Delivery in 4 hours — Seriously
With locations in Baton Rouge and Denham Springs, La., Do it Best Corp. member Holmes Building Materials operates two home centers, both with about 10,000 sq. ft. of retail space, supplemented by full lumberyards out back and powered by a 22-truck fleet. One location is heavily commercial, the other is heavily retail-oriented, and both operate a store-within-a-store Holmes Windows Doors & More.
The company combines a folksy business slogan — “local people serving local people” — with a ruthlessly efficient distribution model described in one simple phrase: four-hour delivery.
Also aggressive is the company’s growth mind-set — it acquired Pelican State and Industrial Supply in 2010, and is still looking for opportunities.
CEO John Holmes, who in 1980 joined the company founded by his grandfather, shared some of the keys to success during the Do it Best May Market Extreme Retailing panel discussion.
Reacting to the economy
“In this economy, we continue to promote our retail business. Also, we have seen a drastic drop in the number of [builder] customers. Our market is relatively stable, but about 30% of the contractors have gone out of business. So it’s made it that much more important to build relationships with the strong ones. We have doubled our focus on simply building that personal relationship with every customer, especially on the professional side. If you’re not out seeing them, somebody else is.”
On launching installed sales
“People are renovating their homes because they can’t sell them, and they’re looking for a turnkey project. We brought our own staff on to handle installations. They’re on our payroll. They all wear our shirts and hats when they show up in our trucks. It has a real stabilizing effect on the customer. It makes them comfortable.
“But the key to [installed sales] is to have a good team leader. We have the team leader. Every morning starts off with that team leader managing the schedule. Once we get everybody out on the road, his focus moves to quality work done during the day. It really takes a dedicated person who has experience, who can look the customer in the face and say the job is finished. Personnel is everything.
“The program protects your margins because now you’re selling a project instead of an item. And it’s a value-added item. You’re not selling an item they can go buy at a big box. Primarily, it’s built around the windows and door business. Typically, we run about 30% to 35% gross margin on an installed sales package.”
On four-hour delivery
“From the customer’s order to the delivery of the product, our goal is four hours. There are exceptions. We do track them every day and shoot for 100% on time. And every afternoon I get an email that tells me how we’re doing. If the dispatchers are not working fast, they shouldn’t be working for us. We struggled a couple years back having too much overtime. We were operating the traditional hours from 6 a.m. to 3 p.m. Then we moved to a rotating staff and hired more people. We’ve gone back and evaluated our sales based on our workload.”
On merchandise mix
“This year, we’re building for the future, remodeling our main store. It’s been six years, and we intend to turn it upside down. We’re adding 5,000 more feet to our retail location and adding product categories such as appliances, home decor and cabinets.”
On inside support
“If we were starting over again, we would probably begin by taking a key inside person who is organized and detail-minded — maybe the guy who is not as good at retail sales — and move them to support an outside person. Then you would have an outside person tied into an inside person who is very detailed-oriented.
“Typically you can have about three outside salespeople per support staff. In the window and door biz, that’s a different person. Millwork is a little more complicated and specialized. But three to one is what we found works well generally.”
On customer connectivity
“We stay in front of our contractors with our outside sales staff, and I follow up behind them. We typically include an event as part of our marketing. One thing to keep in mind: If you lose one, if you built a good personal relationship, it’s possible to go out and get a new customer. But it takes a lot of work to make that transition.”