What does it take to turn a new entrant into the market leader in just three years? Our journey in launching a regional manufacturing facility for building products taught us that success hinges not on competing on price but on building trust, driving value, and challenging the status quo.
Setting the Stage
When we launched a new regional manufacturing facility focused on building products for commercial and residential construction, the odds were stacked against us. The market was saturated with six established competitors: three local, one regional, and two national players. Seventy percent of the sales went directly to contractors, while the other thirty percent flowed through distribution channels. Relationships were transactional, and trust between contractors and distributors was almost nonexistent.
This lack of trust created a unique challenge. Contractors preferred direct purchases, viewing distributors as unnecessary middlemen. Meanwhile, distributors were reluctant to stock inventory, feeling alienated by a system where their bids were often undercut. In this fragmented and price-driven market, we knew we needed more than just a great product—we needed to reshape the industry's relationships and processes to carve out a significant market share.
The Strategy
Our approach centered on building trust, creating value, and challenging the status quo across the entire buying journey. Here’s how we did it:
Redefining Relationships Across Stakeholders
We engaged everyone involved in the decision-making process, including:
Owners/Developers to understand their project visions.
Architects & Engineers align product specifications with project goals.
General Contractors and Subcontractors to address operational pain points.
Distributors to restore trust and foster collaboration.
Shifting the Industry Mindset
We worked to demonstrate the advantages of distributor partnerships, such as shorter lead times, reduced carrying costs, and improved risk management. By focusing on the total cost of ownership rather than just upfront pricing, we showed contractors the long-term value of working through distributors.
Empowering Distributors
To convert direct buyers, we helped distributors stock the right inventory and positioned them as reliable partners who could meet contractors’ day-to-day needs.
Aligning Internally
Internally, we built alignment across sales, production, and corporate teams, ensuring everyone understood the market strategy, the local conditions, and the deliverables needed to succeed.
Overcoming Internal and External Challenges
We faced both internal and external hurdles that tested our resolve.
Internal Challenges:
Traditional manufacturing practices couldn’t be implemented immediately due to the facility’s startup limitations.
Misalignment between production and sales teams created friction and inefficiencies.
Corporate pressures to meet aggressive targets didn’t always align with the realities of building trust and changing buying habits.
External Challenges:
Contractors lacked alignment with distributors and trusted direct purchasing more.
Distributors were reluctant to invest in inventory due to historical norms.
The market was resistant to change and heavily focused on price over value.
Despite these obstacles, we doubled down on communication, education, and engagement. By creating shared goals and holding ourselves accountable, we gradually overcame these barriers.
Driving Change and Building Trust
The turning point came when we embraced our role as market stewards. We did more than sell a product—we helped shape the industry.
Educating on Total Cost of Ownership: We showed contractors the hidden costs of direct purchasing, such as inventory carrying costs, labor, capital expenses, and operational inefficiencies.
Coaching Distributors: We helped distributors identify and stock the inventory contractors needed most, restoring their confidence in the partnership model.
Building Partnerships: Through consistent communication, transparency, and follow-through, we earned the trust of contractors and distributors alike.
The Results
Our efforts paid off in transformative ways:
Market Share Growth: In just three years, we grew from less than 4% market share to over 46%, establishing ourselves as the go-to partner for contractors and distributors.
Industry Shifts: Three competitors exited the market entirely, one closed operations, and two withdrew due to logistical challenges.
Distributor Investment: Distributors began stocking critical inventory, implemented job-site stocking programs, improving project efficiency for contractors.
Trust and Alignment: We became trusted advisors for all stakeholders, creating partnerships that prioritized value over transactions.
Lessons Learned
Here are the key takeaways from our journey:
Trust is the Foundation: Building trust takes time, but it’s the cornerstone of lasting partnerships.
Value Over Price: Helping stakeholders see the bigger picture transforms transactional relationships into strategic alliances.
Communication is Key: Whether aligning internal teams or engaging with external partners, clear and consistent communication drives success.
Challenge the Status Quo: Industries stuck in their ways can be reshaped with the right mix of strategy, education, and persistence.
Conclusion and Call to Action
My journey in opening a regional manufacturing facility and transforming the market taught me and my team invaluable lessons about leadership, strategy, and partnership. By focusing on value, trust, and alignment, we didn’t just grow market share—we reshaped an entire market.
What strategies have you used to overcome entrenched market challenges and drive growth? I’d love to hear your thoughts in the comments!
At Tidewater Solutions Group, LLC, powered by Sales Xceleration®, we specialize in helping businesses like yours navigate these challenges. Whether you need short-term support to close out the year or long-term strategies to drive revenue and empower your team, we’re here to help.
Let’s connect and discuss how we can partner to ensure your business has a story that is changing the numbers in a positive way.
Shawn Dunahue
Fractional Revenue Operations Advisor & VP of Sales
Tidewater Solutions Group, LLC
Email: sdunahue@tidewatersg.com
Tel: 941-320-2131
Feel free to reach out to learn more about how we can support your sales strategy, execution, and team empowerment for continued success.
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