July, 2006

The Avis Approach

Sometimes being number two yields its own winning strategy.

By Reed Kneale

“At Avis, we try harder because we want to be number one.” Your whole life you’ve been told go for number one or don’t go at all. Avis saw opportunity in its number-two status and seized it. The car rental company demonstrated that being number two can provide enough quality customers to make you a winner. Avis’ approach is not a quick fix to lagging sales, but with the right techniques, it can reward the patient and the persistent in our own industry. Here’s how:

Create a list of 25 potential customers. Identify new customers by sifting through the local HBA, the new-home section in the Sunday paper and building permit information. Don’t neglect to ask your current accounts for recommendations and check with your sales manager to see if potential customers might be lurking in a database.

Do your homework and qualify potential customers.

Spend some time researching the following questions: What markets do your prospects serve (custom, track, commercial)? Do they have reliable credit histories? Do they buy on price alone? What unique problems do they have? Can you create a solution or fill a need? Who does their decision-making? (It isn’t always who you think: Dig now rather than waste opportunity later.) Are they growing? (Customers with increasing sales make increasing purchases.) Does their geography fit yours? (New customers close to home are the easiest to service and sell.) What product line seems to be the best fit? (Start with a small decision on a single line rather than asking a builder to throw out several vendors or a large supplier.) Is the company’s culture a good fit for your personality and skill sets?

Do you have the right chemistry? What are the potential purchases from you

annually? (No point in catching little fish when you’re after lunkers.) Whom do they buy from now, and why?

Rate them.

Use the answers to the above questions to rate all potential customers. Total the results and select only the top 10 to focus your attentions on. (Choose the top six if you think you may not have the time.)

Make a plan for each. Look over your ratings and develop a 12-month plan that keeps you active in their business. Create a toolbox of actions that will put you in contact with new accounts. This can include mailings, making a friend among the sub trades, checking the jobs for problems, offering value engineering and Builders Club benefits, and asking for a small segment of their business. Have a specific objective in writing to accomplish for each account every month. Make that account constantly aware of your interest.

Share your plan with management.

Ask for management’s help and support. Include joint calls with management in your plan. If all else fails, use management as a door opener. Working with your managers will commit you further and make you more likely to follow up. Your persistence is key to winning! Ultimately, management will see you as an asset for growing business and will allocate resources to help you achieve your goals.

Execute the plan.

Set aside a specific time, on a specific day every week that you devote to follow up with your top-10 targeted accounts. Don’t miss this appointment! Share this commitment with your sales manager for encouragement and to ensure accountability.

Patience: The Hardest Part.

The best customers are the hardest to get and take the longest time to build trust with. You could throw low prices at them, but even if they buy you will not be profitable. Why not wait until something changes for them (service gets bad, OSR quits, a key person becomes ill or dies, a new buyer arrives, etc.) and offer your value-adds as their reason to change to you—not price. Builders will go to the number-two supplier naturally as a result of your investment in their business. The builder will not be bargain hunting as much as filling a need. Because you have qualified the customer, you know there is a fit to begin with and you’re able to hit the ground running on service needs.

As with any fishing experience, no hits may come in the beginning. But expect them to come over the next 12 months. The hits you actually get may surprise you!

Good luck being number two!

Reed Kneale has 28 years of experience in the LBM industry, including building sales teams, designing commission systems, recruiting sales and management talent, creating sales and marketing plans that deliver measurable results, implementing installed sales programs and tailoring programs to target large builders. He can be reached at 330.285.1985 or via e-mail at thekneales@aol.com.