April, 2009

Decking in the Downturn

With customers seeking discounts, be prepared to demonstrate value. But first, you’ve got to get them in the door. Try these proven tips.

By Bob Heidenreich

This is a year when all of us in the lumber and building materials industry have to know where every penny is, and what  that penny is doing to help our business.

That’s especially true when it comes to decks and decking products.

Even the people that can afford to build new decks now are expecting value and demanding better discounts. A few months ago, Money magazine had an article telling consumers how to insist on better deals in this economy, and they specifically cited deck builders and materials as an example.

We’ve decided that this year is the perfect time to offer and market what we’re calling value-based decks. We’re offering a packaged, entry level, 8-by-10 treated wood deck this year to generate interest and drive traffic into our store.

However, I know that if we actually ultimately sell only that bargain basement deck project, we’re not doing our job correctly.

Once we get an interested buyer in our store, whether that’s a small deck builder or a D-I-Y homeowner, we have to be ready to then coach them about the differences in materials, and why better materials cost more but matter so much to the finished project.

“Loss leader” decks are designed to get customers into the store so that we can talk to them face-to-face, and hopefully, upgrade them to the type of deck and materials they’re going to be happier with in the long run.

We’re continuing to advertise, even in this down market, with print advertising that goes directly to households. Our lower end deck project packages are designed to get people in our doors.

And by the way, if you find that you’re generally selling lower-end deck projects this year, be sure that you’re also selling “expandable” designs, so that the customer understands that down the line in Phase 2 or Phase 3, they can update this basic deck easily in this way or that. Plan for the future.

This year, it’s also critical that you keep your name out there in front of potential customers. Don’t forget the value of having your company’s name on everything you provide and deliver. Make sure that your lumberyard’s name is prominently displayed on every load of material. Offer yard signs to your good deck builder customers that also display your company’s name. It’s cheap and effective.

And while generating new business is always critical, don’t forget to keep a sharp eye on the activity in your yard, as well. You can throw away money much faster than you can make it if you wind up with material damage.

With decks, appearance absolutely matters. Deck boards and fasteners and everything else must be handled carefully to maintain that high-quality appearance.

Take composite boards, which might be $50 apiece. Those composites aren’t like framing material, where if the product gets scratched, it doesn’t really matter because they will be covered up and no one will see them. It’s very easy to wipe out all your profits on a sale with a small amount of damage that you’re going to have to eat.

Some damage is inevitably going to happen even in a very carefully run yard. At our company, when something does get damaged, it’s up to us to figure out a new use for those materials so that they don’t go to waste.

For instance, if we know that a customer is going to be building a low-to-theground deck, where the damaged piece won’t show, we try to encourage them to use that scratched material. We try to market products toward the finished use, but that takes extra time and extra effort, and you also can’t sell those materials at your typical cost. In house framing, it doesn’t matter if the materials have banding corner marks, but in decking, it does. Make sure that you’re not cutting your prices to the point where you don’t have enough mark-up to cover damage.

This year, you both need to encourage new sales and to take care of the products you already have.

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.