As the son of a roofer and the founder of two roofing companies, Ken Hendricks had always found dealing with roofing distributors frustrating. He couldn’t find one business that could meet all of his needs, and the level of service he and his father received was often poor. Seeing a chance to succeed in a highly fragmented industry, he decided to go into the distribution business himself. In 1982, he formed American Builders and Contractors Supply with the ultimate goal of creating a nationwide chain of one-stop shops for roofing professionals that would thrive by delivering the type of customer service he and his father never received.
Twenty-five years later, Ken Hendricks is the CEO of Beloit, Wis.-based ABC Supply Company Inc. with more than 350 stores in 45 states and the District of Columbia. The company is the largest wholesale distributor of roofing materials and one of the largest distributors of siding, windows, gutters and other select exterior building products in the United States. In 2006, sales of the privately held company were approximately $3 billion, and Ken Hendricks chalks it all up to the company’s core values, which stress treating the customer with respect and providing top-notch service.
“A roofing contractor is treated in society as some sort of second-class citizen,” says Ken Hendricks. “I truly grew up with that feeling, and I saw the way people treated my dad, who I had so much respect for. As I grew up, throughout my entire life, I’ve wanted to change that perception. That’s been the driving force behind ABC Supply."
Growing Up in the IndustryWhen it comes to firsthand knowledge of the roofing industry, Ken Hendricks is one roofing distributor who has it in spades. “I sort of grew up in the business,” he recounts. “I worked with my dad after school, on Saturdays and during the summers from the time I was nine years old. I started out carrying a third of a bundle, then half a bundle, and worked up to carrying a complete square. (Yes, a complete square.) It was just to keep me out of my mother’s hair. I’d ride my bike to the jobsite, work until 6, and my father would put the bike in the back of the truck and we’d go home for dinner.”
Born in Janesville, Wis., Ken Hendricks dropped out of high school at 17 and spent the next four years driving a repair truck for Wisconsin Power & Light during the day and working a second full-time job as a draftsman at a conveyor company at night. He did roofing work on the weekends and soon had so many roofing jobs that he quit his other jobs to form his own roofing company. He hired his own crews and took on both residential and commercial work, including Kmart stores and military bases. A decade later, Ken Hendricks and his wife Diane owned three prosperous companies - Blackhawk Roofing Company, which did commercial roofing, International Roofing, which did residential roofing and government work, and Hendricks Real Estate Properties - but they were looking for a new challenge. The idea of forming a national chain of distributors had always intrigued them, and in 1982 they ventured into the distribution side of the industry with the purchase of three stores from Bird & Sons.
They opened new outlets and acquired struggling distributors at such a rapid pace that ABC Supply was No. 1 on Inc.’s list of America’s fastest-growing companies by 1986, when it added its 47th store. By 1998, the company had more than 200 stores and reached $1 billion in sales. Six years later, with 271 stores, the company surpassed the $2 billion mark.
Along the way, the company developed its Catalog Division and acquired or established affiliate companies, including Mule-Hide Products Co. Inc., Amcraft Building Products Co. Inc., American Construction Metals, Stone Metal Products and Vande Hey Raleigh, to produce some of the private label brands the company sells.
Ken Hendricks maintains that ABC Supply’s focus on the needs of the customer is the key its success, and the company aims to ensure excellent service by providing top-notch training and support for its customers and associates.
“I remember buying a lot of roofing material from distributors, and they didn’t care about me, or the project, or how to help me do the job faster or easier,” says Ken Hendricks. “They just cared about the money. When I went into distribution, I didn’t forget about my past. On my desk I have a plaque that reads, ‘Unless your customer is a success, you will fail.’ There’s one key in business: Help your customer succeed.”
“We’re not a products company, we’re a service company,” he continues. “Anyone can buy roofing materials. We get the complete order there when they need it.”
Putting the Customer FirstOne of the people in charge of making sure orders arrive on time is Ken’s son Kevin Hendricks, vice president in charge of branch operations. Kevin Hendricks worked in his father’s repair shop and on his roofing crews while he was in high school, before ABC Supply came into existence. “My first roof was a coal tar pitch tear-off when I was 14,” he says. “I was hooked.” He graduated from high school in 1982 and worked on several roofing crews before taking over the ABC Supply branch in Madison, Wis., in 1987. He ran the branch for 10 years before taking over the Midwest Region, and he has been in his current role since 2001.
When it comes to the dynamics of distribution, Kevin Hendricks agrees with his father that the basic premise is pretty straightforward. He points to the company’s recent ad, which bears the tag line, “ABC Supply works hard to keep you working. Not waiting.” “That’s what it’s all about,” he says.
Ninety-eight percent of ABC Supply’s customers are professionals, including builders, remodeling contractors and contractors specializing in roofing, siding, windows and other exterior building products. “When it comes to residential work, regardless of the size of the contractor, the average house is still 35 square,” says Kevin Hendricks. Whether it is a commercial or residential project, big or small, the requirements are still the same: “You need all the material there - exactly what you need - when it’s supposed to be there.”
ABC Supply not only helps its customers succeed by delivering top-quality products on time, says Kevin Hendricks. It also assists its contractor customers with education and training, as well as in other areas, such as marketing. “We’ve been there before,” he says. “We know the challenges of the small contractor - and their needs. We educate them on the latest products. We offer training at our National Support Center in Beloit and we sponsor manufacturer training programs in our stores and at jobsites.”
