The following is a transcript of a podcast on How to Successfully Sell Building Materials in Canada. As it is almost a twenty-minute read, I thought I’d give you the option to listen to the podcast episode, watch it on YouTube or read.
Hi, this is Mark Mitchell from Whizard Strategy. Glad you could join us again today I have an amazing guest for us today to discuss an important subject, how to grow your sales in Canada.
Many people tell me, “Oh yes, we sell in Canada or we want to sell in Canada”, but it just seems like they don’t quite go about it correctly.
My guest today is Alison Raes, the founder of ILA marketing, which is an independent rep firm that represents building material companies in Canada. And she’s also the founder of a new company, Katabatic Manufacturing that sells construction adhesives.
Alison, welcome to the show. Tell us a little bit more about your background.Oh, thanks for having me Mark. It’s so nice to be on the show and get to spend some time with you because I’ve been listening to your podcast for a very long time.
So a little bit about me, ILA marketing group is 23 years old this year. So I’ve been in the Canadian marketplace and we’ve also operated in the U S marketplace for a few of those years, And we represent building material manufacturers that are looking to grow their business in Canada.
I’ve known Alison for a number of years. And I also reach out to Alison frequently when I have questions about independent reps, because I’ll see companies that will either use or want to use independent reps, but not be happy with the results. And many times I find that they don’t really understand how to work best with independent reps.
Alison and I were talking recently and we started talking about Canada. Alison started off with, “Oh my gosh, Canada is such a different market. And it’s different for this reason and this reason and this reason, and I’m sitting there going, Oh my gosh, this is really important information. I want to share this U.S. building material companies who haven’t mastered how to be successful in Canada.
Why Companies Struggle With Canada
I think companies struggle with Canada because they see it either as another region of the U S. They’ll have either a rep or an independent rep, and they don’t really understand what’s different.
I was working with a client who is entering the Canadian market and I was working with the sales rep they have there about, how can this company best support you? And he rattled off, well, I need a sales sheet and a few other things. So I get the agency to get those things in the works. In the first round of the sales sheet, they had the word color and it was spelled C O L O U R.
The vice president of marketing, the company comes back, and tells the agency, we don’t spell color that way. I’m like, okay, are we going to sell in Canada? I got it changed back to colour. Little details like this make a big statement about how you view Canada.
You have to have marketing materials that are bilingual. Some companies assume you can just find somebody that can translate to French, which may not be the same as French Canadian and also the English in Canada.
Let’s talk about language and about little details like that, that I think can make a big difference. I assume if I’m a Canadian and I get something, I see that this company made an attempt to make it English Canadian and French Canadian, that I will appreciate that. And I will notice companies that don’t, and perhaps feel disrespected.
As consumers, whether we are professional consumers or, consuming for our own personal use, whatever that is, we want to feel like somebody connects with us. We, want to feel like they understand us. And, and I think this is exactly the same scenario here where, taking the time to truly understand, Canada will help you be more successful.
It’s a Big Country
.Another issue in Canada is the distances between markets. You can’t just drive from Vancouver to Montreal in a few hours. We’ve been through this a number of time with manufacturers where, their plan is to just overlay what we do in the U S and assume it will work.
The US and Canada are very similar marketplaces. We’re talking about small differences but that mean the world to Canadians.
The ability to translate information, especially when we’re talking about technical material, like installation guidelines. Making sure that those are not just in French, but Quebecois French. You want to use the terminology and vocabulary that is going to resonate with contractors in Quebec, not just contractors that maybe are operating in France, for example.
The next step is to recognize that Vancouver is as different from Toronto as Boston is to Los Angeles.
We recognize this in the U S but we don’t necessarily take the time to recognize this in Canada. Companies that want to grow into Canada, but aren’t set up to have representation across Canada is to okay to, pick a market and get that market going successfully. And then move to the next one.
You don’t want to be a little bit successful in all the provinces or markets. You want to get your fair share out of Toronto or wherever you start and then expand. I wouldn’t see if you agreed with that. And it sounds like you do.
I do as Canada is huge. I mean, we’ve got a lot of ground to cover, and if you’re going to enter into any large territory, being able to find some success in Toronto success , for example, is going to resonate more with a Montreal or Vancouver architect than in having success in Florida.
For example, when you can show successful project in Canada, you’re going to see people say, “Oh, they understand our codes. They understand how we build.” I agree with you to be able to have that small isolated access. Maybe it is only one city, one basic market to be able to bring that across to other markets, smart approach. Yeah.
