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August, 2006

GNH Lumber, Greenville, NY

The appeal of family ownership and face-to-face service keeps bringing customers with home-building dreams into GNH Lumber’s one-stop shop.

By Dan Emerson

It’s often been said that timing is everything, and that’s certainly true in the Darwinian world of retailing. The success Greenville, N.Y.-based GNH Lumber has enjoyed since moving in 2004 to the 43,200-sq.-ft. former home of an Ames discount store space is a case in point. GNH’s relocation to a bigger, better facility coincided with a growth boom in Greene County that has helped fuel an upswing in GNH’s sales and revenue.

The family-owned company was founded in 1937 on Route 81 in Norton Hill by Stanley L. Ingalls, the grandfather of current president Stan Ingalls. In the 1960’s, GNH purchased another lumberyard in nearby Windham, N.Y.

In early 2003, having outgrown its 1,800-sq.-ft. store and lumberyard, GNH was considering a plan to remodel and add more space. The firm was also facing the prospect of new competition from Home Depot and several other big-box retailers that were eyeing the growth spreading south from the state capital of Albany towards Greenville. Migration from the New York City area has also been a factor in the area’s growth.

GNH’s move to the vacant Ames store on Route 32 came after its owners contacted Ingalls. The facility not only provided much more space, it offers much better drive-by visibility than the old location, where, as one local put it, unless you knew it was there, it was hard to find. Ingalls decided to move the flagship location of GNH Lumber from its home of 67 years to the new facility five miles down the road.

Moving Pays Off

It didn’t take long for the move to pay off. GNH recorded a 43% increase in sales for the first year in its new location, which has 12,000 sq. ft. dedicated to retail and a drive-through warehouse. GNH’s annual combined sales have grown from $12.8 million in 2004 to $14 million last year, with a conservative projection of a 10% increase for the current year that would bring the year’s total to $15.2 million. In the first quarter of this year the company recorded a 30% increase over the same period a year earlier.

In August 2004 GNH faced a potential challenge when a Home Depot outlet opened in Catskill, a town fewer than 20 miles southeast of Greenville. But the new store didn’t affect GNH much, Ingalls says, noting that more competition may come from new Super Wal-Mart and Lowe’s outlets planned for the nearby community of Catskill.

GNH took advantage of its larger facility to expand and enhance its most successful customer service feature: the home planning center it has maintained as a major customer draw since 1990.

The center has three full-time draftsmen who use a computer-aided design system to help customers turn their homebuilding dreams into reality. Throughout the homebuilding process, customers learn about various construction technologies and the often-complicated process of building their own home.

"The home planning center has always been one of my pets,” Stan Ingalls says. "It has greatly increased our visibility and sales. Getting people in the door before they even start digging gives them an opportunity to see what we’ve got and talk to our people. We can offer them another option before they go somewhere else, like an architectural firm.”

Ingalls adds that there aren’t many engineers or draftsmen in the area who will do home plans, so the company claims that service as its niche in the market and highlights it in advertising. "It sets us apart from some of the other independent dealers, and especially from Lowe’s and Home Depot,” Ingalls says. "We have planning-center salespeople who know the products and can talk one-on-one with the customer and are able to answer their questions.”

Separating the home planning center from the store is a large display-wall showcasing various types of doors, windows, shingles and other components. "It’s a touchy-feely thing,” Ingalls explains. "Customers need that kind of visual information more than ever before, because there are so many different options in the marketplace. Also, contractors like the fact they can send their homeowners (customers) to us and we will steer them in the right direction, help them pick out the right products.”

Selectivity in choosing quality vendors is also important, he notes. "We want to be able to stand behind the products we sell, so we’re very selective; we don’t bring in 14 or 15 different window lines. We’re a Marvin window dealer and stick to that because it’s a quality product.”

Ingalls, 58, joined the firm full time after finishing college and a stint in the Navy Seabees. His daughter, Genn Hagan, is director of marketing and Greenville’s division manager, and his nephew, Ed McQuillen, is vice president of purchasing. Genn’s stepbrother, Scott Powell, is division manager of the Windham location, her younger brother, John Ingalls, works in sales and cousin Kevin Ingalls is the firm’s general manager. "Part of our niche is that we’re a very family-oriented company,” an approach that extends beyond actual family members to embrace employees and the local community, Stan Ingalls explains.

