Taking it to the people
Sellers of building supplies often struggle to attract high-margin DIY customers. However, a DIY-focused business is well worth the effort. John Power reports.
Sellers of building supplies often get nervous around DIY customers; there is always a risk that huge investments in time and effort with non-trade clients might achieve nothing but small sales, endless product returns and incessant follow-up enquiries. But this stereotype is misleading. In fact, a DIY-based building supply business can be both successful and low-stress, representing a welcome supplement to lower-margin trade customers and setting the scene for long-term repeat business.
In this article we will examine ways in which building supply merchants can increase profitability by maintaining a loyal following of DIY customers.
Let’s start at the coalface by looking at the operations of a well-run building supply business, the intricacies of which offer valuable lessons to other companies in the sector.
Gisborne Garden & Building Supplies, a single-outlet business in regional Victoria, is highly tuned to the needs of local residents. While the business prioritises landscaping work, its overall services are quite diversified, all delivered via three on-site divisions: Gisborne Garden Supplies, Gisborne Hire (general machinery, etc), as well as Gisborne Mini Mix (concrete delivered in compact mixers, which are ideal for accessing smaller properties).
All three divisions have evolved to accommodate a ‘projects-based’ community demand. Customers range from traditional urban homeowners to small-acreage hobby farmers, professional farmers, vignerons, as well as lifestyle property owners with allotments of less than 100 acres.
Typical projects undertaken by these mostly DIY customers include small-to-large landscaping works, driveway maintenance and pothole repair, construction of sheds and small rural outbuildings, as well as clearing and mulching works.
Whereas many building supply business owners in regional areas feel compelled to stock an immense amount of product from all main product classes, including timber, insulation, steel, cladding and tools, Gisborne Garden & Building Supplies has taken the opposite approach – stocking only the kinds of products that DIY and trade customers are likely to need for their own local (mostly outdoor) projects.
In this way the business has carved a specialist niche for itself, avoiding direct competition with generalist hardware outlets by offering immense expertise and product depth in relation to specific, locally relevant services.
DIY customers account for approximately 70 per cent of all garden/building supplies sales (and an impressive 30 per cent of the Gisborne Mini Mix concrete business).
This DIY focus has allowed the operation to expand profitably under the watchful eye of Director Mark Greenshields, who has run the business from its present site for the past 15 years.
Mr Greenshields said excellent customer service is crucial to attracting DIY customers and ensuring the success of the business.
“I have two employees [Kallin Trotman and Mark Butler] who are really exceptional; they could run the whole show on their own if they had to,” he says.
During a first-time visit to the facility in mid-October (service assistant: Kallin) for a DIY purchase of crushed rock, the strengths of the business were immediately clear:
• Logical layout: Easy-to-find office/store close to the facility entrance.
• Parking: Plentiful parking alongside the main office building.
• Customer service: Greeted within two minutes.
• Scope of operations: Personal explanation of the scope of the business, as well as main product purchase and delivery options.
• The right product: Determination of the right product with the aid of a display wall of samples.
• Next steps: Clear instructions regarding bay pick-up. Wide drive-thru lanes for vehicles towing trailers.
• Extra assistance: Cheerful assistance loading vehicle.
The above features of the business might sound like ‘common sense’, but it’s surprising how few merchants in the building supply industry tick all these boxes so thoroughly. Something as simple as offering to help load a car, or describing different load and pricing options for future visits, can mean the difference between a happy repeat customer and a one-time tyre-kicker.
Retailers who have a strong involvement in their customers’ DIY projects are bound to win ongoing customer loyalty, and home delivery services are fundamental to the process.
“I reckon we would deliver about 80 per cent of all DIY customers’ orders,” Mr Greenshields said, adding that delivery services (which are charged) are an important part of the business, not a burden.
One might also speculate that home deliveries facilitate additional, subtle forms of involvement in customers’ projects, as drivers have a responsibility to unload materials in the correct position, at the desired rate, etc. This passive but important on-site interaction with the customer only enhances the goodwill already earned at the business premises, and reinforces the value of the overall service.
Lessons to learn
What lessons can be drawn from the above observations when applied to other suppliers of building products?
While not all building supplies and materials have easily identifiable project outcomes that a merchant might exploit, it is clear that DIY customers want ‘full project’ solutions, not just a stack of products. If we consider a major category like insulation, for instance, how many insulation suppliers alienate DIY customers by stacking warehouses to the ceiling with different sorts of materials, with no clues provided about which kind of product might suit a specific project? The same might be said of plasterboard and cladding sheets, many of which are similarly slotted into warehouse racks without any discernible order or sense apart from sizing. Add-on services such as
(2) the recommendation and display of relevant installation tools,
(3) the presentation of adhesives and sealants matched to specific materials and project types,
(4) offers of more diverse package sizes to suit different jobs, as well as
(5) in-store display boards showing different grades of product, would go a long way towards enticing more DIY customers into stores while encouraging staff to discuss projects in greater detail with customers.
Increased numbers of DIY customers shopping for building materials means greater financial returns to the merchant, plus plenty of additional business opportunities. It is no fluke that Gisborne Garden & Building Supplies has a flourishing machinery hire division, which feeds directly off its strong DIY client base. Hire machinery also gains business from the DIY-friendly Mini Mix concrete division, with customers hiring concrete leveling machines, etc, to complete their projects.
One-on-one attention is the name of the game when targeting DIY customers. Businesses that lock down efficient and methodical ways to interact with consumers, particularly first-time visitors to a facility, will reap the rewards of higher margins, additional opportunities for add-on sales and hire business, as well as free public promotion from positive word of mouth.
It is worth noting that Gisborne Garden & Building Supplies has limited formal marketing strategies, a negligible street profile due to its position in an insular industrial estate, and only a modest online presence. Nevertheless, it has managed to gain a loyal DIY customer base by providing affordable, solution-based services based on high-quality customer care. It is an example worth following in the broader building supply market.