Beat Last Year: Five Fundamental Shifts to Win the Sales Game

There is only one game in sales. No matter what the condition of the housing market, the game remains. Regardless of interest rates, the game remains. I don’t care whether you are marketing toward the pro, the consumer, both or neither. Five thousand SKU’s or twenty five thousand, the game is still the same: Beat Last Year.

Turn on the radio, the TV, pick up any magazine or newspaper, listen into any dialogue between LBM executives and hear an inescapable and constant lament of the downturn in housing. Banks declare losses and bankruptcy and foreclosure around every corner, and dealers downsize and go out of business everywhere. Holy Cow, we woodpeckers would be better off abandoning our businesses entirely and opening an ice cream stand. Now I am now absolutely sick of it. Sick and tired of hearing experienced but pessimistic industry senior staff lament the plethora of reasons, factors or conditions that make it ‘hard’ to beat last year’s revenue numbers.

Of course it is hard. Decades of housing industry glut and several recent years of unimaginably low interest rates on mortgages made it just about impossible to be unsuccessful as a LBM dealer. Year after year of building industry excesses have effectively atrophied our sales muscles. The seemingly endless flow of business required comparatively little proactive sales effort. Now after years of comparatively easy business subsiding, we are called to resume proven professional sales habits and seek new innovative ways to garner customer loyalty and sales. It is going to seem hard until we reach championship fitness levels within all our professional skills.

“We were fishermen, with fish essentially jumping into the boat for so long, that we forget how to fish at all”, said one depressed dealer. “My team has forgotten how to cold call, how to prospect for business using any method at all. We never learned how to perform a customer needs analysis. I never dealt with growth capacity in top SKU’s. I didn’t deal with my bottom performing products so now the strain on inventory investment has me frighteningly lean on top selling products. And I am so nervous about losing the market that I am not willing to take any risks and not encouraging my sales staff to do anything different, even to make sales.”

Leaders who focus on prevalent challenges and obstacles to winning will likely lose every game. Leaders who focus on their most fundamental responsibility to create an attitude that cuts past obstacles, doubts, fears and inconvenient facts will effectively create a reality of The Game, a simple game, to just Beat Last Year! These winning leaders focus on five fundamental shifts in attitude and action to Beat Last Year.

From Sales to Account Management

Salespeople generally sell products in product categories within their area of expertise or comfort zone alone, virtually ensuring that the typical LBM salesperson stops pursuing sales in certain product categories midway into a project, ignoring engineering categories – plumbing, electrical, heating – and most delicious décor categories like paint, kitchen, bath and flooring. I am sorely aware that the majority of our traditional LBM sales staff lacks competence or confidence in product groups further from the sill plate. So I recommend a simple but effective approach. Transform Key Sales people into account managers.

With a shift to an account management paradigm, Key Sales people augment traditional selling of familiar product categories with a fuller responsibility for total customer account development. The Key Sales person introduces identified targeted growth customers to peer professionals within the team who are totally competent in the engineering and décor product categories. In this way, Key Sales people become account managers, now accountable for the analysis, strategic and tactical planning for fostering growth in those targeted accounts. Then they orchestrate the team effort to serve the customer needs through all product categories. Team members act in symphony to grow revenues in targeted growth customers. Together they Beat Last Year.

From Buyers to Merchants

I recently was stunned to hear a comment by a “buyer” employed in a major regional LBM organization. He said, “Really, being short stocked or out of stock provides a great opportunity for a sales person to be a hero to their customer. Customers gain confidence in their sales person who jumps through hoops to satisfy customer needs.” I have no idea who trained this misguided professional to adopt such an ineffective mindset. I almost fainted when I heard him. This LBM dealer is NOT gonna Beat Last Year and this buyer is one reason why.

The number one reason given by professional contractors for NOT shifting greater product volume to a dealer is the sense that a dealer cannot handle their current product volume let alone any additional business given. Observing a sales person routinely heroically overcome low stock counts to fill common orders – even if they are BIG – erodes customer confidence. Such a false sense of heroic effort to put a sale together is never a sustainable substitute for the professionalism of maintaining actual inventory for basics sales, never mind for growth.

Imagine, if you will, any standard counter sales person’s response to a professional builder’s request for a HUGE order. “Well, you can’t have that big order you want now, because you only bought half of that quantity last year in this same time period.” That would never do. Yet, this is THE standard response from far too many buyers when the branch managers and sales staff request growth level quantities for top selling products. This common practice suggests that the primary orientation of the buyer is governing or limiting sales growth, instead of playing to Beat Last Year.