Hagan agrees. "We’re not a faceless corporation,” he says. "We’re very well known in both the Greenville and Windham communities and we give extensively to both communities and the surrounding area.”

Competition Motivates Move

The prospect of future competition from big-box retailers not only helped influence GNH’s move to a new facility, it has also provided renewed motivation for the company to focus on what it does best: providing personalized customer service.

"They [GNH] have been successful with their whole approach to customer service,” says Tammy Wandler-Ginexi, regional director of the Northeast Retail Lumber Association (NRLA). "They have always been very upfront and honest, and customers know that. And for customers who want to build their dream home, it’s just one stop with GNH. They can do everything.

"Not only have they been a family business,” she continues, "but they treat many of their employees as an extension of family. They have 20- and 30-year employees who are very loyal.” That helps make the company approachable, which Ingalls says is the company’s goal in serving customers. "When a customer comes in, we can put a name to the face,” he says. The personal approach also works well with contractors. "They feel that they have a one-on-one relationship with us.”

Over the years, contractors have accounted for about 55% of GNH’s business, although that category has been growing recently along with the accelerating development in Greene County. Providing an enhanced level of service to contractors means having more and better material handling and delivery equipment, Ingalls says. "We used to just dump a load of framing; now, we set it on the ground with a boom truck, or take it off with a piggyback truck and put it where customers want it, or we put sheet rock on an upstairs floor. They’ve grown accustomed to that kind of service.”

Over the years, the company’s service area has shrunk from about a 50-mile radius to about a 30-mile radius. "But in special cases, we’re willing to go the distance for contractors,” Ingalls says. The GNH delivery fleet includes two boom trucks, one crane truck with fold-up crane, a piggyback truck, two commercial vans, one flatbed and five non-commercial flatbed trucks.

Since early 2003, GNH has used the Activant Eagle business-management software suite to help follow customer orders and deliveries. "It’s been a great help in tracking things,” Stan Ingalls says. Activant has allowed GNH to help streamline ordering and receiving, which helps to eliminate errors.

Relatively low employee turnover has been a major factor in enabling GNH to provide high-quality, personalized service, Hagan points out. GNH managers pride themselves on knowing the names of most of the company’s 50-plus employees, although that’s become more difficult as the company grows. "Employees know if they have an idea for the store, they can come right to Stan’s office, sit down and talk about it. We want them to feel it’s their company as much as ours,” Hagan says.

Ingalls adds that because of the family atmosphere, employees who’ve left have wanted to come back. "We really do care about our employees and treat them like family,” he says. "You don’t find that in too many places.”

Incentives for All

As a more tangible way to reward employee loyalty, an incentive program for all the employees is being developed, Ingalls says. Though nothing is concrete yet, the plan will include commission for outside salespeople and a percentage of store gross-profits for counter and other front-line staff, he says. "We want to include everybody in the pool so they can still leave the counter to take care of customers without worrying about stepping away from the register.”

As part of its strategy of promoting from within when possible, GNH emphasizes employee training through vendors and the NRLA, Hagan notes. For example, the retailer’s employees recently participated in a tour of the Saginaw Lumber and Millwork plant to learn more about its products. Many GNH employees also receive ongoing training at the NRLA training center in Rensselaer, N.Y., about 40 miles to the north, and at nearby Columbia-Greene Community College.

According to general manager Kevin Ingalls, though, the form of training that yields the most bang for the buck is "ghosting,” in which a new employee spends time with an experienced employee and observes how the employee does his or her job. "That will ultimately show what each job requires and how the job gets done,” Ingalls observes.

The company has long-term plans to add a third location in the region, Ingalls notes, and to guide GNH through its continuing growth, family members have begun the process of putting together a strategic plan with the help of a consultant.

The company’s marketing strategy has included a little bit of everything, according to Hagan. Placemat advertising at local diners has been surprisingly effective. "Based on everything I learned in college, I thought that would be a waste of money,” he says. "But we’ve had a lot of customers coming into the home center with ideas for homes and additions drawn on the backs of placemats.”

For the last several years GNH has also purchased commercial time on local TV news and weather programs, and placed spots on some of the area’s largest radio stations. "It keeps our name out there,” Hagan explains.

Located just south of Albany, the company draws customers who are willing to drive to get one-to-one service rather than what they could expect from a big-box retailer. "More than half of our retail traffic is people we know by name or by a project we’ve done,” he says. "They love that.”

DAN EMERSON, a Minneapolis-based freelance writer, is a contributing editor.

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