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Taking operations online

Today’s powerful technology tools make it easy to do more and more online, including giving our customers 24/7 access to your product pricing and to their accounts. This month’s question is from a dealer who is considering doing both, but wants to make sure it’s the right move before pulling the trigger. At the heart of the question is … just because we can, should we? This month’s Real Issues. Real Answers explores …

Taking Operations Online

First, we asked our readers whether their customers are allowed to access product pricing online. Just over a quarter of respondents said that they do offer product pricing for customers to access online.

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We followed up that question with one about account access. More than 40% of readers who participated in the survey indicated that they allow their customers account access online.

Account chart

Finally, we asked readers to respond with how they may directly address this month’s Real Issues question. How would you advise this dealer?

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“We don’t currently offer online pricing or accounting functions for customers to log into. We’re considering it, because we can see the potential upside in time-savings for our team, and the ability for our pro customers to access their account 24/7. But before we pull the trigger, we’d like to make sure that the plusses outweigh the negatives. We’d also appreciate any insights from dealers who’ve taken this step, with any advice on obstacles to avoid along the way.”

Responses from lumberyards, full-line building material dealers, and distributors:

“Great question! We are in the same boat as you, in that we email invoices and statements. But, we do not have online pricing or accounting functions via the web. I am curious if our business software offers this or if we would have to use another.”

“We do not currently offer such online pricing or accounting functions, but absolutely see this as a next logical step to keep our business relevant. Obstacles will include internal and external pushback to change historic behaviors. Be ready to train your workforce to adapt to such technology and be prepared that some of your staff may not opt into such changes and decide to move on. It’s hard, but it’s part of keeping the business sustainable.”

“As a company, we are in the same mindset. Our system definitely is not up to today’s standards. Knowing this information would really be helpful in making future decisions.”

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“Do it. We’re in the process of implementing those functions within our system and we believe it will help streamline our interactions with customers in a big way.”

“If you are a small LBM dealer as a lot of us are, plan on a full-time IT person to run it.”

“It would be another list to keep pricing current.”

“It’s a great way to offer value-added services to your customers and if your ERP platform supports it, it really makes sense. I think the biggest concern most have is the safety and security of the data. Before you allow a lot of outside access to your system, you need to be adequately protected from hacking.”

“Think about self-checkouts, it saves payroll dollars, but it loses the personal touch/relationship. The accounting piece is a no-brainer in my opinion. That being said, we still answer questions weekly that are right there if our customers would just log in and look. To me, the online pricing depends on your product mix. I spent 26 years in a big box, for lumber and building materials, there were really only a handful of items people would look at and we know what they are from our quotes, OSB, 2×4, 80# concrete etc., but if your product mix has other home building items like plumbing, electrical, and paint, then online pricing along with being able to put an online order together will place you competitive in your market.”

“Limit accessibility.”

“Do it. Everything is going that way, as it is being driven by the way we use our personal charge and banking accounts.”

“A team that oversees pricing would pay for itself through convenience to customers.”

“I am very curious about this myself. We recently purchased a lumberyard that has been a successful business for over 30 years. However, they run on zero technology. I think it would greatly help my company.”

“It is nice for the dependable customers that keep track of their accounts to see the total of the accounts and be able to pay ahead of the end of the month if they are wanting. Some of our customers call directly in the office and never receive a copy of the receipt. Using the online access will make it easier for them to see what their bill is. Do lots of training for your team and your customers so all know how to use the online access.”

“Online pricing is selling by price only. If you want to sell to a future or to a repeat customer, you will need to find a way to get them in the door and let service sell your customer.”

“To be competitive in today’s market, materials suppliers need to be more communicative, so that customers can quickly make decisions, sometimes even outside of business hours when we can answer questions directly. Online pricing would be standard pricing with any accommodations or deals only available by speaking with the account manager.”

“At this time, we have no plans to implement this online access.”

“Online access to invoices and emailing statements are necessities in today’s world. Our smaller customers do much of their bookkeeping after we are closed, and our larger customers want to eliminate as many phone calls as necessary. The plus is reduced customer questions to our accounting department.”

“Eventually this will likely become the norm, but I believe it is best to hold off on this as long as possible. The infrastructure required to maintain up to date and/or live pricing and invoicing will be enormous. Those costs will have to be pushed along somewhere down the line.”

“Must assure pricing and inventory are accurate for success.”

“We don’t currently offer this, but I think we probably should. I think I understand most of the negatives of doing this but unfortunately this is just where customer expectations are shifting to. I think most customers would see this as a significant benefit. In this case, I would rather be an innovator than a follower.”

“Invoices must be selected by customers for online payments. Avoid partial payments with no remittance info.”

“We do not allow this at this time.”

“Analyze then implement.”

“We have portal access to view invoices, job totals and make payments. We are not currently offering pricing or quotes online. We do this for two reasons. First, it’s impersonal and we may not know how the information is being used or if we’re losing orders. Second, we deal with primarily independent custom builders and remodelers, so we want to be personally involved with that aspect of the business.”

“We do not do this for many reasons, and we also understand how this could be a valuable tool. Security, and constant updating due to market fluctuations could be labor intensive, not to mention the cost to implement.” “Good luck.”

“We have only been doing it for a short time, but the customers who take advantage of it do love it. If a customer was going to share your pricing with a competitor, he was doing it already.”

“Just do it!”