More Energy Efficient
Another difference is Canadians tend to build things that are more energy efficient.
For sure. And you know we’ve definitely seen that transition in the building code that has gotten progressively more energy efficient, progressively better at managing moisture. The one thing that I think we consistently see in some markets more than others is that most developers and many home builders, certainly on the custom home building side, are going to build above code.
And we’re looking to grow from there. Most product selection is a seen as a marketable approach to our consumers. So our consumers are very aware energy consumption. They’re coming to the table asking these types of questions. And I would say that developers and home builders certainly on the custom side, and some of the production side as well, are getting better at marketing, something that is unique and better than the building code stronger than it needs to be better than it needs to be.
Go Beyond Code
And turning that into a competitive advantage and consumers are willing buy it.. I mean, right now, our market’s on fire. So our market is absolutely crazy right now. Both in building materials and in home sales.. But even when it’s not as hot, we’re still seeing that builder are not building to just meet codes. We’re finding that they’re building something more and in some markets, considerably more.
Are you finding the same thing in commercial buildings that they build beyond code or do they more stay to what the code requires?
You know, what, somewhere in the middle, so definitely, we’re very aware of sustainability and energy efficiency. They may be in development, but they’re looking to have their offices in a LEED building, for example. So the thing that’s working very well is that, our developers, whether they be commercial or residential are really tapping into what is marketable in our markets. And, and that is something that’s higher than the building code. So does stuff get built at building code? You bet it does, but we’re seeing these developers that are really excelling and getting a really strong market presence building at considerably higher than that.
That’s been a real challenge in the States. Builders will look and say if the customer can’t see it, it doesn’t exist. So to have a better quality of insulation or anything that’s hidden in the wall that there’s no upside to compared to having a granite countertop or something that the customer can see.
Are your building codes like in the States, we have a national building code, which is really just a model? It’s like here’s the national building code that they’re constantly updating it and so forth. And then each state looks at it and says what they’re going to do. And then each locality looks at what they’re going to do. Does Canada work the same way with their codes?
Alison : Yes a very similar approach. And again, I’m not a building code expert, but we do see municipalities that even escalate further than the provincial code for sure. Vancouver is notorious for that. Vancouver is almost famous throughout the building envelope side of the business. Some of the things that they require in their builds now, come from experience. I remember when Vancouver spent a massive amount of money on fixing leaky condos. They spent more money on fixing those leaky condos than they did in the entire building industry in the municipality. So they learned from that and they said, okay, these are some of the things that we’re going to change in the building code for our very, very wet environment here in Vancouver.
Mark : And do you, also have a problem with contractors or builders will push back the local municipality, They may complain, that’s going to cost an extra $500 to build a house. And that means we’re going to sell fewer houses. And then we also have selective enforcement. We have certain things that are clearly in the building code, but the code inspector, either one doesn’t check for that or just looks the other way.
Alison : We have the same issues. And, you know, it’s only as good as what I really think is the driving forces, the voluntary compliance. I see voluntary compliance, pretty high in Canada. I think there are inspectors that go around maybe don’t necessarily see everything or maybe aren’t highlighting everything for sure.
You know, there’s definitely experienced levels that are going to be different from, from inspector to inspector. Yes, there’s definitely differences there, but with the way that Canadian consumers are quite knowledgeable and they’re very involved in social media. You know, if something goes wrong somewhere, it’s highlighted. It’s not as though contractors and builders can walk away from a job. For the most part, we see pretty high levels of workmanship, not always, not everywhere, but for the most part, people people are voluntarily looking to do the best work they can do.
Relationships Are Important
Mark : You bring up another point. In the United States, we went through a period where people in building materials sales got very frustrated because they’d been used to the importance of relationships with your customer. They know you, you know, them, there’s a trust level. And all of a sudden it’s like, wow, relationships don’t count. You know, it’s just, who has the lowest price or whatever was important, but they’ve kind of seen where that relationship is less important. I’ve always felt this didn’t happen in Canada. The Canadian building material companies that I work with that want to come to United States, I’m always telling them you’re too nice!
Mark : You’re selling against the sharks from the U S company. I have always felt that Canadians should be just a little more aggressive and confident in your product and not so darn polite. Canadian companies tell me, when we’re doing business in Canada, the relationship is very important if you’re selling to a builder or a dealer, distributor architect or contractor. Am I right.
