don’t like that guy. Done.” The only thing I probably learned in all my years is that if my salesmen don’t want to sell it, they will prove to me that they will not sell it. Absolutely. All that [marketing] stuff is great, and we need it. But there’s another aspect to it too.
FISHER: The other thing that’s changed in our model from our grandfather to my father to mine to even three years ago: We’re not suppliers any more. We are subcontractors. Because all the contractors we’re working with, they’ve got less staff. They don’t have people to pick up at the lumber yard, so they’re calling us. My outside sales people are running the jobs. They’re getting the blueprint as a file. Sometimes the general contractor or the builder hasn’t even opened it. So a file is sent. The contractor sends it to us. We do the takeoff. Four months later we hear from the guy: “Hey, guess what? We got that job. Can you call my framer and get us started?”
WEBB: Tell the story you told me about Little Stanley.
FISHER: One of my outside salesmen gets a call today from Stanley. Stanley says: “I need to go to the Woodland job. Where am I going?” He didn’t call the general contractor of the builder; He called my salesman. Now there happens to be three different Woodland jobs, and Stanley—he’s the trim carpenter for the builder—is calling my outside salesman and ask him which job he’s supposed to be at. Again, we’re subcontractors. So you guys need to help us run these jobs.
What Dealers Want from Manufacturers
FLEISCHMAN: And again, new products will always be out there but Andersen Windows went from 20 pages to, I don’t know how big the catalog would be. Remember: We can order that wrong with one button. The entire thing. So—
FISHER: And no returns, by the way.
FLEISHMAN: --We need more factory tours, more integrated computers, more software. We’re one of the only industries [in which] I can’t see distribution level. I have no idea of what inventory they have. Why do I have to call the same guy, order three pieces of J-channel, through your store when I already know the price? I’ve got to call that in. There should be some program where I can just click click click order order, I see the inventory. It’s done in most industries, people. We’re a whole generation behind, or two or three. And it’s not getting better, it’s getting worse.
QUESTION: A great way to do it would be for the manufacturer to see your inventory with an authorized stocking level and a lead time. You don’t want to look at my stuff. I’ll do the job for you.
FLEISCHMAN: Amen, brother. That’s what I’m looking for.
SAME QUESTIONER: If we can see the stocking level and when you want it delivered, we’ll do it.
WEBB: And clearly one of the goals of this meeting is to bring you the technologically advanced dealers because there are some dealers who are still doing things on paper.
Education Opportunities
QUESTION: I’m a manufacturer of building products—OSB, actually—and I’m curious on your views about the whole education process with respect to the skill of the labor base. How do you deliver the training to the builders through what types of tools, content?
WEBB: I presume you all have product knowledge sessions of some sort. Dean, do you want to start with that?
CONRAD: Much to our surprise, as the industry has continued to recover, we thought there’d be a lot of skilled labor out there. We have another division of our company that’s installed sales. We’re doing more business in installed sales today. We’re running framing crews, we’re doing finish carpentry, we’re erecting walls. We’re doing more of the house than we ever have before. And the contractors are telling us [it’s] because either they can’t keep up with code issues, or they can’t find the skilled labor to do it.
WEBB: So how can these people help you guys?
CONRAD: From my perspective, if each vendor were to be able to come up with some type of YouTube or DVD training session that we could give every one of our training associates to go through and take it on OSB and the proper installation techniques and why you’d want to use 5/8s vs. 7/16s on this application or that application or just the whole process of how it’s made.
FISHER: We do lunch and learns for architects and builders. And that’s separate, because for the architects we give AIA credit. The builder PKs [product knowledge sessions] that we do are great except you gotta hope that when they’re learning, they go back to the jobsite and they’re teaching. And that’s not always the case.
