Over the last twelve months, I have been keeping track of the biggest reasons why building materials manufacturers aren’t growing as fast as they would like. This is based on what I hear your customers tell me during my research and what I observe the most successful companies do to grow faster. These are not in order of importance as every company has their own situation.
1. Customer Service is King
I always ask dealers, builders, architects, and other channel customers who their top three suppliers are and why. They always tell them the reason is their level of customer service They also tell that they couldn’t imagine doing business with anyone else.
No matter how good you think your customer service, is could be better. Customer service is not defined by you but by your customer. It’s not how fast you answer the phone, it’s much more than that, a lot more. Find out how your customers define excellent customer service and then exceed it.
How a customer defines customer service is also always changing. It not only changes because of how other building materials manufacturers perform and changes in technology. Your customer expectations of customer service also change based on how they are treated in their personal life. If an insurance company or retailer can make something easier, why can’t their building materials supplier?
If you want to make it harder for your competitors to steal your customers and make it a little easier to raise a price, customer service is the key. You can read more here.
2. Still Too Many Old White Guys
When I am interviewing your channel customers, I keep seeing younger and younger people who are deciding what products to use. Younger people follow a much different purchase process than the building materials industry of even five years ago. They spend more time online and not waiting for a sales call. Just because you are the leader means little to them. It may even be a negative as they can relate leaders to companies like General Motors and IBM when they are looking for the Uber or AirBnB of your industry.
Your younger customers are not as afraid of risk. The adage, “No one ever got fired for buying IBM”, no longer applies. You have to do two things: 1. Communicate with them in the places and in the manner that they consume information. 2. Show that them that you are still relevant.
Internally I see younger sales and marketing people who understand how to win over the younger customer. I also see how these people are not allowed to make changes. The building materials industry is still stuck in the era of “Until you have paid your dues, like I had to, and have a little gray hair, you can’t know what you are talking about. You just don’t understand; this is how the building materials business works.”
Hire intelligent and passionate young people and listen to them. Let yourself become the student once in awhile. If you don’t have a LinkedIn page with a photo and several hundred contacts, you are an Old White Guy. Read more about Old White Guys Here
3. Knowledge is a Competitive Advantage
Just like customers tell me how much they value customer service, they also value knowledgeable sales people. They tell me that the majority of building materials sales people don’t really know very much. According to them, every time they agree to see a new salesperson that they assume that 50% of the time it will be a waste of their time. Building materials customers also tell me they avoid stopping at many manufacturer exhibits at trade shows because they assume the sales people are not very knowledgeable about their business.
They find that sales people are typically knowledgeable about their products and may have had some sales training. What they don’t know is how a house or a building is built. They don’t know how the customers business works or what keeps the customer up at night.
Sales people need to spend time on job sites and be there for an install of their own products. This may sound basic, but I was with a young siding sales person with a years experience, who called on builders and architects and had never installed siding.
To be valued by your customers, sales people need to deeply understand how their customer’s businesses work. Most builders, contractors and architects are willing to teach a sales person what they need to know. And even if you think you know all about y0ur customers because of your years of experience, you can’t stop learning.
If you want to grow and outperform your competition, continually invest in training and education for your sales team.
4. Fire Someone
If you are really serious about your business, you need to realize that you are playing in the big leagues. You need to have the best team. I see too many building materials companies keep playing with players who are past their prime or, in marketing, minor league players who aren’t ready for the big leagues.
Past your prime, like the term, “Old White Guy” is more of an attitude than a physical age.
Here’re the three areas that are as critical as a quarterback, pitcher or coach.
VP Sales – This person needs to be driven, competitive and full of energy. They also need to be a great leader and developer of sales people. Too often, I see someone who is just trying to put in a few more years to get to retirement. Lack of growth is no longer their fault; it’s the customer or some other problem. They don’t support or have any new ideas The type of sales leader you need doesn’t find excuses, the get results.
Head of Customer Service – This is frequently a person who is doing what they are told. Customer service is so important today that you either need to replace the head of your customer service department or retrain them. To retrain them, they need to be the type of person who is excited about blowing up their department and starting over. You can read more about this here.
Marketing – While there are some sharp marketing people in building materials, there are too many incompetent people. They are just order takers. They do what they are told and add no value. These people should be a pain in your ass. They should always be proposing new and better ideas. And even when they don’t make sense to you, you need to listen and learn. Your sales and marketing teams are probably not working together for you and here are nine reasons why sales hates marketing.
When you put up with weak players, everyone knows it.
It tells you employees the level of performance you will accept. Fire someone in 2016 and replace them with a winner, if you want to grow. Don’t be lulled into feeling things are good just because your sales are up. It probably has more to do with the market being up than from anything you are doing.
It tells you employees the level of performance you will accept. Fire someone in 2016 and replace them with a winner, if you want to grow. Don’t be lulled into feeling things are good just because your sales are up. It probably has more to do with the market being up than from anything you are doing.
If growth is not enough of an incentive for you, then you should consider simply surviving. The industry continues to consolidate and bigger companies tend to become more and more difficult to compete with. Even without consolidation, I find that there is always one company in each category who is the leader, the one customers want to deal with. If that is not you, you better change.
If you’d like to a fresh perspective on how you can grow your sales faster, contact me.
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