May, 2009

Selling Installed: Part I

How do you sell decks installed, and yet not compete with your contractor customers?

By Bob Heidenreich

There’s one question I get asked a lot as both the owner of a lumber center that sells to decking contractors, as well as being the owner of a company that builds decks: “How you manage to sell materials to contractors, and yet also build decks for homeowners? Aren’t you directly competing against those contractors?”

If you have a yard that sells installed decks, you’ve probably asked yourself some version of this same question.

The reality is, this is a situation where we have competing goals—to sell to contractors, and yet to also build our own decks. However, the way we’ve found to address this concern is to educate our contractors so that they know that they’re never going to lose a job to us based on price.

Any contractor who buys from us on the yard side and is loyal to us, we teach them the same skills that we’ve learned about deck building to level out the playing field. We teach them how to price their jobs, and I freely share with them how I price my jobs. (I also explain to them that I’ve got far greater overhead that I must support in our bidding because of my building, trucks and so on. Since they generally don’t have that same level of overhead, I show them that it should be easy to underprice us on any job and still make money.)

That said, if I am approached for a bid from a homeowner for a deck, and I know that I would be going up against a contractor who buys from us, I simply don’t bid the job. I would always rather sell multiple decks to a contractor than one deck to a homeowner.

We work very, very hard to build relationships with our deck contractor customers. We show them how to estimate their  jobs, how to build better, more profitable decks, and share with them the tricks and techniques we’ve learned as deck builders ourselves. We want their business in our yard, and we want them to make more money building decks so that they will continue to buy from us for years to come.

It’s true that there can occasionally be a hiccup with this philosophy in that some deck contractors want to learn everything they can from us, and once they have, they want to go elsewhere to buy lower-cost materials.

To counter that, we try to educate our contractors in stages, so that we can build their loyalty to us and so that they can realize over time that what they receive from us has much greater value than saving a few dollars buying materials elsewhere. This education process always includes teaching our contractors about the quality of our materials, such as showing them that our special manner of stacking lumber indoors on risers keeps all the pieces straight and true, which ultimately means less waste for them.

And just as an aside, we sometimes find ourselves in an interesting position with some deck contractors because of our large showroom. Contractors send their customers to our showroom all the time to get ideas for their decks. The problem comes from the fact that a small number of the contractors who do this on a very regular basis are people who never buy their lumber or materials from my yard.

When we discover that a customer has come in, sent from Contractor X or Y, we joke among ourselves that that person has just thrown “a tuna in the shark tank.” Loyalty is a two-way street; we’re extremely loyal to deck contractors who buy from us, and for those who don’t…well, let’s just say that a homeowner in our showroom is also a chance for us to gain their business.

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.