Regardless of the size of your company, everyone benefits from healthy partnerships: owners, suppliers and clients alike.
Jud: Pete, describe your partnerships, just in general, that you have either with your suppliers or manufacturers or whoever they may be.
Pete: We have two partnerships. One is a local appliance store in town here. We remodeled their business about seven or eight years ago. We put some kitchen displays in there and cabinet displays. They put their appliances in there. We get to showcase our cabinets and kitchen designs. They let us put our pamphlets, newsletter and brochures. It's kind of a win-win situation. They have nice looking kitchens to showcase their appliances, and we're able to get leads from that. People look at the cabinets and ask, "Oh, who put this in?" Another partnership is a granite company we work with. As we go along and install granite countertops in our kitchens, we'll photograph them for our Web site, which is for the marketing. We've got a deal with the granite company where they'll pay for half of the professional fees of the photographer. We give them the pictures. Anything they use as marketing in our area, they will mention our name. Those are some of the ways we try to work with our subcontractors and people in the area.
Jud: Terry, give me a review of some partnerships that you have.
Terry: Jud, I wouldn't say it's complicated, but we work with our suppliers and trades closely on a lot of things. One way is to create leads and another is for education. Another way is to save costs, and to be faithful to them. We're really concerned about service to our clients, so our partnerships are developed so that all of us are on the same page as to how we'll work with our clients. They and our employees in the field are really important. As an example, my window distributor will measure all our windows for us. This happens to be a company called Windsor, the manufacturer. Pacific Mutual Door is the distributor. We use my rep, who we've developed a relationship with. He'll actually come to the house and do all our window measures for us along with my lead carpenter. We make sure that we have those right. At the same time, because we have that relationship, they take us to their factory once a year to study and learn about their windows. That's also nice. We believe a lot in education. We want to make sure we work with our distributors so that we educate. We do customer appreciation nights at our distributors, especially our appliance distributor. We'll set up a nice showroom and bring in a chef or they will bring in a chef and we do dinners for our clients there. That's kind of nice. Since I'm so involved with NARI, I've had to work with a lot of the distributors on the manufacturer's side on lots of different programs. I've worked with national people like Owens Corning and Pella and some of those to do educational programs for our NARI group here. I've worked with Bosch and some of those — SkillsUSA. These are relationships we've developed that, I think, over the years are really going to pay off. It helps the quality of our work, it educates our people and gives us good strong relationships throughout our whole industry life. Does that make sense?
Jud: It absolutely does.
|Terry Skilling, Owner and CEO
Terry: Ten years from now, I want to be able to call up and have a strong relationship with people. If I was in California and wanted to talk to someone, say, about the beautiful vanities that I see on Pete's Web site, I could call up Pete. He could say, "Let's go up and see this guy about these vanities." I might be able to get a better vanity than anyone in Kansas City! Does that make sense?
Jud: Yes! What you're saying is your partnerships are relationships more than anything else to help you better service the client. On the other hand, in servicing the client, you also are getting an education from them to stay abreast of what's going on. In your particular case, you're even using some of your suppliers to enhance the look of you to your client in the way of appreciation nights and that type of thing. It totally makes sense to me.
Terry: They invest in our brochures. We just did a big charity event for a home for handicapped kids. With one of my suppliers, I just had to make one phone call and ask him if he wanted to provide a door for this for a silent auction. It ended up being such a nice door that they put it in a live auction — and there were only four things in it. It gets our name out there without having to spend money.
Jud: That's another advantage. Being in this partnership, you're also getting your name out there in other ways.
Terry: Anything that we can to do get these great quality leads or recognition. We don't have to pay for that.
