May, 2006

Galehouse Lumber

A personal style in communications and events keeps contractor-oriented yard in touch with customers.

By Craig A. Shutt

Galehouse Lumber in Doylestown, Ohio, just outside of Akron, has put an emphasis on connecting with the customers who often remain unseen by company personnel—and management has recognized that such intangible investments can pay off.

Contractor yards, like Galehouse, that do the bulk of their volume via phones, faxes and e-mail can thrive on their efficient service, but they often lose the face-to-face relationship that helps bond customers and dealers. To avoid that fate, Galehouse creates opportunities to show off its staff and reach its customers in ways outside of a strictly business relationship.

Those efforts are spearheaded by the company’s monthly two-sided newsletter, the Galehouse Monthly, but they also work through a variety of annual events and vendor promotions.

Together, these efforts have played an important role in the company’s expansion plans. Galehouse will be adding a distribution building by 2007 that will help reorganize stock and make its 10-building site more efficient.

A Family Affair

The company has emphasized personal touches and operated as a family affair since the lumberyard was purchased by Stan Galehouse in 1972. The lumberyard was originally designed to service the company’s construction business, which began in 1965. Both divisions work from the same headquarters building, with the construction business run by John Galehouse and Mike O’Hara. Today, the company derives about 98% of its $20 million in sales from contractors, most of whom don’t visit the office to place or receive their order.

"We attempt to differentiate our company by constantly keeping our name in front of our customers and potential customers,” explains Fred Langguth, who began as an outside salesperson 29 years ago and now heads up sales and marketing. He is aided by Jeanne Nehrenz, who assists with the variety of events and communication programs.

"The huge lumber companies are grabbing up a lot of customers and putting big money behind big events,” says Nehrenz, who has been with Galehouse for nine years. "So we need other ways to make an impact. We’re finding that there are ways we can use our reputation for great service to create loyalty, but we have to get creative about it on a small budget.”

Winning over top management to the notion that even a small investment could pay dividends was not an easy sell at first. But the executives came around. "You have to look at the big picture,” says Langguth. "Justifying this investment is hard, because it’s not sales-oriented, and it’s hard to measure. It’s relationship-oriented. But management has become very receptive to that approach.”

Newsletter with Personality

The newsletter began four years ago as a way to reach customers and other contacts in a regular, low-maintenance and low-cost way. "It’s become the key to our communication,” says Langguth. "Our goal is to present our personality and tie in all of our people, so they become faces to our customers and vendors.”

"Before we had this, our communication was limited,” adds Nehrenz. "Few customers actually came to the yard to do business. We wanted to make sure they knew who we were, and we realized we had many things that were important enough to tell them, such as events, new personnel, product information and sales tips.”

The piece is a two-sided sheet that mails in a business envelope. It’s created in a standard Word document, using a basic template that allows the two marketers to simply update each component. "It’s simple, but it looks good and achieves our purpose,” Langguth says, estimating that it takes about 10 hours per month total to produce it. "We wanted to keep it short—we didn’t want it to look so big that customers would put it aside to read later. Everyone is so busy, we can’t expect them to pick it back up again.” Keeping it simple also ensures it goes out every month, another key to its success.

The front includes a prominent one-third-page chart of a rolling 12-month pricing for rough-lumber square-footage prices. That information originated on the company’s Web site, where it receives more hits than any other page, Langguth says. Another third of the front page is devoted to the "Insider’s Message,” which discusses new events, personnel and personal notes. A narrow column along the right side provides personnel updates, complete with photos. Galehouse prides itself on its longtime employees, some with more than 25 years’ experience, and it uses employee photos extensively.

On the back, a center panel prominently features a project by one of the company’s customers—with a photo taken by the Galehouse marketers. "It gives us a chance to go visit them and make them feel involved,” Langguth says. The top panel announces the winner of a monthly lunch sweepstakes drawing, while the bottom third features a list of key personnel and phone extensions, e-mails and cell phone numbers.

"We’ve been surprised by the response,” says Nehrenz. "Many customers mention things they have seen in the newsletter, or tell us on the phone they enjoy being able to put a face with a voice. The key for us was to learn what works. At one time, we tried coupon promotions—but we’re just not that kind of store, and it didn't work that well for us. The newsletter works.”

Expanded Flyer Program

Galehouse's vendors like the newsletter, too. Currently it has three sponsors, but all of the company's manufacturers are offered the opportunity to sponsor a monthly flyer, which is included in the newsletter.

