How One Distributor is Bucking the Trends and Finding SuccessJanuary 9th, 2012 by DWM Magazine
Let’s face it—there are only a very few areas in North America enjoying growth when it comes to new housing. However, in talking to members of the building materials industry recently, one of those exceptions is a state growing due to its potential energy sources–North Dakota. Andy Nelson, sales manager for Lavelle Co., a family-owned building materials distributor located in Fargo, talked to DWM/Shelter about growth opportunities in the state. Though it’s not easy, Nelson has implemented some unorthodox approaches that have paid off.
DWM: Tell us more about the opportunities in North Dakota and other areas.
Nelson: We have enjoyed a strong/stable economy overall in our North Dakota service area and continue to see growth opportunities in the other states we cover: South Dakota, Minnesota and a portion of Iowa. North Dakota is strong due to the energy capabilities coming out of the state . We see growth due to the need for housing in the old field areas and strong agricultural areas, etc.
We have had to go and find opportunities in the other states. Some of that has required us to go outside of our comfort zone. We found the only way to break into some of those other states is to have someone active in [those] areas including Iowa. We tried to cover that area with a rep out of Fargo, but learned we are better served hiring a rep living in that market. For example, we needed someone local that would be able to participate in homebuilder events, builder events and many others.
The Minnesota market area is our toughest economy, particularly Northern and Central. But another thing we did that helped us service our customers was realigning the territories. The owners were a little cautious when I suggested this, as I also added another sales rep because I saw us losing some business and market share. You should have seen some of the looks I got: You have an area that is down 25 percent and you want to add another sales rep. But it worked great and it has caused us to rebound to gain back market share lost in the downturn and highly competitive area.
DWM/Shelter: I know you are adding another door line to your offerings. What prompted this?
Nelson: We are in the process of adding Therma-Tru entry door systems to our offerings in mid-December.
We will continue to supply quality Perma-Door’s (Taylor) entry doors to round out our entire entry door offering to our market. We realized we were losing market share because we just didn’t have the right product offering in fiberglass entry doors. Our goal is to grow across the board in all our offerings; the addition of this new brand rounds out our offerings and we also know it will help us gain new customers.
DWM/Shelter: How will this change the company from a sales and growth standpoint?
Nelson: The response has been extremely favorable, as customers tell us it rounds out our offerings. They have been loyal, though, to our company, not the specific brand. They sometimes had to find other sources and now they don’t have to do that.
For two and a half days after we announced the new addition I fielded calls from customers and one of the things I heard was, ‘This is one of the best things you have ever done.’ That affirms that we made a good decision.
DWM/Shelter: You are implementing new things in your plant as well. Tell me about how much of a capital expense that required and how you expect this new addition to impact sales.
Nelson: We have added UV flat line pre-finish equipment so we can offer improved finishing abilities to the millwork products we provide to our retail customers .
Since we were founded in 1939 we have always been a very financially sound company, and that has helped us during this downturn. When the downturn came we looked at where we wanted to make key investments to keep our sales and volume going up. The high quality automated finishing equipment is one of those key areas.
A lot of energy is involved when a customer has to find a third party pre-finisher. When we do it for them it just makes the process so much smoother, and we offer an improved quality finish. The new equipment also speeds the process up significantly. It’s like the magic box—the door goes in one end and comes out the other. You don’t have to wait several hours for the product to be dry, when it comes out it is ready to be packaged and shipped to our customers.
DWM/Shelter: What is the one thing that will most contribute to your future success?
Nelson: We still feel strongly that relationship sales continue to be a strong factor. Most territories we serve are relatively small from a population standpoint but we need to make sure our accounts are being taken care of so our customers have no reason to look to a competitor for products and services. In the end we have happier customers and happier salespeople. Our reps can make many same day trips and then come back and spend time with their families most nights. We are not trying to push everyone to their limit. We are trying to grow market share with existing customers then add new ones as well, we want to be sure we are taking great care of existing customers before we add new ones.