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Key Ideas to Managing Distributor Relationships

Home built by Premier Custom Builders

One in a series of interviews conducted by Point To Point to better understand the players that comprise the building products channel, how they engage with brands, and the sizable market forces reshaping their worlds.

From the moment you start talking to Alan Brown, president of custom home building company Premier Custom Builders, you know you’re talking to a guy who knows what he wants. It’s a quality that colors his distributor expectations and managing those relationships.

I’m looking for a creative partnership with my distributor. While on occasion I use multiple distributorships—particularly for items with fluctuating prices like lumber—my preference is to work with one company, and only one contact at that company. That’s the way you build a relationship.”

What’s Changing
Located in Chagrin Falls, Ohio, Premier Custom Builders averages 15 starts a year and has received numerous awards, including runner up for the best green built home in America in 2009. With 27 years in the business, 54-year-old Brown is stepping up his relationship with his distributor as the market grows more competitive.

“I see my distributor more frequently now as the marketplace is much more competitive. One of the keys to success in today’s world is bidding 100% accurately. The more clearly I can detail what I need, the better the bid. Plus technology products are changing more rapidly. Staying in touch with my distributor helps me be aware of what’s new.”

One change Brown has noticed post-crash is his client’s involvement with his distributor.

“I’m finding that my homebuyer clients are interested in meeting with my distributor rep to talk through different options. Clients are much more educated; they can go to Google and find out more—‘Oh, wow, I can put that type of siding on, or that type of siding … I want to find out about every siding’—that’s more the norm today. Homebuyers are much more hands on.”

Distributor Expectations
Brown maintains managing good business relationships with his distributor. He discusses problems with him and values his recommendations and insights. As he says, “It’s not just all about the money.”

A pretty self-sufficient builder, Brown doesn’t need much in the way of traditional sales and marketing assistance from his distributor, such as training for his trades or videos to share with his clients. But he does have definite expectations of his distributor.

“I expect him to jump in the middle when there’s a problem, whether it’s with delivery or something else. Mistakes happen. Just correct them quickly and efficiently.”

“About once a year I’ll ask for a co-op on advertising. And if I’m going to build a model home, I’ll ask for some financial assistance with that. If I’m going to take on some risk and do something to increase sales—which my distributor will also profit from—help me out.”

“Industry news? Yes, I expect that from my distributor, especially product news—updates, recalls, failures and the like. If it’s critical, I expect a phone call right away. Otherwise, notify me in person and follow-up with an email to document it.”

“Turnaround on quotes is imperative; when I give a due date it’s got to be met. Post-order customer service is important if there’s a problem, but I don’t expect problems. I definitely value inventory availability. If there’s no product there’s no business.”

Technology
As for most of us, technology has impacted Brown’s operation significantly.

“Mobile makes our communications between trades, vendors, clients and employees much clearer, much faster. Plus we use an online construction management system. Now materials aren’t shipped or accepted without a PO, and change orders are mandatory. For instance, when a client approves the siding choice, everybody knows about it—the installer, my supervisor, the distributor. It’s made my whole operation more transparent.”

“I do use social media. We’re on Facebook and it’s been a positive for my business.”

But for Brown, the Internet—and buying online—is a double-edged sword.

“Where I am doing a lot more online is when a client tells us about a new product. Then I’m searching and sourcing outside of my distributor. We partner with our homebuyers. It’s a matter of trust. If they bring me a product they want to use, I have to find it.”

“I see buying online increasing over the next five years and I hate it. It’s very difficult and complicated and I can’t get away from it because now it’s customer-driven. He comes to me wanting a unique item, I go to my distributor for a price, and the customer can get it for 20% less. So my distributor looks bad and I look bad. Take plumbing—my customers can order any plumbing fixture online cheaper than I can at the supply house with my deep, deep discount. So you order the stuff online, but when’s it gonna come and is it gonna be right and who do you talk to if it’s not right? Plus it kills any potential for markup.”

Biggest Distributor Frustration
Major problems—like product failures—are a source of great frustration for Brown.

“It’s when there’s a product failure and I have to get the manufacturer involved. I want to address it expeditiously before my customer gets itchy and goes to an attorney. People drag their feet in these situations. Nobody seems to feel the urgency or put the time in that I do to resolve it. Distributors don’t seem to have the training or the inclination to act as an interface between all parties. If I was a distributor I would teach my reps to drop everything and make the resolution of a product failure a top priority. That’s how you earn a customer for life.”

Final Thoughts
Despite the market forces reshaping the channel, one thing hasn’t changed for Brown: the importance of the distributor-builder relationship.

“We run our whole business on building trust with our clients. If we tell a client we’ll have a price for him in a week, we have to—we promised. I can only do it if my rep gets quotes back to me on time. That’s the most important thing in earning business in today’s world: following through. It’s key to developing and earning trust from people.

Growing relationships. Follow-through. Trust. Clearly Alan Brown is a man who knows what to value, and values what he knows still works in today’s world.
Topics: Building Products Manufacturing