Alison : It sure is. We operated in the U S for a period of time where in both countries. And I did notice that there’s a bit of a different approach. What I would say is that the sales approach that I see successful in Canada versus the sales approach that I see successful in the U.S. is that there’s a lot more of a consultative sell, or helping versus selling in Canada kind of approach.
Alison : A Canadian sales approach is, I’m going to be here for you next week. I’m going to be here for you in a month, and I’m going to be here for you if you have any issues. And these builders really rely on the people in our industry to be able to support that, not just the manufacturers. It might be a product that has a really good reputation and other in another area like the U S or Europe or something like that. But the supply side, in Canada, will say, no, we’re going to wait and make sure that’s proven. There’s a little bit of that. There’s a little bit of, I gotta protect my people. I gotta make sure they have the very best for me because they trust me.
Alison : It’s not that I haven’t seen that in the U. S. I just see this as a more consultative sell versus a strong push where the aggressive kind of approach may put Canadians off a little bit.. So we have seen situations where we’ve tried to overlay something verbatim from the U S into Canada, and it kind of gets, you know, a little bit of pushback where people are like, that just sounds a bit too much. That’s a bit too braggy, or it’s a bit too, too strong. And so, so I’ve definitely the same, same approach in the, in the reverse where a Canadian company going to the U S may seem a little bit, on their heels and shy to be proud of their product.
The Last Mile Can Be Really Long
Mark : The next area that we touched upon is distances. The United States is a big country, but we have lots of populated areas. The distance from Chicago to St. Louis from St. Louis to to Des Moines or wherever, there’s pretty much cities everywhere. For most of the U.S., you can go from a city and every few hours run into another big city.
Alison : That’s why the last mile, the last kilometer in Canada of delivering product to our marketplaces is logistically challenging. If you look at our country, you’ll see that approximately 80 to 85% of our population lives within a hundred miles of the U S border. So we are strongly dispersed east-west and very lightly dispersed North to South. So as soon as you start, you know, servicing these Northern communities and, you start to see some very heavy logistic challenges and heavy costs.
Alison : Understanding the geography of Canada is an important first step for a manufacturer entering into Canada. We separate the country into three different pieces. We have Western Canada, we central Canada, which you could, you could put Ontario and Quebec together. That’s a vast majority of our population right there.
And then Atlantic Canada, and the difference, uh, even time zones between the furthest West and the furthest East is four and a half hours. So we’re dealing with a vast country and a lot of miles to cover our supply chain is particularly important in Canada, partnering with a strong supplier, a supply chain with really strong logistical capabilities don’t even try and enter into this market, these marketplaces without some good partners.
Mark : So when you say partners, I’m use the word distributor. The distances that we think about our distributors deliver in the States. And, and I think you were mentioning sometimes like how far, like they could have to go 300 miles or more to deliver to a dealer.
Alison : For sure. And you know, like you can look at some of the marketplaces, even in, uh, in British Columbia, it’s not unheard of to be driving eight to 10 hours to our Northern communities. And these are some of the strongest dealers. These are dealers that are, not just buying a pallet of product. They’re buying truckloads of product on a regular basis. These Northern dealers permeate our whole country, no matter which region you’re looking it has these highly rural areas that demand this service. And, and in order a recognized suppliers through many of the buying groups, youy have to be able to service all of them.
Buying Groups Are Important
Alison : Buying groups are a really strong part of the Canadian market, much stronger as I understand it then than they are in the U S market They are very organized and 90 to 95% of building materials move through a buying group of some sort. So our true independents are few. You need to get the attention of these buying groups that have, have dealers everywhere and many dealers in rural areas in order to tap into those organizations and really get their support. You need to commit to servicing all of their locations. It’s a price of doing business and we see our our distributors really navigating that to make sure that they have a good support in all of those Northern communities.
Mark : But if I’m a manufacturer and I’m selling truckloads to distributors, I’m not delivering, anything less than a truckload. What I’m hearing is a smart thing to look at, depending on your product category would be to look into is there a buying group for this type of product? In other words, certainly it sounds like lumber dealers but maybe I’m selling a product that sold through a one-step distributor, a specialized specialty product. The question to ask is there a buying group? If you get the interest of the buying group and then to look for who’s the distributor that can service these customers. And then they’ll be able to, if you get with the right distributor, get the product to wherever it needs to go in Canada. Correct?
Alison : Absolutely. In Canada, that partnership with your supplier, with your supply chain and in particular, your distributor is critical to success.
