Many building materials companies planned on 2015 being a good year. Unfortunately, the weather didn’t cooperate in the first quarter, so many companies were off to a slow start. There are some factors, like the weather, that are out of your control, but there are also some controllable, overlooked ways that are slowing your sales growth.
In the last few months as I have been interviewing and traveling with salespeople and calling on customers, I have noticed a trend that is slowing sales growth.
Business is Good Enough
One of the downsides of a recovery is the memory of how bad things were. In the context of how bad things were, things today are pretty good. Compared to how hard you had to work to get business, it’s now much easier. It seems like there’s plenty of business to go around, and you don’t have to work so hard or get stressed out.
I first noticed this with building product dealers and builders. I have not seen this with lumber dealers who seem to still be very motivated by their competition.
With dealers, who tend to be small business people, I noticed that they are back to their personal income levels before the downturn. Business is good, they are happy with their income, and they don’t have to work too hard. They don’t feel threatened and they don’t see the need to do something like add a sale person or work extra hours.
The manufacturers, who supply these dealers, are now being held back by the complacency of these dealers. There are also some dealers who are as gung-ho as ever. I was just surprised by the number of dealers who are quite happy with the status quo. In every case, I saw opportunities for these dealers that are being ignored or overlooked.
If you are facing this, you need to support the dealer with your own sales team making more local calls and/or review your dealers. I’m not a big fan of just adding more dealers. I feel that limiting your dealers is a smarter strategy. In my experience, dealers who have an exclusive or partially exclusive relationship with a brand will work much harder for you.
In exchange for some exclusivity, you should expect more from a dealer. If they aren’t hungry and are happy to sit back and let the phone ring, you need to be looking for a new dealer. And not just any other dealer, but the best dealer you can find. An aggressive, smart dealer with a business plan.
Your Own Salespeople May be Holding You Back
I have also noticed salespeople who must be sandbagging their numbers, as they don’t seem in alignment with the potential. I will spend a day with a salesperson and ask them a question like, “Who are the largest architects, remodelers, builders or contractors in their market?” I then ask which ones they don’t sell.
They tell me and I ask why? They then tell me, “Oh that’s (name of competitors) customer. What goes unsaid is, “If I call on them, then the competition will call on my customers.” What a nice arrangement. Let’s all be nice!
The other excuse I hear is, “They’ll never buy from us, they always use the other guy” or “We had a problem in the past.”
When I ask, “When was the last time, you called on them?” The response is always, “A long time ago.”
I’m not a big fan of the “Fear of God” sales leaders but I do believe that every salesperson should have a target list of customers and a plan to convert them. They should be accountable for this, provide progress reports and network with other salespeople to see what’s working.
Are You Supporting Your Dealers?
Before you lay blame on slow sales on the dealer, be sure to ask them what you could do better. I frequently see a company with a great product but a problem like customer service or shipping that holds the dealer back. These problems can also provide an incentive for the dealer to shift business to a competitive brand. Sometimes it isn’t that he actively tries to switch the customer, it frequently is just that he stops pushing for your product.
This should be a good year for building materials manufacturers, that could be even better, if they look out for these issues.
Contact us if you’d like to learn more about how to grow your sales.