As market dynamics change, so too must business models. This is true across the entire industry including distribution. Evergreen Construction Specialties Inc.provides a good example of pathways to growth and the capability to adapt.

Evergreen is a Division 8 material supplier with product lines including hollow metal doors and frames, wood doors, FRP and other specialty doors, hardware, and access systems. From their home in Seattle, Evergreen serves the Pacific Northwest, the Mountain West, and select customers worldwide.

Background

The company was founded in 1996 when David Moore, Sr. and Lance Stretch, left a position with the largest distributor in the Seattle area. Initially, these two principles were the only employees of Evergreen. While Lance got the shop set up, Dave attended to initial sales. Through previous relationships, Evergreen had orders on the books as the company was being founded.

“Dave was really the driving force for the business during our early years,” says Lance. “However, by 2006, he decided to move on. At that point, we had about 15 employees. And that is when I took over as company president.”

Not long ago Evergreen hired its 51st employee.

The Nucleus of National Accounts

1997 was a significant year for the young company. “One of our previous manufacturing partners came to us with an interesting proposition,” says Lance. “They had been working with Costco. But due to the varied locations, Costco had grown tired of working with different suppliers for every project. That manufacturer suggested to them that they go with a single supplier and recommended us because they knew we were young and hungry.”

As a result, Costco has been a national account for Evergreen for over 20 years. “We handle all of their North American stores,” continues Lance. “We’ve also done stores in Australia. And I’ve done consulting in Taiwan and elsewhere for them.”

This is also where Special-Lite doors are employed by Evergreen. Always striving to contain costs, Costco vertically integrates what might typically be outsourced. So, for example, Costco owns its own poultry farms and food processing plants. Here, Special-Lite products, such as all-fiberglass doors and frames as well as hybrid aluminum and fiberglass doors, find application.

Nurturing National Accounts

Evergreen has three national accounts currently and as with our other closely held accounts these tend to be priorities for them.

For these clients, Evergreen manages Division 8 products including doors, hardware, and framing. As a result, contractors associated with these projects are not allowed to go elsewhere or to bid other competitive products.

“We work very closely with their design teams,” says Lance, “and basically take over their specifications. We also work with their architects to help them take projects to completion.” Steve Price, who manages the Costco account, works very closely with MG2 (the Architect and owners rep for Costco) to make sure each project has the correct product and also meets local codes.”

Such accounts require special care. For example, for the Costco account, Evergreen sends an individual to every project following installation of their products. This individual performs a complete walk-through to ensure that the products were installed properly, that they are functioning well, and that the customer is happy with the results.

“This service is built into our contract with Costco,” Lance says. “We perform this service within the first 30 days of opening. It’s kind of a headache because we’re flying people all over the country,” says Lance. “But it keeps us in front of them.”

About five years ago Costco suspended this practice suspecting they might not be getting their money’s worth. But after one project went sideways, they asked Evergreen to take up the practice again!

The western states sporting-goods chain, Scheels, is another national account. “We first secured the Sheels business by participating in a single project via an open bud which was secured by one of the partners in the company, Glenn Guthrie,” says Lance. “But they gave us an opportunity to interact with their design team and we helped them through some of the headaches they were experiencing. This led them to invite us on board and assist with their next project.”

Soon, Evergreen was writing their specifications and creating more business for their affiliated manufacturers. By standardizing their specifications, the Scheels architect didn’t need to worry about these details anymore. In turn, this created continuity between all of their projects. That continuity became important for the Scheels project teams, contractors, and subcontractors. It also meant that their project costs could always be known up front.

Another Growth Strategy

Beyond these national accounts, Evergreen has pursued other growth-oriented initiatives. A few years ago, for example, Lance and his partners had a strategic thought to get into some smaller metropolitan markets, avoiding larger ones so that they did not have any conflicts with existing manufacturing partners. This would require a different business model than they had currently. So, they determined to establish a presence in these markets without brick-and-mortar.

Utah is a prime example. With agreements in place with current major manufacturers to stay out of Salt Lake City proper, Evergreen determined to have a presence East and West and South within the state. The model was so successful that they have expanded it to several other locations.