In 2000, the company launched its ABC Freedom Programs, a portfolio of products and services designed to help contractors build their businesses. A variety of marketing tools - including jobsite signs, local job leads, a marketing starter kit and targeted direct mail campaigns - are designed to save contractors time and make it easy for them to get the word out about their businesses. Other programs include the In-Home Finance Program, which gives contractors the option to offer their customers convenient financing, and the company’s Open Top Dumpster program, which allows them to order dumpsters from their ABC Supply store at the same time they order the products they need for a job. “Time is money,” states Kevin Hendricks. “Getting more items handled in one phone call makes the job that much easier.”
Customer feedback is important, and ABC Supply polls its customer base by phone and uses a “hotline” and comment cards to record customers’ complaints and suggestions. “We use that input to help us decide how we can improve,” says Kevin Hendricks. Customer Advisory Panels are also used to measure the company’s performance and find out how ABC Supply can help contractors of all stripes, including home builders, low-slope roofers, and residential reroofing specialists. One example of a change instituted as a result of such feedback is the company’s Hassle-Free Return Policy, which is now the same at all ABC Supply locations.
Another is its Delivery Assurance Program, which pledges that the order will be delivered within a half an hour of the set delivery time, or the company will contact the customer to let them know the shipment will be late. “Contractors know that unavoidable delays happen, but they told us, ‘If you know you’re going to be late, let us know,’” states Kevin Hendricks. “We will be there complete within a half hour, or we will call the foreman at the jobsite to let him know.”
Training the Company's AssociatesIn order to ensure a consistently high level of service to its customers, ABC Supply makes it a priority to offer ongoing training to its associates. “We’re only as good as the people our customers deal with,” asserts Kevin Hendricks. “We know our front line is our bottom line.”
To help associates hone their product knowledge and build their skills in sales, customer service, marketing, safety and other areas, the company established ABC University in 1999. Since that date it has invested millions of dollars in the training program, and more than 1,400 associates have participated. Associates can even learn how to install roofing systems so they have a thorough understanding of what customers go through every day.
Training is computer-based, field-based, and conducted at the company’s National Support Center. “The curriculum is structured like college courses,” explains Kevin Hendricks. “Associates decide which career track is best for them, and we work with them to assess what types of education are needed and structure a plan to meet those needs.”
Each branch has autonomy, notes Kevin Hendricks, but every associate goes through standardized training and passes tests. “We track the results, and each employee has their own scorecard,” he says. “No matter what position you’re in, you can take the initiative to start the training necessary to take the next step in your career path.”
He points out that most promotions come from within the company. “We put a lot of emphasis on internal growth. Of course, we are always recruiting and always looking for good people, but 60 percent of our managers come from inside the company.”
Just as the company uses feedback from its customers to chart its course for the future, it uses feedback from its associates to ensure that they are inspired, challenged and engaged. Associates are polled twice a year, branch scorecards are produced quarterly, and planning meetings are conducted at the branch, regional and company levels. “We’re an open-book company,” says Kevin Hendricks. “Every person is just as important as every other person. No job is more important than another, and we all understand that the customer is king.”
Looking to the FutureBoth Ken and Kevin Hendricks expect a slightly softer market in residential construction in the next year or two. “There will be a little hiccup in the market, due to interest rates,” predicts Ken Hendricks. “People have been a bit overaggressive and overbuilt.” He is quick to point out the industry has weathered cyclical slowdowns before. “When I started ABC, the interest rate was 22 percent,” he notes.
“We’ve experienced tremendous growth as an industry, and even if it drops off a little, it should be a great year,” states Kevin Hendricks. “Everyone needs a roof over their head.” He points to energy conservation and regulation as issues for contractors to keep an eye on. “Everyone is concerned with the world environment, and the move toward environmentally friendly products will continue,” says Kevin Hendricks, who expects guidelines like California’s Title 24 will move east. “The key to selling green roofing systems like GreenGrid is to emphasize energy savings.”
He worries about the ramifications of possible changes in the regulatory process. “Codes and code enforcement will be something to watch. It could become more difficult to keep up with different code changes.”
Nevertheless, the company’s goal is to reach 500 branches and $5 billion in sales in the next five years, while staying true to the company’s core values.
“The driving passion I have came from the way my father was treated,” says Ken Hendricks. “It was burned into my gut. I wanted to change things for all those kids and all of those fathers who worked so hard and didn’t get the respect they deserved. The passion still burns in my gut. I’m 65 years old, and I have no plans to retire because I can continue to inspire people. It’s that passion that’s driving this thing. I love my customers, and I want them to be successful.”
He says he never thought of going public. “If you go public, all you get is money. It’s not the money that’s important; it’s how many jobs you can create with it. My greatest joy is to see a warehouse guy or a roof loader move up to become a store manager. At a recent managers meeting, I asked everyone who started as a forklift operator, warehouse person, roof loader or truck driver to stand up, and 50 percent of them did. Nothing moves me more than that.”
Helping to build a company with approximately $3 billion in sales is a big accomplishment, notes Kevin Hendricks, but he says the roofs that he worked on and those he helped his customers build are a greater source of pride. “The roof is the crowning achievement of every building. We protect everything underneath that roof, which is basically everything people own.”