The other thing: You asked a question that I would say, Start realizing that the labor force in Chicago,[when you say “good morning”] it’s “dzien dobry” and “buenos dias.” And have [your information] in Polish and Spanish, because it’s multilingual in my market. I have a Hispanic person working, I have a Polish lady both at my front counter. You gotta have that. You gotta address that, especially if you’re talking about installation of windows, any kind of siding, any kind of flashing. If we throw out a roll of zip tape or we throw out a roll of flashing, sometimes it’s in the dumpster. Even Simpson with joist hangers; I bet 50% of them aren’t nailed off right.
FLEISCHMAN: This is the best example I can help you guys with. In the Milwaukee market, the housing has slowed down because of a lack of labor in all the trades. That’s absolutely happening. How you can help: We had one of our largest builders does Andersen Windows, also a vinyl line called Lindsay, and they were having over 50% callbacks. We actually went there with the manufacturer rep who was wonderful, with the builder, which was again the third stool [leg] integrated, and we brought the framing crews. And that builder said: “If you’re going to work on our framing crews you will attend.” And we held them accountable.
We showed them exactly how to do it. We go out and spot-check every job, we call it the white glove treatment. We do a framing inspection report back to them—I don’t think we have to do it for every job—and again on the manufacturing level, spot-checking how your products are being installed would help us out a ton. And again, when there’s a builder agreement where the builder signs off; not everyone will. The small guys aren’t going to do that, but the ones who are hiring framing crews would absolutely love it.
We are going to go off to an OSB plant and tour it this winter. Again, getting the plant tours helps your business a ton: We almost get a 100% conversion ratio if I can get a builder to commit to go to see your site. Look at your own data; I bet yours is almost 100%. Have more of them. VIP them there, get ‘em on board, and then follow up with some little incentives like points for them to use. And again, just that gesture from the factory of somebody calling six months later and saying “Hey, did you remember our tour? How was it? Love to have you back sometime.” Great stuff.
“Silver Bullet” LBM Sales Reps
QUESTION: An observation: We’re a manufacturer. So we go in and meet with hundreds of customers, right? We have 50-60 people running around and we don’t sell products to them worth thousands and thousands of dollars. We make foam insulation, and we want to be relevant to you. So, yes we come in with our samples but when it’s all said and done we’d love for you to call us when there’s a problem about the wall, the envelope. If we can do that then we’ve done our job.
So we go into a PK session and, depending on the size of your company, there may be 12 people there. We know that not all 12 are equal. So from our standpoint, we’re trying to find out who the movers and shakers are. Right? And we have our own way of doing that. So there’s always going to be two or three people in your company that our salesman is going to latch onto, because that’s where most of the growth, most of the orders are coming from.
So we try to do everything we can to be relevant to your company and all 12. But when all is said and done, if we can find the two or three movers and shakers, we’re going to have a very good partnership, even though the eight or nine other guys may not do what we want everyone to do.
FLEISCHMAN: That definitely makes sense to me. I tell [companies], “I don’t want every rep coming in and meeting every salesman.” A, it’s a complete waste of time, and B, I call it the silver bullet: Instead of shotgunning it, find those great opportunities and then nail it.
QUESTIONER: A PK session for us is as much about finding out who among your guys are going to move the product as it is about [product knowledge] … because we know it’s not resonating with every person. It’s real early in the morning or late at noon. Some had to travel, some don’t want to be there--
FLEISCHMAN: The semi-retired guy who drinks too much who’s monopolizing everybody’s time. I think we’ll all been there.
QUESTIONER: --And we recognize that all our sales people aren’t equal as well. But I can tell you, and I think I speak for other manufacturers, we spend a ton of time thinking about how we can be relevant. … In this day to survive, you have to add value. Coming in, starting with the lowest-price product, anybody can do that. Our people go to sales training too, so we’ve got to figure out how do we add value to your business. We can only do that by asking questions and figuring out who these guys who are really making it happen for you, and those are the ones that we really have to pay attention to.
Solve Our Problems, Please
FISHER: The most important thing you can do is what Joel said: When there’s a problem, get out there. And that’s what we do. I’m solving problems all day long.
QUESTION: Are there any vendors that stand out in your mind as empowering their salespeople to resolve issues in the field quickly?
