Download ProSales Magazine Sept2013

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Customer Focused:
Bill Rossiter says that
retaining existing customers is less costly in
the long run than trying
to force your marketing
program to constantly
“buy” new ones.
44 / ProSales / September 2013
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Done right, marketing connects you to
customers and leads to sales
Making
Magic
Photo: Michael NeMeth
E
lton Mayfield recently replaced the furnace
and central air conditioning in his home. He
hired an HVAC installer he’s used before and
trusts. “I didn’t even ask if he sold me a
Trane or a Carrier,” Mayfield says. “I trust him. And if
I have a problem, I will go to my guy.”
Mayfield, who is co-founder and partner of ER
Marketing in Kansas City, Mo., thinks this is the kind
of relationship that dealers should strive for with their
customers. The problem that he and other marketing
and public relations experts see is that many pro
dealers still don’t really know who their customers are,
so they can’t know for certain how marketing
translates into leads and sales. Without a game plan, a
goal, or a measuring stick, dealers’ marketing
inevitably becomes a hit-or-miss exercise.
“There are customers and there are customers,”
says Rick Fernandez, a long-time public relations
consultant. That might sound simplistic, but Fernandez
isn’t the only expert who thinks that dealers’ market-
ing aim is more true when they paint a bull’s-eye
on their existing customer base. Retaining those
customers is less costly in the long run than forcing a
marketing program to “buy” new customers all the
time, says Bill Rossiter, a former sales and marketing
executive with Owens Corning who now runs
Sylvania, Ohio–based Interrupt Marketing.
Know Your Customer
Rossiter recommends a systematic approach to
“profiling” customers. That means dealers should be
gathering reconnaissance on who’s coming into their
locations and how often, what products and services
they came in for and what they ultimately order, and
why any customer whom a dealer’s marketing targets
does or doesn’t shop its yard or store.
It’s one area where trade partners such as
manufacturers and buying groups—sometimes
underutilized resources, say marketing experts—can
help. They often have access to demographic data,
By John caulfield & Kate tyndall
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September 2013 / ProSales / 45
Air Time: Parr Lumber
employees Corey Valdez
(left) and Tony Cookston
man the mikes on
Parr’s Weekend
Warriors radio show.
such as the age of homes in a given market and when
they might need renovations, which dealers could
share with their contractor customers or use to target
specific homeowners.
Serving the Pros
Because there is a great deal of movement within the
residential building industry, the amount of churn is
substantially higher than for all businesses, reports the
National Association of Home Builders (NAHB).
So it behooves dealers who think they know all the
builders and remodelers in their market to take a second
look. They may find that they need to dial back a bit on
loyalty programs and reach out to new builders.
Dealers with a lot of retail customers are the
ones who find they need to develop programs to
reach that market segment. That group is Internetsavvy, price-aware, not afraid to comparison shop
and ask questions, and is very willing to walk away
when unhappy.
Dealers such as Cincinnati’s Nisbet Brower and
Hillsboro, Ore.’s Parr Lumber, which both serve
46 / prosales / september 2013
several market segments, have found that they need to
customize their marketing efforts. What works for a
builder who is already familiar with the yard won’t
necessarily work with a retail customer.
About 15% of Parr’s overall sales are to retail
customers, says marketing director Nancy Cranston,
although some of the dealer’s 31 facilities (which
include seven cabinet design centers) depend more on
retail sales than others.
“Our builders know everything we have, and we
have developed relationships with so many of them,
but it’s the retail customer who doesn’t know we
have decking and fencing and cabinets and appliances,” she says. “It’s constantly a challenge to get
that segment in.”
Parr’s “Weekend Warriors,” a home improvement
radio show, has proven a draw not only to builders and
remodelers but to retail consumers as well. The show,
a winner of a 2012 ProSales Excellence Award for
marketing, has now been syndicated to 11 new
markets in Oregon and Washington.
The dealer gets feedback from customers who
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photo: Leah Nash / Novus seLect
Marketing
Marketing
for one agency that she consults only for graphic
design work) and radio and newspaper ads.
