July 1, 2010
Turn obstacles into opportunities
By Therese Dunphy, Editor-in-Chief
“All the adversity I’ve had in my life, all my troubles and obstacles, have strengthened me… You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you.”
— Walt Disney
Since the last USGS Aggregates Industry Atlas was published in 2008, many operators throughout the nation may feel like they have been kicked in the teeth. By most metrics — tons produced, man hours worked, margins achieved — the last two years have offered plenty of troubles and obstacles. But like Walt Disney, numerous operators have also found ways to improve their businesses and create efficiencies to weather the weak economy. The same strategies that have made tough times bearable are likely to yield even better results as the market improves as, undoubtedly, it will.
One of the ways some operators have protected their business is through a sharp focus on meeting and exceeding customer expectations. Today, it is important to have customers who are not only satisfied, but loyal. Competition for sales is fierce; you have told us that repeatedly through the Aggregates Manager Forecast Survey. During the last several years, competition for sales has ranked as the biggest problem facing your business; and it has been a growing challenge. Between 2007 and 2009, the percentage of operators who ranked it as their top concern grew from 23 percent to 34.3 percent.
To learn why contractors choose one construction material supplier over another, we surveyed readers of sister magazine Better Roads to rate their priorities (see Figure 1). While it’s no surprise that price took the top spot on their criteria, product quality and customer service also ranked high on the list of many contractors. Operators have little room for movement on price. Many report having taken sales during recent months that yielded little to no profit. Further, cuts of this nature make it difficult to invest in the personnel, equipment, or technology development that will set the tone for future growth.
Instead, smart money lies with giving the customer what they need to succeed in their business. Whether they need a quick turnaround time at your site so they can carry more loads per day (see page 10) or the development of a stone that resolves their pavement challenge (see page 5), providing that kind of partnership will allow your business to prosper as the economy continues to recover. And that might make a kick in the teeth a little more bearable.
Figure 1. Contractor Ratings
Customer Product Product Sales Technical
Billing Service Quality Range Price Support Expertise Ticketing Transp. Other
Very Imp. 33.6% 64.0% 82.2% 49.1% 86.3% 35.5% 40.4% 30.9% 42.7% 31.8%
Imp. 42.7% 29.8% 13.8% 43.6% 12.8% 49.1% 48.0% 52.3% 40.5% 36.4%
Not Imp. 23.6% 6.2% 4.0% 7.3% 0.9% 15.5% 11.7% 16.8% 16.8% 31.8%