Tom Swartz: Define what partnering with suppliers means to your company.
Laurence Carolan: Partnering with my suppliers, whether it be my lumber yards or my window supplier, means having dedicated sales people who I can contact directly that will provide me with pricing information and service. It is a relationship that is strongly based on a personal relationship that I have with the various salespeople.
Jeff Grundahl: I think a lot of it is based on what your business model is and what your core team brings to the table. If you’re a smaller shop and you don’t have a lot of resources, I think that answer might be different; however, for us, we’re a full-resource company. Partnering with suppliers for us really comes down to making sure that they’re customer focused, that we get their cooperation with our designers, our team, and my product managers, and that they’re there to support us. Just like Laurence said, it’s partly based on our relationship with that salesperson, but it’s also about products and training and things like that.
Swartz: Do you have a partnering relationship with more than one supplier?
Grundahl: When things were crazy in the early and mid-2000s, partnering with more than one supplier was maybe less than common just because everybody was so busy. Over the last two years that partnering has taken a whole new twist, at least in our company, because we look for those folks to provide us with additional things like training and CEUs. We didn’t really ask for those types of things before, so now we have more than one partner. That’s partly based on what our customers and the public expect from us, and maybe it’s based on some of the strengths that we’ve found in those companies that have weathered the storm.
Carolan: For me, it depends on the products. For example, I have a window supplier, and I’ve had a 10-year relationship with my salesman at that company. That is an extremely strong relationship, and I don’t tend to move away from that. When it comes to lumber, roofing, kitchen cabinets, and other supplies, I tend to be a little more particular about the companies. I have a number of companies that are NARI members that I tend to maintain a loyalty to. There are a few other suppliers who my loyalty remains to them regardless of price because their business model of service, service, and more service has not changed in this time, and their quality has not changed. We’re always looking for quality and service, but sometimes in certain aspects pricing is important. In dealing with the supplier, I would say 90 percent of the time, for me, it has to do with the service as opposed to pricing.
Laurence Carolan, GCP, CR Owner, House of Laurence, Merrick, N.Y.
House of Laurence was founded in 1991 as a general remodeling and contracting firm. The firm employs seven people. In 2012 the firm’s volume was $1 million, and they are projecting $1.25 million-plus in 2013.
Jeff Grundahl, CR President, JG Development, Blue Mounds, Wis.
JG Development was founded in 1990 as a residential design firm that specializes in remodeling and new-home construction. The firm employs 14 people. In 2012 the firm’s volume was $3.5 million, and they are projecting $5.3 million in 2013.
Swartz: How does partnering with suppliers work in terms of leads, estimating, sales, and markup?
Carolan: I have received one lead from my supplier, just at the end of last year. In general, it is purely a buy-and-sell relationship that I have with my suppliers. It’s not something that I have needed, but I know that they have suggested to us that they can come out to help access my client’s needs. The service is there but I tend to maintain a personal relationship with most of my clients. Although when I was looking at this and thinking about leads, I did last night ask one of my suppliers about leads. So it’s something that I’m following up on.
Grundahl: Leads are a tricky thing because, again, it’s somewhat dependent on your model. If you’re a service contractor, I think leads are fairly easy to get from suppliers and so forth because they may have someone who needs some service work. But if the focus of your model is more full-service remodeling, I think that’s a tough thing to ask for specifically from a supplier; however, here at JG we have a strategic partnership program with a lot of these vendors and suppliers and, more importantly, our subcontractors. We track what leads we get from those folks, and we strongly promote leads because then they are our preferred vendors and our preferred suppliers. So they can limit their own competition a little bit by participating in the program we’ve developed. It’s tough to get on a bigger scale, but it is absolutely a worthwhile endeavor. It does drive leads and lead generation from some of your sources you might not historically think are there.
Swartz: Do you get priority delivery and in-store service from your partners?
Grundahl: I think we do get priority. I think we earn that priority with our mutual respect and our business that we give these folks. As Laurence said, there’s a reason we’re with a lot of these people. It is about relationships and it is about service because remodeling is all service, anyway. When we go to a vendor or a partner and look to develop a relationship, I tell them who my team is and what they’re going to do; and when we follow that up with the performance they’re expecting, then we do get priority. If we call and ask for something, typically we get it, and that’s what we sell to our customers, quite honestly. If you’re just somebody on the street and you want to call up a lumber supplier and expect something delivered to your project, good luck. But if you’re working through me and I call them, it’ll be there and I guarantee it’ll be there.
Carolan: Not on in-store because most of the ordering for my crew at our local lumber yards is done by me, and we have materials delivered. The lesser materials are something that we do at Home Depot and Lowe’s. We are located close to two stores that in the morning are a little bit quieter and, therefore, we’re able to get in and get out. The business model is no matter what size you are, if you pay your suppliers, your subcontractors, and your workers on time and fairly, you’re going to get service. That’s something I think that is noticed by the suppliers. They know the people. I don’t call up every morning and ask for first-thing delivery. If it gets there tomorrow afternoon, that’s fine. But when I need it on time, first-thing delivery, that is something they will do everything that they can do to get done. As Jeff said, it’s based on something that I have earned and that the company has earned by being a particular way with your partners in business.
Swartz: What are the advantages of a partnering relationship? Are there any disadvantages?
