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Leverage the market opportunity

Sales - Rick Davis

Leverage the moment! That is my advice to salespeople in these unique times for the construction industry. If there has ever been a better sellers’ market, then I know I haven’t lived through it.

Housing inventories are at the lowest levels in decades, meaning we need new houses. As a result, demand for new construction is approaching 2005 levels. Product scarcity has driven up pricing to unprecedented levels, which hasn’t put a nick in demand, let alone a dent. Remodeling expenditures skyrocketed during the pandemic and many prognosticators are projecting a robust future. The outlook is rosy, so why are so many salespeople complaining?

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They’re complaining because it is hard to keep up and customers are demanding. If it’s not enough to keep your existing buyers happy, you have your competitor’s customers trying to cherry pick your inventory to fill orders. Sales-people are complaining because the lead times for products has approached levels that jeopardize planning even for the most efficient builders and remodelers. So, what should you do?

I say stop complaining and start leveraging this rare opportunity. Here are my tips of the month:

  1. Communicate better than the competitors. Everyone is dealing with daily price fluctuations and lead times being quoted not in weeks, but instead months. Instead of feeling victimized by the strange times we’re in, recognize that you are not Be the provider that helps your customers cope in these difficult times. This means ordering complete packages at the outset because fill-ins are sometimes hard to deliver. It means working backwards on lead times and, instead of waiting for buyers to place orders, telling them when they need to get them in if they want their projects to go without a hitch. This is a time for brutal honesty and quality planning.
  2. Elevate your margins. If there was ever a time to raise your margins, or at least hold them, this is it. I find a lot of salespeople are uncomfortable doing This is not a time to “practice” delivering building materials; it’s a time to improve your cash flow while increasing your cash reserves. If you are a business executive reading this, forward it to your salespeople with an attached note that emphasizes the importance of cash flow to any business. Now is the time to build up cash reserves.
  3. Cull your customer base. Got a loyal, fair-margin customer who is delightful to work with? Make sure they get first dibs on inventory, favors, and service. Got a nuisance customer? Elevate pricing and you’ll be compensated fairly or potentially lose them. If you are ever going to lose customers, now is the time. It is your best opportunity to replace
  4. Prospect. Prospect. Anyone familiar with my work knows the value I put on prospecting as a non-stop duty for salespeople at any stage of their careers. The chaotic times present opportunities to “select” the right buyers. Prospecting is not about persuading; it’s about finding the best future clients when the timing is right. If there every were a time when buyers are open to change, this is it.

It feels counterintuitive to salespeople to work on their business at a time when they are so busy working in it. You decide for yourself, but in my book, the current market conditions present opportunities for sales growth like we haven’t seen since the start of the 21st century. It’s a great time to seize the moment.

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Rick Davis, president of Building Leaders, is a premier sales trainer in the building materials industry. His latest book, Sales Economics: The Science of Selling, is now available at buildingleaders.com. Rick can be reached at rickdavis@buildingleaders.com

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