Cultivating commercial

Growth opportunity with economies of scale — if you have the courage to play a long game

THE COMMERCIAL FLOORCOVERING CLIENT can be just like a residential customer. Both are demanding, have different levels of product knowledge and both need your help — it’s just that the stakes are higher when a whole condo needs work compared to a single unit.

Economies of scale certainly make the commercial flooring business attractive for Vancouver, B.C.-based Beatty Floors, founded in 1929. Vance McCarthy, president at Beatty Floors, says his company has a residential showroom downtown open Monday to Friday that operates mainly on client-based referrals. “It isn’t a big thrust,” says McCarthy, “over 90 percent of our business is commercial.

“We are not open on weekends to cater to the retail shopper, but we still have the talent to kick in carpet — which is contrary to what we do every day.”

What Beatty Floors does do every day — and many nights — is service the rental replacement and downtown corporate TI (tenant improvement) market.

“Most of it is putting down carpet tile and LVT,” says McCarthy. “We do a lot of work at night doing lift replacement business for the general contractor who has to build out a new space.”

A good marketing tool for the business is to demonstrate how the company minimizes disruption to the client’s operations during lift and installation. Besides repeat business, where the reputation of Beatty Flooring precedes itself, there is a video primer on its website for the uninitiated. “A lot of people feel that it’s a real infringement to their business to get that done and the video shows how simple it is. We work at night, as well as Saturday and Sunday, to replace the flooring. In the morning, you come in and your work is not interrupted.

“A lot of people assume that they have to hire furniture movers to move everything out first.” Many floorcovering retail outlets that serve the general public also serve the commercial market and thrive in both spaces.

Carpet One Floor & Home in Oshawa, Ont., is one such retailer. General manager Guy Pylypiw explains that customers come to him from multiple avenues.

“We get a lot of our leads now from our online marketing efforts,” says Pylypiw. “The store has been here since 1978 so a lot of contractors know that we are here.” The Carpet One location has also mined other industry contacts. “We talk to contractors who have been referred to us through other trades,” he says.

COMMERCIAL WORK OFTEN COMES to those that proactively enter bidding processes, a practise that Carpet One engages in on a frequent basis. “We are also active in going after work bidding on tenders at municipal levels,” says Pylypiw. He points to a website, www.bidsandtenders.ca, as a valuable resource to find contract work in the store’s region. (The Bids & Tenders site is heavily skewed towards, but not exclusively, the province of Ontario. Other services, such as the Alberta Purchasing Connection, are also available in Canada.)

“The vast majority of the municipal and regional governments around us, as well as different police forces, have all of their tender requests go on the site. We find the ones we are interested in bidding on and take it from there.”

Pylypiw notes that his store has “a number of local designers that we have dealt with some for quite a while,” as well as “bigger names in Toronto that we are doing a lot of work with now.” The national reach of Carpet One has also helped develop relationships with designers.

Christopher Capobianco, sales consultant at wholesaler Spartan Surfaces of New York, N.Y., and Coverings installation columnist, works with architects and designers (A&D) all of the time. Since the A&D firms are listed, he is able to reach out and introduce himself. “I ask if I can come in and do a presentation,” says Capobianco. “That is one scenario where I am prospecting myself. The other scenario that is most common is where a prospective customer is working on a specific project and finds a particular product on the internet and reaches out through that manufacturer’s website. I get the lead and follow it from there.”

However, unlike most wholesalers, Spartan has its own marketing department as well as “a very robust website,” he says. “One of the unique things about my company is that it is very large with 45 reps in 25 states.”

Once Capobianco has established himself with clients, they will have his samples in their library. “One of the things that I spend a fair amount of time on in my very first conversation with a lot of the interior designers,” says Capobianco, “is to tell them about myself and my history in the industry. In my particular case, it goes back to 1932 and my great-grandfather.”

At Spartan, Capobianco and his fellow reps are encouraged to sell their individual brand first before the brand of the company. “If people are comfortable with you as a rep and as a person to rely on, they are going to call you all of the time,” says Capobianco. “I encourage people to call me any time and it has nothing to do with the product that I sell. I’m usually able to get them comfortable with my experience.” So, when they think the customer needs vinyl flooring for a project, Capobianco goes through a process of learning about the project, use of the space, the client’s expectations, right down to the maintenance program.

“I STEER MY WAY into whether a product is or is not appropriate for that use,” he says. “That is one thing I learned in seven years of doing complete inspections. A lot of the flooring failures that I saw were the result of the wrong spec.

“Unfortunately, many reps that do what I do, or a flooring retailer or a commercial flooring retailer — someone who is recommending product — don’t have courage to talk someone out of a product. Being a strong enough resource for the client also involves saying no once in a while.”

One recurring problem for trustworthy commercial flooring businesses is overcoming the race to the bottom on material price. “There is a massive influx of LVT suppliers in our market place,” says McCarthy. “In my experience, it is super important to buy from a quality source than to seek the lowest prices out there. Usually that comes back to haunt you.”

THE WRONG SPEC sometimes isn’t about durability, according to McCarthy. “There is nothing worse than doing a big project with a nice light colour that isn’t going to be maintained. It’s a decision that was poor at the beginning and I think that it is better to give them good counsel at the start than having an irate customer in five years that is unhappy with their purchase.”

McCarthy speaks bluntly about current market conditions. “We urge people to work with suppliers that have a reputation and would do the right thing should anything go wrong — versus the guys that are flying material in from China and have boatloads of 5 ml product that is under $2 a foot.”

Beatty Flooring is more interested in long-term relationships with customers, according to McCarthy, than trying to do anything to close a sale. “I’m ok with losing a deal, but I don’t want to lose a customer.”

The west coast location of Beatty Floors, far from the headquarters of many suppliers, has lead the company to stock its own inventory of commercial carpet tile. “In 2011,” says McCarthy, “we went out on a limb and brought in 10 SKUs for stock and keep it at 10. We call this ‘right here right now.’ That has been a really good door opener for a lot of opportunities.

“By far its not the cheapest product out there, but it’s attractive and there are never any claims.”

The thoughtful professionalism at Spartan, Beatty and at Pylypiw’s location contributes to their ongoing success. “Right now, we are at about 25 percent commercial, up from 20 percent in 2016,” says Pylypiw. “A lot of our long-standing companies are continuing to grow.”

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