Defining Your Relationship

Tuesday, June 28, 2016

Over the (dare I say) "many" years of working with our contractor customers, "Relationships" come into play. The good news is that ours is a business of establishing a "Relationship" with everyone we do business with. I still remember how years ago, a contractor friend of mine had purchased a Redi-Mix plant. He sold it a few years later, made a little money, but had an interesting observation about his experience. He said, "You know what the problem is in dealing with cement, cement blocks, etc.? The stuff has no ‘personality’...How do you ever sell this stuff and add ‘personality?’” Just kind of comes down to "Who has the cheapest mud and blocks out there.”

Our business model is quite different…There’s something very aesthetic and "emotional" about "Wood," doors, windows, trim, etc. A lot of "personality" going on there. So, in dealing with this great variety of stimulating products, we get to know our Associates, customers, vendors, all. And those relationships and friendships can last for years and decades in many cases. It’s something we should appreciate and handle with care.

These longtime relationships, however, can get challenging. I've found though that the separation between "Business" and "Friendship" becomes more and more blurred as time goes on. Had a very rude awakening about this as we went through "The Great Recession." A number of our Builder/Customers "awoke" one day to discover (surprise) that the draw they were getting was barely able to pay for the fourth job back…and in some cases, it was much worse than that!! And then when we "demanded" that we be paid (Surprise! We have to pay our bills too!), the relationship often "went South." We were quickly told that if we liened jobs, and actually got aggressive about being paid, we'd "Put them out of business." How could we be so cruel and unbending in this situation?

When the Recession got going it didn't take long and we got tough…really tough. And yes, some of those customers couldn't continue and went "broke," but in hindsight, if we had been much more lenient, they wouldn't have made it anyway. What I learned, though, was that by becoming more "Business" and "Professional" about our collections, it also forced some of these builders to address their problems much more quickly. And one of the most important elements was to communicate frequently!! No, really often, and appropriate...not a weak-worded email or collection letter, but up close and personal. It has a much greater impact when you're "eye-ball-to-eye ball"! And many times it was me, the company President, who reached out to this errant customer.

Facing these negative situations is never easy, but if you're the one that takes the lead--ahead of other vendors, suppliers, etc.--you set the theme that "others" now must follow. Of course this cuts both ways: As a building material dealer, if you are experiencing a problem with getting a payment made on time, immediately go to your vendor and "Talk." Our relationship with our bank was poor (basically non-existent) and in hindsight, I should have been talking to them frequently as they too were running scared and we just faced the template of "being in this sick industry."

We "grew up" quickly during the tough times. Have you yet learned the importance of relationships? And just as necessary, to know when smart business decisions have to rule the day, and not "Emotions”? If you're "smart" on both sides, you can't go wrong…Here's to "Great Relationships" and continuing professional success in your business.

Al E. Bavry, CEO, Kimal Lumber & Hardware 6/28/2016

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