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8/3/2019 The State of LBM Today- bis Track User Conference - October 2011
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Craig Webb, Editor, ProSales2011 bisTrack User ConferenceOct. 19, 2011Las Vegas, NV
The State of LBM Today
Have Your Plans Gone Awry?
Using Outdated Equipment? Worried About Your Source of Supplies?
Feeling, er, Short-Handed? Concerned About Your Employees?
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Hanley Wood October 24, 2011 PROSALES presentatio
What About Your Key Players?
Relax! WereHere To Help You
Find New WaysTo Survive
and Thrive
How Many Dealers See Technology
This group isdifferent.
Youre aheadof the crowd,
and inexcellent
company.For instance
Award Winner: Millard Lumber Honorable Mention: Concord Lumber
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Hanley Wood October 24, 2011 PROSALES presentatio
Joost Douwes, Chinook Lumber Riki Newkold, HPM Bldg Supply
2011 Excellence Awards Winner
Raymond Building Supply
2011 Excellence Awards Winner
Sanford and Hawley
35 Years of Reporting
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48 states visited since joining ProSales in Sept. 06
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Hanley Wood October 24, 2011 PROSALES presentatio
Todays Agenda
Whats New With Dealers
Favorite New Ideas
Dealers Seal the Deal
The Big Picture
1. Painful Medicine for the Economy
Cause and Effect Red States, Blue States
Source:MoodysAnalyticsviaHWMI
Current Jobless Rates by County
Red States, Blue States Renters Still Say They Want To Buy
Source: Hanley Wood Housing 360 Survey of 3,000 Americans, September 2011
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Hanley Wood October 24, 2011 PROSALES presentatio
So Why Arent They in the Market?
Source: Hanley Wood Housing 360 Survey of 3,000 Americans, September 2011
Lots of Pain, Little Gain
U.S. Housing Starts
571,000
417,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2006 2007 2008 2009 2010 2011
2,300
2,100
1,900
1,700
1,500
1,300
1,100
900
700
500
300
(Thousands of units)
MultiSingle-FamilySource: US Census Bureau
Annual Starts:2005: 2,068,000
2006: 1,801,0002007: 1,355,000
2008: 905,5002009: 554,000
2010: 586 ,900
Three More Years of Burnoff No Million-Starts Year til 2015
Source: Hanley Wood Market Intelligence, March vs. September 2011
0
500
1,000
1,500
2,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
S pr in g N ow
Housing Starts, 2005-2010 actualand 2011-2015 forecast, (000s)
2,068
1,801
1,355
905
554 587587
671
803961
1,080
Top 10 Builders Market Share
2010 Share:24.75%
Source:Buildermagazine
Top 100 Builders Market Share
Source: Builder magazine
34.5%32.6% 33.3%
34.4%35.7%
36.7%
43.6%41.2%
38.7%36.7%
43.4%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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Hanley Wood October 24, 2011 PROSALES presentatio
Dont Expect Help From These Guys Mr. Homebuilder Is Feeling Besieged
Fannie/Freddie lending limits have shrunk Mortgage interest deduction is under attack Government tools to jump-start economy lose favor 20% mortgage down payment could become the rule Banks are both kingpins and pawns in the recovery
Whats a Banker To Do? As C&D Lending Soured
0%
5%
10%
15%
20%
25%
30%
2 Q0 7 3 Q0 7 4 Q0 7 1 Q0 8 2 Q0 8 3 Q0 8 4 Q0 8 1 Q0 9 2 Q0 9 3 Q0 9 4 Q0 9 1 Q1 0 2 Q1 0 3 Q1 0 4 Q1 0 1 Q1 1 2 Q1 1
Banks C&D Loan Performance, 2Q07 to 2Q11
Source: FDIC
Charged Off
90+ Days Past Due
30-89 Days Past Due
They More Than Halved C&D Lending
$0
$100
$200
$300
$400
$500
$600
$700
2 Q0 7 3 Q0 7 4 Q0 7 1 Q0 8 2 Q0 8 3 Q0 8 4 Q0 8 1 Q0 9 2 Q0 9 3 Q0 9 4 Q0 9 1 Q1 0 2 Q1 0 3 Q1 0 4 Q1 0 1 Q1 1 2 Q1 1
Source: FDIC
Bank C&D Loans Outstanding, $mlns, 2Q07 to 2Q11
And Theyre Still Hurting
Source: FDIC
Volume and percentage of past-due C&D loans, 6/30/11
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Hanley Wood October 24, 2011 PROSALES presentatio
What Needs To Change?