Jud: Pete, did that ring a bell for you? Did you want to add anything to that about some of the relationships you've built, either with your appliance people or your granite top people?
|Pete Valentino, Owner
Pete: Well, it's funny, too, because while you were talking I was thinking of the whole idea about relationships. That is key, including the relationships that we have with our subcontractors. We've had the same plumber for 18 years. What do we do that keeps him happy? We give them work, and they don't have to do anything but wait for the call from us. On the flip side, when we ask them to be somewhere on a certain day, they're there. We try to pay them, "If you give me an invoice on Tuesday, I'll have a check waiting for you on Friday." We want to be able to turn that around. The whole idea of the relationship is really powerful as how your company is perceived.
Jud: Partnerships become relationships more than just a partnership, per se. I think you've both said that.
Pete: I agree with that. It's a relationship, and not so much just a partnership.
Terry: We'll have a company party this year. We'll invite all of our manufacturers' reps, all our trades. We'll have a separate one for our clients, and we don't invite them to that. But, even then, one of our manufacturers or distributors would provide the space for it.
Pete: We have a party like that right before Christmas. It's actually for past clients and our subcontractors. Our subcontractors have built relationships with our clients. They're in the house working. It's a good time for everyone to get back together and touch base.
Jud: That's what often happens. The actual worker out there on the job, trade contractor or employee — it makes no difference — they end up with a relationship with the client. That makes a difference; it helps them remember to call you because of that relationship. It goes back to what Terry said regarding the education side of the thing. Pete, do you get leads from any of the trade contractors, suppliers or manufacturers?
Pete: We do. Over the years, you'll get a lot of leads, and then you won't get leads for a while. You question, "Is this really a good partnership?" And, all of a sudden, the phone will ring and two or three leads come in. That may turn into a $100,000 kitchen. You think, "Alright, this is still working!" We can go out and have lunch with the owner to talk over what we can do or what are we not doing. "Can we set up appointments with our clients with your salespeople instead of having our clients just walk in?" We'll do things like that just to keep the relationship open and make sure everyone's comfortable with the direction in which we're going. We're in two of their stores. It works out pretty well. We do get a lot of leads from them.
Jud: Being in those stores must help tremendously on the appliance and granite tops. Terry, do you get leads from some of the manufacturers and/or suppliers?
Terry: Yes. We have a database on that. So far this year we've gotten seven projects from it. They've been at about $142,000. Some distributors are better than others. We get most of the leads from our kitchen cabinet (supplier); we have a custom cabinet maker who gives us some. We have a plumbing distributor who gives us some. We have an architect who gives us some. They're just really good leads. That was one of the things we really try to develop with those relationships. We solicit them. We don't take them to lunch or anything, but whenever I'm with my rep, I always talk about leads. I also give them some, too; it's a fair trade.
Jud: The sales material — do the manufacturers and suppliers give you the proper amount of sales material that you'll need?
Terry: Anything we want. We have a library for it. All of the sales material are mostly production books, magazines, brochures on materials, and a lot of "how to" literature.
Jud: Pete, do you use sales materials from them?
Pete: Typically, we get a lot of samples from our granite company. They'll give us any sample we need. They do have some literature, but not that much. On the appliance side, we'll call if we need specs. Now it's just as easy to go online and download the specs for any appliance. We've kind of gotten away from calling. Our thing is being able to put our material in their store. We get more out of that.
Jud: You're going into reverse to some degree; going into their territory instead of them coming into yours, realistically.
Pete: That's exactly what it is.
Jud: We've got both sides of the fence here going each way. Pete, do you use samples of any kind from your manufacturers? Do you have problems getting those?
Pete: Typically no; not at all. About six or seven years ago, they cut us a deal on a Wolf stove. We had the stove in our showroom. There was a time we were doing cooking shows in our showroom. It was propane, and we hooked up a tank. We had a 30-inch Wolf range that we could wheel out. We had professional chefs cooking with it. They cut us a deal on that because of the relationship we had.
Jud: Terry, how about you with displays and samples?
Terry: There is no problem at all. When we do our home shows, a couple of our people will provide customized displays for that. We get sales items that we need; we've had them make custom cases for us, there isn't a problem at all. We try to keep a lot of that stuff to a minimum or it just sits around your office, like granite and stone samples, bags — that's pretty easy to get.