A Walk Across Canada
Mark : If you walked us across Canada, the way we we say in New England they built things very well. Sometimes they’re stubborn about this is how my grandfather did it. I, I’m not going to change, even if this is a new, better product. Then you go down the East coast to, down into Florida, you start to run into people who are very concerned about hurricanes. They have codes that you have to meet for that and so forth. And they may build out of different materials, like concrete instead of wood-frame. And then you go over to Texas and they kind of have a reputation for building big showy houses that aren’t particularly built with the best materials.
Mark : You go to California and you’ve got a lot more interest in energy and green. So they, they will do new and inventive things and maybe more contemporary things. And, you know, you start going up the coast to Oregon and Washington, and now, you know, they’re concerned about energy, but they’ve got more moisture issues to contend with. If we were to start in the West and travel across Canada to the East, what words come to mind to describe each area.
Alison : For now that that could be a podcast in and of itself. I’ll do my best to keep it as brief as possible. I’ll give you a few highlights across the country. In Vancouver, we have very high value real estate. Architecturally, you will deal with people that are very concerned with moisture management, very concerned with thermal bridging, making sure that we have good energy efficiency that is very strong in our market. When you talk about style, you definitely end up with high value cladding options, roofing options, things like that. When you start moving we could probably package Alberta, Saskatchewan, and Manitoba.
Alison : You’re dealing with a lot of people that are, that have very cold weather conditions. So, making sure that we’ve got triple pane windows and very good insulation through all of their builds, commercial and residential are very important. That’s why we talk about this a lot with regard to Katabatic and our adhesive’s ability to work in cold weather, not everybody can do that. And it’s hard to understand how these contractors are working on a typical day in January in Saskatoon, where I’m from. And you know, what they’re getting handed in those environments, it’s very difficult for people that are in more temperate weather zones to understand.
Getting into Ontario, you’re looking more into the production builder and subdivisions. It’s also a high value market. We’re dealing with both scenarios of moisture management, and cold weather conditions in those markets. We get asked about those conditions a lot.
In Quebec, they have a lot of different building practices in Quebec that are stronger or more robust than some of our other marketplaces. And so they look for solutions like panelization in their cladding option. They accept new products very readily. They are so self-taught, and they grab a hold of things and do a great job of putting new products into projects, both architecturally at the specification side and all the way through. Quebec is very progressive.
Alison : And then Atlantic Canada, you’re now back to cold. You’re colder than the West coast, and really having strong winds. This creates a lot of concern with claddings and things that will not hold up in these conditions. A standard residential application in, in Halifax needs to be a bomber. It needs to be very, very strong for them to have 10 or 15 or even 20 years life of a typical building material. So in a nutshell, um, that would be my highlights across Canada.
Mark : That was very helpful and very insightful and I’m sure to the listeners, we’ll give them something to think about.
Parlez Vous Francais
We also touched upon, if you’re going to sell in Montreal, Quebec, your rep needs to be fluent in French. If your rep or your rep firm doesn’t have someone fluent in French, you should forget that for now and focus on the areas that are English speaking.
Alison : And I would even go so far as to say, depending on the type of product you sell, it may not be an option to say, I’m going to support all of Canada that speaks English, but not support Quebec. You may need to make the choice. And this is something that we’ve seen a number of times, you know, when the market’s hot and in the U S they kind of say, well, it’s okay. We’ll just develop Canada later, right? When the market isn’t maybe so brisk, and when people are looking for business and they’re looking to grow sales, they may say, okay, it’s time to really look at Canada, invest in Canada, have a look at it. You know, let’s really get in there and see what we can do in the Canadian marketplace.
Alison : It made sense. Sometimes many Canadians can drive or they can source your product from the U S faster than you can drive to your next major Canadian city. Because we’re so close to the border. So, so the idea that some manufacturers and we’ve seen sort of one foot in one foot out into Canada when the market’s a bit slower, but now that the market’s a bit more brisk in the U S we don’t have the same supply capacity to extend to Canada. And I would say that that can be really damaging. I think it’s the manufacturers who are ready to come to Canada and support the markets through ups and downs, because it you know it’s a decent size market place. It’s about the size of California in. terms of sales opportunity.
Mark : That gets back to the importance of relationships. I found when relationships are important people remember, you said you were serious about Canada, then you were not. Now you’re back again. Am I supposed to believe you this time? Where maybe in the States that person has now moved on to another job. So there isn’t that memory, that may be there in Canada.