Source: Hanley Wood Housing 360 Survey of 3,000 Americans, September 2011
The of the Problem
2. Whats Happening With Dealers Flags Have Fallen in Every State
LBM Facility Closures, Jan. 2008-Present: Near 1,625
Source: ProSales research
Red and Blue Redux
Source:MoodysAnalytics
viaHWMI
Current Jobless Rates by County
RelativelyGood Here
1. Oil Patch (TX,OK, LA, ND)
2. Ag-Dependent
Areas3. Dealers Serving
Upscale Areas4. Dealers With
Solid Financials
Encore Flooring &Building Products,
Springdale, AR
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Hanley Wood October 24, 2011 PROSALES presentatio
New Flags Have Been Planted
LBM Facility Openings, Jan. 2008-Present: Over 330
Source: ProSalesresearch
RealisticThinking
Youre talking housingstarts going [in Las
Vegas] from 30,000 to5,000. We downsized
our facility here and wegot into a much cheaper
facility and weve justhunkered down and tried
to operate as efficientlyas we can. We dont
view this as going to endanytime soon, so we
have to survive in themarket as it is. Thats
how weve designed ourbusiness.--Ron Mason,
President,A.C. Houston Lumber
ShiftingFocus
Kimal Lumber,Nokomis, FL,
changed its nameto Kimal Lumber &
Hardware. Itadded more than2,200 new SKUs.
Cloud Cover
Advice You Can REALLY Use
"Never order barbeque in a place that also serves quiche.--Lewis Grizzard
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Hanley Wood October 24, 2011 PROSALES presentatio
Pursue Home Buyers, Not Builders Bringing Customers to Your Clients
TW Perrys All About the Home show, Montgomery County, MD
Pursue Architects, Too Step Up Your Prospecting
Ruth Kellick-Grubbs says: On average, it takes 14
attempts to makecontact. Successful salesreps today target 40+calls per week.
Keep a list of 10 to 15active prospects at alltimes.
Practice your voice-mailmessages and actualconversations.
Prospect Prior to Building Permits Sample OSR Profile
Average Target Diff
Sales by OSR: $ 276,045 $250,000 110%
GM$ by OSR: $ 75,160 $ 67,500 111%
Quote Value by OSR: $ 754,959 $750,000 101%
# Penetration Meetings: 20 15 136%
# Penetration Sales: 1 2 60%
# of Prospect Contacts: 36 42 87%
# of Conversions: 1 1 133%
Source: Ruth Kellick-Grubbs,
Effective Sales Strategies for Todays Market,
ProSales white paper, September 2011
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Hanley Wood October 24, 2011 PROSALES presentation
Analyze Your Sales Better Analyze Your Sales Better
Dixie Lumber, Easley, SC
Analyze Your Sales Better
Dixie Lumber, Easley, SC
Sell More To Current Customers
Dixie Lumber, Easley, SC
Ask the Customer Why You Won Discover Newer Ways of Talking
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Hanley Wood October 24, 2011 PROSALES presentation
Remodelers Want You Wired
What are the top three things that independent lumber and building material dealers (i.e.,NOT the big-box chains) could do to improve the sale of b uilding materials to remodelers?
Offer broader range of products 26%
Facilitate online ordering 25%
Before- and after-hours pickup 19%
Deliver in smaller quantities 16%
Shorten lead times 16%
Make sales reps more available 11%
Improve materials ordering process 9%
Source: ProSales/Farnsworth Group survey of remodelers, January 2011
Younger Remodelers Are Different
A Tablet To Take for All LBM Headaches Competitive Challenges
Lowes is rolling out a websiteupgrade this month that will
Store customers purchasingdetails
Provide a site to get warrantyinfo and installation guides
Help customers envision howa wall color or flooringproduct will look.
Remind them when its time
to get new filters and such.
E-Mail Newsletters
Don Abel Building Supply, Juneau, AK
Provide New Promo Opportunities
Don Abel Building Supply, Juneau, AK
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Hanley Wood October 24, 2011 PROSALES presentation
Twitter
Dunn Lumber, Seattle
Follow Dunn Lumber, Get This Reply
Add QR Codes To Your Card Dont Just Bid on Whats Presented
Turn in one bid with whatthe builder wants, and
then a second bidshowing how, for
instance, selling energy-efficient products could
save the homeownermoney. Or how delivering
the stuff in a few bigshipments rather than
several small ones cansave the builder $$$.
