Hardware Retailing The Industry's Source for Insights and Information
The North American Hardware and Paint Association (NHPA) has recognized key home improvement operators for their successes and strategic solutions for 15 years with the Top Guns award. This award highlights retailers who are committed to their communities, their teams and to the independent channel at large.
Greg Templeman, president of Sunpro, which operates 16 locations in Utah and Idaho, came to his role after a chance meeting at his daughter’s soccer game. Read the conversation with Greg below and click here to read a profile about his business and meet the other honorees.
Tell us how you got to where you are today.
Greg Templeman: Mine was certainly an unorthodox path. I come from a family of dentists, so it makes no sense that I’m in the hardware and LBM space. I went to the right school for this industry. I went to the University of Vancouver in British Columbia, which is the most well-known lumber schools in Canada, really in North America, but I studied international relations and Russian. So I was all kinds of mixed up. When I got my degree and wanted to work for the department of foreign affairs in the Canadian government, and that didn’t pan out.
I ended up getting my MBA and worked for a specialty company called SpaceKraft which is owned by Weyerhauser, and then later on by International Paper. So my first foray or experience into the lumber space was with that company.
I actually met a guy at a rec soccer game. This guy struck up a conversation with me, and we talked a few times at a game after that, and he reached out to me on LinkedIn and asked me to lunch. What I thought was an innocent “let’s be friends” lunch turned into a quasi-interview in a Chick-Fil-A.
He was intrigued that I worked for Weyerhauser, since they are a large supplier to Sunroc Building Materials, which is now Sunpro. One thing led to another, and I’m interviewing. I realized it was more of a culture fit interview, so I sat down and we talked about a little bit of everything. I was hired into the position of northern region vice president of started working there about seven years ago, and I’ve been president since 2017.
So the industry kind of found me, and I love it. I had different career aspirational goals. I did grow up in a small farming community, and I really love the principles that are embedded in a small town community where you look after one another. I think the LBM and hardware space are certainly very emblematic of that. So it’s great to be in an industry that really values community centricity and family values and principles.
What’s been your hiring strategy recently? What qualities do you look for in a new hire?
GT: Sunpro’s vision is “Building a Better Community” and we have four core values: We value people; always give a full measure; our word is our bond; and quality products and services for the best value. That governs everything about the Sunpro culture. We hire on that basis and we let people go on that basis.
We are having a labor crisis. We have over 500 employees. We’re obviously in the hardware space but we’re also in the insulation space, so we’re really in the trades right now. So it’s hard to hire no matter the position. So we have five staffing agencies that I’ve signed agreements with. All have a different niche and market focus. One actually goes door to door in targeted communities and hands out Sunpro’s job postings. Our truss laborers, in areas where we have truss operations, are primarily Hispanic, so we’ll go to Hispanic communities or wherever we’re having the most success recruiting. But it’s really, really hard right now. The employees we do have are suffering from marginal burnout, so they’re working really hard. We have postings sit forever. As the president of Sunpro, I have to see every potential employee application where they have a record. And in the past, we would be a little more careful, but lately it’s very rare that I don’t approve a hire. Obviously we want to see a certain amount of time has passed since whatever the indiscretion was, but it’s tough in Utah and Idaho where we operate.
Our strategy is based on our vision and our core values, and we won’t compromise on that. We offer an unbelievable benefits package, it’s unparalleled in our space, in the construction and building materials space. But unless you have vision or a family and you think about benefits, there’s really not a whole lot of value there. We’re working through it. I thought in 2017, the market was so thin, and I thought we reached the bottom of the labor pool, but I think it’s much worse now.
I have to express gratitude to two of my managers, Michelle Steele and Brian Johnson. Michelle does an outstanding job managing the part-time schedule. In our store in Springville, our flagship retail operation, the bulk of our employees are part-time students, high school students in most cases, so managing that schedule every single week is a bear. But, you have to be flexible otherwise you don’t have access to that pool of employees and they are critical to our operation.