FLEISCHMAN: Yeah, I have a few.
QUESTIONER: And how do you view them?
FLEISCHMAN: In a very high light. And in terms of return on investment, yeah, they go very far in our company, not only directly from the purchasing team, but all the way down. They get viewed very well by the company. Hallmark [Building Supplies] is our distributor of Tyvek in our marketplace. They actually will go around us a little bit and they’ll do their own lunch and learns with architects …They’re educating and telling us about [leads] and getting it spec’d. And they aren’t necessarily bringing us jobs, but they’re integrating it in [telling us] “Boy, this big job’s coming. I don’t know if you were aware.” And they’re pushing us to different levels than I thought we could be.
Also, the best reps definitely have—and they may take this upon themselves—is the grey area. Those are the sucky ones. Anyone can say “That’s not done under warranty” or this and that. But they’re talking to us before the meeting, having a good game plan and saying, “OK, we’ll take care of you guys on this project.” And again, not that we can’t pay it, but sometimes a third, a third, a third [paid equally by dealer, manufacturer, and builder]—that’s a relationship for life right there. But saying “fill out the warranty card online,” and oh good lord.
WEBB: Bob, can you tell us about a great vendor working with you?
FISHER: I got a call from a lady that built a house with us like nine years ago. And it was a custom, big house. She had all Marvin windows and she had Marvin out at least three times before the phone call she had to me. Because when she bought the house they had these round-tops, casement round-tops, and it was brand-new to Marvin at the time. They were clad. And she called because she was nervous about the fact that after 10 years, the warranty was going to be up. So Marvin’s guy—the tech rep—came out, surveyed with the salesman, surveyed every window in the house. The tech guy, the guy that fixes it once the new sash comes out, he had a clipboard. He noticed two windows that were fogged. They were failing. So he wrote those up. And on the other side of the fireplace were two of the identical windows. There was nothing wrong with them. He wrote those up for replacement. He wrote ‘em up because he said, ‘Listen, I know these people are almost near the end of their warranty. I don’t want them to come back after the warranty expires and give Marvin a bad name.’ That’s service. And he the guy who was going to have to change out those two sash. He gave himself extra work, but he realized that this woman has had problems, and he wanted to try to stem the tide on the next set of sash that went bad. To me that speaks volumes about Marvin’s service.
WEBB: Do you have a great vendor? And it’s interesting to me because you buy from those vendors, so you must engage in these wonderfully rancorous conversations. After that’s over, do you still have people you like?
CONRAD: We have a great relationship. I like the industry. I like most of the guys that we deal with. As far as favorites, we, like everything in life, there’s good ones and bad ones.
WEBB: Can you just name one? What they’re really looking for is, What’s an example of a role model?
CONRAD: I would say probably the best that we had in the market –and he has since left the market—was Huber: the Advantech, the Zip product. The rep we had was just unbelievable with helping us market the product to do the downstream marketing, taking care of any issues. Bob did not have to go back and check with his boss. He had the authorization—I’m sure he had parameters—to do what he needed to do to fix the job. But our Andersen people aren’t bad people. We buy MasterBrand cabinetry, they take good care of us. AZEK—the old AZEK, I don’t know how it’s going to be now with the new AZEK-TimberTech—but the old AZEK, they were very good at resolving problems downstream.
WEBB: And the ones who weren’t good for you, they aren’t customers any more, I bet.
CONRAD: I’ve been in this since’81, and it’s always amazed me how some companies are represented in the field because I always felt that if someone back in corporate really knew, as Joel and Bob say, the person will come in and say “How do you think the Steelers are going to do?” or bring in a dozen doughnuts and a pat on the back and that’s it. But if you have a problem, they’re nowhere to be found. There are some of them.
