Associated Building Supply Pares Down in Order to Grow
|The leadership at Associated Building Supply made business decisions proactively to position itself for future growth and come out ahead of the crowd crippled by the downturn.|
Whether they wanted it or not, the economic downturn has given many window and door dealers extra time to slow down, regroup and re-tool their business models. For some companies, it’s a means to survival, and for some it might be too little too late.
Associated Building Supply, however, likes to run ahead of the crowd.
When the building industry was booming in 2007, especially in the California market ABS serves, owner Chris Cole recognized that longer-term, sustainable growth would require an outside-the-box revamping of his business model. He was carrying multiple product lines, had varying personalities and sales approaches on his sales force and had to make decisions about the future infrastructure of his Oxnard, Calif.-based business. “I just decided it was time to either grow or maybe contract this business,” he recalls. “I was at that crossroads, that reflection point.”
With about 20 years under his belt in the building materials industry, Cole shut out the noise of the then-frenzied new construction market, which is what his company primarily served, to evaluate how he’d like his company to look down the road. “By nature, I’m a contrarian,” Cole admits. “Wherever the herd goes, I generally go the other direction.”
And that’s what he’s done to not only survive, but post impressive growth in the last two years. He saw the sharp economic contraction coming, he says, and he put into place plans to strike while the proverbial iron was hot. “The storm clouds on the horizon were evident,” he says. “Everybody else seemed like they were going to curl up and defend against the pending storm. So in that chaos, we got aggressive.”
The company has opened several locations in the last couple of years and continues to gain market share from its competitors throughout California. In the first half of 2010, ABS experienced more than 30 percent growth in revenue compared to the previous year and looks to add qualified talent to the team to drive additional growth in sales. “We grew through the contraction, which is the opposite of what conventional wisdom dictated within the industry,” Cole says.
Cole began his career in the building materials industry in 1988 as a window and door salesperson. He worked for a couple of companies serving professionals with nationally-known fenestration products, often landing among the top sales people each year. “In 1993, I ventured out on my own,” he says. “I started by myself, leveraging the relationships I had with some customers. Slowly, I started to build a sales force.”
Cole says that, based on his previous experience, he wanted to build his company on a foundation of fairness to the customer. Even today, his “fairness doctrine” is the key mantra for ABS. “I decided in the beginning that there would be a perception—a legitimate perception—that I’m in it for the long-term relationship with the builders,” he explains. “Fundamentally, I built my business on the idea that I’m going to be really, really fair.”
As builders in California rode the new construction wave, ABS grew right alongside its customers. In 2004, ABS had two stores—one in Anaheim and one in Ventura County—and Cole knew he and the business had reached a breaking point. It was time to either invest and grow or increasingly fall short of the expectations he had about how his company would serve local professionals. “I started to put together the infrastructure I would need to build this company,” he says. “From all my past history working for other companies, I knew what I did and didn’t want to do.”
For starters, Cole wanted to keep ABS focused on the sales aspect of the relationship, offering a sales force that offered to local professionals expertise in the area of windows and doors. To keep his salespeople as effective as possible in the quickly-moving field, he realized this would require a sizeable investment in technology and resources. “I knew I wanted to build a hunting organization and have the system in place to support it,” he says. “I put a lot of money into allowing all of the sales to take place in the field.”
Cole also aimed to keep the organizational chart at ABS as flat as possible—the goal was not to make a company full of managers, but build a company full of window and door experts to help builders and contractors. “I struggled to keep the organization as flat as possible,” he says. “I spent a lot of money on a cloud-based accounting and processing system. I wanted to keep it all about the sales.”
With the technology in place and the personality of the business starting to take shape, Cole looked to expand his team of sales consultants. But in 2005, the marketplace was booming and it was difficult finding the right people to come into his organization to serve his customers in the way he had hoped to further establish and solidify. “I knew we needed new blood in our business, but I had a lot of problems doing that,” he says. “The work ethic of the generation I was recruiting was atrocious. I had huge training classes of 10 people and I would only keep one or two.”
|Sales manager Scott Thurber shares Cole's vision to streamline the business, focusing on one product line and holding tight to the company's "fairness doctrine."|
As he continued to build an aggressive sales force, trained to actively seek out business opportunities, Cole kept looking for ways to blend his concept of a hunting organization with the fairness doctrine he wanted to offer his customers. With a talented sales manager, Scott Thurber, on board, Cole and his team streamlined the business. They decided to start trimming their product offerings, hoping that by focusing on fewer product lines, the sales force would be set up for additional success.
