Forming Lasting Customer Relationships

Coley Herrin smiles when asked about how much room there is for growth in PDI’s financial future. The distribution and retail company was founded in 1973 and has grown to have a sizable footprint in the Southeast, serving plumbing contractors, consumers and design professionals.

Based in Lawrenceville, Georgia, Herrin is firm in his belief that the company’s focus on lasting relationships has PDI well positioned for expansion in product lines and revenue.

The key is offering the right mix of expertise and guidance to make customers view PDI as their first pick in a fastchanging and highly competitive market.

“We may not be your biggest supplier. We may not be your biggest customer, but we can be your best, and that’s our goal,” Herrin said.

The company was founded under the name Plumbing Distributors, Inc. Herrin, whose dad was a plumbing contractor, joined PDI as operations manager in 1999 after working in manufacturing and distribution. By 2007, he was the general manager and worked closely with the family ownership. Following the passing of Glad Mealor in December of 2010 and his son Sid in May of 2011, Herrin became president in January of 2011 and CEO in 2017.

PDI Kitchen, Bath & Lighting has 19 branches across Georgia, Tennessee, South Carolina and Alabama, and 14 showrooms across Georgia and Tennessee. The company employs nearly 400 people and generates about $300 million in gross revenue.

Herrin drew lessons from his experience working closely with family leadership. He saw how strength in training and identifying talented people helps develop long-time employees, the foundation to build relationships with customers.

The company has its own internal training programs for executives and staff. PDI also works closely with manufacturers to better understand the products they are selling so that team members can offer educated advice.

“My advice to other distributors is you’ve got to invest in training. Things are changing really quickly and if you’re not getting that information to your people, then it’s not getting to your customer,” he said.

PDI works closely with manufacturers and trains its members to understand the products they are selling, which contributes to a better customer experience.

Developing an Omni-Channel for Sales is Key

The company’s vice president of sales, Brandon McNeal, says the future looks full of potential as the Southeast continues to draw more people to the region.

The bulk of the company’s sales come from residential plumbers and trades professionals, with sales to consumers also generating significant revenue. McNeal, who worked for national retailers and manufacturers before joining PDI, cites trends showing that homeowners have an average of more than $300,000 in equity as the fuel for plumbing sales in renovations and upgrades.

Generationally, he points out that Baby Boomers, the biggest group of home owners, are likely going to be renovating their homes to make them easier to live in as they age.

Another big group of potential renovation business McNeal sees will come from Millennials, who are the biggest group of home buyers, and they are willing to spend more on renovations than other generations.

That points out the importance of the company’s smallest, but fastest growing revenue stream — online sales, McNeal said. Younger buyers use the Internet to research products and find inspiration for their remodeling plans.

In that sense, the online platform becomes increasingly important because potential customers who use the PDI website can explore design ideas and then put together a purchase plan and schedule. PDI then offers its expertise to guide contractors and buyers to a solution, rather than just an equipment sale.

“That e-commerce piece is a tool we have to build. If we don’t build that, if we don’t allow our customer that type of flexibility, it’s going to be hard for us to remain a preferred (business) with this upcoming generation,” McNeal said. “I am a true believer in our differentiated value proposition. You know we’re not going to be everything to everyone … but for those that appreciate the value proposition we offer, I feel like we’ve got a tremendous amount” to win customers.

The digital platform also helps PDI compete with large online and big-box retailers. McNeal said that someone could theoretically buy all their equipment through a website or a national retailer but they’d likely struggle with figuring out how to put it all together because of the complexity of some designs. PDI can show a plumber how to install a complicated luxury shower, for example.

A Warm Greeting Generates Sales and Relationships

The company’s showrooms are also part of building in-person relationships with customers. Researching products online is limited because a buyer cannot physically touch a sink, for example, or see it in the real world to get a sense of how it will actually look once it’s installed. And showrooms are good vehicles to begin building a relationship with a potential customer, whether it’s a homeowner, plumber or interior designer.

“I want my team to be greeting them warmly with a smile in less than thirty seconds.”

Brandon McNeal

“Again, most of the customers who are walking in our door have not done this before,” McNeal said. “It’s not normal for them. They’re intimidated, so we want to really put them at ease and establish some credibility with them. ‘You’re in the right place. We’re going to make your life easier and we’re going to help you.’”

Continued Growth Requires Nimble Planning

Shifts in sales channels are a reflection of how radically the business model has evolved for distributors, Herrin said. He recalled his father’s era when distributors relied on showrooms, warehouses and face-to-face contact.

Technology has transformed the distribution business in terms of back-office systems and the growth in online sales. PDI is using AI applications to forecast trends in products and sales, which is much faster than having a human wade through mountains of data.

“The payoff for us is to be able to take all this data that we have access to and look at trends of customers and builders to make sure that we have the right product in the right location at the right time for our customer,” Herrin said.

Distributors need to be nimble at meeting customer needs — and orders — by having systems in place to get products to the right place at the time. He believes creativity and ingenuity are skills that must instilled throughout the company.

However, he also returns to the competitive edge that building sales on lasting relationships gives to PDI, even as it grows its online presence.

“I’ve seen a lot of people try these self-service counters and all this stuff. Contractors don’t like that. They like to talk to a person,” he said.

Herrin sees lots of room for growth geographically and in product choices. The company began selling appliances three years ago by acquiring another company. Herrin is also thinking about expanding its electrical offerings beyond lighting. HVAC equipment sales is another market that PDI could enter.

Those strategies mirror trends throughout the trades.

“Plumbing contractors are now getting into electrical. You’ve got HVAC people getting into electrical and plumbing, and it’s the same customer. We’ve got to figure out how we can find more things to sell to our same customer and make it more convenient and easier for them,” he said.

When asked about how much potential new revenue PDI could generate, and how long it will take to reach a new milestone, possibly $1 billion, Herrin smiled and said with a laugh, “Five years.”

“I’d love to see those numbers much bigger, whether we could double it or triple it,” he said. “I know that that sounds crazy and we’re 700,000 miles away from that ($1 billion), but you’ve got to you dream big.”

To save time, customers can order their products through a custom online portal and pick up at a nearby branch the same day.