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Scwing t3 Weitem States, Includlng Alarka and Hawail

(gstet publicatbn Euilding Ptoducts Digest seves the E&t)

PUBLISHER Alan Oakes (ajoakes@aol,com)

PUBLISHER EMERITUS David Cutler

EDITOR David Koeniq (dkoenig@6uilding-products.com)

ASSOCIATE EDIT0R Karen Debats (kdebats@building-products.com)

CONTBIEUTING EDITORS

Dwight Cunan, Carla Waldemar, Roy Burleson

AD SALES MANAGER Chuck CaseY (ccasey@building'products.c0m)

CIRCULATION Heather KellY (hkelly@building'products.com)

ADMINISTRATION DIRECTOR/SECRETARY Marie Oakes (mfpoakes@aol.com)

How to Advertise

Contact our adveilising offlces lor tates: WEST, MIDWEST, SOUTHEAST: Chuck Casey' Newport Beach, Ca.; (9a9) 852'1990; Fax 949' 852-0231 ; Email ccasey@building-products.com

NORTHEAST: Paul Mummolo (N.J.); (732) 899' 8102; Fax 732-899'2758; Email mummolop@ comcast.net

How to Subscribe

Contact Healher al (949) 852'1990

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45m Campus Dr., Ste.480, Newpod Beach, Ca' 9266& idiiir-i,iii1 ii,irirr.1liri, rn.. peii6oliih F6Gse paid at t',ldwport Beach, ca., and additional.post otfices..lt is an indepenj..tft"*ri,O pi,6ii.iiion"ioiif'eietait, "noesaldairO distributidn levels ol the lumber and building products markets in 13 ;;;i6,;';r# C,,it,gi.'t@b00i b-itrtieiFubtrshing, tn_c, Cover and entire contents are fully protected and must not be ii,-"iiiir.iii inl.i 'iinier witnout ivritten permission."All Rights Beserved. lt reserves the right t0 accept or reject any editorial'or adv€rtising ftatter. and assumes no liability for materials furnished t0 it

Arurrruso l'm just not sure about the color? hever agreed to that! ls that board crooked? it too late to change my mind?

Available in STK and clear rough dry,2x2 through 2x12 or run to pattern. Totems, rabbeted beveled sidings or channel rustics. WR cedar timbers also available' Call for quotes, don't miss those orders. Up sell your customers to a cedar patio cover.

How much?

Can you do anything about the price?

You guys are making too much noise!

You ran over my dog!

Meow!

It doesn't look like the magazine.

Why doesn't it look like my neighbors?

Be kind to my flowers. I can only pay in quarters.

Be finished before l'm back!

Good customers can be forever

Particularly in light of the last l2 months of business activity, there may be no better time than now to value your best customers. Yet, so manY companies will roll out the red carpet to get new customers or sPend manY resources managing problematic customers, while completely ignoring and neglecting many of their best longterm clients.

It is true that every comPanY needs the lifeblood of new customers. However. research shows though that it costs five times as much for marketing and sales to new customers than to old ones. If you analyze the numbers, it is many of your very old customers who are the most profitable. While we will often put up with the shenanigans of problematic customers-Yes, You know the ones-who are alwaYs moaning and complaining and trying to nail you to the wall for every dime' we won't spend a nickel on thanking those customers who are there with us year in and year out through the good and the bad. It is not the results of one year that should be considered but the results over many years. as you calcu- late each customer's lifetime value. It is that number that should dictate lvhere you should allocate your sales and marketing resources, which will naturally be the most profitable ones.

I am not sure how manY of us really calculate the profitability of each customer, which should include all the hidden costs. Most of us maY look more at just the sales number or the gross profit, but that would be a great mistake. The cost of comPanY resources to solve every issue and all the minutiae all detract from profitability.

For example, there was a wholesaler I sold to many years ago in a different industry who found shortages with every delivery. Intriguingly, the shortages were written up by the same hand on the same Pad everY time. I came to the conclusion that this company had hired someone just to write up imagined shortages. And, if theY did this with thousands of vendors that they dealt with, this was really a very profitable occupation. [n our case, the iosses were tens of thousands of dollars a year. The costs of our senior executives, including mYself, and triple checks on each shipment made doing business unprofitable, and we decided to stop all shipping and doing business with them.

I still believe in the old 80/20 rule-2O%o of your customers provide 80Vo of your profits. It is the 20Vo you should be spending more time with. In this industry there can be hundreds of suppliers our customers could do business with. We sometimes get complacent with the business we get and we forget about all the sales that go to our competitors.

So think about line and Product extensions with these good profitable accounts that could further increase the business done with these customers. For examPle, You sell them siding, but they buy their decking elsewhere. What imPact would that have on your bottom line if You could change that?

What do you do when You realize there is a significant drop off with any account? What are the true reasons? The answers often require research beyond the superficial explanations typically given, like business being off. Most often you find the business has been lost to a competitor who was spending more time on the account than you were and coming uP with innovative ways of doing business.

Let's face it, business today is more about partnership creation, problem solving, and maintenance than ever before. Failure is not tolerated today. You did not like the quality of the last two shipments, you simply go and find a new supplier. You are fed uP with your cable company, You change them. In the hustle and bustle of life' we do not have enough hours in the day to keeP trYing to solve the same problems.

In the end, retaining customersespecially the profitable ones-boils down to communication. Unfortunately, we tend to take our best customers for granted. Research suggests that customers who have done business with you for three to five years have the lowest satisfaction, loyalty and commitment. You can bet that those customers are listening to your competitors, who may be trying to get back the business that they lost to you a few years earlier. By calculating lifetime values, You discover what and who is important, and that they are as important-and that it maY not be those you have beem sPending all your time, energy, and money on.

The storcge rystems used by mony lumberyords ore inefficient, lobor-infensive, ond unqppeoling to customers. Krouter offers uptodote rocking systems ond building thd ore superior tro ilrose designed ond construcfed decodes ogo.

Since 1954, Krouter Storoge Sysbms hos offered solutions to the commerciof distribution qnd indushiol morkes. Our Building Produds Division hos insnlled sysiems ot hundreds of lumberyords thraryhorr the U.S. We ore fie pioneers d the rocksupported building concept, plus rve or[inoted the fully integroted, steel-frome contilwer rock onopy system-the dominont type used in lumberyords todoy.

Choose fronr ttre induntq/r widgrt sebction ond size d fxturer for fte building producfs indushy.

Here ore sev€rql of the mqny Typiol Building Profiles to meef yolr specific needs.

For sometime now, The Kelleher Corporation has been deeply committed to those suppliers who use sustainable forest management practices. That's why way back in March of 2OOO, we were one of the first distributors in the US to obtain our FSC Certification. We have offered a variety of certified products over the years and are now proud to present a complete line of FSC Certified Primed Pine mouldings and millwork.

At Kelleher, we continue to do our best to offer products that help you compete in today's market, while protecting this little planet we call home.