The dealer used to spend $800 per week on its
regular newspaper advertisement. This spring, for the
local Parade of Homes, the company offered to pick
up the $800 entry fee for any builder who would agree
to buy all project materials from Mathew Hall. “We
picked up three builders that way,” Ruether points out.
Along the way, she has been able to slash the
marketing budget by two-thirds to $100,000. This
year, Ruether thinks the budget may be even slightly
less. “Half the battle is knowing your customer,”
Ruether says, “and a lot of people waste a lot of money
figuring that out.”
Be Flexible
No Dough: Bill Gutherie
of Gutherie Lumber
spends nothing on marketing. His only effort
at marketing is stealing
pens from his dentist
and giving them to his
contractors. He says he
has about 20 contractors who regularly ask
him if he has any more
of those great pens.
48 / ProSales / September 2013
enjoy the radio program, but Cranston acknowledges
that figuring out whether the show translates into sales
at the register is difficult. “Measurability is really a
challenge for us,” she says. The marketing department
has used Google Analytics to measure its website
traffic, but other than that, objective measurement
often yields to instinct.
Like many other dealers, Parr scaled back
marketing efforts during the downturn. It was only this
year that the company ratcheted up its efforts. The
dealer spent almost all of its $170,000 radio budget
on a series of 30- and 60-second spots broadcast
from each location, thanking all the trades for
their business.
Mathew Hall Lumber has done more than just
thank its builder customers. The St. Cloud, Minn.,
dealer used its entire marketing budget to help its
builders. “We might help them get a new sign on
their truck, new uniforms for their crew, or some
advertising,” says Holly Ruether, Mathew Hall’s
director of marketing.
Ruether says that the change came a few years
ago, when the dealer realized that it was spending
50% of its marketing budget to chase 5% of its
customer base rather than playing to its strength: its
pro customers.
“After doing everything and spending so much
money on advertising,” Ruether says, “we got smart.
We finally figured out that we’re the ones who know
best how to market [the company].”
Ruether cut out advertising agency fees (except
Along with knowing your market, Bob Chamberlain
argues that flexibility is key to a successful marketing
plan. That’s why the Nisbet Brower marketing director
has built checkpoints into his plan, where at intervals
he can evaluate a particular strategy, tweak it if need
be, or eliminate it altogether.
The Ohio dealer serves residential builders,
commercial builders, and consumers, the latter
primarily through its showrooms in Cincinnati and
Dayton. Depending on the target customer segment,
Chamberlain says his company has to determine what
makes the most sense when it comes to defining
strategies and allocating marketing dollars.
With builders, especially semi-custom and custom
builders, relationships are very important. On the
consumer side, it’s a different scenario, Chamberlain
points out. “You really do need to have a significant
Internet presence for the retail segment.”
“Part of the Internet process is how you choose to
engage people,” he adds. “Sometimes we get leads
through the Internet on the kitchen and bath side. They
contact us about looking for a remodeled kitchen.
Those are easy to measure.”
For that retail segment, Nisbet Brower has used a
mix of television, radio, and print advertising, but
Chamberlain admits that trying to figure out ROI is at
best “kind of fuzzy.”
For the showroom’s TV campaign, sales
associates asked customers if they came in because
they saw the commercial. But since a resulting sale
might not occur for months, if ever, figuring ROI is
tough, Chamberlain notes.
At Jackson Lumber and Millwork in Lawrence,
Mass., marketing manager Pat Marcotte has learned to
change with the times. When the dealer catered more
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Marketing
to the retail trade, Marcotte spent more marketing
dollars on print advertising but found retail customers
hard to woo.
The dealer decided to refocus its marketing on
courting builders and remodelers.
As a result, she says, “We started advertising
totally differently. I went from doing cut-and-paste ads
in papers to doing events for remodelers and builders.”
Now Jackson Lumber offers its builder customers
continuing education courses and classes on the
lead-paint issue. Two years ago, the dealer set up a
rewards program for remodelers.
