Are Products Bringing You Down?

Some of your company’s product segments and brands are profitable.  

Some of your company’s product segments and brands are a drag.

What is a small business owner to do?

Sit down and grab the beverage of your choice.

Comfortable?  

Now list the under-performing product segments and brands that are not meeting your company’s minimums.  Those minimums can be profit, service, style laggard. Whatever you think makes them a drag on your brand.

Then list if each product category is a target market essential or an accessory product category.  Please make this black and white, not gray; either you have to have it or you don’t.

This simple exercise will allow you to see what is causing you grief.  You decide: live with it, remove it, or improve it. Then get on with your day-to-day.  You have done what you can. Do not allow yourself to stress over it any longer.

No More Boring Retail Showrooms, PLEASE!

Great showrooms are memorable. Good showrooms have a few special products scattered about. Bad showrooms are well, boring. I believe those that take risks with their product and product presentations are more memorable and will win more customers in the long run.

A majority of today’s Internet shopping sites present a vast array of products that are easily viewed on your screen, but a customer is still not able to feel the material and see how colors pop in person. Luxury clients enjoy visiting creative spaces to see, touch and shop for beautiful products. This is why people leave their screens. This is why people seek out great brick and mortar showrooms.

So, what is a great showroom? A popular definition is one that continually both surprises and delights its customers with its engaging ambiance and inventive product mix supported by talented salespeople and five-star service. Simple right? Unfortunately nothing that can be labeled great is simple and therein lies the challenge and fun, yes FUN.

Your luxury showroom is catering to designers who fly all over the US and Canada and enjoy antiquing in Paris. If your showroom is populated with gray and white factory displays and has not had a colorful addition in months, these good customers will visit once and move on. They do not need to shop in your place, there are plenty of other boring showrooms within driving distance. If your showroom is to make their go-to list, you must let them know you are willing to take chances by showing new, unique, even startling products and learn what they crave today

The next step is threefold:

  1. First and most important: before you start working on numbers two and three, you must set a regular time, I suggest monthly, to quietly walk your showroom looking for ways to make it great. I suggest focusing on: 
    • Displays that are tired and need updating.
    • Displayed products that are not selling, boring and need to be replaced.
    • Discovering places where you can add an attractive display, small or large. This display should both provoke your salespeople and captivate your good clients.
  2. Second, commit to #1 above and start having fun in your showroom working to make it full of surprise and delight.
  3. Finally, start learning what you customers purchase and discover what they are dreaming of. This comes from your sales data and setting up opportunities to talk with your good clients. We will dig deeper into this in following post.

Now, let’s get to the fun part.

“The one thing we all agreed on, our chief aim, was to be totally unpredictable and never to repeat ourselves,” Mr. Terry Jones of Monty Python’s Flying Circus.

So why not have a bit of fun in your showroom. I am not saying that you have to completely redesign your showroom with a Candyland color scheme, but use your imagination and create punches of color and inventive product vignettes that will challenge your repeat clientele, intrigue new shoppers and keep your sles people hopping. People love to see and touch shiny new things.

One note of caution: bold displays lose their edge over a period of 6 to 9 months. Construction should be simple and easy to change out. Paint and wallpaper are easy to change. Also, try to work with vendors that understand that products in your bold settings will increase the visibility of their brands and increase bands awareness.

Luxury showrooms are there to delight and challenge their good customers, so make some changes and get out of the white and gray palette. It is really dull.

P.S: A good play here is to allow a good, strong willed, designer to design the vignette. This helps them extend their brand’s reach and you will presents a new look to your clientele.

P.S #2.: Those daring displays will play great on social media. If you can set six and change one out every month, you will always have interesting content for you and your customers to share.

A version of this article appeared in the January 31, 2020 issue of the DPHA’s newsletter, Connections.

Related reading: From Nielsen.com: Battle of the Brands: Consumer Disloyalty is Sweeping the Globe

Value = Experience / Price

We are in the midst of the largest retail shakeup in history.  To put the DPH showroom performance in perspective, Coresight Research notes in its November 15 update, “US retailers have announced 9,052 store closures and 3,956 store openings.”  Having just returned from the annual DPHA conference, I can tell you that the overall feeling is that business is good and will remain that way for the next 18 months.  While this is not a statistic, deeply researched or confirmed, it has been a good indicator for years. I would like to congratulate all DPH showrooms for continuing to run ahead of the brick and mortar pack.  Let’s make sure we stay ahead.