Jud: Do either one of you have an unusual manufacturer or supplier that you use? You both talked about cabinets, appliances, windows and doors. Do you have any unusual thing, Terry?
Terry: One of the things we're trying to develop right now, and the people I'm talking to, are suppliers of the green building materials. In our area, and in other areas, I think that's going to be a big part of the future. We try to do it as much as we can now, but there are people in the area that are really specializing in putting together information about products that are available. I don't want to say it's unusual, but it's different. I have a relationship with an artist on glass tiles and different specialty things we might like to use in kitchen back splashes. We look for really nice, high-quality items.
Jud: Pete, you're out in California. You've got to have some unusual relationships with different products.
Pete: We do. We have a gentleman who does metal ironwork that's more artistic than anything. It's really beautiful and takes time to get. It's just something that the typical person doesn't have out there. We want to bring products that the typical consumer doesn't see. But, again, we have relationships with a glass company that does custom stained glass, whatever we want to design. And, this metal fabricator, he does a lot of custom artistic metal for us. If the consumer was really sharp, did their homework and has some design flare, they probably could find that stuff. Our thing is making it easier in bringing that design flare to our clients. That's part of what our relationship with the clients is. Let us do the leg work. Let us come up with the design that blows everyone away. We're always on the lookout for something new and different.
Jud: How do you go about finding these unusual suppliers and manufacturers?
Pete: We go to trade shows all the time. We went to the National Kitchen & Bath Association show in Vegas. It was a three-day affair. We brought the whole company. We try to go to as many of those shows as we can to really see what new products are out there. My designer has a really creative side. If she sees something that sparks her design ideas, she says, "Look at that, we could do something like that!" And then again, just day-to-day driving around seeing stuff. You've got to be constantly on the lookout for somebody and just talk with people.
Jud: Terry, where do you find these unusual people?
Terry: A lot of times we look in the trade publications, like Professional Remodeler, looking at the pictures. They always have sections on new products. We have relationships with designers and architects. I'll just get on the phone and call two or three of them that I know and say, "Hey, we're really thinking about this idea. Is this possible? Could we put a waterfall in behind the Wolf range? How do we do it?" Things like that. We keep on the lookout for things, but mostly we would contact the designers we have relationships with or go online and look in the publications.
Jud: Do you do trade shows?
Terry: I might go to one trade show a year. I've done those before and they didn't appeal to me that much. I know you could probably see a lot at those things, especially the kitchen and bath one. There are beautiful things. I've just never really gotten into that.
Jud: Terry, give me some kind of an idea of how many leads you might get per week that you can contribute back to a manufacturer and/or a distributor.
Terry: Probably three on average is what I've looked at over the first six months.
Jud: Out of that, how many closings might you have?
Terry: Generally one out of three. I think over the first six months, we've gotten like 21 or 22 leads. They're great leads, don't get me wrong. We've closed, like, seven. Especially a distributor — when a distributor recommends you to a client, if someone came into the plumbing showroom and picked out supplies for a new bath and needed someone to install the bathroom for them, it's a different kind of lead because the plumbing supplies are running direct through the distributor, so we're mostly doing labor, except for miscellaneous materials.
the discussion continues...
Jud: And you will do it that way?
Terry: Absolutely, we'll do it. They are jobs where we've been recommended. The client probably feels safe with us, because we've been recommended by someone they feel safe with.
Jud: I think it's called third-party marketing. Pete, how many leads do you get a week, and what's your closing rate?
Pete: I would look more at a month. I may have two or three a month from a company. Typically, I'll get three, sometimes four; we'll probably close one or two. Our marketing is more geared toward past clients; that's really where we get most of our work. It's just one more spoke in the wheel of the whole marketing program. I wouldn't say it's the biggest spoke.
