All businesspeople crave certainty and clarity in a world that is unclear and chaotic. The members in Starnet have a higher tolerance for making decisions with limited data, but they also prefer certainty and clarity when possible. To improve industry performance, there is an opportunity for much more coordination between commercial flooring contractors and the manufacturers at large. Coordination between the initiatives at the manufacturer and sell through channel partners like Starnet can be better aligned, especially when capital investments need to pay off. 

To fully understand the opportunity for better coordination, we can start with an academic definition of a cooperative. The definition written below was designed to inform decisions around taxation, but a valuable perspective stripped of marketing flourish. 

“A cooperative is an organization established for the purpose of purchasing and marketing the products of its members, i.e., shareholders, and/or procuring supplies for resale to the members, whose profits are distributed to the members (in the form of patronage dividends), not on the basis of the members’ equity investment in the cooperative, but in proportion to their patronage of it, i.e., the amount of business that each member transacts with it.” Carla Neeley Freitag, Taxation of Cooperatives, 744 BNA Tax Management Portfolio § I, 1 (2d ed. 2008). 

One can compare the definition above to the Starnet Mission – Through collective strength and integrity, Starnet will enhance the success and profitability of its members, while protecting and increasing the market share of supporting manufacturers by providing a standard of excellence that serves the needs of the customer.

Note the emphasis on holding market share for committed manufacturers and effective sell-through effort. The patronage dividend to the cooperative member scales with their commitment to purchase, not to the entire cooperative. Starnet members are committed to this concept. We are often surprised at the effort and time placed by manufacturers pioneering other routes to market through influencers and implementors. Often those routes to market cannot be quantified and most of the time are not related to the invoice path. An example is the architectural and design community. Cooperatives provide very tidy sales channel plans, methods of measurement that can be carried to executive level boardrooms, and long-term organized activation that can reduce the development time for effective salespeople from two years down to one year. Activation with cooperative members also reduces turnover in the field, which is the most significant challenge facing manufacturers determined to grow consistently.

We recommend a few areas where additional effort would improve outcomes when working with Starnet and similar cooperative sales channels, for example in B2C retail.

Committee Systems as a Focus Group and Business Partner

Most cooperatives run a committee system. This is an efficient way to increase engagement and ensure consistent feedback from members. The start of each year is an active time for the Starnet cooperative. Scheduled changes in the makeup of the board of directors normally impact the priorities and makeup of the member-led committee system. The committee system normally responds to the priorities of the members at large, which will vary by economic and client initiatives in their local markets. Common themes for member success and areas of concern are collected through the committee system. Manufacturers looking to increase sales should become as familiar as possible with the structure of committees. They should have the marketing and product management teams get engaged with committees to streamline workflow and reduce product launch schedules. The committee system can act as an analog version of AI language models. No matter what question is asked, an answer will come back with suggestions and context for success. 

We see some Preferred Vendors effectively coordinating with the Vendor Partner Committee to get the results desired. In addition, the Best Practices and Training Committee may be engaged to determine how to assemble labor teams to enable the manufacturers’ success, including training and equipment required. In contrast, the Finance and Technology Committee has yet to be brought in to understand how members can efficiently process item master data through computer systems to supporting bidding, submittals, purchasing, and closeout documentation. That missing coordination essentially acts as a sales prevention plan! Our industry has huge opportunities to be better using committee activation as a primary effort.

Placing the Product in Context – Where Does It Fit in Sequencing

On rare occasions, the manufacturers will make investments and take a position on a market focus that our members take advantage of locally. There is more room for industry collaboration in these instances as well. Often massive capital investments are made and the work of influencing the specification community begins without any engagement with the distribution and installation channel partners. Commonly these audiences see the “new product” at an industry event and the hopeful description from the salespeople is massive new sales volume.  

The ASTM standards and conditions required for the flooring installation to begin often cost much more to create than the execution cost of the flooring material and installation labor. Challenges in sequencing on a jobsite can dramatically slow or prevent the success of a product launch. Most of the time, our members adapt products and systems, and use them in a novel way that solves challenges for clients. This adaptability is vital to daily commerce in commercial flooring. We see all too often that these sequence issues are discovered by the manufacturer well after the launch. A single Best Practices and Training Committee meeting would have identified the issue and offered several potential options for success or ideas for accessory and complimentary product solutions to accelerate success, reduce claims, and potentially eliminate a poor experience for everyone involved.

Better Outcomes

Starnet initiatives focus on talent, operating model, technology, and data which lead to business success. These concepts are implemented at each member location through various job descriptions and roles in member companies. The functional areas include sales, estimating, administrative project management, and labor project management. For every member and every aligned manufacturing partner, Starnet provides multiple programs and reinforcing experiences through the committee system that enhances business effectiveness. Nearly any business objective, from launching a new product to benchmarking the effectiveness of maintenance labor productivity in the field, can be supported through the Starnet infrastructure. Other cooperatives can have similar impact in their areas of focus, such as B2C or single-family builder. 

Independent member innovation and local market access is connected to efficient national execution streamlined through the board of directors, committee structure, and the Starnet Staff. Cooperative models like Starnet provide the most stable and organized market path for any manufacturer looking to manage the U.S. and Canadian channels focused on installed commercial flooring and interiors. 

The balance of effectiveness and efficiency provides every stakeholder with multiple options to access the power of a $4 billion dollar network and every Starnet member with boundless resources to enhance their business success. When we align with an active partner who has clear business objectives, we help them succeed, and produce outstanding long-term value for our mutual end user clients.