QUESTION: I hear lots of references to vendors and suppliers, I think that’s the wrong approach. We should be partners. We all need to get into the contractors’ wallets, and eventually into the homeowners’ wallets. We have the same agenda. That [separate supplier/vendor] mentality diminishes that relationship that we have as manufacturer and distributor
FISHER: You’re certainly partners, and I’ve heard this for 35 years. But the bottom line is: When we need you, you need to be there. And a lot of times they’re not. I don’t have a very large marketing department, OK? It’s a very small company. There isn’t a lot of advertising. There are the sweaters and T-shirts that we’re scrapping for. But everybody knows that in the last few years we’ve barely gotten a Christmas card from most of the people we buy from. They’re not willing to do the golf outings. There’s a lot of pushback.
Service vs. Product Quality
QUESTION: I’m hearing a lot about service and I’m curious as to whether, if you had to balance it out between product and service, is it 50-50? Is it 80-20? What are we looking at?
FLEISCHMAN: Depending on the product. You have an OSB guy here [in the audience]. If I have an OSB problem, that’s a really big issue. That’s a true commodity; that’s how to differentiate yourself. And it scales back to windows, probably, those type of lines. That’s where that balance is. It’s just like you guys: there’s always that tricky balance. That’s a hard one to answer.
CONRAD: Normally whenever it goes bad it goes bad; it’s just ugly. It snowballs. From “They won’t cover it” or it’s this. or that. It’s difficult to try and get resolved. I don’t like to make idle threats, and we won’t go out and threaten a vendor or supplier, but in the end if they don’t resolve the problem to what we feel is fair and equitable, we probably won’t be doing business with them.
WEBB: As a matter of principle in any given category—let’s say framing lumber, engineered lumber, windows, doors, caulk—do you have a philosophy as to how many brands you want to have? I know dealers who want to have a multiplicity—four or five, six brands. I know other people who will just go with one brand. And that’s it. Do you have any philosophies as to how many you’re going to get in bed with?
FLEISCHMAN: Less is better than more. If I can get down to one in the marketplace—I was just talking to somebody today, we just talked to Shaw and Mohawk, the two largest guys. Similar products, similar horses. It was classic as far as representation. I talked to the reps and the reps’ bosses and said “Tell me why I should sell your brand?” And they kind of giggled and chuckled. Neither company came back to me with a program. I was shocked. I’d rather sell less is more. There’s so much to know about the brands. Composite decking would be classic. I mean, how can you differentiate yourself, not only in the marketplace, but then to represent six or seven and explain why each one is a little bit different or better. We chose Trex a long time ago and have been very happy with that. Now I can say why we differentiate ourselves. Our salesmen get stronger every year at it. If I have every brand, I diminish who we are?
WEBB: So you go for the one.
FLEISCHMAN: Try to. Again, it’s not always possible.
Advertising’s Role
QUESTIONER: As an agency, we’re kind of caught in a situation where we know we might be advertising to the customer but that’s probably not going to be enough to lift business with a distributor. We know we have to grow our business within the distribution community. So what we’re looking for—and I know there’s no silver bullet—how do we connect from publisher and their website where we put advertising down to your level, where we can take that then to the contractor, complete the loop and grow our business for our clients within your distribution system?
FISHER: That’s a great question. It’s tough because obviously we’re looking for quality. I’m in a market where, fortunately, price isn’t everything. It’s not like I can charge whatever I want, but really the analysis starts with me.
And I listen. I’m on the frontline with my contractors, and if I keep hearing about Bosch tools, I bring in Bosch. We started with Trex, we moved to AZEK. Lots of problems with the Trex their first generation, second generation. Tyvek—we’ve stuck with Tyvek because they’ve got their solution guy. They’ve got a Tyvek specialist out there. When there’s an issue, they actually branded that product for us perfectly because our builder, our custom builder, uses the tape, he has the system, so he buys into the system. With all due respect to Pactiv: They’re there, they’re servicing us. And that’s how we make the decisions. [Looks at Conrad] Do you guys carry, with all the locations, Tyvek, Typar, Pactiv, all the different ones?
CONRAD: We’re Tyvek and we have a private label--
WEBB: That’s another issue.
CONRAD: --because some of the customers just don’t want to pay the price of the Tyvek. Some of them buy into the whole system and the building envelope scenario.
