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Salespeople know they need to know more, but not all know how

Bill Lee sales & operations

The way your competitors go to market and the way your salespeople respond to your competitors’ pricing tactics have a lot to do with both the sales and the gross margin your salespeople can achieve. So you don’t have to be a rocket scientist to realize that it takes more than salespeople getting “last look” to achieve the company’s gross margin goals.

Few building supply businesses inventory a significant number of unique products; thus, one has to wonder why so many salespeople frequently get themselves into “lose/lose” pricing squabbles in an all-out search for pricing advantages. Competitiveness has as much, if not more, to do with the supplier’s service offerings as it does with their product offerings.

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Do you maintain a competitive service file (complete with photos) that lists your company’s customer service policies, warehousing configurations, record tracking for on-time delivery practices, etc.? Can your salespeople articulate the tangible benefits their customers receive because of the methods your company uses to deliver specific material packages?

One of the ways savvy builders tell me they can spot building material salespeople who have the customer’s best interests at heart is by paying attention to the way they direct their conversations on sales calls. They ask customers questions that sound a lot like these:

• “Why don’t you let us give you a few prices on some of our most competitive product lines so you can get a feel for how effectively our company’s buying programs benefit your company’s ability to compete in a blowout construction economy?”

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• “If you are willing to share the plans on some of the jobs your company is bidding with me, we could sit down together and come up with a pricing strategy, perhaps tied to some of the special buys we’ve been able to negotiate…”

Though there are still builders in every region of the country who attempt to buy and sell based on a pricing advantage, there are an increasing number of builders who have learned to focus on quality and value to achieve an optimal level of profitability.

While one company’s prices are clearly higher or lower than those quoted by a competitor, the service benefits one company offers over and above a competitor are not so easy to prove. A certain amount of research is typically needed to convince customers that they can reduce their construction costs by paying more for material.

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To convince customers of the advantages your company offers as a result of your service superiority, measurements are usually necessary on the part of both the customer and the supplier. Examples are:

• What are the odds that the material will be on the job site by the time your salesperson promises it will be there?

• How likely is it that the material your driver delivers to the job site will be the same quantity and specification as listed on the customer’s purchase order?

Let’s face it, when the sub shows up on the job and the material is not what he needs to complete that job, there is no telling how many days the closing is going to be delayed. In the construction business—like most businesses— time is money.

So, what are the specific differences between your company’s offerings and your competitor’s offerings? How is your sales force different? What services does your company provide that your competitors do not? How does the talent of your sales force stack up to that of your competitors? What benefits does a builder receive when he does business with your company versus those of your competitors?

The answers to questions like the ones listed above should either position your company to better explain its competitive advantages or open your eyes to the challenges that your company must overcome in order to outshine the competition.

Bill Lee is a respected sales and business consultant in the LBM industry. For more information, contact Bill at leeresourcesinc@gmail.com

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