Page 6 - Nov-Dec 2023

MESSAGE FROM THE PRESIDENT

WHAT TO THINK AS WE END

2023 AND ENTER 2024?

TREVOR SMALL
LBMAO President

s we come to the end of 2023 our industry faces several tough is your people. Make sure that in a time of spending tightening, your
Aquestions. Most people in the building materials industry would team is well trained and coached to be successful. A trained, skilled
describe 2023 as an ok year, but not spectacular. The forecast for 2024 staff can and does bring in customers. Even in troubled times there
and beyond looks increasingly concerning. We have several issues that are still customers who have money to spend. A well-trained staff can
are affecting the building supply industry in Ontario in the coming year find those customers and convince them that your business is the best
and how we react to them will determine the success of 2024. place for them to buy from. That training can be in the form of product
The new home construction has slowed considerably from where it information, sales skills development, technology learning, estimating
stood at this point in 2022. Interest rates have increased at a rapid rate, and quoting skills (we have some great classes here at the LBMAO this
leaving homeowners accustomed to low mortgage rates scrambling to winter – shameless plug). You need a staff that does a better job than
figure out how they will be able to make their payments. The thought your competitors at the sales process. This starts from your staff who
of a move-up house has disappeared from most homeowners’ radar. look after your website. That might be the first point of contact a future
If we look at the interest rate progression, we can see why. We customer may have, to those who answer your phones and greet your
had become accustomed to low interest rates. Until the recent rate customers, to the estimating and quoting staff. Those staff need to
increases, the prime lending rate in Canada had not increased above work at making sure they sell all the parts and pieces in a project, not
4% since October 2008. Spending habits and debit loads over the just the easy parts. Your delivery personnel need to be well trained as
thirteen-and-a-half-year span became entrenched. From 2015 to 2019 well, and they need to know how to deal with issues to get difficulties
the prime rate averaged 3.4%. Since June 1, 2022, we have seen the resolved quickly. The delivery driver may be the first, last or only real-
prime rate more than double to 7.2%. Our banks and government person interaction your customer may have had if they ordered online.
had encouraged high consumer spending with their monetary policy. Make sure they are trained to make the experience smooth, painless,
Homeowners on interest only and variable mortgages are now and enjoyable for customers.
suffering. This has caused consumers to think long and hard about Another area that can be controlled and is critical in a challenging
changing homes. They may have a lower rate mortgage currently that market is follow-up. Following up on a customer’s quote or phone call
they would like to hold on to, or they are nervous about the ability to seems so easy but it can also be so problematic. Let your customers
sell their existing home. know when to expect quotes, special orders, estimates and deliveries.
Rapid interest rate changes have also changed renovation spending. Get a system for follow-up that will make sure customers are happy
The high-dollar renovation projects that have been so integral to with your staff and operations. This exercise may also provide you with
members of the LBMAO in recent years are also getting a hard look important data about upcoming projects, jobs, and interests of your
from customers. The basements, decks, fences, and additions that customers. Data is becoming an increasing important part of today’s
were all staples of renovation spending during Covid are now getting a building material world. You might be amazed by the feedback you get.
second thought by concerned homeowners. What do you think we can expect for 2024? With careful planning,
The monetary market and interest rates are issues that, as suppliers coaching, and training it can be successful, but it will be more
and retailers, we need to work with but have little ability to control, challenging than ever. Let me know your thoughts and expectations
so what can be done? The most important thing that you can control for 2024. Feel free to e-mail me at tsmall@lbmao.on.ca.

6 LBMAO Reporter - November-December 2023 www.lbmao.on.ca