I am blessed to work for one of the nation’s largest HVAC distribution companies, Johnstone Supply, which does close to $2 billion in annual sales and operates more than 380 stores nationwide. A few years ago, our corporate office sent a survey to our contractor base looking for answers about what our customers most valued. The results might come as a bit of a surprise.
The No. 1 item a contractor wants from an HVAC supply house is not the lowest price. What is most important is for the supply house to have adequate stock on hand. Our survey concluded that product availability was indeed the No. 1 concern, regardless of the contractor’s size. We actually had categorized contracting companies into various sizes, such as two to five trucks, six to 10 trucks, and so on. We found that different size contracting companies have differing needs. Technical and business training were important for the small contractor, but not as much for the larger contractor that typically provides in-house training for their staff, so such services were unnecessary. Larger contractors were more interested in speed of delivery and a broad product selection, and consider these services more valuable. The larger contractors are more interested in stocking programs or just-in-time inventory.
What I found most interesting in the survey was the question we first asked, “What is most important to you?” followed by a second question, “What does your current supply house do best?” What was intriguing was that contractors said the availability of product was most important; however, service was at the bottom of the list of services they actually received from their current supply house. The survey clearly showed the contradiction in what they wanted and what they received.
The survey also showed that price ranked as the second most important factor when choosing a supply house, but when asked to list what services their current distributor does best, price ranked 11th. It was interesting to see that what contractors thought was important was actually not, based upon what they were receiving from the supply houses they do business with. If availability of product and price were really hot buttons, why would a contractor funnel all of its business to a supply house that is struggling to provide these services?
What the distributor provides best, according to the survey, was fast delivery, ease of purchasing, and a highly trained technical staff.
Contractors universally value ease of purchasing and fast delivery, yet most companies are reluctant to order the supplies they need using the Internet. The same folks who balk at ordering HVAC products needed for tomorrow’s installation will shop on Amazon for birthday gifts for loved ones. If individuals place their trust in Amazon, or whatever site they shop on, why not use the service for business, as well?
Our company has a robust Internet site that makes shopping and placing orders a snap. Users simply enter a delivery date, and the goods will arrive the next day.
We also found, based on the results of the survey, that it’s safe to say contractors, regardless of size, have settled into using a supply house that is not providing what they said they really wanted. In short, inertia has taken over.
The problem could be that they got so used to that same old routine of going to the same supply house they’ve used for years, and they’ve gotten comfortable. They’ve settled for services that they really don’t value. They’ve become complacent and have not pushed their current supplier to step up and become a better partner.
The other side of the coin could be that the contractors surveyed really didn’t know what they wanted most out of their distributors. What they thought was valuable, as it turned out, was not as important as they originally thought.
My advice, and the purpose of this article, is to advise any contractors who are reading it to sit down in a quiet place and re-evaluate what is best for their HVAC company.
I would recommend making a list of the most important factors in choosing a supply house. I would also suggest getting staff involved. I would brainstorm and write down what is of key importance to determine what’s needed out of a supply house. The fact is, the top suppliers are more like business partners. The contractors they serve provide them with the tools they need to succeed and grow in a very competitive industry. If they feel they’re lacking in training, do they not have a great field rep? Or, does their supply house lack product during heavy demand months?
The hard answer might be that it’s time to switch supply houses, vendors, or both. I realize change is scary and uncomfortable, but contractors have to challenge themselves to find ways to operate more efficiently (online ordering), more profitably (fall and spring stocking programs), and more effectively by providing timely training for their staff.
A good supply partner should be able to provide contractors with the support they need to accomplish all their goals. They should meet with their supplier and tell them about their changing expectations and what will be needed so they both can succeed. You must clearly communicate what you feel is necessary to succeed in today’s fast-moving marketplace.
I am not necessarily advocating that contractors switch suppliers, especially if they’ve done business with the same company for a number of years. They owe it to them and to themselves to try to fix the relationship.
If, however, after stating their new priorities, they find that they’re still getting the same old “business as usual,” it might be time to search for a new supplier that can provide them with the tools they need to launch their business forward. The old saying of “grow or die” is very relevant in today’s marketplace. If they’re not evolving and adapting, they’ll soon find themselves out of business. Today’s contractors have service technicians who effectively use iPads and smartphones and replace the stock they use with a few clicks of a button. The customer gets their invoices via email or text. If a supplier is not helping them keep up with the times, then they might want to find a new supplier.
Publication date: 11/9/2015