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In one of the best speeches we've ever heord, Tocomo builder Curtis F. Peterson tells lhe lumber industry from retoiler to monufocturer, where ihey hovc missed the boot, why, ond whot thcy con do obout it. His speech, fo fhe Forest Industries Morketing Congress, is must reoding for everyone i'n the business.

rf'IHIS JUST MIGHT be the humorous r part of this session, beeause I think Larry (Lawrence Laukhan man&ger of Pemton, Inc.-who 'build 500 homes annually), and I were thrown in at the last moment. I think Dr. Rich said, "well, we got a lot of nice professors, let's have a couple of cqstomers and see what they look like."

What I am going to give you is one builder's view of your industry and where I am wrong just sayoh hell, he can't know anything he's only a customer.

Tacoma is a slow and tough market and if you build a hundred houses a year you've got to sweat to get there and we are in the 75 to I00 range. The importance of this is that we get called on or contacted by most of the suppliers and representatives from your industry. I try to keep reasonably well informed on the trends in my industry and yours, I would imagine that Larry and myself are somewhat representative oI the builders that you are going to have to try to sell.

I approach this industry with no background in it. I actually read myself into building the way we do it, which is essentially with the Lureco component four foot two and four foot panel system. I have never built any other way. L don't see any logic in building any other way. I just can't see assembling a bunch of little pieces out in the field. Inherent in my comments is the thought that this is a good system of building; that there is really no other system; that the on-site fabrication has to be reduced, and the components as they get into place must be increasingly complex.

No good talk is worthy of anything without a definition, so my definition oI a component is a sopi.r.sticated, multifunction part in place. Emphasize the words iz ploce becatse this is my problem. Getting t}lem there. I can buy tlem easily. And I also think that this is probably your indus. try's biggest single failing when it comes to selling the builder. What is the problem of getting your ,product in place?

First is the high mortality rate between the discussed or published ideas that you see in the standard trade magazines and the ones that grow into generally accepted usage..There is lots of talk but little change. Secondly I note a lack of dramatic innovation in this industry and particularly from your field. I find a great deal of modi- fication, but I find very little substantial change, as contrasted with many other industries in the last twenty years which have exploded with new concepts and new ideas. I find that there is a slow eroding of the traditional materials and the traditional concepts in the building industry by socalled new materials such as copper and steel and plastics and aluminum. And this is usually being done piecemeal. They pick you off a little bit at a time. If I were in your position ['d be a little jittery about all this.

When my wife read this speech she said, "why don't you title it, "you're rw damn good lor thc lollowing six reasons." I told. her I couldn't as I only had five. So here goes

I don't think you know how your products are used. To me they appear to have been conceived in a laboratory, or in a vacuum. When I say used I mean everySsl,ots of tal'k, but littl'e cbange , , , a lack of d'ramatic innoaation , d,on't knou yoar customer , sal'es staffs are bad'ly trained, , , I'unaber yard,s-if eaer tbere utas a sick group of businessrnen that is one-a, tbe local leael in particul'ar,)) thing from desigrred, oonceived, bought, or' dered, shipped, hauled, nailed, moved, handled, repaired, drilled, painted, stolen, accounted for. These are my problems. A piece of prefinished paneling is wonder{ul in a lumber yard display case but it's another problem getting it to the job site, getting it in place, and taking care of it. This is what I mean by used. If you're going to sell me you've got to help me understand the problems of using your product. t think the best example is the stud-the common old ordinary stud which would seem a fairly simple piece of building material. If you haven't done so follow one through a production cycle. See horv many times it's hauled around and cut and see what the plumbers do to it and see what the electricians do to it. See what maybe ar inspector will do to it. It's just unbelievable what a simple, small structural component goes through before being used. And then the damn thing's warped and the nails pop in the dry wall and we have to go back and fix it anyway.

A builder is never done with a house. At least Larry and I figured we had a system. We are going to incorporate a com' pany eaeh day; build one house and then go out of business. We take care of our call-backs that way. But this isri't realistic, of course. You live with those houses. So used to me is a many years long terrn.

Secondln I don't think you know your customer. And here I'm speaking of the builder of course. I don't think you know how he buys; I don't think you know when he buys; I don't think you know his basic motivations; I don't think you know what his problems are. And please don't make the comfortable assumption that this customer will respond to a logical appeal. He's probably not much less logical than the rest of us, but I'll tell you thisif he's active he's a hell of a lot busier than most of us. If you're going to get through to him, you've got to understand how this guy func' tions. I don't think that you as an industry understand this man. I don't think you're even trying to understand him, really.

Thirdly I don't think you talk in terms that this man understands. This is the opposite side of the coin of understanding how he makes his decisions. The gap between what you know and think and talk about your products and what the customer thinks about them or how he views them is sometimes appalling.

I think the most maligned term in the building business is cost savings. These are usually superficial and meaningless and do not extend deeply enough into the builder's problem, which is the total cost in place over a long period of time. I would question whether you really understand the appeals of some of your products. We've used the wall system or the component system as an example here. To me the basic appeal of this particular product is not field labor saving nor even the material saving. In my instance it happens to be fund turnover. In other words, some of the appeals that your products may have may be far-removed from your traditional way o{ thinkirg.

In our instance we have rather limited eapital. Every builder is broke--just assume that because he's always reaching for something beyond. So we enjoy this particular system because it lets me get the damn things up so fast I can get my money and spend it on yesterdayos bills before I have to get caught up with the next few days. So my point is that sometimes the appeal of a product is not an obvious one.

I think your sales staffs and your merchandiser's sales staffs are badly trained. And they generally resort to dollar selling when I don't think they have to. They may understand the builder and/or they may understand the product, but they seldom understand both. The greatest danger lies

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