Midwest dealer charts new course

kick it up, or stick with the core business and get out?"We decided to do what we do best and do it even better, rather than fractionalize and lose our core focus," Dennis relates. Just in time, turns out. Moments later, the construction-busting recession hit. As happened everywhere, the picture became bleak.

"After what had been a manic euphoria, the last couple of years have been the most challenging in my memory," Dennis notes about the downturn-then continues on his mission to combat it fleNNls DoRN rs currrNc BACK on life's more fleeting l-fpleasures-like golf-in order to devote himself llOTo to his all-consuming passion. It's, ahem, his store.

So, how to cope with the freefall? Retrain your staff, reevaluate your product mix and margins, realign your store, expand your retail space, and reach out for a new niche of customers-factors Dennis thinks about 2417 anyway, even in his sleep. "If you do things the same old way, you'll keep getting the same old results," he knows.

"I love being a merchant!" sings the c.e.o. of Portage Lumber, Portage, Wi., which Dennis co-owns with his brother. "I love fussing with margins, looking at products. Whenever I go grocery shopping with my wife, she's looking at the produce while I'm looking at displays."

And, like the golfer he recently was, he's constantly working on improving his game. He's reexamined the company culture, re-aligned the store, and rethought his consumer base, which he recently shifted from almost exclusively pros to serving retail consumers as well.

Not a minute too soon. The brothers bought the yard from their father, an agreement enacted when Dennis was 35 and completed, he jubilates, on the eve of his fiftieth birthday (he's now 62). Their father, still chipper at 87, had been hired in 1953 to run the start-up yard as a 28-year-old lad with an eighth-grade education and two little boys to support. Nonetheless, he held out for part-ownership, and to seal the deal, plunked down $10900 he'd astutely managed to save up.

Soon after, in answer to popular demand, a construction division was launched. Faced with a choice not long ago-

But costly improvements weren't in the books, either, as he kept insisting to the folks at Do it Best, who offered counsel. Changes had to deliver a bang for the buck, and for not that many bucks indeed-a big ROI for a very modest investment of capital. "Things we could afford, on a smaller customer base. We're not Madison; we're not Chicago," he does a reality check on the town's demographics.

Dennis sized up his competitors. Never mind that his was the sole lumberyard in town, there were Menards and Home Depot 20 minutes distant. But that's not where he tumed his gaze. Competition, this marketing master understands, consists of every outlet siphoning shoppers' disposable income-groceries, restaurants, phone stores, what have you. "We didn't want to be the coolest lumberyard; we wanted to be the coolest strtre-the best shopping experience," he's most emphatic. "We had to fight for every dollar we got. For instance, we used to carry two types of gloves; now, it's 30. We looked where our employees and our family members shopped-for clothes, cars, electronics, and on the Internet."

And that propelled improving...well, everything: margins, sales and, most of all, the total customer experience.

To jumpstart improvements, Dennis asked around: What can we do better? Differently? Easier? "It scared the hell out of me, to be honest, but I realized there were two things necessary-to get more information to our customers, via a website, and to get more PK training to our employees, which was challenging for us."

An inspiration arrived, out of the blue-or rather, out of an email. Black & Decker alerted him to a clever new gyro wrench. Amazed, he walked around with his iPhone, showing its possibilities to his 28 employees-voil6: no need for a special conference room and time off from work for product training.

"Training consists of two parts," he instructs: "cultural and anecdotal. And we're working on it. For instance, like Walgreen's pushes candy bars at the register, we recently put in ice scrapers and trained the cashiers in suggestive sell-to ask customers if they cared to purchase one. The year before we started that, we sold nine. This year, in just one week, we sold 32-and that's without any snow so far! It's a little thing, but it adds to the bottom line.

"It's our job to train staff to do that," he emphasizes: "to train cashiers to be salespeople." He instructs them, in going beyond their basic job description, to spot customers who need help. As a carrot, he makes it part of their compensation. "To a base of $lOArour, they can earn 57o of the margin, which can add $3 an hour to their salary-or, double it, if they're good. It's now a different culture; you don't just show up, you take care of our customers and are always looking for the next sale. Let customers know they're special, and they'll keep you top of mind. That's the part of the culture we need to work on," he reminds himself. and us.

Dennis isn't shy about asking for a sale, himself, either. At a party recently he ran into Susan, an acquaintance who mentioned she was thinking of remodeling her kitchen. "We'd love to talk with you," said Dennis-who ended up with the $134,000 account. In gratitude-or call it 'pay it forward', he sent her a $350 set of knives she'd been coveting as a thank-you gift. The next year, Susan bought a lake home and called to schedule another kitchen jobanother $100,000 in the company's pocket.

Dennis knows it's smart to solicit ideas from those who have their customers' voices tuned in-no, not managers: the cashiers. These key people suggested ways to speed up and simplify procedures, such as credit-card transactions. They reported unstocked items customers had been asking for.

He's also rethought the practice of a Christmas bonusnoting that some employees don't celebrate the holidayand made it instead an annual bonus. given out durine a performance evaluation on the anniversary of hire, $20 for each year of service. And for Christmas, employees will be invited to a party wherein they can shop the store at cost that night. "The cost for the company is minimal, but it's seen as a huge gesture by our employees," Dennis explains.

Another "free" improvement: Two years ago, Portage had added an S-foot display of $1 items positioned, as Dennis says, "in a low-rent part of the store, the weakest location. We offered tape measures for $1, and sold 19. Last year, I moved them to a drop box up in front to see what would happen. We sold 628. We did it again this year and sold nearly 1,000."

A small sales improvement like this not only increase profits, but, as Dennis explains, "help create a value statement that fights the 'expensive' image of an independent store-all with one goofy,little product."

Another huge improvement that didn't require a bank loan was Do it Best's suggestion of realigning existing space to get the biggest effect for the least amount of money. "We had a contractor sales area, a rental area, and a retail space, but were staffing too many people] because of layout. Now, the service counter has been moved from the front of the store to the back so the nearby departments could be manned by fewer personnel."

Yet another move that paid off was changing the positioning of tools that proved too close to the front of the store. "We've grown the section substantially, but also moved it halfway back so it gives a good visual impression as your eyes move through the store-it looks more impressive."

So do the flooring, K&B and paint departments nowadays. "They used to be tucked into corners, but they're now up front, and adjacent. In fact, one customer complimented us on adding floor coverings to our offerings. (We'd been selling them for 35 years but she'd never noticed them before the move.) We'd had the big-ticket items tucked away in the back-but not anymore!" he's learned.

Just in time... because contractor sales had dropped off significantly. "Now, they're starting to pick up again, but all margins are tight. So, the new concentration on retail was very important to offset that with a 5Vo to 1Vo margin increase."

After September's soft re-opening, which has driven a nice increase in sales, "People are congratulating me, saying 'You've got it all figured out.' But I don't have all the answers," he says. "There are lots of questions, lots of challenges left -but also, so many opportunities. But I love doing itl As a wise person once said, 'No matter what the mission, the journey should be joyful."' That's Dennis's mantra, too. "I love a party. But," he can't help underscoring, "bottom line: It's a business."

Sounds like, for this man, they're one and the same. So, who needs golf, anyway, when you're having this much fun?

Carla Waldemar cwaldemar@ comcast.net

By James Olsen