Alison : You may be able to focus on one market and sort of extend that success to other marketplaces in Canada. But if you’re looking to open up Canada, in my opinion, you’re better off to, to really invest in local people to be able to carry your message and understand the building code, understand the players, understand the entire marketplace. Then you are to try to, you know, come up here three or four times a year and hope for the best. It can work, but I’ve never noticed it be dramatically successful as those companies that do invest. They get really good attention.
Mark : That’s good to know, because I would also think that you may be able to, let’s say, be in the U.S. and sell into Toronto. If you’re selling a product that an architect’s going to specify in Toronto, he could be designing a building that’s going to be built anywhere in Canada. You’re going to spend time selling the architect, but you don’t have representation in the other city and a general contractor is going to easily value engineer you out of there.
The other thing I just want to touch upon is the world of big boxes in Canada. What’s the current state of affairs with big boxes?
Alison : We definitely have seen big boxes as a part of the Canadian market for some time. Depending on the market, they can have very strong stores. They can have do it yourself or consumer oriented stores. It kind of depends on the market that they’re in. One trend that I’ve definitely seen more of over the last number of years here is how some of our big boxes to get really aggressive at the contractor level, really focusing on the professional. For a number of years, that may be wasn’t as well done. It was more of a, you know, we’re looking for Mr. Mrs. Jones to come in and come buy paint and a few things and here’s your shed package.
Alison : Well, they’re getting much more sophisticated. They’ve re we’ve seen this in the U S I think as well. I mean, they’re really flexing their muscles. Some of the systems and buying power and the things that really made them successful on the more do it yourself side, they’re really flexing those muscles on the, on the pro side as well. I think that’s something to watch for sure. In the Canadian marketplace, we still havereally strong independent dealer networks. They may be flying the banner of a home hardware or Sexton, or Rona.
Alison : They really are members of these organizations to be able to gain buying power and to gain access to advice on floor plans and product mixes. We see a dealer ownership transitioning right now from maybe some of the retirees that are handing down with it succession within their families or selling their stores. In doing that, we’re seeing some youth come into the organization and certainly seeing some, different faces and different focuses in those dealers. But you know that the independent dealer is very strong in the Canadian market. They really are well connected with their builder customers. It’s through acquisition that we’ve seen some of the small regional players get picked up by some of the larger organizations.
Mark : That sounds a lot like how we see hardware stores in the States where, you’re a True Value Hardware, but really you’re an independent. So in Canada happens a lot with lumber dealers is what I’m hearing you say.
Alison : A ton. And, and there’s a lot of, multi-location stores. I’m not sure what the percentage is but there’s a lot of ownership that owns a number of stores. If they’ve got three stores that work, they often grow to five, six, seven stores in a region to gain some power. There’s also the consolidation in our industry has been ongoing since the day I entered in and I’m sure will continue. The independents still have a tremendous amount to offer and are a very strong part of the Canadian market.
Mark : This has been great. A lot of important things to think about if you want to succeed in Canada. To summarize what I heard today, the first issue is to understand Canada and its size, in other words, how big it is. You also need to understand where the population is and how each area is a little different. Just like we would look at Southern California versus Northern California, uh, two very different areas. And then to understand how the importance of relationships are still very strong.
Mark : It isn’t like, I can this guy, I got a better price today. So this guy will buy from me because I got a better price or product. A little more patience can go a long way in Canada. Do your homework to really understand the market and the customer. You also should have good representation in Canada. What would you consider a minimal amount of representation in order to be successful in Canada?
Alison : I think having somebody in Western Canada, preferably Vancouver, simply from a standpoint, that it’s the largest market. A design happens here. The next would be, and this would be as thin as, as you could possibly go. It would be preferable to have two people in the East. Having a bilingual rep in either Montreal or Toronto is critical so if you were to have two reps, that would be your absolute minimum and three would be better.
Mark : This has been great advice any final thoughts you want to leave us with?
Alison : More than anything, I want to leave you with the thought that the Canadian market is worth investing in. We have really good partnerships available here. Our markets are healthy. I won’t say we’re recession proof, we’ll knock on wood even saying the word. But we have some things that I think will lead to strong long term growth. If you’re a U.S. manufacturer who is looking to enter or grow in Canada, it’s very doable.
Mark : Thanks again for giving us some of your valuable time and your expertise. and, uh, really appreciate that. I’m looking forward to having Alison speak at the next Whizard Summit on this very subject, where we’re going to get into more depth on growing your sales in Canada.
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