“Going for simplicity means that the sales force can stop being generalists and start being the thoracic surgeons of the industry,” Cole says. “We started paring down in 2007—chucking product books off the shelf.”
In time, ABS ended up sticking with Jeld-Wen, making the national manufacturer its primary line. “It was a slow process with our sales reps because they may have had their favorite line to sell and it’s like taking a pacifier away from a child. They were going to scream a little bit. But we really wanted to embrace a partnership with a manufacturer, and today, we’ve aligned ourselves with Jeld-Wen.”
Downsizing its product line in order to grow proved a successful strategy for ABS. The company is now among the largest Jeld-Wen providers in California. Today, the company has seven showrooms throughout the state, as well as its corporate offices. “Focusing our guys on just that one product, we’re becoming a big fish in a big pond.”
As Cole and his team whittled down the company’s manufacturer partnerships, they looked for a product that offered what they considered best in class—not only in the product line-up, but also in terms of sustainability, innovation and warranties. In doing this, the company’s sales force developed the expertise Cole had wanted among his employees. “We’re going to survive, flourish or die based on that one product,” he says. “So we have to believe it.”
Given that all of the product training was streamlined rather than spread thin over various product lines, Cole and Thurber were able to clear the decks to focus in on the “fairness doctrine” upon which the company was founded. “Our fairness doctrine is the most important thing around here,” Cole says. “If it’s fair to the customer, management will never question why you made a decision.”
Cole has kept his organizational structure streamlined as well, removing the “let me ask my supervisor syndrome” that can often undermine a relationship between a company and its customers. “There are no field managers here, no heavy administration or bureaucracy,” he says. “We’re running with 13 sales reps and four admin people—I consider myself one of the admin people.”
Cole and the entire ABS team takes the company’s fairness doctrine to heart. It’s not just a slogan on the company’s Web site—it’s one of the first aspects of the business the team will bring up as they’re establishing new relationships with customers. “People publish that they’re fair all the time but it doesn’t really mean anything inside the company,” Cole explains. “But when you lead with that—the fairness policy is the first thing to come out of your mouth—customers notice that and they learn to trust that you mean it.”
|Chris Cole's focus on fairness and offering expertise in one product line is resonating with professionals in a competitive market.|
The company’s customers have come to trust the dealer’s approach, just as Cole had hoped. “Our rep [from ABS] made suggestions for areas to value engineer the windows and doors to get the most for our dollar,” says Bob Bruce, a contractor who recently worked with ABS to complete a large custom home project on Stanford University’s campus. “We never felt as though we were being sold anything, but rather felt as though we had a true team player with a common goal, which was to deliver the best finished product within our budget.”
Jeremiah Tolbert, architect and principle of Tolbert Designs, also feels similarly about working with ABS. “I believe they seek to please their clients by offering [and] suggesting great products, and carry that through to the final installation of it,” he says. “ABS does their job with excellence from start to finish.”
ABS is still primarily focused on the new construction market, especially at the upper-end of the market, though it will take replacement jobs as well. As most of ABS’s professional customers do their own installations, the ABS team focuses on being product experts and serving in a consultative role on behalf of its builders and contractors. “When it’s time for windows and doors, our customers will say, ‘I’m going to hand you over to my window and door guy and he’s going to take good care of you,’” Cole says. “They hand that part of the process to us and we protect the builder. We know our customers’ business models and we do the best we can to mimic that.”
Though the market is down, Cole asserts—firmly—that there are still hot spots in the market and he expects his company to continue to grow. “A few months ago, I would have told you we were through it, but now we’re in a second dip,” he says. “I welcome it, I really do. The marketplace still has its hot spots, and we’re going to chase the hot spots. We’ll still make money because there are still opportunities out there.”
Cole believes his proactive approach to trimming down the company and focusing in on a single product line will help ABS continue to stand out in the marketplace. “Most companies feel they need to carry everything to serve the customer,” he says. “We have the opposite philosophy. Our customers want to buy from specialists, not generalists. We sell windows and doors and we specialize in one brand name. That gives us a high level of trust with our customers because they know we are not offering the spiff-of-the-day in our sales approach. We’d make the move [to this model] again in a heartbeat.”
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