Sales forces: Do it Best points to growth

BY Ken Clark

One of the challenges facing independent hardware stores in late 2012, as an election looms and uncertainty reigns, can be classified under the headline: “Good problem to have.” Specifically, it’s the challenge of managing a business through an upswing.

Bob Taylor, the CEO of Fort Wayne, Ind.-based hardware co-op Do it Best Corp. — a longtime proponent of the cash-flow-is-king approach to retail management — says the adjustment to improving business conditions can be a challenge to independents in the hardware business.

Some of the themes expected to play out at the co-op’s Fall Market in Indianapolis is the ideas of transition and growth.

“There is that understanding where you’re moving from an era — the 1990s and early 2000s — and in some degrees managing growth. The focus today is really more about creating growth. You can’t let the economy or anything else be an excuse. You have to go find ways to create opportunities and help your members find those opportunities and take advantage of them.”

Although it’s a good problem to have, managing through a growth spurt or a comeback requires a steady management hand.

“If you turn it around and you’re coming up off the bottom where business is increasing — sometimes in significant steps and with a reduced line of credit and purchases bumping up — it’s a caution sign to watch and be very vigilant on that right now,” he said. “You can be chasing yourself.”

Taylor, in his first formal Home Channel News interview since being inducted into the Home Channel Hall of Fame during the National Hardware Show in May, offered advice for managing growth. It’s more important than ever to communicate with your lending partners. “Help them understand the business and the dynamics and what’s going on out there in the marketplace,” Taylor said. “Particularly for those members more closely aligned with the building site of the industry, which are seeing some of the very welcome jumps in the business.”

The co-op itself is expecting to see some increases in business conducted at the upcoming Fall Market in Indianapolis, which officially kicks off Oct. 13 after a couple days of preliminary educational sessions. Attendance at markets has been running flat or down in recent years. (“Keep in mind the years we went through,” Taylor said.) Attendance was down in May, even though actual business activity increased by about 8%, according to the co-op.

But an early reading about five weeks ahead of the upcoming October market shows double-digit percentage increases in store attendance and an even higher increase in total badges.

“It’s a dramatic difference,” Taylor said. “We’ll have to see, but it’s a great early sign that maybe we have turned a corner.”

The October event will be the first without veteran executives Dave Dietz and Dave Haist, who retired officially over the summer, and who were replaced by new VP finance Doug Roth and new COO Dan Starr.

Taylor describes the transfer as smooth.

“As much as you appreciate the contributions of guys like Dave Dietz and Dave Haist, the real tribute to both of them is that it’s a non-event,” he said. “They both have done such a great job in assisting with the transition. It’s been seamless.”

Meanwhile, several projects related to the co-op’s Extreme Growth initiative are moving forward:


“This is a continuing evolution, and one that we’ll continue to put resources behind in the years ahead,” Taylor said.

• Retail pricing

Do it Best is bringing in competitive pricing information from Rival Watch in combination with the co-op’s internal pricing research to offer market-by-market intelligence to help members build their own pricing plan.

• Planograms

The co-op is activating an alert system to tell members when an item has been replaced or deleted in a planogram, so that retailer assortments can stay current.

• Aggressive recruiting

The co-op’s Performance Satisfaction Guarantee program is recruiting key retailers in a way that shows off the co-op’s confidence. If a company tries Do it Best and is not completely happy in its first three years, Do it Best will help the company convert back to its former co-op and pay an amount equal to 10% of the average annual warehouse purchases. “We don’t expect to pay out on that,” he said. The company has added 80 new members since the launch of its extreme retailing program. Taylor added: “We really want people who are running to us and not running from someone else.”

Summing up his attitude for his members, Taylor played the optimism card: “I think there is a realization that if I look back at our performance over the last five or six years, when you look at how close we were to the epicenter of the housing crisis and the challenge with the economy, and come through that period and this year marking this our ninth consecutive year with a rebate in excess of $100 million, you feel pretty good about the performance we’ve demonstrated during some very challenging times.

“And a lot of optimism looking forward.” 


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How concerned are you that a trade war could hurt your business?

Comeback kids and other Summit highlights

BY Jim Reynolds

Later this month, at the ProDealer Industry Summit (Oct. 24 to 26 in Savannah, Ga.), Home Channel News will recognize BMC as the 2012 Pro Dealer of the Year. It is the story of the great comeback. 

Emerging from chapter 11 in late 2010, BMC found itself among the rubble that has been our residential housing market.  With few signs of recovery in sight, BMC set out to first rise from its own fiscal ashes, and then begin to renew its position in the LBM industry.

As Springsteen exhorted in his post-911 hymn, “My City of Ruins:” “Come on rise up, come on rise up!!”

They did, and to gain insight into how this was accomplished, stay tuned to HCN because our December issue will delve into detail (and it’s always about the details, isn’t it?) with a special report on BMC, featuring interviews with key executives and visits to several BMC facilities and even some construction sites.

But obviously they are not the only survivors — look around and you will find industry people, what most outsiders looking in would describe as the best of the best, from dealers to wholesalers and suppliers, in small, medium and large companies. 

Last month, HCN profiled Chuck Bankston of Bankston Lumber as another example of how hard work, integrity and positive thinking can make a survivor out of any company, in any market.

Compared with most in the industry, I am fresh off the turnpike (a piker), with only about 15 years working in the industry from the publishing side.  But in those years, I have observed the following:

• This industry has some of the smartest, most ethical, most hard-working and (this may be the most important) nicest professional people I have ever worked with.

