The recently announced direct selling relationship between Armstrong and CCA Global Partners has sparked its share of controversy. Independent specialty retailers, as well as members of other buying groups, are concerned how this arrangement will impact their businesses, and whether CCA members will receive favored-nation status. Adding fuel to the fire are a series of its mistruths circulating throughout the industry. FCNews editorial director and associate publisher Steven Feldman recently sat down with Paul Murfin, Armstrong’s vice president of sales and distribution, in an attempt to bring clarity to the situation.
First, why did Armstrong and CCA embark on this relationship?
When you reflect on the industry today, I think CCA has come to the realization that there are a few manufacturers to which they have to be important. And those are the manufacturers that will be around long term. The simple nature of the relationship is CCA recognizing Armstrong’s position in the marketplace, and Armstrong recognizing that we have an opportunity to improve our position with the CCA groups, which encompass over 2,000 independent locations.
Straight out, what’s in it for Armstrong?
We entered into it first and foremost because we want to grow our business. Beyond that, we think we have an opportunity to improve the way we execute with this type of customer. It’s very difficult for a full-line salesperson (distributor or not) that has a full bag of products and multiple types of customers to call on a member of a buying group and understand all the details of that program in addition to all the details of our product line. So by putting this program together and employing field service reps, we will have a team of people that can more easily speak the language of buying group customers.
At the same time, that will enable our distributor salespeople to more effectively focus on the needs of the independent retailer. Customers today are different, whether they are builder focused, property management focused, retail focused, commercially focused or part of a buying group, and I think this CCA deal is an example of realizing that different types of customers need to be serviced in different ways.
So regardless of what people have read or heard from some of our competitors, the No. 1 benefit of our arrangement with CCA is superior execution, both for the independent channel as well as the buying group member.
Talk about some of the myths you’ve heard floating around and dispel them.
The biggest myth is the CCA member will have an unfair advantage over all other independent retailers. We have an obligation to ensure the CCA member is competitive in the market, just as we have the same obligation to all other independent retailers.
Another myth appeared in another trade publication, and the interpretation was that all our Web site leads would be directed to CCA members. The fact is our Web site leads will continue to go to those retailers–in buying groups or not–that are most supportive of Armstrong.
What about pricing?
If anyone thinks Armstrong is capable of setting price in the market, it’s simply not true. The marketplace is what dictates price, and we are committed to making sure every dealer can compete effectively in the marketplace. The largest benefit for the CCA member is not the lowest common denominator, meaning price.
So what is the largest benefit for the CCA member?
The way the CCA member benefits most is execution. We will be able to develop programs in St. Louis, which can be effectively and broadly executed at the store level.
Even when I worked for a company that owned the entire process, I personally stood outside buying group locations before I made a sales call and did not know the specifics of the program. The outcome is you walk into a store and sell this week’s promotional offer. And that is working against the broader program the manufacturer is trying to develop with the buying group and the member itself.
This really has everything to do with improving the execution within a buying group. It gets Armstrong closer to the customer.
Can’t it be argued that the CCA relationship can actually benefit the non-aligned dealer?
As a result of Armstrong hiring service reps that are focused on the buying groups, this will allow our distributors’ sales force to increase their focus on all other independent retailers, and the outcome should be better service for everyone involved.
Does a CCA member have access to products that the non-aligned independent dealer does not?
There are no exclusive products today offered to any member of a buying group. Certain products may be private labeled, but the independent specialty retailer has access to everything.
We are committed to doing more business. Nobody in this industry has invested more in the success of independent retailers via new products, new merchandising, new programs, consumer advertising and the best network of distributors.
What’s happening now is people are spreading misinformation based on this CCA direction. What they are not doing is talking about how this deal results in better execution. No one is saying they have better products. No one is saying they have better programs or merchandising. What they are doing is spreading fear in lieu of making a similar investment.