Business Operations

Work Together at Every Level

All parts of our industry can gain from improving our relationships, and leveraging those improved relationships for future new opportunities.

All parts of our industry can gain from improving our relationships, and leveraging those improved relationships for future new opportunities.

I’m convinced that there is a bit of a disconnect at the distributor level; manufacturers know they need their builder/installers, and retailers, of course, love their builders… but in reality, it’s the distributors who are the primary client of the bigger manufacturers, and those are some sizable orders they place, as few deck builders are making purchases by the rail car! Naturally, those distributors have become the focus of manufacturers. However, it’s not the distributors who are determining what the market actually wants (that’s the homeowners); so we’ve got manufacturers focusing on what their immediate clients want, but not as much on what the end-user wants. And it’s ultimately that end-user, who sets what the market actually desires.

So we’ve really got five levels with the homeowners, installers, retailers, distributors, and manufacturers each interacting with the process in an occasionally disjointed way. Ever play “whisper down the lane” as a kid? Inevitably, what the first person says (in our world, that’s the homeowner) will change just a little with each retelling, and by the time it gets to the end (the manufacturer), it’s been rephrased and will not be a perfect retelling of what the wider marketplace actually wanted. So we’ll see inevitable reductions to the market cap due to imperfect metrics and misunderstood desires.

I’m not suggesting we eliminate all middle players, and have the manufacturer distribute, sell, and install. Perhaps that’s because I do a lot of installing, so I’ll call out my own potential bias here! But in all sincerity, I think each level of the process brings unique benefits and value that cannot be easily replaced by others. Rather, I am arguing that we can all do a better job of recognizing the value each important industry step brings to the table, and then help those team players maximize their unique position in a way that facilitates the overall process bringing greater value to our shared marketplace.

So let’s dream together a little, shall we? What if a manufacturer invested in providing in-person sales training to contractors so that they became better at understanding subtle client preferences and buying motivation? What if they provided classes in sales techniques, etiquette and sales psychology (ideally through an impartial industry platform such as NADRA)? Then what if they involved the retailers to make sure the in-store sales associates worked to support the installer through improved product knowledge and better upsell techniques? And what if this manufacturer empowered their distributors to ride along with those installers, helping the contractors to have a second set of eyes and ears in those crucial homeowner meetings—and then provided feedback and reinforcement on techniques, and any missed opportunities? What if the distributors then assisted in follow-up marketing to the homeowners, and used their greater operational structure and polished professionalism as they facilitate those contractors in their growing businesses, and pass along critical homeowner feedback and questions/concerns to their manufacturers?

What would this do for our industry? Well, those with the most end-user contact would inevitably gain a greater skill set and become more proficient in their process, with fewer missed opportunities and more accurate material and design recommendations. Maybe this would help make it a more enticing, and more rewarding profession that would intrigue more young people to get involved?

Those retailers would certainly see increased sales, and lower returns with higher per-sale margins. That’s an obvious win for them!

The distributors would see better loyalty from their retailers, and enjoy a greater respect from their manufacturers, all while ensuring that they are transporting the best and most marketable products available.

And the manufacturers? Well, they’ll not only have better knowledge of what the market wants now and what unmet needs are out there still to satisfy, but they’ll have increased sales and a more stable industry structure to grow with going forward as they innovate and introduce their next generation of products based on a heightened clarity of market preferences!

I know this is a bit ambitious, and not how we have traditionally worked in our “separate silos.” However, if we are to see our industry survive and thrive into the future, these are problems worth solving!

 

 

 

Matt Breyer

Matt Breyer is president of several companies, including a family-owned residential remodeling business that specializes in designing & building outdoor living spaces, and president of NADRA.

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