I recently met with a talented, experienced group of buyers in a very large independent LBM organization and posed this inquiry to the group, “Name your top 30 customers.” They set off in a laudable recitation of one major construction firm after another. After about fifteen companies were named, I interrupted them and asserted a truth so often overlooked by even the best players in our industry. The buying staff’s first and foremost customers are their own sales staff and branch managers in their own organizations. This truth facilitates a paradigm shift, from a buyer’s role of procurement and governance to a role of merchant service to their own inner organizational team members focusing on sales growth.

Merchants keep the needs of their customers at the forefront of their minds. Merchants engage their customers in product training to be more successful professionals. Merchants assist hands on directing their customers toward proper product placement and identification in stores, yards and warehouses. Merchants spend up to half their time walking the organization’s facilities and directly dialoging with their customers in account management and branch management to develop an on-going success strategy for growth. Merchants understand that in order to stock the right levels of top demand items in all product groups, they must be disciplined, even obsessed with product group refinement to invigorate or eliminate under-performing products. In their obsessive pursuit of growth, merchants never ever under any circumstance allow their customers to be embarrassed by a sad lack of product. Buyers operating within a merchant paradigm (not a governance paradigm) play the Game to win. They Beat Last Year.

From Meetings to Individual Performance Coaching

Imagine your favorite sports team. Imagine that team in the peak game for the championship. Now imagine a quorum of coaches never on the field, but locked in a dark, dank office in deep discussion about the state of the game and the ineffectiveness of their team while their players fumble about on the field unguided and desperately in need of individual time with their mentors. Unimaginable. NO high level coach would ever expect to support their charges into the winners circle, wearing the gold, with such a habitual pattern of improper focus.

Something horrible has happened to the executive function on our LBM industry. Top level executives are absolutely imprisoned in so many meetings that they have little time for meaningful direct contribution to their team. When I encounter an organization struggling to Beat Last Year, I find every time players with no personal coaching from their leaders. I find leaders sequestered away for hours every week in meetings that usually have little meaning for the game in play. I have lived my entire career in the LBM and Home Center Industry. I can say from poignant personal experience that the most meaningful moments of my career have been when the amazing leaders who have been my professional guides through these rewarding decades have taken some individualized coaching time with me.

Executives – leaders – have one overarching prime responsibility to their teams, to model optimum technique to their players. Executives must block priority and significant time every calendared week to leading by example and carefully pruning improper behaviors and attitudes that interfere with championship level play. Presidential executives must devote plenty of direct coaching time to their senior officers to ensure the effectiveness of the systems that drive their organizations. Operational executives must devote the majority of their time in their branch locations recognizing stunning performance and encouraging their teams to identify weaknesses in execution and strengthen them. Marketing/Merchandising executives must spend more time in direct individual dialogue with the account managers and product specialists (Paint staff, Kitchen Designers, Millwork Specialists, Flooring Staff) in order to teach product knowledge and sales tech, all the while listening for market opportunities that always comes from front line employees.

Cut out 75% of all your dad-gum executive meetings held behind closed doors. Fill the time gained with individual coaching to educate team members to play a better game, refine a system to play more efficiently and effectively. Limit any meetings to those that provide a forum for players to demonstrate their accountability to one another or, most importantly, create a venue for THIS profound uplifting and encouraging message to your team: Beat Last Year.

From invisible secret knowledge to visible game stats and score boards

Show me an LBM dealer failing to beat last year, and I will bet my bottom dollar that the underperforming group does not have highly visible scoreboards such as Daily Comparative Performance Stats This Year vs. Last Year in Sales, Gross Margin, Transaction Count – By Account Manager, Sales Person and Branch. Yes, most organizations have these simple queries available, but they do not always distribute them to the team and use them as a prompt for immediate operational and tactical adjustments in their game trajectory so that scores are ever improving. In the worst case scenario, performance stats are fodder for negative conversation about what is happen TO a LBM dealer as a victim of the market, economics, competitors, vendors or the like.