Jud: That's interesting, depending on the way you're using that marketing. Pete, right along with that, what do you offer the manufacturer? What do you promise the manufacturer? Anything?
Pete: In the way of, "You're the only guys I'll ever use," I don't promise that. It would be hard for me to say, "You have to use this appliance company." There are other appliance companies in our area that are just as nice and equally as competitive. I will tell clients we're in a relationship and we can set up an appointment. But, it's really up to them. We don't get any kind of benefit from buying appliances. Again, there are relationships with other companies that I also want to keep open. With a trade like a granite company, they're going to put in a piece of granite on one of our displays. Of course, the cost of that was half a dozen pictures of the jobs we've done. That was a great deal and cost us almost nothing.
Jud: Terry? Anything you promise the manufacturers?
Terry: Just that we'll continue to support them. I think what they want is just to be paid on time, if you're talking about a distributor or manufacturer. I don't really know how to answer that, Jud. As long as they don't fail us somehow in the way that we would like to manage a project and service a client, there's no reason for us not to do business with them. No money under the table!
Jud: No, and that's a good point to bring up. I certainly haven't been in that business, and that's one reason I haven't done some insurance work. I haven't wanted to do that kind of game, and we don't play that. Terry, tell me this. A manufacturer gives you a lead and the lead turns out to be something that needs a different type of product.
Terry: I've had this happen before; I'll just use an example. It happened with a window distributor. I'm doing a big project with them right now. Before them, there was a project where the customer called them, and they referred us. We went out there. The customer didn't want their window after they researched it. They wanted a different kind of window that wasn't as good, but they wanted a different window. I called up my rep and said they don't want your window. This is why. What would you like me to do? Every time that's happened, which isn't a lot, they'll say, "go ahead and sell it." We're doing this because, in the long run, they know that most times it will work out for them. We've never tried to hide anything from any of them.
Jud: Pete, how about you?
Pete: I'm inclined to agree. Just like Terry said, ultimately, I think, you really need to take care of your client. That's where we get most of our work. I would call and say, "This is what's going on, how would you like me to proceed?" if we're getting the lead from them. But the reality is the client will get what the client wants. I wouldn't want to force something just because I got the lead from, let's say, Pella windows. If they don't want Pella windows, then you get them whatever they do want. I think if you're upfront and honest with everybody, it usually all works out. I don't think anyone's going to harbor any ill will toward you.
Jud: I think both of you have said the whole idea is that the relationship you have and being honest with the people you're dealing with — not only your client but also the manufacturer in both cases. Is that a fair statement, Pete?
Pete: Yes, I agree, it is.
Jud: Terry, is that kind of the way you look at it?
Terry: I agree 100 percent.
Jud: Do either one of you find that the relationship you build with the manufacturer and/or the distributor, will you end up getting "warranty work?" In other words, you can take care of the warranty problems better because you have that relationship?
Terry: I don't know. I would say, personally, yes. But I don't know how they treat all their other people. I don't know how a manufacturer or a distributor's rep works a warranty. I know that we can make a call and get a call back right away. We have all their cell phone numbers. If my production manager needs something, either warranty work or something, I just think that if you have this relationship, these distributors or manufacturers will go out of their way to help. As an example, I have a patio door now at a client. This patio door is three years old, and the lock keeps breaking. I know the client is doing it. She says she's not. The door manufacturer has been out there three times and continues to fix it for her for free, because we purchase a lot of doors for them, I think. They might just be that kind of company.
Jud: Pete, how about you? Do you get warranty work help when you have these relationships?
Pete: We look for a company that's going to do that. We know that when you sell it and there's an issue down the road, they're going to come out and take care of that kind of warranty. I think, just in the nature of the material, that probably we pick out if it's a real good window company, they're going to come out and do stuff like that. We have a vinyl window company that has a lifetime warranty. They'll come out and fix windows if the seal pops or whatever. They just do that. I would rather pay a little more if I know I'm going to be able to sell that to a client. Typically, the distributors will go the extra mile. Of course, it costs a little more. In the long run, it's well worth it.
