March, 2009

Selling in a Tough Market

Price, value, and flexibility are key.

By Bob Heidenreich

This year in decks, it’s all about value. One of the biggest trends we’re seeing so far this year is that everyone is very price conscious. Homeowners and builders want—and are demanding—lower costs.

People want to go back to the basics, and while we are still carrying all the “frills” for decks such as decorative columns and other items, we’re going to be using them primarily as add-on sales this year.

Instead of starting to sell a customer with the higher-end products on a deck project, we’re starting on the lower end and working our way up. We need to make our customers aware that we have lower-end options available and then lead them into higher-end materials, if they want those.

Whenever times are tough, there are also opportunities to be seized. It’s a very good idea to keep your inventory thin this year, because I think there will be bargains available later.

When manufacturers put materials on sale, you want to be able to take advantage of that, but if you’re sitting on a tremendous amount of inventory, you won’t be able to.

We also have to be ready for the challenge of selling customers any of our higher-priced, higher-quality material. For instance, we’ve improved the quality of our treated lumber, and we’re going to now physically show customers in the store how this product performs better than standard treated lumber. We can actually demonstrate, with a little test we do right in front of the customer, the quality of this product versus standard treated material.

We’re willing to accept slightly lower margins on this higher-quality, higherpriced material, but we’re also going to spend more time really showing our customers why this is a better product and one that they should use. We’re doing that to combat competition in the market, where others have come in with lowpriced treated wood. We need to be selling our quality, and actually showing customers the difference.

And the current change in the economy is also reflected in the products available for us to sell.

Some companies out there have gone away—or are going to. It’s important to carefully look at the products you want to sell, and make an informed judgment about who’s going to be around this time next year. For instance, with composite deck manufacturers, I think it’s possible that where there were once 80, there will eventually be 25.

Along with that, I think we’re going to see a resurgence of real wood product for decking over the next couple of years. Cost is part of that, but I also think that consumers aren’t completely convinced that the composites hold up as well as some claim.

Something else that we’re planning for this year is that I think it’s going to be easier to sell customers a “starter deck,” say an 8-by-10 treated-wood deck which they can add onto later. Design is going to be really key in that.

By the way, we’re hearing about some cities and their building inspectors that have declared that they’re no longer going to accept deck design plans from some big box yards. That’s because some of them are using design software that’s sub-par. As a result, the plans can be flawed.

Be sure that you contact your local building officials to make sure any plans you’re providing meet the requirements of your local building codes. You want to make sure that you are positioned to take advantage of every last sale.

BOB HEIDENREICH is the owner of the 30-employee Deck and Door Co., in Apple Valley, Minn. He has been selling decking and home improvement projects for 26 years.