Tom Benedict joins us to share how builder material manufacturers can better approach builders to pitch new products.
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In this episode, Zach and Beth talk to Tom Benedict, the Vice President of Purchasing at Wayne Homes in Akron, Ohio.
Tom offers insights on how what builders are looking for from manufacturers throughout the purchasing process, from pitching a product to supporting the builder after installation.
Meet Tom Benedict
As the Vice President of Purchasing at Wayne Homes, Tom oversees manufacturer relationships in order to get the best service, best product and best pricing possible. The regional company builds around 500 custom homes a year throughout Ohio, Pennsylvania, West Virginia and Michigan.
Rather than working in subdivisions, Wayne Homes focuses on customers who already own the land and have taken care of hardscaping milestones such as driveways and sewer connections. They offer 45 plans, but each one is fully customizable and typically requires three rounds of revisions with the company’s CAD department.
Tom has been with Wayne Homes for decades. The company has seen a few transition periods and at one point was bought by Sentex and operated in an expanded market. After the downturn, key stakeholders bought Wayne Homes and turned it back into a private, regional operation. As a result, Tom has keen insights on how purchasing works for both smaller and larger builders.
How to Navigate the Builder’s Product Selection Process
When looking for a new product, builders usually perform an in-depth review process. The first thing they look at is price, in order to narrow down their options. It’s extremely important for manufacturers to give builders accurate pricing information so that the builder can remain price competitive. Even if your product is higher quality, builders can’t afford to drive up their prices.
From there, the builder team looks at quality, installation and distribution. According to Tom, it’s frustrating to sit with a manufacturer and learn about the quality first, then get to pricing and realize it’s not even close to what he’s looking for. If a builder can’t keep prices down, they won’t be able to sell houses.
Wayne Homes works on scattered sites rather than developing a single subdivision, so field managers aren’t onsite at all times. This can make delivery difficult. Manufacturers need to offer excellent service, ensuring the delivery process and installation instructions are clear, as there is sometimes no one there to answer the tradesmen's questions.
Getting in Touch With a Purchasing Director
Purchasing directors at building companies are approached by new manufacturers all the time. These directors purposely make themselves unavailable to make it more difficult to get a meeting with them. Instead, manufacturers should try to win over someone close to the director. He’s more likely to meet with a new building material manufacturer if there’s already an existing relationship with someone he knows, such as a partnering lumberyard or another colleague in the business.
When they do take on a cold call meeting, the biggest red flag is when a product isn’t priced competitively, particularly when there’s no extra value provided to the homeowner. If the customer won’t notice any quality changes and they aren’t having any issues currently, there’s no sense in the builder adding a more expensive product to their portfolio.
As you go into a meeting with a builder, think about what’s important to both the purchasing manager and the company. Some purchasers, for example, might be bonused on the number of rebates received. Other companies might place greater importance on driving profits. Understanding these nuances can help you find the best way to structure pricing in a way that best suits each specific builder.
Mistakes to Avoid as a Manufacturer
One of the biggest mistakes you can make is when you don’t research the company before a meeting. Builders often find that manufacturers incorrectly assume that all builders work the same way, which couldn't be further from the truth.
At the very least, you should review the builder’s website before going on a sales call. This gives you an idea of what kind of homes they’re building and where. From there, you can figure out how your product will benefit the builder. If you have to ask the builder where and what they are building, you’ve most likely already lost the deal.
During the meeting, you should also be able to at least quote a price range to the builder, even if it’s not a specific number. Otherwise, it’s hard for the builder to know whether or not they can move forward.
The distribution process is also very important, as well as how the companies relate to each other. Builders want to know that they’ll receive robust customer support when there's an issue during or after installation because they need to keep their customer satisfaction high. After all, much of their future business depends on referrals from current homeowners.
Tom says personal relationships also matter, and not just with a national builder manager that he has the initial meeting with. Builders want to know who they’re going to deal with on a daily or monthly basis. If it’s a regional manager who will service the account, for example, that person should be included in the meeting as well.
When meeting with a builder, also give accurate information on your fill rates. Accurate fill rates are crucial because even a variation of a few percentage points can be the difference between making money and losing money on a job. Be honest and forthright with builders not just about your product, but how your company manages and fulfills orders as well.
What Builders Look for on Manufacturers’ Website
The manufacturer’s website is the first place builders goes when researching a new product, especially in advance of a sales meeting with a rep. For aesthetic products, they want to see the selection available, such as color. If it’s a structural product, they want to find out what kind of installation support is offered.
Builders usually have difficulty in finding information on where manufacturers are located. Heavy materials, such as shingles, can be expensive to ship, especially when building on scattered sites and not a subdivision. If builders can find out where the manufacturing site is in the country, it gives them an idea of whether or not the relationship would be efficient from a shipping perspective
Maintaining Relationships Amidst Employee Turnover
It’s no secret there’s a lot of turnover in the industry. Since it’s a relationship business, it’s often easier to follow a sales rep to his new company rather than stay with the original manufacturer. The issue can be compounded by poor handling of the transition by the manufacturer.
Here’s an example.
Three years ago, a manager at manufacturer left his position for a job at a new company. It took three years for the original manufacturer to hire a replacement, and during this time, they offered no support at the national level.
As a building material manufacturer, you can create systems to notify existing companies of staffing changes. If you wait until your previous employee goes to a new job and lets your customers know for you, you’re at risk of losing that business to their new employer. The manufacturer should know the builders and purchasing people so it’s easier to handle when a staffing transition happens. Give the builder resources on how to navigate the change; otherwise, you could end up hurting existing relationships.
Where the Construction Industry Is Headed
One of the biggest concerns for the next three to five years is the issue of labor. Builders need to find products that are installed more easily and more quickly, as there isn’t enough labor to keep up with demand.
Materials need to take away the skill level in the field in order to get more people in the industry, faster. As national production rates continue to increase, it’s vital that all players in the industry work together to bolster the construction labor force.
Want to get in touch with Tom? You can go to the company’s website and find an application to become a trade partner with Wayne Homes. His response rate is 100% for this approach.
Have questions or thoughts on this week’s podcast? We’d love to hear from you! Email us at [email protected].