For instance, installed insulation, which has grown from a test in one market to full availability in two locations, balances out niche-business ideas that never got out of the boardroom, such as operating a motor pool for Shelly’s fleet of delivery trucks. “Truck maintenance is not within our core competence,” no matter how much sense it may make on paper, says Shelly. “That’s something we’re not getting into.” But Shelly is committed to entrepreneurship, which enables each branch to suggest and test niche businesses if and when customers demand them … and then perhaps take them corporate-wide to boost the overall bottom line.
In addition to location autonomy, Shelly’s current organizational structure, initiated in the mid-1980s to relieve Greg and his co-owner and cousin Bill of day-to-day operations, includes individual product managers for kitchens, exterior openings, and interior millwork; those managers coordinate with each of the selling divisions to take customer orders, coordinate shipping and delivery, maintain centralized warehousing, and supply and update showrooms at each selling location. That structure, says Shelly, lets location managers run their own shows without having to invest in running niche businesses that serve the entire organization; rather, they access those services upon customer demand.
And while location managers are accountable for their operating expenses and are allowed to make pricing decisions based on market factors (albeit within corporate profit margin guidelines), they defer to centralized purchasing and credit departments that ensure volume pricing and keep administrative costs and systems management in check. “It’s all about teamwork,” says Shelly. “It allows us to remain a leader in this market.” Not to mention more than doubling the company’s revenue and nearly so the number of its locations in a five-year span.
Ancillary Accomplishments When production home building took off in the Twin Cities in the mid-1990s and maintained a strong pace, area homeowners found it tough to convince siding subcontractors and carpenters to come off multi-tract projects to install a few windows or a gutter system, even through a referral service offered by Lampert Yards.
So the dealer started Lampert Exteriors, a separate operating division that installs siding, fascia, soffits, gutters, windows, and exterior doors for homeowners in the Minneapolis-St. Paul metro area. “It wasn’t a conflict of interest or competition [with contractor accounts] because they weren’t interested in those jobs,” says Leier.
In the decade since launching Lampert Exteriors, the division serves a limited market area (encompassing three Lampert Twin City locations) and boasts a 12-person management staff, several in-house crews, its own administrative and showroom space in nearby Roseville, Minn., and even its own Web site.
In the past two years, Leier has adjusted the marketing effort and budget for Lampert Exteriors to reflect its consumer revenue base. “It’s significantly higher [as a percentage of revenue] than our LBM marketing budget,” she says, “but we realized it needed to be at about 10 to 12 percent to reach consumers.” The campaign includes newspaper, billboard, and radio advertising that leverage Lampert Yards’ 118-year history, which Leier says lends credibility and gives consumers confidence in the Exteriors division.
No less successful is Lampert’s Pro Finance division, also unveiled in the mid-’90s, which provides construction financing to account holders. “Few lenders really understand construction lending, and our [contractor] customers often need money fast,” says Leier.
In addition to facilitating loans with friendly local lenders for its pros, Pro Finance (also with a separate staff and P&L) reduced overdue receivables and fostered loyalty among Lampert’s pro customers—despite the fact that they are not required to buy materials from the dealer as part of their loan agreement.
The latest Lampert venture is Builder’s Surplus, which opened in early July. Focused on imported, discontinued, and other surplus and value-priced cabinets, flooring, millwork, and doors obtained in volume through a buying group, the retail storefront serves cost-conscious property owners, pros, and consumers.