WEBB: But as a purchaser, do you have a philosophy as to how many brands you’ll carry in a particular line?
CONRAD: It depends on the particular line. For the most part, less is more. I’m a big consolidator. I’d rather buy the majority of our products from just one supplier, although in roofing we carry two different lines.
WEBB: It sounds to me that if you get up to two, that’s a lot. I was thinking the typical dealer carried more than one.
FLEISCHMAN: Especially in our market in Wisconsin and I think nationally as well, there’s Parade of Homes, and Model Homes, and I think that pendulum swung really far one way where you were getting 50% off and it was really being abused for personal homes. Then it went all the other way, like Bob said, and everything went away. I still think there’s a real sweet spot. Builders will use what they’re accustomed to. Don’t miss that opportunity. If a guy does 40 homes a year, and I know it’s an hour away and you’re putting your neck out, and especially you manufacturers have gotten you’re butt burned in ’08 when a guy was doing 40 went down to one. But when this guy is doing 40—and you can integrate it with real game plans with this guy and factory tours for his sales staff and this and that, and saying ‘hey, we’ll do your next two models for free.’ And that might be—maybe I’ll split it with you, I know others would. We do quite a bit. If I can get it in their home in the field, get it expedited, they’re gonna sell that. And now it’s in their company and they’re all going to get busy as we’ve just heard again [in a previous conference session]. And they’re going to use it for a long, long time. That’s probably been our best conversion. Give it to ‘em. Try it. Small stuff. Drop off a case. Drive around and throw it out the window.
Using Two-Steppers
QUESTION: Buying direct vs. buying groups vs. buying through distribution?
FISHER: We’re LMC.
CONRAD: We’re Do it Best.
FLEISCHMAN: And we’re independent. [Everyone laughs.]
QUESTIONER: What are the advantages of being independent vs…..?
FISHER: We found a co-op that fits. We’re not real heavy into hardware and they’re heavy into lumber. And with respect to the quality of that organization, it fits our mode.
CONRAD: And for us, basically we buy the majority of our hardlines through Do it Best, most of our commodities we don’t buy from Do it Best. I think we’re their third-largest customer. We occasionally buy lumber. We don’t buy roofing, we don’t buy insulation, we do buy our drywall thru Do it Best. Our lumber buyer has a better relationship with a couple of mills and we do that on a direct basis. Insulation, we deal direct with CertainTeed. Roofing we dole it out to CertainTeed. That’s what works for us.
FLEISCHMAN: We haven’t found any buying groups that have convinced us that the way we do it isn’t as good or better. I said “If you give 2% to LMC, give me 1% and you keep 1% and we’ll call it good.” But maybe we’re a bit of a renegade in the marketplace. There aren’t many independents left. Two-step looks fine, but I don’t want to sacrifice any market share. We’re living on one or two percent operating net income. I can’t give up that one or two percent. ABC, Quality, whoever is going to crush me if I do that. So I’ve got to get as close to direct as possible.
Market Research Needs
QUESTION: I do market research in my company and we hear a lot about marketing not being effective, or it could be better. And I heard someone make a comment about that, where maybe for my local area you’re not getting the presence you need. Can you describe specifically what you are looking for from the manufacturers that would be more helpful?
FLEISCHMAN: A lot of times, I do Facebook and Twitter and I do think manufacturers are somewhat way behind on that sort of thing. And I know it’s all kind of scary but again, I don’t think there’s a lot of integrated things in there. I do think that giving us data and research and marketing that we can use [would be good]. A long time ago, people went to a model home and one of you large manufacturers did it, and [the study involved] how many seconds a homeowner looked at something. That’ great for the builder and great for us. Give us preflight lists or checklists, great ideas that you guys have come up with that you know we could use. We don’t have—
FISHER: The resources.
FLEISCHMAN: You guys do great, but we at times don’t have the resources or the ideas or the time to implement it. Especially the builders; give them tools to succeed, and that goes a long way on your level. And that’ll resonate back.