A SCORE is a results measurement like daily/monthly/weekly sales performance. GAME STATS are action driven. An action of keen finesse available to LBM dealers is to engineer a set of measures similar to the game stats essential to designing tactics to improve athletic performance. This should be done for the business day and cumulatively for the month, quarter and year. Some stats for our industry might be the number of customers an account manager introduced to our Kitchen Design staff, the number of Kitchen customers introduced to our lumber sales staff (after all, good for the goose is good for the gander), number of deliveries on time, number of complete orders by day or week, particularly those void of inventory availability issues. A key stat is availability of the top performing 500 to 1000 “A” velocity items (called Never Outs by those totally committed to the Game), fostering growth oriented inventory levels in these items. Game Stat cultures focus on the little things, the performance details that Beat Last Year regardless of conditions, competitors and pessimism. In short, Game Stats measure Actions and Predict Readiness that lead to championship scores.

From Poorly Performing Pessimism to Winning Optimism

About a year ago, a fine little business invited me to assess the company and coach the organization into a winning attitude and aptitude. This client does business in the worst city in America for sales growth, in Flint, Michigan, with Ford, Chrysler, and GM in shambles. My client’s business is located on a nasty little street across from an abandoned brick mill building and a horrible garbage recycling plant. Gunshot holes riddle the walls of the sales office, from errant bullets fired between feuding citizens in the neighborhood. The unemployment rate ranges from 10 – 20% in the Flint area, and in virtually all of southern Michigan. Dealers have been going out of business at an alarming rate for a few years now. Home prices are plummeting. From the outside looking in, there is no reason at all to even imagine that they could Beat Last Year. Indeed, they had not beaten last year for ages, until the most amazing thing happened.

Immediately, we began in earnest an excellence initiative focusing on growth. Growth – The Game – is Beat Last Year. We set scoreboards and game stats in place. We cut out marginal players and recruited talent. We communicated a passionate message of how the Game would be won. We set product category refinements into motion and began recruiting vendor partners who shared our tenacious attitude towards winning the Game. We imagined creative approaches to serving our professional customers in traditional and non-traditional ways.

Now, one year later, this group is up 45% over last year in sales with a corresponding increase in gross profits. They have experienced improvements in their bottom line profits in nine of the last twelve months, with October their most profitable month in a decade. The sales and operational team are absolutely convinced that winning the game is up to them. Regardless of every good reason to simply give up and take whatever happens, they are designing their own success. Fueled by fervent dedication to Beat Last Year, they are outperforming every other dealer in the state compared to last year. They are simply kicking ass. They are and will continue to Beat Last Year. Guaranteed!

If this group in the worst city for growth can win the game in sales, then any dealer in any market in America can get up and play a better game. Whining, worrying and stating the obvious too-often recanted market conditions most certainly hinder performance. What is YOUR daily message to your organization? Are you promoting doubt about what can be accomplished? Are you overlooking dedication, creativity, proper measurement, intense personal coaching of your players? Are you allowing your buyers to block growth of their own team players? If the leaders in our LBM industry do not proclaim a winning Beat Last Year message, then who the heck will?

Winning attitudes win games. Are you measuring delivery effectiveness with an eye on increased capacity to evoke confidence from your internal and external customers? Are you looking to non-traditional business segments in order to experience growth? Are you cutting through the often encountered resistance of lumber/building materials oriented account managers to foster sales in the décor categories where the gross margin and inventory, manpower, and equipment requirements are significantly more advantageous than continual growth in commodities and hard materials alone? Are you presiding over your organizations systems to resolutely address inefficiencies once and for all? Are YOU championing BEAT LAST YEAR every moment every day until is becomes the creed and culture of your team and your organization?

If not YOU, then WHO? Whether you are Executive or Manager, Account Manager or Specialty Salesperson, Truck Driver, Cashier, Janitor, it does not matter. Whether you are in an increasing, flat, or dwindling market, IT DOES NOT MATTER! Lead from where you are. Call the Game. Beat Last Year!

Yes. Economics are a consideration. Competitors can be really tough. The game still doesn’t change. Economic and market factors need not be obstacles to growth. I encourage the fine executives in LBM and Home Centers across this nation to rethink the approach to the game. I invite you to cut past market and economic factors and all other obstacles, to play the game to win. Develop Account Managers who sell farther from the sill plate than ever before. Challenge your Merchants to serve their customers with growth in mind. Prioritize Performance Coaching in your weekly calendar and prune excessive meetings. Make Scores and Game Stats visible to everyone involved in beating last year. Strike an optimistic poise and champion the game every moment every day. Do these things and you will surely Beat Last Year. Leave them out and you surely will not.