Secondly, pre-COVID and post-COVID, we have a fairly structured work-from-home policy. Where you’re fully at home, but we have a common workspace when you need to be in the office. We’ve developed that into a hybrid space. Those who can do their work adequately from home now have that option, whereas pre-COVID, they didn’t have it. So, you’ve got to be flexible and willing to work with them.
What has your product sourcing strategy been over the last 18 months?
GT: If you can buy it, buy it now. Just yesterday, I was talking to Michelle, and we’re buying pallets of industrial adhesives for our stores and distributing them to other locations. But you don’t know when you’re not going to be able to get it, and with the supply chain issues, specifically transportation right now. At least in the LBM space, I know a lot of dealers are double buying, meaning they don’t really have a need for all of it, but they’re hoping the second order will come in before the first. It’s certainly a crisis for us. I’ve got great managers who are working through it. But when it’s there, and we know it’s an item that we’ll turn quickly, we buy it.
How have you managed customer loyalty?
GT: We have a robust loyalty program called Sunpro Rewards. For every $1 you spend at Sunpro, you get one rewards point, provided you pay within terms, which for most of our customers is 30 days.
The customers who are paying within terms can redeem those rewards three different ways. You can do a gift card, so let’s say you spend $1 million with us, you can redeem for a lot of $100 gift cards. Typically we don’t want people to use them that way. You can also redeem them for a travel voucher.
But our preference is our signature Sunpro Rewards trips. The conversion rate is much more favorable to the redeeming parties. We were in Dubai and Maldives earlier this year. We just got back from Switzerland a few weeks ago. We offer about three or four trips on an annual basis. When you go on a trip with one of your customers, typically their spouse will come with them. So the redemption rate for that trip to Dubai and Maldives was about 2 million points for a couple to go, so that means that individual has spent $2 million with us paid within terms. We have no problems rewarding customers like that.
It’s very extravagant. It’s grown into something much bigger than I ever expected it to be. It has its own momentum now.
For our retail hardware customers, going on these signature Sunpro Rewards trips is probably not feasible for them, but they can use those points to redeem for gift cards or travel vouchers. Sunpro has always had a pretty good position when it comes to customer loyalty with those rewards trips. Even those who don’t go on it, they hear about the trips and I think some have aspirations to eventually buy a few hundred thousand dollars worth of hardware or lumber. If they’re building their own home or multiple homes. But that’s the foundation of our loyalty program.
What does the home improvement industry look like in five years? What do independent retailers need to do to compete?
GT: I have some serious concerns with some of the trends we’ve seen. The migration of customers back to the big-box stores. It’s highly frustrating, especially when you’ve done your best to try and be sticky for those particular customers. We’ve made a conscious decision that if you want to go and buy panels of 7/16th OSB or CDX from Home Depot or Lowe’s, which we know is a loss leader for those organizations, go ahead. You’re probably not our best customer profile. They invariably come back and start buying from us again, whether it’s a small general contractor or even in the retail space. There are certain customers who we’re OK not being sticky to them because they are often the ones who don’t pay on time and are very much price buyers.
Really my two takeaways from the pandemic is first, we will diversify deeper our supply chain. EWP, the LVL and high joist. We have a supplier that we are single sourced with. In the LBM space, it makes sense to be single source because they offer significant rebates. Now we work with four different EWP suppliers. We should have diversified early on.
Secondly, I have a concern about ability to buy. You really need to manage your supply chain aggressively. As the big guys get bigger, if I’m a mill operator, I’m going to sell to the guys that are in first position, which are big boxes, and then after that you’ve got regional consolidators like U.S. LBM or Kodiak Building Partners. Unless you’re part of a buying co-op, you’re down below tenth position, so certainly not a priority for a mill or an operation that’s trying to sell you material.
I’m not suggesting you need to get bigger to be in the business, but in the LBM space that certainly seems to be the case. In the hardware space, I think there’s always going to be a need for a small-town independent hardware operator. I just wonder if certain product categories will become more valuable and others more commoditized, so you manage your mix of product offerings better to suit the customer who comes to you because you’re an independent, family-operated business.
The conversation here is a transcription of the Top Guns panel discussion from the 2021 NHPA All-Industry Conference. It has been edited for clarity and style.
