Kodiak Building Partners' customers are "extremely bullish about 2024 and beyond," feel better about the supply chain, and frankly aren't disappointed by the relative lack of frenzy compared with the past two years, President and CEO Steve Swinney says.
Speaking Oct. 11 at a workshop for building product manufacturers, Swinney also said Kodiak expects to close three more deals by the end of January, adding to the eight it has closed over the past 22 months.
Other speakers at the Building Products Customer Workshop, hosted by The Farnsworth Group and Venveo, joined Swinney in worrying about how labor shortages have hamstrung the building industry. They also seconded the notion that producers and distributors need to get better at what they do, starting with more communication.
"During supply chain disruptions, I felt a lack of communication and transparency," Swinney said. "That’s what broke down one relation I had. I don’t expect you to be perfect. I expect you, as a key partner, to be consistently communicating with me as we work on this together."
What else matters? "Fifteen years ago, when I got into [LBM], it was about the cheapest price, Swinney said., "Now it’s about value. We have an opportunity to invent new ways and solve customers’ problems. … How do we make those processes super efficient, super reliable, super consistent? … We can do things that let them use not quite as much labor. That’s a way to solve their problem.”
Here are other highlights from the conference's first day:
Going from Good to REALLY Good
Venveo's Beth PopNikolov (at right in photo above) called on the manufacturers to build sales reps who are redefining what it means to be a really good rep. For instance, you need to go beyond knowing your products to knowing the customer's projects and the obstacles to building them. Really good reps go to bat for the project's designers when general contractors want to switch products, she said. And really good reps are so devoted to the client's interests that they'll refrain from pushing their own products when there's a better solution.
Social Media from Influencers Is a Soft Sell
Some attendees were intrigued by the Farnsworth-Venveo findings that architects and designers use social media for product research. One reason why, PopNikolov said, is because a lot of that social media is from influencers, and their messages reach the architects and designers after office hours.
"Influencers capture the attention of the 73% of architects on their couch at 9 p.m., drinking wine and scrolling their Instagram feed," Farnsworth and Venveo wrote, a bit cheekily, about their findings.
Load Your Website with Useful Stuff
Venveo's Deanna Murphy displayed Delta faucets' website as a role model for what a vendor can do to maximize its online services. The website includes information on where the product is available, links to reviews, the list price, technical specifications, installation sheets, and maps showing where to find installers and/or local dealers.
The door hardware supplier Reese goes further by offering "Competitive Equivalencies" where a customer can enter a competitor company's product name and find the equivalent Reese product.
Rose Revenue Outlooks, Glad for a Break
Results of a recent Farnsworth Group survey released at the workshop found 60% of home builders, 56% of residential general contractors/remodelers, and 84% of commercial GCs/remodelers expect their revenues to increase in 2024.
This positive attitude contrasts with attendees' worries about a potential recession. That might be a problem for manufacturers, but Swinney said most contractors Kodiak talks to have a different attitude.
"They’re not too disappointed that things slowed down. They’re happy for a break,” he said. Swinney also reported that contractors, confident "business is going to be there for a long time," plan to be more selective about bidding. They don't want to return to a time when they were working 80 to 90 hours a week, he said.
Change: A Threat and an Opportunity
Farnsworth Group's Grant Farnsworth said surveys in years past typically found 15% of contractors said they're willing to try a new product. That changed with the COVID era's product shortages. When told their preferred product was unavailable, 24% of builders and 27% of remodelers said they purchased a different brand or product--at times from a different supplier.
“Be super sensitive" to pros' newfound willingness to change, Farnsworth said. "This is something that we haven’t seen in previous generations.”