Ruth Kellick-Grubbs,Jane Fesler
Doubling Up: Its Economic
Source:CensusBureau
But Also an Ethnic/Social Trend
49 million Americansabout one in sixlived in 2008in a HH with at least two adult generations. In 1980, 28million did. The number of multigenerational HHsgrew by 500K in 2010 alone. Pew Research Center
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Hanley Wood October 24, 2011 PROSALES presentation
Whos Likely To Want McMansions
Household Native Non.-U.S.Type Citizen Citizen
One person 28.0% 15.1%Two people 35.0% 20.8%Three people 15.4% 20.3%Four people 12.9% 21.1%Five or more people 8.7% 22.7%
Renter Occupied 22.8% 59.7%
Source: U.S. Census Bureau, September 2011
Reach Out to Remodelers
Old Houses Need Repairs
Average Age of U.S. Housing Stock
2005 34 years (oldest in U.S. history)
2013 37 years (projected)Source: Harvard Joint Center for Housing Studies
Source: Freedonia, 2009
Age Breakdownof U.S. HousingStock Before 1960
33%Before 1960
33%
1960s
12%1960s
12%
1970s
20%1970s
20%1980s13%1980s13%
1990s
13%1990s
13%
2000s
8%2000s
8%
Better Prospects Than in Homebuilding
Hanley Wood Market Intelligence Remodeling Index
Rental Housing Rehabs Qualities That Remodelers Value
Source:
ProSales
Survey ofRemodelers,
Dec. 2010
Timely Delivery 8.98Having Products in Stock 8.87Knowledgeable Sales Reps 8.78Product Selection 8.58
Loyalty and/or Past Relationship 8.57Price 8.44Special-Order Capabilities 8.25Return Policy 8.19After-Sales Support 7.92Nationally Recognized Brand 7.35Credit Policy 6.82Can Communicate Electronically 6.68Learning Opportunities 6.47E-Commerce Capabilities 5.76
Vital
DifferenceMakers
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Hanley Wood October 24, 2011 PROSALES presentation
Help Them Be Better Businessmen
Fewer than 15% of allremodelers know the costof being in business.
90% will eventually faileven if profitable.
Every one of themreinvents the wheel.
RemodelingconsultantShawn McCadden
Help Them Be Better Businessmen
What They
Want Need
Tech know-how * Biz management
Product info * Leadership skills
Customer service * Financial mgt help
Design trends * Sales/mktg training
Employee ski lls * Biz p lanning/budgeting
Adver tising help * Industry awareness
Low pr ices
Source: Shawn McCadden
What Architects Are Hearing
2%
2%
26%
34%
41%
-9%
2%
17%
43%
54%
Hobby/Game Room
Au pair/in-law suites
Mud room
Home office
Outside living
2011 2010
% respondents reporting popularity of room increasing minus %reporting decreasing popularity 2Q11
Source: AIA Survey
Silver Streak
Source: Harvard Joint Center for Housing Studies
Universal Design Will Grow
Source: Washington Post, 9/23/11Kitchen Design, Takoma Park, MD
Market More Creatively
The Annual Running of the Dachshunds in Kearny, NE
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Hanley Wood October 24, 2011 PROSALES presentation
Sell Condiments With Your Deck
Voyageur Lumber, Ely, MN
Brush Up Your Shakespeare
Miamis Shell Lumber Hosted a Production of Romeo & Juliet
Smile! 4. Dealers Seal the Deal
What DealersReally Sell:Knowledge
Russell Do-it CenterAlexander City, AL
Four Recent Surveys
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Hanley Wood October 24, 2011 PROSALES presentation
Info Sources for Kitchen/Bath JobsQ: How useful are each of these sources to you?Scale of 1 to 5, where 1 is not influential at all and 5 is very influential.
3.83
3.74
3.65
3.44
3.35
3.33
3.08
2.99
2.97
2.92
dealers/distributors/retailers
web sites: manufacturers
magazines: trade
industry peers
web sites: trade magazines
subcontractors
web sites: industry associations
magazines: consumer
manufacturers sales reps
trade shows
Info Sources for Kitchen/Bath JobsQ: How useful are each of these sources to you?Scale of 1 to 5, where 1 is not influential at all and 5 is very influential.
dealers/distributors/retai
web sites: manufacturers
industry peers
magazines: trade
subcontractors
manufacturers sales reps
web sites: industry
web sites: trade
trade shows
magazines: consumer
3.87
3.73
3.41
3.40
3.31
3.24
3.20
3.18
3.02
2.97
4%
9%
12%
34%
42%
Trade Shows
Colleagues and Coworkers
Magazines and Catalogs
My LBM Suppliers
The Internet
Product Info Sources for Remodelers
Source: ProSales/Farnsworth Group survey of remodelers, January 2011
Not So Good With Architects Yet
Source: Survey for Hanley Wood, Summer 2011
Youre the GuysWho Seal the Deal
A spring 2009 ProSales surveyof dealers found: Nearly 63% get asked daily
about quality andperformance of specificproducts. Another 27% areasked at least weekly.
44% said that, at more thanthree-quarters of theirencounters with clients, theyrecommend particularbrands. Another 42% moresuggest products at half tothree-quarters of all theirmeetings.
Lyndhurst (OH) Lumber
Dealers Train as Well as Sell
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Hanley Wood October 24, 2011 PROSALES presentation
The Place To Go for Hard Answers
What is the primary source of supply for the tools andsupplies you will need to do RRP-related work?
Source: Remodeling magazine reader panel survey, September 2010
You Teach Building Science, Too
Face It: Some Builders Could Use Help Coming Attraction: Savvier Customers
Learn FromHistory
Its All About How You See Things
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Craig [email protected]
One Thomas Circle, NWWashington, DC 20005(202) 736-3307
Thank You!