Franklin Building Supply

OWNER -TO- OWNER www.franklinbuildingsupply.com | 208-514-2200 | 9222 W. Barnes Dr. Boise, ID 83709 JUNE 2018

A Conversation With the CEO WHAT REAL GROWTH LOOKS LIKE

A lot of it comes down to planning and engagement. When we set targets for the quarter, year, and into the future, we have to take into account the number of customers as well as the number of dollars. Identifying opportunities to convert prospects into customers and chances to follow-up with our current market are the foundation for growing our business, no matter how much lumber costs.

For a business to be successful, it has to be focused on growing its market share. Obviously, we’re not any different, but it can be difficult to properly assess what growth looks like in an industry like ours. That’s because our raw sales numbers are heavily dependent on the cost of lumber. When the price goes up, so do our figures. If we’re not careful, this correlation can mask what’s really going on and make our growth seem overly rosy. It’s not hard to imagine the problems this perspective could create. The second the price of lumber goes down, all of a sudden, we’re not doing as well as we had assumed. That hasn’t been an issue recently, because the price has been steadily rising since 2016. If you look at a graph, you’ll see small fluctuations — it’s a commodity, after all — but the overall trajectory is a hard upward turn. That won’t last forever, so we have to figure out how it factors into our actual growth. The bottom line is that increasing market share can’t be calculated on raw sales numbers alone. It has to come from selling to folks we haven’t worked with before and providing more for our current customers. Luckily, we have an outside sales team that understands how to go about pursuing real growth.

The way I see it, there are two types of sales strategies: proactive and reactive. Reactive sales happen when a customer contacts us first. They have a need, express it, and we meet it. With the help of our incredible production and fulfillment teams, we provide these customers with an experience worth raving about. That helps, for sure, but it’s usually the easier half of the sales equation. The more difficult part comes with proactive sales. We have to seek these out on our own, but it can make all the difference. When you’re reactive, you differentiate yourself through price and quality. Being proactive, on the other hand, gives you the chance to impress a potential customer long before they make a sales decision. It lets prospects know that you care about them. When they are ready to buy, you can bet that they’ll call us first. The same goes for follow-up with current customers. Talking to somebody outside the buying cycle may seem like a waste of time, but it plants the seed for future interactions. Last month, Levi wrote about how we are always looking to increase our capacity — that improved performance allows us to grow, but it’s all for naught if we don’t take the time to understand what growth means. Don’t let the price of lumber fool you. We need to pursue real growth — the kind that won’t vanish the moment prices go down.

President and CEO –Rick Lierz

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