Here We Go Again

John Cashmore
January 15, 2008
COLUMN : Dealer Perspectives | Management

Many of us in the building materials business have read this book before. Housing starts and permits plummet, sales drop and it is time to start the belt tightening. When it comes to cutbacks, they usually come in the following order:

* Training
* Market research
* Marketing programs (dealer, consumer, builder and remodeler)
* Sales support and/or customer service
* Sales staff
* Production staff

Generally, you are safe if you happen to be in the following functions, presented in no particular order:

A DIFFERENT APPROACH
Consider for a moment that the company takes a far different approach. As many manufacturers in the field cut their training, market research, and customer sales and support teams, one company is there ready to prey on the disenchanted customers left behind. Many dealers and distributors depend on well-created, sell-through marketing programs to help them sell to their customers. If suddenly their main vendor cuts these programs, and they feel it will affect their ability to sell, they start looking to find new suppliers. What would your dealers do if another manufacturer approached them with window  pricing that’s basically the same as yours, but came with free sales and installation training sessions, a full set of well-designed marketing materials or an incentive package that enabled builder or remodeler customers to earn a flat screen TV. Your dealers are likely to be facing their own struggles, and that makes them easy prey for the competitor offering more.

A severe decline in the size of the market is a challenge for every company, but manufacturers should remember when a pie gets smaller, it gets smaller by the same radius all around—so should your company. Training, marketing and sales support shouldn’t necessarily top your list of budgets to cut. It might cost your firm market share and make it tough to recover even when the market rebounds.

John Cashmore is president of Market Resource Associates, a supplier of market research services to the window, door and building products industries. Questions and comments from readers are welcome at john.cashmore@mraonline.com.