“We now have individuals performing detailing functions in seven states: Idaho, Utah, Montana, South Dakota, Texas, Georgia, and Mississippi,” says Lance. “These individuals all work from their home and we found that we can hire a higher level of professional given that we don’t have to make the brick-and-mortar investment. We can pay them more. And we find that with all things digital these days they are not hindered in any respect.”

Texas is another emerging market for the firm. Evergreen was pulled there by one of their existing customers—a national contractor in Wyoming.  Their growth in Texas is so impressive that they are now looking for a second individual for the state.

“We have found that if we don’t step on too many toes in the major metropolitan areas,” continues Lance, “that we can grow our business outside Washington state.

Growth at Home

In the Seattle area, Evergreen operates out of a 20,000 square-foot brick-and-mortar facility. 38 of the 51 associates work from this building.

Lance is the majority owner and he has three minority partners. One of these partners (Steve Price) is responsible for the Costco account and has three individuals working with him. One of the partners (Chad McLeod) is in charge of Northwest sales and is a vice president. Another partner (Glenn Guthrie) is in charge of sales in the Mountain states and business development.

Lance observes: “The work we do with many larger accounts begins here in the Seattle area with companies such as Google, Facebook, and Amazon. We’ve done about 15 facilities with Amazon. So we take advantage of their footprint here in the Seattle area to grow our business in other areas.”

In the Seattle area, Evergreen has been competing in a very robust and vibrant market for the last few years. One of the practices that Lance has used is to go up into the Seattle Space Needle and count the number of tower cranes. He says that this gives him some indication of future business!

As Seattle companies grow, they bring in other businesses and multifamily housing. Multifamily housing is not a market Evergreen has traditionally pursued but they were pulled into it through customers like Amazon and have now taken over the preinstallation aspects of such projects for these customers.

Evergreen Success Factors

Providing an easier pathway for their customers, as illustrated above, has become part of the culture of Evergreen. More than mere talk, this notion of exceptional customer service is woven into the very fabric of the company. It is a foundational value.

“We push our people hard and do not depend on an 8 to 5 workday,” Lance says. “We sincerely put the customer first.  In turn, these relationships give us a better understanding of how they do business and how we could better support them and fit into their design team.”

“We’re not a bid house,” says Lance, “and, therefore, customer service is the highest priority for us.”

Such a high level of service can be costly. Yet Evergreen does not charge any fees upfront for the services the company performs. They do, however, ensure profitability through individual project fees.

According to Lance, the people of Evergreen are the most significant reason for their success. “We seek the best people,” says Lance, “and the best people seek us.”

Through word-of-mouth and project related exposure, Evergreen has become an employer of choice. Thus, they can be selective about adding new employees. This method of acquiring talent has become very meaningful for Lance and his team. Of course, investing in his staff is also a chief consideration. He does so through such things as training through DHI, for example.

Working with Contractors

Most projects come their way because they have established solid relationships with contractors. But because they are not a bid house, they can spend more time on the front end of the project.

Evergreen uses a quasi-checklist to qualify contractors. It includes such questions as the following:

• Have we worked with them before?
• If we did, what was the experience like?
• How did they pay (good or bad)?
• Are they a paper mill or not?

Yet Lance is quick to add that as they qualify contractors, the contractors are also qualifying them.

“They come to us,” he says, “because they have worked with us before or they had seen us on a project. Sometimes, of course, they come to us simply because they need another number. We may or may not respond to those kinds of opportunities unless we see significant follow-up possibilities. We vet that out so that we don’t waste our time.”

Best Practice

When asked about Evergreen’s best practice, Lance was quick to reply:

“Don’t forget why you’re doing this,” he says. “It is not about us. Yes, we are in business to make a profit.  Yes, we want the paycheck. However, we need to remember that the work we do has life safety implications. Beyond these issues, the work that we do influences the customer experience within the building on a daily basis.”

“Remembering these things,” he concludes, “helps us understand the importance of XYZ contractors and ABC owners.  Developing relationships with them and being part of this overall team of people is integral to the operation of the building and to our success. We’re not just checking off a box and moving to the next one.”

Such perspective forces Evergreen to continuously look at their business model, their practices, and their people and to consider how they will add value in the future.