For Kevin Hancock, delivering fast, automated information to builder customers is critical to his company's ability to compete. That mind-set drives much of the technology strategy at Casco, Maine–based Hancock Lumber Co., a $115 million, 500-employee dealer that's been in business since 1848. “We have to make sure customers never have to wait for information,” says Hancock, president and CEO of the family-owned business. “Our goal is to make sure it's timing-irrelevant for customers” when they interact with Hancock Lumber.
Being able to interact with contractor customers to a greater extent online will be especially helpful for follow-on orders that occur after major deals are closed, Hancock explains. “For the big, preliminary organization of a job where there's a new house to be built, those things are typically still set up the traditional way,” he says. “Once a builder is ready for a second-floor framing load, that's the kind of thing where they can shoot us an e-mail as opposed to having to find somebody live.”
Hancock is among a growing number of lumber and building materials dealers that are putting computer systems and other tools in place to strengthen their ties with customers and improve their internal operations. The technologies vary—from e-commerce and Internet transactions to data analysis and radio frequency technology—but the underlying goals are similar: to serve customers on the customers' terms and preferred medium.
Many experts say this attitude is necessary to compete. It's the nature of the building industry that contractors spend their days on jobsites or with customers, gathering information they need to deliver quotes on projects. Much of the follow-up information gathering needed to actually quote prospective jobs happens after the lights have gone out for the night. And Hancock Lumber is just one of many dealers on the quest to serve customers 24/7.
That's definitely the case at Schneider Lumber Co., a 70-employee operation based in Canton, Ohio. “If we can supply customers with pricing information just as fast as they can use it, they are able to supply their customer with that information and force a decision before the customer can seek alternatives and before buyer's remorse sets in,” says Marc Schneider, president.
Taking On Technology Web-based electronic price quotes. Real-time analysis of records stored in giant transactional databases. Handheld computers equipped with radios to automate core functions like inventory check-in. It's all heady stuff for lumber and building materials dealers, many of which are family-owned businesses and, depending on their size, often don't have dedicated technology personnel.
That means these systems—and the individuals that deploy them—often are selected by the top executives of these businesses, who deal with everything from corporate strategy to hiring retail employees. As a result, many dealers don't have a formal approach to technology training or education.
Generally, experts say, is that for those dealers with $10 million or less in sales, there usually is no dedicated information technology or “IT” person. In companies between $10 million and $50 million in sales, there may be one dedicated techie supplemented by contract workers as necessary. Companies with more than $50 million in sales typically will have a handful of IT professionals.
Schneider Lumber breaks this IT paradigm. A 96-year-old, single-location business with less than $20 million in revenue and 70 full-time employees, the company manufactures arch millwork and steel doors and frames, and supplies lumber and building materials. Marc Schneider and another employee wrote all the software that runs the company. While he's not a programmer by trade, he is a mechanical engineer who's neither afraid of technology nor unduly enamored with it; he simply sees its value to his business. When asked about traffic at the company's Web site, Schneider says he needs to write a snippet of code to retrieve that data and makes pleasant small talk while awaiting the results of the query he generated. Schneider is concerned about the accessibility of pricing information to his customers, through manufacturers and others, a condition wrought by the Internet and other factors that he refers to as “perfect pricing information.” Given that customers have easy access to his cost structure Schneider asks, somewhat rhetorically, “If they clearly understand what we pay, how do we add value and provide evidence that we're doing so?”
One of Schneider Lumber's answers to that question: a secure Web site from which contractor customers can obtain price quotes for materials around the clock, eliminating those “deadly” lead times.