Newer platforms, such as social media and
smartphones, will work only when a dealer has a good
handle on what content customers want and how they
prefer to receive it.
“You can’t just do things the same way you used
to,” says Kimberly Brandner, director of marketing
and client services for Brandner Communications, a
marketing and public relations agency in Federal Way,
Wash. “You have to be creative about how you
reach customers.”
Stick With What Works
With its 99% pro base, Syracuse, N.Y.–based Erie
Materials doesn’t have to worry about dividing up its
marketing dollars. “If we were having to market to
consumers and homeowners, we would have to inflate
our marketing budget a lot,” says Jim Santoro, Erie
Materials’ marketing director.
The dealer, which has 10 locations (including a
50 / prosales / september 2013
Clear and Consistent Messaging
Even retailers that are proficient at marketing can be a
little heavy-handed in their self-promotion and a little
light on the variety of their promotions, observes Katy
Tomasulo, public relations and social media manager
for Seattle–based agency C Squared.
Marketing by small businesses tends to be “too
intense for too short a period of time, so no one pays
attention,” says Mike Michalowicz, co-founder and
CEO of New Jersey–based consulting firm Provendus
Group. He recommends “a constant drip” [of
information or promotions] so customers in need will
think of that dealer first.
Beyond traditional advertising, that message can
be delivered in many ways: newsletters, blogs, and
opinion pieces in local newspapers, for example. It can
also be delivered through a dealer’s branding. Each of
these platforms, though, must be consistent and clear,
says Jennifer Swick, a former marketing director with
Parr Lumber who now is a partner at marketing firm
Wheelhouse 20/20, in Portland, Ore.
Swick and her partner, Scott Ericson, another Parr
Lumber alumnus, note that clarity might entail
developing separate campaigns for different markets
and even individual yards, especially if locations don’t
stock everything that the dealer is selling in its
weekly circulars.
Swick and Ericson agree with other marketing
experts who say that a price-driven marketing strategy
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photo: Courtesy JiM santoro
Feed & Greet: Erie
Materials hosts barbecues and trade shows
to stay in touch with its
pro customers.
distribution center) serving customers in northern
New York and Pennsylvania, ranked No. 20 in this
year’s ProSales 100, posting $182.8 million in total
sales in 2012.
“We rely a lot on direct mail and electronic
communication, and we try to evaluate [our efforts]
based on buzz and feedback,” he says. The dealer
sends out postcards and mailers with the occasional
coupon. Santoro says that he has found email to be the
most cost-effective form of marketing. To that end,
Erie produces a monthly email newsletter and uses
email blasts to announce a new product or send a
reminder about a promotion.
Like most other dealers, Erie hosts customer appreciation events such as barbecues, which are held at each
of its locations, and sponsors outings such as a dinner
cruise, a fishing trip on Lake Ontario, or a golf weekend. The dealer also puts on a biannual trade show,
along with smaller events and seminars for customers,
which often give local architects the opportunity to earn
continuing education credits.
Marketing
52 / ProSales / September 2013
Big Builders Are Gaining Market Share
600,000
New Home Closings
will eventually yield diminishing returns—despite
conventional wisdom that price drives transactions.
“I can price-shop anyone in three minutes on my
smartphone, but if it’s a price-only proposition, you
constantly have to reacquire that customer,” says
Mayfield, the Kansas City marketing consultant.
Ericson asserts that the question any dealer’s
marketing must answer is, “Why should a customer
buy from me?” The answer, he says, must be
unambiguous: Why are your quality and service
unique? And if the dealer’s marketing can’t answer
those questions, Ericson points out, the dealer needs
to find its value proposition and figure out a way
to improve it.
Value-added marketing emphasizes how
dealers can help professionals sell to their customers,
says Interrupt Marketing’s Rossiter. Tomasulo of
C Squared adds that dealers can position themselves
as experts to both pros and homeowners by marketing
services such as installation or sharing the latest
product trends. In that vein, dealers should leverage
their relationships with suppliers. Tomasulo points to
decking tool kits that her client Weyerhaeuser
Distribution recently created that include 10 how-to
articles, which dealers can print out and post
in their stores.
