Product guide: before jumping into installed sales, conduct a careful analysis of which products best suit your company, your customers, and your market

Prosales, Jan, 2006 by Mike Butts

One of the most common challenges facing dealers jumping into installed sales is deciding what products to offer: How to choose initial products for installed sales, how to add products, and which product categories to avoid.

Many owners think of insulation, siding, and other similar products when they think of installed sales, but today installed sales has grown beyond just those areas. According to the 2005 PROSALES 100, the top five most commonly installed products among the nation's top 100 dealers are windows, entry doors, cabinetry, interior doors, and locksets/hardware. But no matter what the statistics say or what your competitors may be doing, the goal of any successful and proactive installed sales program should never be to achieve the status of just another "me too" installation service provider. Rather, it should be to service a product niche that currently is not being served at all or is one that has been identified by your customers as causing them pain or problems when being installed by other subcontractors, such as windows.

When I conduct a market survey for a dealer considering a new installed sales operation or considering expanding an existing program, one of the first things I do is look at established service providers. Who is in the market providing these services now? How are they doing? Are they local or national? If there are local competitors, are they providing installation services for only their customers, or are they using the program to expand their customer groups? In addition, you should consider the perceptions your core customer group has regarding this service, what installation services they are using right now other than the usual suspects of flooring, HVAC, roofing, electrical, and plumbing, which are typically purchased on an installed basis by specialists, and if there is room for another service provider in the market.

Once you answer these questions, use the information to strategically define areas where your company can fill market voids and also make a profit.

Offering installed sales, or growing an existing program, isn't as easy as simply saying, "Let's install widgets." To grow successfully you must first look carefully at the market, your customer's needs, and your core competencies. Then carefully make your decisions based on fact, not speculation. Next month I will address specific product offerings in more detail.

EDITOR'S NOTE: This month Mike embarks on a new business venture, launching LBM Solutions, an independent consulting firm offering training programs, educational services, consulting services for a number of areas, and strategic growth planning for independent lumber and building material dealers, suppliers to our industry, and federated lumber associations. Please check out his Web site, www.lbmsolutions.biz, for more information, or contact him directly at 517.668. 0585 or mike@lbmsolutions.biz.

Mike Butts is president of LBM Solutions, a DeWitt, Mich.-based LBM supply consulting and training firm. 517.668.0585. E-mail: mike@ lbmsolutions.biz