• Some of the merely “successful” people in the glory days do not seem to be around anymore. Were they just “order takers” riding a white hot market?

• Innovation and perspiration will always offset stultification and exasperation.

• Hard times always makes hard workers more valuable.

Our cover story this month asks the question: “What is your business worth?” We think that hardware, home center and lumberyard businesses (the whole home channel) are going to be worth more and more each day moving forward. 

Who’s going to grow? Who’s going to innovate? Where will all the talent in the industry end up? The coming years will reveal those answers to us for sure. Every one of us has an opportunity to have an impact on our own outcomes.

So what is your company doing? How are you going to compete in this (yes, it’s OK to say it now) growing market?

Some of the best and brightest will be in Savannah this October, when Home Channel News and the NLBMDA (National Lumber & Building Material Dealers Association) host the ProDealer Industry Summit.  

BMC will be there. So will many other LBM dealers, distributors, wholesalers and vendor companies in the industry. 

Will you be there representing your company? It’s a good place to start, because 2013 will surely offer opportunity for comeback kids. 


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How concerned are you that a trade war could hurt your business?

The PDIS Playbook

BY Brae Canlen

As the 2012 Pro Dealer Industry Summit (PDIS) prepares to convene in Savannah, Ga., the nation’s housing market sits on the precipice of a long-overdue recovery. The LBM industry has watched and waited, knowing that the bottom would eventually arrive. Recognizing — and responding to — that turning point will be the subject of several seminars and presentations on Oct. 25 to 26.

An Oct. 26 keynote speech given by housing industry analyst Ivy Zelman may help attendees make some key decisions about their businesses for the next few years. Zelman, who founded her own firm in 2007 after working for Credit Suisse Group and Salomon Brothers, conducts proprietary research that involves all aspects of the housing industry. Although she was one of the first analysts to predict the depth of the housing bust, Zelman is now sounding bullish on the housing recovery. One of the positive indicators, she notes, is dwindling inventory of homes for sale. 

“There’s not enough supply, given higher levels of demand,” Zelman recently told the Wall Street Journal. “With every passing month, distressed homes are being absorbed at better and better prices.” Construction of new homes has been sluggish for years, and an increasing number of renters are choosing single-family homes, removing them from the available housing market.

In addition to sharing her forecast for 2013 and beyond, Zelman will moderate a panel of pro dealers discussing their views on improved planning in 2013.

Moving from the macro picture to the everyday running of an LBM business, the conference will feature two speakers who focus on improving operations in two key areas: negotiating and marketing.

“The One Minute Negotiator” isn’t geared toward consummating a deal in less than 60 seconds, stressed George Lucas, who will open the general session on Oct. 25. The author, trainer and consultant is focused on a one-minute strategy toward sizing up the other side of a negotiation and choosing the correct approach. 

“Most people are fearful of negotiations,” Lucas said. “They think it’s going to damage relationships.” But negotiating skills are more important than ever in the current LBM market, he added. 

“Margins are thinner than they’ve ever been, and it’s extremely difficult to win new business based on price alone,” said Lucas, whose client list includes Orgill and Rust-Oleum. “Any attempt that’s price-based is going to get the incumbent to cut their price.”

Knowing the other side’s negotiating style — i.e., collaborative, competitive, accommodating, conflict-avoiding — is always helpful when entering into a deal-making session. But Lucas can offer pointers when recognizance is in short supply. “I try to help people get their mind around a negotiation in a short amount of time,” Lucas said.

The marketing seminar at PDIS is also geared toward quick results. Brian Bunt of The Empty Bin specializes in word-of-mouth marketing for lumberyards, which means, in a nutshell, using happy customers to advertise for free. Giving them a reason to talk about your product or service is what all good lumberyards do; facilitating the conversations is what takes the extra effort.

Using examples from the building industry, Bunt will explain how to conduct a campaign that leverages a lumberyard’s core customer base and identifies its best “talkers.” In one case study he utilizes, it was the delivery drivers, who were given cameras to take photos of each load they dropped. Individual drivers were then graded as a motivation tool.

“It’s the delivery guys who really spread the word,” Bunt told Home Channel News. “They tell their friends and customers about the extra steps they take.” The cameras worked as a conversation starter. “It’s common for a customer to ask, ‘Why are you taking a photo?’ ” he explained.

Bunt doesn’t believe in traditional methods of advertising. “We try to stress that advertising is the cost of being boring,” he said. “You’re paying someone else to talk about what you’re doing.” And in a radical — and some might say “refreshing” — change of pace, Bunt doesn’t push social media; he estimated that 80% of word-of-mouth marketing takes place off line.

Instead, Bunt goes in for more offbeat and innovative promotions. Windsor Mill, where Bunt works as director of marketing, put a stamp on the back of its Windsor One trim board and moldings that said, “Call Kurt for a shirt” and included a phone number. The free T-shirt offer resulted in a number of phone calls to the head of Windsor One’s customer experience department, which then led to conversations about current building projects, materials being used and so on. In other words, a foot in the doorframe.

Bunt, who has also taught workshops at LMC and the National Association of the Remodeling Industry (NARI), promised other sources of inspiration for those who attend his hour-long seminar on Oct. 25 at the 2012 PDIS event, which is being held at the Savannah Westin. 

“At the end of the [session], they’ll be able to create a campaign the day they walk into the office on Monday,” Bunt said. 


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How concerned are you that a trade war could hurt your business?