Grundahl: I think the biggest advantage of a partnering relationship, specifically for companies that don’t have the “horsepower” to do all of the facets of business, is you can lend yourself some credibility and some sales help with those partners if they’ve got a qualified team of salespeople. That can lend you some credibility when you’re talking to your customers, and you can actually send your customers there. That’s a big piece of it. Knowing that they’re going to be well taken care of and followed up on while they’re there is huge. And then warranty. We get a new product every 10 minutes it seems like. We have to keep on top of that and it’s a really big advantage if you’ve got a true partner that is going to bring those things to you and say, “Have you seen this product? Do you understand that it’s out there? Can any of your customers use it?” Thirdly, I think in today’s world one of the advantages of having some of these partners is the fact that they offer education and training for those of us that are required to be licensed in certain states. As far as disadvantages go, it’s a little tough to forge new partnerships because people look at existing ones as hard barriers to break. So it somewhat limits your view of the horizon if you’re considered a partner with companies.
Carolan: I would totally agree with Jeff in saying the credibility that a company provides when you send your customers there to look for supplies and products when they’re helped so much, and the salesperson talks positively about you and your company. When you walk into a large showroom or a large supplier, and people greet you and know you by first name, there’s a credibility created there. In partnering with somebody you also know that you’re going to get the product that you’re sold, you’re going to get it on time, and if there are delays you’re going to get that information in a timely fashion. You can manage your clients, and your clients can know and expect what you’re getting from somebody is what they’re supposed to get. You don’t always get that if you don’t have a relationship. When there are problems they’re there to take care of it. A disadvantage I’ve recently experienced is that I have a relationship with two supply houses. One was getting the job and there was just an issue with pricing with the other, and it was rather embarrassing for me to have to say to one of them, “I’m sorry.” It shouldn’t be, but again I’m friendly with both of these people; and I’ve discovered that sometimes you’re going to have to go here, and sometimes you’re going to have to go there. But that’s a difficult thing when you have a personal relationship with people.
Swartz: How do you develop a partnering relationship? Do professional trade groups play a part?
Carolan: Prior to being a member of NARI, I really didn’t have much of a relationship with suppliers, apart from my window supplier. I found that, whether it’s NARI or NKBA, these are great organizations to allow you, on a friendly basis, to meet many of the people who can be partners with you—whether it’s on committees, at dinners, or in meetings. I think it’s rather difficult to walk in the door of a large lumber yard and say, “Listen, I want to have a relationship with you.” Maybe you can, but who do you speak to? Are you speaking to the right person? I think when you’re involved in a mutual relationship in an organization, you’re going to have people approach you, and people are going to help get you to the right person. You also have a relationship with fellow professionals. At a meeting you might have a conversation with a contractor, and you’ll get into a discussion of similar projects. We like to talk to each other, and we like to help each other.
Grundahl: I truly agree with what Lawrence is saying. When you get involved in NARI or many other organizations, you’re guaranteed that you’re dealing with some of the best of the best. You not only get opportunities to meet people, but you really get opportunities to see them at a personal level. If you walk into a showroom or a vendor supply house, and you ask to sit and talk with that person, you’re going to get their business. But if you see them at a NARI function or event or you sit on a committee or you sit on a board, you truly get to see these people. You can see whether they give you just a bunch of lip service or if they’re really somebody who’s going to stand up for what they believe in. To me that’s the value in those associations. You get out what you put in.
Swartz: What would it take for you to switch suppliers?
Grundahl: If that supplier decides to drop the ball or drop their level of service, that’s one of the first things it takes because a lot of these are built on relationships and trust. You’ve got to lay out what they get and what you get. If you’re going to switch suppliers, I think they’ve got to be able to come to the table and say, “Here’s what you get, and here’s what I expect in return.” People who are willing to step up and are going to put in the effort to make sure they get a business partnership or relationship out of it, to me that’s what really breaks that line, so to speak.
Carolan: The movement away is if the supplier messes up and stops providing you with the service. Not on a one-off basis because it happens to the best of us, but if it becomes a consistent habit that they’re not supplying you and they’re not servicing you. My window company has not done that in 10 years; they’ve gotten better and better at service. My tile supplier is the same thing—service, service, service. I moved away recently from my longtime cabinet supplier because of a lack of service. Pricing is never going to make me move. It’s not about price, it’s about the service.
Swartz: Do you get any kind of special discounts on products, showroom displays, samples, or anything of that nature from your partnering suppliers?
Carolan: I do get free samples of windows, cabinetry, and a variety of things that I need. They are available to me—to be delivered to me, to be delivered to my customers, to be brought out. I do believe that is due to a relationship I have with them. If I really need something priced right for samples, they will work with me on those things.
Grundahl: We do, and we actually push very hard for that. We’ve got a fairly significant gallery here that’s an interactive space that walks people through our process. Our vendors have been very good to us about giving us samples and discounts for our showroom. If they don’t want to display their products here, then I sure as heck don’t want to sell them. I think that the “command it versus demand it” applies here as well. You command discounts from your suppliers and vendors, and you do that by earning their trust and their respect and paying them on time. If we don’t get discounts as general contractors and remodelers, then we’re probably not going to survive for very long.
Swartz: What advice would you give to a remodeler about partnering with suppliers?
Grundahl: Join NARI. If you get in and get some certifications and really up your own game, you’re going to get better. If you’re going to go specifically to suppliers and vendors and hope that they’re going to help you get better, you’ve really got to lay out what you’re going to do for that supplier or vendor as well. You can’t just go in there asking for things. If you lay everything out upfront, you don’t have any misconceptions about what that relationship is going to be, and it really is a mutual respect, a mutual benefit. If it isn’t that, then you don’t have a partnership.
Carolan: The first thing you have to remove from your mindset is price. Your goal should be to become more professional and become more involved in NARI certifications. These are things that you can use to sell. When your suppliers see that you are professional, it’s going to be much simpler for you to partner with them. It’s as much to their benefit to say they’re partnered with your company. Look for what you can give not what you get, because you will get out of it what you put in. PR