A brief thought of reflection and a heartfelt “Thank You” for all the readers who commented and provided positive feedback on my last column. I posted a seven-day challenge for all of us to honor Larry Crowley, a great man who we lost too early. So why not toss it out there again for people with an appetite to make our world a better place. We can all make a positive contribution to bring some goodness and unity to our communities. Toxic media figureheads, as well as agenda-driven, power-hungry politicians (from both sides) will not unite us. For the past several years, it seems like our great country should more appropriately be called “The Divided States of America.” Let’s make positive change. Challenge up again:
Seven Day Crowley Challenge
- Smile big
- Learn something new
- Pour yourself into others (with no expectations of receiving anything in return)
- Be solution oriented (instead of complaining about a problem offer a solution to fix it)
- Be a source of positive energy (even when you don’t feel like it)
At the beginning of 2021, I made a bold recommendation to start staffing up and build out your company’s infrastructure to add additional capacity if you wanted to take advantage of the increasing customer demand. Can you feel me now?
When I ask stone fabricators “How is business?” the answers are consistent. Across the board fabricators and large customers are talking about extended lead-times. In some cases, customers are waiting eight to 10 weeks to get new countertops. I hear owners and managers of shops state, “It’s not that big of a deal because everyone is in the same boat.” Yes, everyone is facing similar challenges of limited labor pools and supply chain backlogs. However, I cringe when I hear people make comments like that. It may not be a big deal now because a lot of less forward-thinking companies were caught off guard. Some will view these market conditions beyond their control. However, a few more progressive thinkers will see these current challenges as a tremendous opportunity.
The most attractive value proposition in the stone fabrication industry is shifting dramatically. Previously, price sensitive customers are transitioning their top motivating purchasing decisions to time. If the quality doesn’t suffer, customers are willing to pay more if they can get the job done sooner. The companies who can fulfill these customers’ demands will take market share. The opportunity is staring you directly in the eyes. Are you a victim or an opportunist?
The companies who were proactive earlier in the year and planned to build out their capacity are probably already celebrating their wins. They may have even taken some of your best customers that were willing to pay more.
Unfortunately, it is not uncommon for companies to be blindsided by their customer attrition rates when business is strong and lead-times are extended. This happens for many reasons. Companies are “too busy” to notice when customers quietly drop off. Employees are exhausted working feverishly just to get jobs out the door. Most companies don’t have a dashboard metric tracking their customer accounts and sounding alarms when accounts stop placing orders and volumes drop (daily, weekly and monthly).
As with any challenge, a few companies will recognize the situation and respond by going on the offensive capitalizing on the opportunity. While others will not even see it because they are “too busy” reacting and playing defense. No one will argue the past few years has been unprecedented. Some companies will come out stronger in the end and others will continue to be beaten down. Which camp will you fall into, Chick-fil-a or Pizza Hut?
Some things remain consistent, solve a customer’s problem and you will reap the benefits. Currently extended lead-times are MAJOR problems for the customer base. Be a solution provider, solve the problem and you will get paid a premium.
Over two decades ago, when I first entered the stone fabrication industry, my company had no business winning great customers week in and week out. I had zero industry experience and no perceived competitive advantage. Until I thoroughly surveyed the market and found a universal pain point for a lot of customers, SPEED. Customers wanted their jobs turned around faster. We solved a big problem for our customers. We figured out a way to deliver a quality job in half the time as our competitors. We grew as fast as we wanted. Notice I didn’t mention price as a motivation for customers buying decisions. Not only was it not a factor, but customers were also willing and did pay more if they could get jobs turned faster.
Most fabricators have an inflated value of how much price influences the buying decisions. It is not as big of a factor as most make it out to be. Think about your own purchasing decisions. You are likely to pay a premium for a product or a service that solves a problem. This is another topic for another day.
A great leader gets focused and capitalizes on the right opportunities. This is where I see a lot of stone shop owners and managers miss the mark. They become their worst enemy because they lack discipline to stay focused on what matters the most. What squeeze produces the most juice? In this industry, there are countless opportunities to pursue and to easily get distracted. There are so many moving parts, so many things to track and so many adjustments needed daily just to get the work done on time. This hectic and very fluid environment presents a problem. A lot of owners and managers are focused on and chasing the wrong initiatives.
I also subscribe to a very simple formula to achieve desired objectives:
- Define the goal
- Clarify and simplify each person’s role and contribution to achieving the overarching goal
- Track performance and hold people accountable
- Remove obstacles for the team
Bringing this home, considering the current market conditions, the companies who can get FOCUSED on solving customers biggest problems will win, BIGTIME! Executed correctly they will also likely increase their margins in the process because the customers are willing to pay more to those who can solve their quandaries.