February, 2009

How to Fine-Tune Your Sales and Marketing Efforts

Ranking accounts by category helps define your customer focus.

By Bob Buck

Only the bitter cold of January would give us Minnesotans license to think that February marks our climb back into balmy temperatures. Weather-wise we may be grasping at straws, but it gave our agrarian ancestors the energy to begin tidying up the tool shed and applying a wrench to worn machinery. Still long evenings were consumed with pouring over seed catalogs and plotting out field plans to ready for the spring planting season.

In the same vein, remodeling contractors are wrapping up their winter’s interior work and ensuring that drawings and permits are in place for their exterior projects. Some years there can be a lag between these two seasons, with the winter projects not quite bridging into spring’s warmth. Experienced remodelers know that while they have set their 2009 goals in January this late winter lull can be best used to put their operations shipshape. Cleaning out the storage area and reorganizing the racks; purging archived computer folders and updating the file system; combing through the open sales leads and singling out the best prospects.

This last task is one that ought to ring true for the sales department at any LBM. Using our farmers’ analogy, it’s a good time to “weed and feed” when planning for the approaching building season. Which are the best remodeler accounts to concentrate on in the coming year? Which ones will respond if given some attention? (Keep in mind many of contractors are also trying to decide where to take their business.) Which are destined to show little activity even with repeated contacts?

To answer these questions, it helps to organize your accounts into some general groups.

“A” accounts: These are the remodelers who have continually used your yard, who show no indication of shopping around for quotes from other yards. They can be good-sized accounts—over $100,000 of purchases for an urban company—but may also be a newer remodeler who is happy to find a responsive lumberyard after a long search. They may also be loyal to a particular salesperson on your staff, who consistently meets their service needs. Would attending these companies’ staff or job managers meetings build on your partnership? What are their sales objectives or target projects?

“B” accounts: They don’t necessarily buy everything from you, but with yearly totals of $40-60,000 they have a solid profile with your sales staff. They are more willing to compare quotes from competing yards. Many of these accounts are more mature companies, aware of your particular skill sets and inclined to have you earn their business. Would inviting them into your yard for, say, an exclusive vendor presentation give you a chance to showcase your value to their company?

“C” accounts: These are the accounts that can sit in the background, not completely out of view, but not demanding much attention either. Some have potential for growth, some will seem to ebb and flow with the economy, and others will never amount to much. Will it work to hand them off to another salesperson? Someone who can get a fresh start and treat them like a new client?

Ranking your accounts makes it possible to set sales goals. Your goals and tactics for each of these groups will differ, and may change along with the profile of the accounts. Without setting conscientious goals for the year you’re more likely to look for a quick solution to keep a contractor in your fold. A classic example of this is cutting margin to sooth a ruptured relationship or to entice a new lead. However, this doesn’t have the lasting power that comes from developing a partnership through small, mindful connections. Membership and active participation in local building associations is one avenue to consistently interact with your clients and demonstrate your commitment to shared goals.

Our farmer knows that the careful cultivation of crops and stewardship of the land through the seasonal turns is the best assurance of a bountiful harvest.

DAVE KLUN and BOB BUCK have extensive experience in the remodeling industry— Buck as a pro remodeler, and Klun as an LBM dealer focusing exclusively on this category.