“You need to make sure that what they offer you in an online store is what will fill your needs. It is easy to open a web store, but to get what you want to work for you is not that simple. Invest the time to make it the way you want, not what they offer you.”

“We have an online store, access to our pricing online, the ability for builders to do their own quotes, and to pay their account online. We also have an app which is used to access their information on their cell phone. Having this has been a lot of work, so we ended up hiring an outside company with knowledge of our software to finish up a couple things with the online store. What has worked the best is being able to receive the ACH payments. We send out statements on the first of the month, and by 10:00 a.m. that day we will already have received several payments. We feel that it was well worth doing, but was a lot of work.”

“The system needs to update in real time to maintain margin.”

“The plusses and negatives cancel each other out. You’re really steering culture. The last thing anybody needs is another login and password. I’m in this industry because I want to work with my hands (not on a keyboard). But I personally also enjoy conversing with others. Lastly, part of your job is knowing your products, services, and your customers. Why do I now need to look it up myself? Sell me on it! And why do I need 24-hour access? Are you an international company? No? Then give it and everyone else a chance to rest. This constant need to produce more and more and have everything at your literal fingertips is dumb and creates an entitled culture. I’m sincerely over it.”

“The online accounting is a great tool for people who choose to use it.”

“We offer online access for our credit customers. So far, there have been no big issues. As far as pricing, we offer different accounts different pricing based on volume and product use.”

“Eventually we will all be there!”

“I’m an old-timer and things are changing in the way we conduct business. More and more of the younger generation want to be able to be mobile and have access when they want it. I think the pros far outweigh the cons.”

“As long as you have procedures in place to price product accurately on a timely basis and have ability to display pricing (including any special pricing) to the customer, I’d go for it. If those processes aren’t in place and strong, I’d start there first before you bring that information online. Many customers will appreciate the freedom to put together estimates on-the-fly and after hours without personally contacting a salesperson, but if the information isn’t accurate and timely, you’ll cause significant aggravation to the customer. It goes without saying, be sure that you have the right infrastructure for this kind of system activity and have a plan for the sales team to engage the customer in ways other than preparing pricing.”

“I would like to see it happen, but the sales staff feels like they would lose control. This discussion has highlighted some inconsistencies in our bidding process which need to be fixed before we can have this level of transparency. There is an additional concern that publishing prices would bring new customers who are focused on price rather than service. This would take up our capacity with sales that are less consistent.”

“We are in the same boat. I think the best strategy is to start slow and allow just a few key customers access for a few months to get feedback and work out the kinks prior to going completely live.”

“I would begin with adding account access. Overall, it would be difficult to weigh the expense savings, if any, to this program, but every other aspect seems to be positive from our experience with the transition. It improves clarity and customer service for your customers and will reduce touches that your AR team will need to have with the accounts that would utilize the system. You will have some customers that will be early adopters of the change, and some that will still prefer to handle their accounts as they always have. If you can somehow incentivize customers to use your system (even on a trial basis), you may see increased adoption of the new service.”

“You are missing out on potential sales. Ask question of dealers who have it now.”

“There are no negatives.”

“Your competition is working on doing it already!”

“We offer one price across the board for customers to get rough pricing, even when an order is placed online it is still reviewed by a salesperson.”

“We would love to incorporate it.”

“We have given our customers online availability of pricing, inventory, and their account for almost ten years with zero problems. Over 10% of our sales are online now.”

“I would be interested to hear what the negatives are, other than appearing daunting and time-consuming to set up. That is the issue we are facing now, but in the long run I would rather spend time and effort to get the ball rolling than lose a customer to a competitor that offers this service. Because ready or not, offering services & managing accounts online is becoming expected and is here to stay.”

Responses from wholesale distributors, manufacturers, and service providers:

“Having online pricing and accounting information would be a plus for those times when your office is closed and I either need a price on an item or for whatever reason need to see my account balance. Also, it would be a bonus to be able to look at pricing when working with a customer either at their office or on the job site.”

“Pricing, no. Access to certain account details, maybe.”

“Unfortunately, the workday is no longer an 8-5 day, and the work week is not limited to Monday through Friday. By not offering your pricing or accounting functions online, you are limiting your ability to service their needs and likely losing their business to competitors who can service their needs when it is most convenient for them.”

“I’d lay out the need for online pricing citing competitors that may already offer it and then how it will make you a lower cost-to-service customer.”

“It’s the future, you have to make the move!”

“For us, it’s been more than worth it. It was a lot of time and money to create a site like that. It’s always being tweaked. It’s been almost a year and we’re still getting all of our customers to use it and on board. Some guys still like to hold things in their hands such as catalogs, pricing sheets, etc. I understand that (being older myself) but in this fast-paced world where inventory and prices change on the dime, this is a much better way for us to do business. We’re always happy to take a phone call with one of our inside sales reps too.”

“Online pricing requires constant upkeep. You have to be committed to it. You also lose the opportunity for feedback. It requires follow up and customer contact to keep informed.”

“Our company is very customer service-oriented; we answer our phones and have very experienced staff which

can field almost all questions and pricing. We don’t feel the need to have everything exposed—most of all to our competition!”

Hundreds of readers share their insights for this every-issue feature. Have a Real Issue? Contact Rick@LBMJournal.com.


THE READER WHO SUGGESTED THE “REAL ISSUES” TOPIC WILL RECEIVE AN LBM JOURNAL PRIZE PACK.
INCLUDES: CAP, MUG, PEN, AND MORE.

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