After 26 years in the commercial flooring business, one begins to cherish the occasions when you can become overwhelmed with excitement or delighted by a professional experience. Many flooring industry veterans with twice as many years in service consistently search (and may pay consulting fees) for exposure to ideas and expertise that renews enthusiasm for the promise of the commercial interiors industry. Recently, a phone call came in to Starnet that captured my imagination and inspired me to share in this article.
Bob Althoff, CEO of Dealernews, a magazine for powersports dealers, and owner of A.D. Farrow Harley Davidson dealership locations in the Ohio market, called me to discuss the Starnet organization. Althoff, whose business card literally reads “World’s Luckiest Man,” is on a mission to get the powersports dealerships across the country and create the National Powersports Dealer Association (NPDA).
It is estimated that there could be upwards of 7,000 associations in the U.S. across all industries. Even though automobile dealers are represented by the NADA, the recreational vehicle dealers have the RVDA, and the marine sports industry has the MRAA, nothing currently exists for the coolest vehicles on the planet—motorcycles. The commercial flooring and powersports industries are about the same size, with estimates of $30 billion, and plenty of debate around what should be included in the numbers. Do we really need to argue about plastic ceramic spacers or stainless machine screws in the totals?
The “World’s Luckiest Man” was passionate about his industry and devoting time to launch what we take for granted in the commercial flooring industry, a professional association. He was looking for expertise and figured that after nearly 30 years and $3.6 billion in sales, Starnet might be serving its members well. Our conversation wandered and it struck me how similar the issues were for “dealerships” in both industries. It was remarkable how much we had in common in relation to goals for benefitting members, the manufacturers, and all stakeholders that depend on our cooperative network. Our industry is fortunate to have several options like the association he hoped to launch for powersports. My call with Bob provided inspiration to review the relevant changes that have happened in the commercial flooring industry, where we have evolved, and where opportunities exist for independent businesses to join cooperatives, associations, and other industry organizations.
Once upon a time there were a few more than 100 carpet manufacturers in the market. No individual brand or manufacturer had achieved more than a 10% market share. Broadloom carpet had 98% of the installed market, DuPont was the dominant fiber producer, and manufacturer extrusion capacity was immeasurably small. Flooring businesses who executed commercial work were known as simply as dealers. The commercial hard surface market in the U.S. was dominated by a singular powerful brand. If carpet dealers did hard surface work, it was generally with Armstrong. The alignment of carpet dealer businesses was generally called a “mill alliance.” Carpet dealers were closely identified with brands such as Milliken or Bigelow in their service area.
The creation of an alliance was simple because so many companies were looking for partners. Geographic limitations allowed the partnerships to remain in reasonably managed geographic areas. Few manufacturers sold direct in the market and the alliances favored the carpet dealer relationship with clients. Dealers rarely were brought together in meetings or trade gatherings. When they were brought together, the appreciation for each other, and the sharing of information (pre-internet) created such enthusiasm that companies such as DuPont obliged the groups with additional gathering events. One association that grew out of the DuPont dealer peer conferences was COMSPEC, which eventually evolved into IMG and then Starnet.
Can Membership Make Me Better?
By joining a cooperative or association, you will gain access to an elite network of professionals with a mutual passion to meet the complex demands of operating a full-service interior contracting business focused on flooring. Through collective ownership and shared experiences, coop members enjoy programs and benefits that shape the industry and enhance the profitable growth of their business.
Connections with peer flooring contractors, vendor partners and industry experts are created through membership meetings. At meetings, every member has access to thousands of years of experience, sometimes in one room. The meetings allow participants to connect with industry leaders and experience the latest flooring trends and innovations. Peer to peer mentoring, sharing best practices and leadership exchange are other valuable parts of the meetings. There are nearly unlimited resources for education, training and industry research programs that enhance member performance. The cooperative model also provides resources to develop staff expertise in sales, specification, project management, operations, and executive leadership. The best organizations also collect and provide annual membership financial and business model benchmarking to expose every member to the metrics of excellence. Exclusive internal member research allows members to make more informed decisions on issues from phone systems to COVID-19 safety plans.
For senior executives in manufacturing, these events are the most efficient way to share quality time with the largest purchasing customers in the U.S. and Canada with just a few days of time invested. Industry partners are encouraged to send executives and functional leaders from different roles such as operations, sales, specification, and business development to these events to gain exposure to members. These internal teams depend on Starnet’s performance to execute their annual business plans and reach internal goals set for their projects. The setting allows the leaders with line responsibility to share their plans and get feedback on how the cooperative can help them succeed in the year ahead. The connection effort is designed to encourage business partners to expect the cooperative to play a significant role in business plans every year and contribute to the manufacturer’s success. Success includes accomplishing strategic goals as well as increasing sales revenue.
I Am Interested – Now What?
Many of us are taking the opportunity during the current business disruption to review our business and value proposition to prepare for the expanded opportunities that lay ahead. Cooperative models such as Starnet have prepared for interested companies to review the structure and programs developed over the decades of proven success. Reach out to a current member or to the leadership of the organization. You will be welcomed and provided plenty of information to make a solid business decision.
Cooperative networks and associations are the most efficient, effective, and reliable channel path for the commercial flooring industry. When we align with an active member who has clear business objectives, we help them succeed, and produce outstanding long-term value for member and manufacturer mutual end user clients.
There are very successful associations and cooperatives in the flooring industry, and we may take them for granted. They work in many ways to improve the industry every day.