Walk-in retail customers, meanwhile, are not only looking for product ideas, but also are interested in getting a referral to a reputable builder, remodeler, or replacement contractor. “We funnel them to our [pro] customers just like our contractors funnel consumers to us,” says Ford, adding that it breeds loyalty among credit and cash customers.
Contractor referral programs are nothing new, of course, though they vary from formal lists available online to a casual recommendation by a sales associate. “We try to match them with pros we know that specialize in their type of project and are available,” says Hannan. “People trust us to point them in the right direction.”
Pruitt, meanwhile, maintains a list of his contractor customers and their areas of expertise to give to inquiring retail customers; Kotter keeps a few local handymen in his Rolodex for similar occasions. “We’ll ask them to go out to help a homeowner,” says Kotter, mostly on small jobs such as window and door replacements.
Despite temptations, or perhaps even demand, to offer installed sales either in-house or with a small pool of contractors, some dealers aren’t willing to risk butting bids with their pros and perhaps clogging the conduit to consumers. “Most pros don’t want to be bothered with small replacement jobs, but even the perception of competing for their business would damage the relationship,” says Dick Young, president of Shoemaker Lumber in Ocean City, N.J., a single-location dealer maintaining 80 percent pro sales.
Crossing Over By focusing on pros with an eye on consumers, dealers that have managed to maintain or even grow their retail business in the shadow of a big-box retailer make a dedicated effort to differentiate their product lines and services from the home improvement behemoths. Curtis Lumber, for instance, carries upgraded products across most categories, such as pro-grade tools; Palmer Lumber’s new retail area features a wider variety of fasteners and other hardline products that appeal to pros but also impress retail customers.
Moreover, few of those dealers suffered revenue losses, at least for long, because the retail customers that didn’t stray, or came back after satisfying their big-box curiosity, fashion themselves as quasi-contractors instead of weekend warriors, and they make substantial purchases.
That’s one reason some independent dealers are showing interest in Ace Hardware’s revived LBM program. Essentially, the program enables pro-oriented members to access Ace’s vast hardline and other non-LBM product inventory, either as Ace-branded stores or as independent locations; dealers also benefit from Ace’s distribution network and contracts with LBM manufacturers, creating an economy of scale that lowers costs and streamlines logistics. “Our [pro-oriented] retailers wanted access to both lumber products and Ace Hardware,” says program manager Amy Pellerito. “They find they can better compete with The Home Depot and Lowe’s [and] it helps them attract retail customers.”
The program also helps member LBM dealers, the vast majority of which are single-location independent operations, stay ahead of other pro yards in their market. “It’s difficult to be totally independent and have a good selection of products at competitive prices,” says Young, who maintains an independent dealer status with the coop (as opposed to Ace’s “Vision 21” branding strategy for dealers) that still gives Shoemaker Lumber access to marketing tools targeting both pros and consumers, just not the rights to use the Ace Hardware name and in-store merchandising.
Like a mix of products that serve pro and consumer customers, value-added services are equally appreciated by both segments. While strategizing services primarily for pros, dealers also see retail customers benefit in terms of access to the showroom, depth of inventory, delivery options and equipment, and design and takeoff services.
At Spahn & Rose Lumber, there’s “nothing special for consumers,” says Hannan, in terms of extra services not already offered to pro customers—unless you consider a bit of extra handholding beyond the call of duty. “All of our people are able to walk anyone through a project and suggest ideas and materials to get it done,” he says, a service few builders and contractors require, but that most consumers do. “They appreciate the help.”