Jud: You end up getting what you paid for.
Pete: You definitely do. If there's an issue, they're out there and they'll take care of it.
Jud: In our particular situation, with a window manufacturer that I can recall, they have a service program. I had a skylight where the bottom latch disintegrated after three or four years. Don't know why it did it; they weren't even home when it happened. The procedure was to call the manufacturer and he'd send a service rep and they would change the window. That's a two- or three-week process. I went to the distributor; got a replacement sash; went out and replaced it; took the sash back; and let the distributor worry about solving the problem. They took care of it without any problem. That's the extra mile that you sometimes have to pay a little more for that you get from the manufacturer in those relationships that you were talking about.
Pete: I agree.
Terry: With all of our companies, we probably have really good warranties for our clients and good protection for their projects as the years go on. If we don't have those relationships and provide the kinds of products that are going to have good warranties and good service, it would be really tough for us to stay in business, especially in the kind of work that we all do.
Jud: Terry, in going up the food chain of a manufacturer, how far do you like to go or have you ever thought about having to climb that food chain?
Terry: Do you mean whom do I talk to?
Jud: Yes. How far up can you go?
Terry: I can talk to anyone. I have relationships with quite a few of the owners because of being involved with NARI and being past president. I know a lot of the owners; I can call them any time. As far as calling the president of Home Depot or someone like that, I'm probably not going to get past John Gordon.
Jud: Your relationship has helped from the standpoint of being in a trade organization, which has helped you to a degree.
Terry: Yes, quite a bit. I've met a lot of people nationally through the Remodelers Advantage, and that's been great.
Jud: Pete, how about you?
Pete: My feeling is kind of like the military; start at the bottom and work your way up. I'm not afraid to go right to the owner if there's something that warrants that. My feeling is that if he's got the proper guys in place that can service us, then I'd rather have that relationship with the guy right out there on the front line. There have been times when the guy on the front line doesn't perform. Then it's time to take the next step. I have no problem in going ahead or on top of people. I'll be courteous: I've got the information from you; now who's in charge of you, I want to talk to the next guy. If there's a system like that, typically it's not an issue. But I have resolved things by going right to the top. Again, they don't want to hear someone barking at them!
Jud: I've often found that when you have to go up the food chain a little bit over someone that you're working with all the time, it's usually because they're not doing their job properly and the owner of the company or CEO often is interested in knowing that.
Pete: I'll explain that I'm a business owner myself, and if this guy was doing this at my business, I'd be concerned. I'd be happy that someone would let me know what's going on. Business owners respect that. It's like you've said, they want to know what's going on out there.
Jud: It was interesting that one of you used trade shows and for the other it's not your cup of tea. I've often found that when you go to the big trade shows, you get to talk to the horse's mouth. You don't go through the distributor, you're really talking to the manufacturer. You can get some information, which is often helpful, that sometimes the distributor has either forgotten or does not have. That's certainly why we had this program. To try to get both sides of the story. I think we've run through the questions, and we're about out of time. Pete, is there anything else you want to talk about regarding relationships you have or suggestions you might have to the readers out there?
Pete: I know my past clients are a lead base. We do a newsletter. In the newsletter, I try to aways bring in one of my trades and do a story about them. Again, it's building that relationship and making it stronger. This quarter, when we do our newsletter, it's going to be a story about my flooring guy — a one-man show and does great wood floors. I'm sure he doesn't have any kind of marketing program whatsoever. It's a nice way to get a little information about him out to 3,000 people. Again, it's building that relationship.
Jud: Terry, how about you?
Terry: On the trades and distributors that we have relationships with, we try to recommend them all the time to people. If someone would call up and ask who to talk to get this great piece of carpet for my basement, we recommend the people that we do business with. They're available to be sent out, e-mailed, and we do recommendations a lot, on smaller projects that might not fit us.