Why? Because nearly 80% of their leads come from customer referrals and strong reviews from previous customers.
Insight: Customer referrals were ranked 4x more powerful and valuable than email or direct marketing campaigns. They were also ranked nearly 7x more likely to result in sales and new business than leads derived via the Internet.
Contractors build their reputation one job and one customer experience at a time. Successful contractors view each job as both an immediate opportunity to make money as well as an ongoing effort to create a sustainable business model.
So why are we educating you on contractor business models? Because companies (manufacturers, dealers, distributors) who are trying to sell and engage with these contractors need to understand it’s not all about just providing a me-too quality product on time; most suppliers can do that. It’s instead about understanding how your customer (in this case the contractor) defines their own business success. Once you understand what’s important to a contractor’s business, you can focus on providing the appropriate - and hopefully unique - support to enable their success.
so, let’s talk a little more deeply about the contractor…
The most successful contractors get it; they understand they are not just doing one remodeling project for a certain price. The best ones realize they are creating amazing spaces for their homeowner customers to live, play and entertain better. Spaces that create a great experience for the homeowner to enjoy their home in a more special way; a new kitchen for more family time, more outdoor living for entertaining with friends or a finished basement for kids to play and have sleepovers. When these homeowners brag about their new spaces, these are powerful referrals, and referrals drive profitability.
Insight: The stronger the referral, the less a homeowner prospect tends to haggle on price. Therefore, referrals drive more upgrades and profitable engagements overall.
This premise also holds true for the contractor. When a contractor connects with a brand of product that truly meets their unique needs, they won’t price shop for other similar products. They know this brand will help them deliver a better customer experience and, ultimately, a better referral rate. A contractor is loyal to a brand that helps their business grow.
start with the basics: communication and quality
The definition (and expectation) of these “basics” are evolving rapidly. The biggest reason for this momentum is that B2B has blended with B2C. In the end, we are all consumers with dramatically advanced expectations that are influenced by our everyday engagement with the likes of Amazon, Netflix and Uber.
Communication is not a canned, one-size-fits-all barrage of emails to a contractor list. Contractors want to learn and grow and be educated, but NOT just on how to install your product. They want to learn how to use social media more effectively, drive a better customer experience in their region, and understand what is trending regionally and nationally.
You MUST be agile. The contractor doesn’t care if you are a $3 billion corporation or how many employees you have. Amazon, Netflix and Uber are all bigger than you and they can be highly agile. Contractors expect and need you to be responsive like they have to be with their customers. Waiting 24 hours, let alone over a week, for a price from you is unacceptable; they will lose their sale. And guess what: you as a supplier may feel good about a 96% on-time delivery or 98.7% fill rate, but the way you measure these is different than how a contractor experiences them in their real world.
While you may view your fill rate as including “only one small piece that was damaged or was neglected to be put on the delivery,” the contractor has to go back to the job and doesn’t get paid until the whole thing is 100% complete. You must realize that what is only “one little missing part” in your mind is a HUGE deal to the contractor because it causes additional labor and cash flow issues. Don’t get me started on suppliers that put that “one little part” back into the standard delivery lead time so the contractor has to wait weeks for the part to come in. It was your fault, so overnight it, or, better yet, have your sales rep drive it to their job site the next day. Now THAT is an experience that will get them talking and drive loyalty.
Contractors do care about quality products they can have confidence in day in and day out. However, quality has been redefined as products that not only perform on every project but also take into account the contractor’s everyday pain points. Take, for example, a decking project. The typical deck is 300 square feet and takes 2.25 days and a crew of 2-3 laborers to construct. It starts with design. Homeowners who are spending money for entertainment want a space that is unique and creates a wow factor for those they entertain. So, if you are a decking manufacturer, make sure you provide digital contractor tools for use in the selling and design process to help with the design and visualization phase.
Insight: More dynamic visualization tools drive 2x more upgrades in the selling process.
Quality also means versatility. For example, one contractor we spoke to described being able to provide a step-up composite deck product for a small increase over pressure-treated, enabling more profit per job for the contractor. This decking material (MoistureShield® in this case) provided beauty and maintenance-free composite benefits for homeowners as well as the workability of wood (cutting, routing, etc.) for the contractor. This product could also be installed near the ground (Ground Contact-approved), preventing contractors from having to use three different types of lumber and decking to meet all requirements.
labor shortage
A contractor’s number one concern for their business going forward is quality and availability of labor. We hear it all around our industry; contractors are turning down jobs because of a lack of laborers to work on their crews. How can you help? By understanding where contractors use your products on their jobs and finding ways to driving productivity for them. For decking contractors, it may mean reducing time on the job by using fasteners that don’t strip during install or that don’t have to be pre-drilled into the decking material to reduce splitting. A decking contractor we spoke with recently told us they saved three hours on an average install just by using the right fasteners (in this case SPAX® engineered fasteners).
Imagine being able to tell a contractor you can reduce their average job time by nearly 15% (taking three hours out of a 2.5-day job), help them complete more projects, reduce their crew need, allow them to provide better customer experience and ultimately achieve greater profits.
build contractor value (not a contractor program)
There is a sea of sameness in contractor programs across the country, in every building product category. Points, trips and gift cards don’t make contractors loyal (most of these programs are actually a pain in the butt for these contractors to track on their own). Contractors are business people. What makes contractors loyal is helping their business to be more successful. Don’t build a contractor program, build value into their business.
When you engage with contractors on their terms and understand their business success factors, you will offer value beyond just quality product delivered on time. You will create a better customer experience for them and enjoy greater loyalty and, ultimately, profitability for your business.
If you don’t know what kind of customer experience you are currently creating for your dealers or contractors, then it’s probably not a valuable one for them. If you’re interested, see our Customer Experience Workshop for more information on how to build a plan to drive a stronger customer experience for your customers.