"It helps keep the vendor’s name in front of our customers in a different way. We get a lot of requests to participate in the newsletter, but we don’t want it to look like NASCAR and fill it up with logos,” says Langguth.

The newsletter helps promote a variety of annual events. The longest-lived is the Customer Golf Outing, which has been held each June since 1978. That program works in conjunction with the Member Mixer that Galehouse sponsors with the Akron Home Builders Association. The group holds a "no-meeting meeting” in June as a social get-together, and last year Galehouse joined with Andersen to sponsor the event, paying for all contractor attendees. "Those events let us get our name out there in a relaxed atmosphere and keep us in front of our customers,” Langguth says. "The builders walk away feeling good about Galehouse Lumber.”

At the other end of the business—and calendar—spectrum is the company’s Winter Product Expo, held each February. Now in its sixth year, the event brings together several dozen vendors for several hours at midday. Lunch is provided and attendees walk among the trade-show booths. Last year, the company brought in The Henry Bierce Co., a local masonry dealer, as a co-sponsor. That firm added its own exhibitors (about eight) and customers. "We don’t compete, and we offer different customer bases, so it worked well,” Langguth says. Vendors for different products were spaced out to provide variety and expose visitors to more products.

"Bierce was considering doing their own show, so it made sense for us to get together. It’s been a great fit,” says Langguth. The program becomes more popular each year. Last year’s attendance was 120, while this year approximately 200 attended. Galehouse makes a point of not chasing Bierce’s builder customers after the event. "We don’t want to push our company down their throats,” Langguth says. "But now they know who we are, and we have had the opportunity to establish communication.”

New Opportunities

That laid-back approach isn’t always the norm. When the local Parade of Homes created an exclusive agreement that left Galehouse on the sidelines, the company paired with a local public-radio station to set up a booth during the parade to hand out Galehouse premiums while promoting the station. "We don’t spend the most money. We partner with other companies for mutual benefit,” says Nehrenz. "We’re always on the lookout for ways to keep our name in front of our customers.”

New ideas are generated from a December Vendor Appreciation Breakfast, at which vendors are presented with the company’s planned schedule of events. Suggestions for promotions, from co-op clothing to sales-incentive trips for hunting and fishing, sporting events and concert tickets, are presented. A number of vendors signed onto the monthly flyer program after hearing about it at the breakfast, and that’s also how the third newsletter sponsor came on board, Langguth notes.

"It’s a neat way to wrap up the year, thank our vendors for their participation, and get them thinking about the next year,” says Nehrenz. Every vendor invited has shown up, she notes, indicating they find it worthwhile. "Our goal really was to thank them for helping us. We never want to strong-arm them. Our own salespeople were not invited because we didn’t want the vendors working.”

New programs are tried and evaluated. One still being tweaked is a fall cookout, at which sponsoring vendors present demonstrations. Last year’s was a rousing success, because it was also held to honor Galehouse Manager Joe Petit on his 30th company anniversary. Previous events, at Galehouse’s site, haven’t worked so well. "Our site is not very convenient, and customers are always busy,” Langguth says. "We’re still determining how to maximize it. We don’t do it every fall, because it hasn’t proven successful enough.”

On the other hand, another new (and inexpensive) program has proven very popular. Last spring, Galehouse’s marketers gathered 50 copies of catalogs from 20 of their key vendors and put them into black bags with the Galehouse logo. These were personally delivered to the company’s 50 top customers to ensure they had the most recent data on key products. Each company was contacted in advance to ask if the package could be delivered. "It was another opportunity for us to see our clients and give them something that will save them time,” Langguth says. "It provided a personal touch. We could tell it impressed them.”

Such successes—and the occasional lack of success—keep the marketers driving toward their next program. "It seems we just finish one event and its time to begin working on the next,” Nehrenz says. "You have to keep working to get the word out.” Adds Langguth, "Participation is vital to keep everyone feeling that they’re attending successful events. You have to stay in communication and make them feel they’re getting something worthwhile.”

Fortunately, staying in communication isn’t a problem for Galehouse, with the array of tactics the company uses to ensure its people remain more than just a name and a voice on the phone.

Jeanne Nehrenz and Fred Langguth run the marketing and communications programs at Galehouse, working to create personal bonds with the company’s contractor customers.