Lack of materials got you and your business down? This may help.
Although lumber prices have dropped below $700 for the first time since mid-January, it’s clear building supply prices overall aren’t coming down to pre-pandemic levels any time soon.
Unfortunately, this presents unique challenges for builders and suppliers:
- Clients typically view suppliers as purveyors of commodities. Too often there’s very little loyalty outside of “my provider is the cheapest.” This forces suppliers into the familiar trap of racing to the bottom to retain business and stay afloat while margins are slowly (or rapidly) eclipsed.
- Prospects are likely to put projects with builders on hold or opt for scaled-down scopes. They’re counting on the market to correct itself and prices to come down. This creates obvious revenue issues, as expected billing cycles are disrupted, eating into revenue and even causing potential cash flow issues.
What’s a company to do? If everyone is grappling with the same issues, SOMEONE is succeeding in the space. There are businesses out there thriving—and they’re doing a few things you might not be doing. What we’re observing in successful building industry organizations at this time is summed up in the following three items:
Do you have a connection with key decision-makers at major clients? Do you check in regularly to offer help or just see how things are going? Are you a human being and a name to them? Or are you simply the representative for another organization who fires over a bill. If you haven’t invested in good relationships with PEOPLE who work for client organizations, you’re behind the eight ball—and now is the time to get started.
There’s more to a transactional relationship than what’s written on the invoice. Do you help your clients solve problems when they crop up? Has your organization been positioned as a group of subject matter experts who know what to do when no one else does? This type of relationship “bonus” frequently tips the scales between bids and cements relationships so they are secure even when times are tough and the next guy might be a little bit cheaper.
Talk about values.
Although Wall Street might be all about value in the coldest sense (money, the bottom line, nothing else), most folks in the industry are not of a size where that’s all that matters. Clients are made up of human beings, and human beings like to connect with people who share values. You might have a company mission or culture page on your website, but when is the last time you spoke with your clients’ top brass about what’s important to them—how they like to do business? Do you always own your mistakes (even though it might not be contractually obligated to do so)? Do you invest in training and education so that employees offer the highest level of service and ability? Talk about it and see if it resonates! (It does.)