Best Practices: Southwestern Interiors - Feb 2021
By Jessica Chevalier
When Bill McCaddon purchased Southwestern Carpets in August 2001, it was a firm solely focused on apartment replacement work, which at the time was mostly carpet installation. Two decades later, it serves the single-family builder business exclusively and has changed its name to Southwestern Interiors, communicating its ability to not only offer carpet to its builder customers but also hard surface flooring (hardwood, vinyl and porcelain), epoxy garage floors, window coverings and design services.
Still owned by McCaddon but led today by Bob Burton, president; Terry Grifford, vice president of sales; and Chris McCoppin, vice president of operations, the business cur-rently ranks No. 38 on Floor Focus’ Top 100 Retailer list with estimated revenues of $74 million.
ROCKING & ROLLING
As a builder specialist, Southwestern serves single-family builders in the Dallas-Fort Worth (DFW) region. The com-pany’s Lewisville location was essentially no man’s land when it established its office there in 2007 but has since grown signifi-cantly, with a massive Nebraska Furniture Mart opening next door. “Sometimes, timing is just everything,” says Burton. “Even though we aren’t retail, our location is important, especially for our contractor partners who are driving out to jobs all over the metroplex.”
Dallas is an undeniably hot market for home building, and Burton reports that as long as interest rates stay low, he doesn’t see that changing anytime soon. In fact, according to Burton, the number of housing starts in the DFW area has doubled in six years to nearly 46,000 expected for 2021.
That activity has enabled Southwestern to hone in on its strengths and capitalize on them-without the pressure to expand, expand, expand. Says Burton, “There is so much op-portunity here that there’s no need to open new branches.”
This March, the company will open a second distribution facility about a mile and a half from its current facility. The new, 37,000-square-foot warehouse will enable the firm to better organize its inventory and operate more efficiently. Tile and carpet will remain in the existing distribution center with hard-wood, LVT, window coverings and garage floors operating out of the new one. Burton explains that the expansion will release a bottleneck the company has had in its operations.
Above all else, most important to Southwestern is being a good partner to its builder customers. In fact, it is by this measure that Southwestern gauges success. “We don’t have a revenue goal,” says Burton. “We never have. Our goal is to be known as the best partner that our customers have. The revenues will follow. We have to be indispensable for our customers, and that is different for each one. Our job is to understand their goals to know how to support them.” As such, the company seeks to ground its sales in communications and partnerships, not price. Burton recalls a former mentor’s slogan, “If you win business on price, someday you will lose it on price.”
Furthermore, the company focuses on selling what the customer wants, not what Southwestern has sitting around and, therefore, has motivation to sell. In fact, the company only inventories products that are recurring purchases, so that it isn’t compelled to move something sitting in the warehouse at the expense of the best possible fit for the job and cus-tomers, designing its programs around each builder’s buyer profile through its state-of-the-art design studio, staffed with design professionals.
Building Partnerships is a group of 12 to 15 residential flooring contractors from across the U.S. who share best practices and discuss challenges. All of the members are customers of Broadlume who, at Burton’s behest, were introduced by Jay Flynn and Michael Vogel, so Building Partnerships, which launched in September 2017, is something of a group within a group.
Though Building Partnerships has no formal leadership structure, it does have bylaws, and the members meet twice annually. They do not buy products together or formally link their businesses in any way, but, says Burton, “I walk away from every meeting with a page of notes.”
Southwestern Interiors has long had success finding new em-ployees through family and friend referrals, but eventually the well dries up. Today, the company is currently utilizing its new branding combined with employee testimonials to attract inter-ested applicants over social media sites LinkedIn and Facebook. Burton explains that when McCaddon was leading the company, the common sentiment was that he would do anything for employees, and they would do anything for him. Southwestern wants to maintain that family-oriented feel but found that it gets tougher as a team grows, so leadership has to be intentional in promoting the culture it wants to nurture.
Burton believes that it’s always important to keep an accu-rate perspective on the work at hand. “Sometimes we’ll do an unexpected pizza day, or I’ll have the ice cream guy show up unannounced. This isn’t the ER. We are in the flooring busi-ness. It’s supposed to be fun. We are building people’s dreams here-buying a house is one of the biggest decisions a person will make. Let’s think of it that way.”
The company is also working to provide employees with a more concrete perception of the importance of their own roles. The new brand materials include a flow chart showing how each employee’s job supports the overall success of the company. “We want even entry level folks to see how they are important,” he notes, “and we have seen retention creeping up over the last year.”
In 2020, Southwestern set out to change its visual repre-sentation, hiring AM Agency to update its look and logo. The agency came back to Southwestern and said, “We think you should do a culture check.” This consisted of identifying what the company was, what it wanted to be and in what ways it wanted to be indispensable to its customers.
Burton explains that his experience as division vice president for Tuftex taught him how important it was for a company to have a memorable identity. The Southwestern Carpets name was frequently mangled or mistaken. Furthermore, Burton and his team realized that they’d like to better tell the story with their name. To that end, AM suggested that the company drop “Carpets,” since it wasn’t representational of its entire offering, and adopt “Interiors.”
In addition, the company changed it tagline from the “Setting the standard” it had used for years to “All in” and established company values all represented by words starting with “in”: indispensable, inspired, industrious, indivisible and innovative.
Supply chain issues are a significant headache for Burton and his builder customers. “If a customer buys a house today that isn’t built, the builders are having a hard time telling them when it will be ready,” Burton explains. “There are supply issues with everything-bricks, appliances, flooring, plumbing fixtures. At one point, we were doing 200 reselects a week. This could be a floor or an accent for a shower. This was slowing builders down, and our designers were doing double the work. It has gotten a little better, but there is still some concern about demand being greater than planned for.” With the limited supply comes higher prices, of course, which will be passed down the supply chain to homebuyers.
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