International Door & Operator Industry

MAY-JUN 2018

Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.

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Page 17 of 110

MANAGEMENT by John Zoller & David Bowen, Zoller Consulting, Inc. V O L U M E 5 1 I S S U E 3 J U N E 2 0 1 8 15 Dudley Doorman always prided himself as the top garage door supplier to most of the largest builders in his market. Dudley scrapped by during the recession by using up excess inventory, laying off several installers and lowering his prices to appease his builders. Both Dudley and his builders were in survival mode, but even after the recession, Dudley's builders kept pressure on Dudley to maintain low prices. As a result, Dudley was barely profitable. He needed an answer. Dudley decided to attend the IDA EXPO to get some new ideas on how to become more profitable. While the seminars were interesting and gave him some ideas on how to improve his business, it was conversations with several door dealer attendees that changed the way Dudley thought about his business. His new-found friends assured Dudley that stressing volume alone might be holding back his profits, especially since Dudley's business model was based on increasing low margin sales. Dudley admitted his margins for doors installed for builders were low, but he thought making a sale one time to a builder guaranteed volume and hence continuous installation work for his installers. In addition, for years, Dudley avoided service work in favor of saving his crews for builder installations. He claimed he just did not have time for service work. Likewise, Dudley hated sales to homeowners because these sales took too much of his salesmen's time and because he believed his sales personnel did not have the patience to sell "one door at a time" to homeowners. His new EXPO friends understood Dudley's reluctance to trying to use his builder salesmen to sell retrofit doors to homeowners. The sales skills of selling to builders and selling to homeowners are completely different they told Dudley. Builders are sold once and then your salesman has to work to hold on to the builder by providing great service. A builder salesman must be on the job frequently verifying installation quality and solving jobsite problems such as no driveway and a full garage with the job superintendent, they explained. On the other hand, retrofit salesmen must be comfortable telling the same spiel over and over again. Yes, Ms. Homeowner, you can select from many colors. Yes, you can have an insulated door and you can have windows with a myriad of designs and inserts to get the effect you want. In short, Dudley's new friends explained that retrofit sales personnel are a different breed from builder salesmen, but the increased gross margin from retrofit doors is worthwhile for Dudley to consider changing his business model. Finally, these EXPO friends pointed out that far more retrofit doors, in units and dollars, were sold each year. Dudley was now really interested in what his friends were telling him, and he wanted to hear more. To make sure he understood, Dudley's friends wanted to define gross profit, specifically that gross profit equals the Enhance Your Profits with BETTER MIX. . . Continued on page 16 instead of VOLUME! Enhance Your Profits with BETTER MIX. . . instead of VOLUME!

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