CONRAD: We need to be sold. We have some companies that represent your products very well and are out on the job site with us pitching the product, doing the lunch and learns, the breakfast meetings, the PK trainings. And we have other companies that just don’t do it. And I can almost tell you the results from the one company that invests in the market, invests in the PK and so on, the results are going to be much different than the other ones. Our customers are very hands-on, they trust very heavily in what we as a dealer select to stock and supply.
How Dealers Influence Contractors’ Choices
FLEISCHMAN: And remember we’re not Bud Light and Miller Lite when you do marketing. Name-brand recognition is OK, but if our salesmen goes, “Yes, Andersen Windows and Marvin’s is great, but I have Semco windows that are 50% less and just as good,” … we just goofed everything up that you did. Typically, and again I’m generalizing, being a little blunt, that’s typically how she goes down, right?
QUESTION: So your counter guy is going to say, “Yeah, we got this, this, and this, but we can really do a better deal with this.” That certainly doesn’t do well for us. How do we counteract that?
FISHER: You can’t counteract it, but what you can do is make sure that that counter guy really truly knows how good that product is.
QUESTIONER: But it sounded to me that what you said was he didn’t understand the value. All he just heard was, “Well, I sold this because this one was on sale and I can get it out of here.”
FLEISCHMAN: Yeah.
QUESTIONER: I think all of us would say that our product is valued higher than any other products that our competition has, so my question is: The training that you do on site, you do for your countermen, how do you react to that? You don’t incentivize to sell the lower-cost product. For you, it’s a benefit [to sell better goods].
FLEISCHMAN: Absolutely. Less callbacks, all of that.
FISHER: The Marvin windows story, that’s a great story. Get it in editorial. Get it published. Have somebody write a white paper on how that happens and increase the knowledge. That’s the way you handle situations.
FLEISCHMAN: I would say knowledge, knowledge, knowledge, knowledge, knowledge. You can’t have enough product knowledge, which might be webinars we can watch on our own time, might be YouTube videos. Also, definitely say, “I want to come in and give you 10 minutes.” Again, factory tours I think are huge.
Connecting with Architects
FISHER: I’ll give you one more idea. What we do is high-end custom. And a lot of what we do is predicated on the blueprint. So what you all need to do is get the ear of the architect. Because Marvin especially grew because they really got the architects to pay attention
FLEISCHMAN: And Pella in Wisconsin for a while.
WEBB [to Fisher]: So your lunches are a great example of a good way to get the ear of the architect.
FISHER: Absolutely.
FLEISCHMAN: Big time.
QUESTION: Who’s got more power, the architect or the builder?
FISHER: The architect.
FLEISCHMAN: At the high end, the architect.
CONRAD: Our company isn’t in the high-end homes, we’re more in the middle.
FLEISCHMAN: A builder does not want to change a spec. It freaks the homeowner out. Because they think you’re trying to pull something. Especially if the dealer is involved. They think there’s something going on, trying to cheapen it up.
FISHER: We have some blueprints where the towel bars are spec’d and the color of the screws in the towel bars are spec’d.
QUESTION: Even down to things like drywall and OSB.
FISHER: Advantech.
FLEISCHMAN: But if it’s spec’d, it’s spec’d, and again the builder can only go back to the architect so many times without that homeowner freaking out, so if I can get Advantech and it’s spec’d, it’s going Advantech.
WEBB: We’ve done surveys where we’ve asked dealers how often residential architects call on them and ask them and ask them questions, and the typical dealer was getting numerous calls every week from architects. It wasn’t like one call a month, two a month. It was like 10 calls a week asking questions about things.
FLEISCHMAN: Typically, this is what they’re spec’ing: Whatever book is lying there, or whoever was in there last. Or what they’re used to. There’s not a lot of rhyme or reason is what I’m seeing. They’re going with whatever template they’ve got there, so there are some real opportunities. Especially as the dollars went away and architectural reps went away. Get back in.
FISHER: Absolutely.