“Engagement should be the key to all marketing
endeavors,” Brandner says. And the more personal and
face-to-face that engagement is, the better, say other
marketing experts.
ER Marketing recently polled dealers buying from
distributor Huttig Building Products about their
preferred communications mode. Email ranked first
by a wide margin. But faxing placed a surprising
second. Mayfield explains that dealers like receiving
pricing and product information from distributors that
they can post at their service counters for customers to
read while they’re waiting to place orders.
As more contractors embrace electronic and
digital communication, dealers need to be where their
customers congregate—be it online forums or social
media platforms.
The National Association of Home Builders
polled its membership last spring and found that 86%
of builders are equipped with smartphones and more
than two-fifths use iPads. Both of those delivery
systems present robust marketing opportunities to
savvy dealers. A recent survey of 65 online retailers,
conducted by marketing research firm Forrester, also
found than 89% either implement or plan to implement mobile email optimization in 2013, with more
500,000
101-200
400,000
11-100
Top 200
Share
Top 100
Share
60%
50%
40%
300,000
Top 10
Share
200,000
30%
20%
Top 10
10%
100,000
2005
2006
2007
2008
2009
2010
2011
2012
SOurCe: MetrOStudy
Market Power: Growth in big builders’ market share increases the need to look
more closely at your your desired customer base and the best ways to help them
reach their clients.
$70,052
Average amount spent on advertising in 2012 by
dealers taking part in the Building Material Operations
Comparison survey.
$10,737
Average amount money that dealers taking part in
the Building Material Operations Comparison survey
received in 2012 from vendors for co-op and
marketing support expenses.
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Marketing
than 70% planning to optimize paid searches for
smartphones and tablets.
Before any dealer leaps into digital marketing,
however, it needs to be confident about its online
presence. That usually starts with a website, which
Brandner says should act as a dealer’s “business card,”
be in sync with the company’s broader marketing
strategy and goals, and be regularly updated with
new information.
That goes for dealers engaging their customers
via social media, too. Dealers need to give pros and
homeowners a reason to visit their Facebook or
Pinterest sites through such enticements as giveaways
or remodeling tips, or serving as a community bulletin
board. But don’t expect social media to lure huge
audiences, Tomasulo cautions. “You should be
thinking quality, not quantity.”
The message can
be delivered in
newsletters, blogs,
opinion pieces,
but it must be
consistent
and clear.
It’s All About Sales
54 / ProSales / September 2013
Jennifer Swick,
partner at
marketing firm
Wheelhouse 20/20.
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PluMMer
Dealers must also realize that social media sites are
communications platforms, not selling platforms. It’s
easy to forget that the whole purpose of marketing is
lead generation and converting those leads to sales.
“Too many dealers don’t attach what they’re doing
[in marketing] to conversions,” Rossiter says.
That’s one reason why Rossiter prefers event
marketing—golf outings, monthly breakfasts,
new-product seminars, and cruises for preferred
customers—as a personalized bridge to sales.
Admittedly, measuring marketing’s results is
easier said than done and can be more art than science.
But one thing is certain, says Ericson of Wheelhouse
20/20: Marketing that does not integrate sales into its
endgame “will fail.”
And, he adds, a bad sales experience is all it takes
to undercut a dealer’s marketing. Wheelhouse recently
contacted the two top customers and five top prospects
for each salesperson at one dealer and the biggest
complaint it heard, Ericson says, was, “I can’t get hold
of my salesperson.” Swick adds that when Wheelhouse
does “secret shops” of different dealers, “95% of the
time they never ask for a name, an address, a contact
number, or when the project might start.”
Much of this inattention stems from the fact that
salespeople have many tasks competing for their
attention, so they often view answering phone calls as
a distraction. And in this era of austerity, dealers are
not going to hire more people. Dealers that want to see
their marketing click, says Ericson, “need to have a
process for answering phones, for accountability, and
for visibility.”
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