Think back to the time before the term “customer experience” was used to evaluate everything from Jiffy Lube to Hermes.  As the industry began to pull itself out of the muck of the recession, the term “product value” was all the rage. Its catch phrase was: “Is that a good value for my money?”  Customers were looking for value – the best products for their dollars, not low price. 

As the industry became skilled on the “value” sales conversation, that term slipped into the background and “customer experience” emerged as the overall, undefinable, defining metric.  Repeatedly we read and have been told that, “All great businesses offer a top-notch customer experience.” We see it referred to in case study after case study but, as with “value,” the challenge is to define and measure great customer experiences.

Angel investor Darren Herman offers guidance in his blog, Operating Partner.  He proposed the following simple formula:

Value = Experience / Price

On first thought, that formula appears to be too simple, when you evaluate the equation in more detail, it makes sense.  The kicker is defining experience. Price is simple: the lower it goes, the lower the experience factor can be to still deliver attractive value. But, if you are playing on the luxury-premium level, you have to improve the experience to justify higher pricing. 

It has been proven continuously that the lowering price value strategy is a never-ending race to the bottom and that’s not a successful formula for DPH luxury experiences.  The decorative plumbing and hardware industry can deliver on its value paradigm by focusing on the following five touchpoints: Showroom, Website, Salespeople, Customer Service and Vendors. 

Breaking them down into easily defined deliverables allows you to create a manageable list to use as a brand experience evaluation scorecard (equally applicable to Manufacturers, Representatives and Showrooms).

  • Website
    • Is your website easy to use and comfortable for your customers to shop?
    • Does your website offer the information your customers require?
    • Is your website easy for Google to find?
    • Are your key vendors’ presentations and product pages up to date?
    • Is your website respected more than your competition’s?
    • For e-commerce sites, does your showroom’s in-stock inventory cater to the products your customers really need before the vendor can deliver? 

Side Note: Today’s customer wants to do their work whenever and wherever they are.  To have a poor website is interpreted as you are not interested in their business.  An effective and easy-to-use website is a must have.

  • Salespeople
    • Are your salespeople more knowledgeable and respected than your competition?
    • Are they consistent from customer to customer?
    • Do they listen actively?
    • Do they want to improve?

Side Note: Every time I am at a showroom or attending a conference the number one problem our colleagues mention is finding good people.  Yet, few companies offer any type of sales training to make their good people better. I have never met a salesperson that cannot get better and that includes me.

  • Customer Service
    • Do you offer uncompromising cradle-to-grave service?
    • Do you proactively communicate both good and bad information with your clients as their job progresses?
    • Do you reach out to the client and end users after the job is finished?
    • Is your product return process painful for the client? Are they presumed guilty before being proven innocent?

Side Note: A significant factor in the continuing growth of showrooms and vendors is based on selling more to good customers.  Will that hold true if you continue to offer the least?

  • Vendors
    • Are they what they say they are?
    • Do they train and keep your purchasing, sales and customer service teams up to date?
    • Do they design and craft products in line with their pricing?
    • Do they deliver on what they promise?
    • Are their demands in line with their value to your business?

Side Note:  Vendors, when was the last time you surveyed the key 100 showroom salespeople about what they think will help your brand improve?  When was the last time you and your distributor showroom surveyed their good builder and trade customers about what they think will help your brand improve? Sitting in your office listening to a few loud folks is not the best way to build your brand’s foundation.

  • Showroom
    • Is your showroom easy and comfortable for your customers to shop?
    • Is your showroom easy to use by your salespeople?
    • Is your showroom perceived as stylish by your core design trade customers?
    • Are your key vendors’ displays up to date?
    • Does your showroom’s inventory contain the products your customers need before the vendor can deliver?

Side Note: Maintaining a showroom is hard work and expensive, but when done effectively is can be very profitable.  The more vendors, representatives and distributor showrooms stay in step, the better for all parties involved.

This list provides a tool to evaluate your business and to determine your customer experience rating.  Each point can be valued good or bad or with a five-point scale. Determine which metric works best for your business and team.

There is one other factor to consider.  Each point on the list focuses on eliminating FRICTION your customers encounter when working with your company.  Both trade customers and end-users HATE friction. Removing friction requires an investment of money and time. Willingly taking back a polished nickel lavatory faucet that looks as if it was attacked by a steel grill brush is not easy or cheap, but necessary.  

Do not lose sight of the fact that you are working to increase your customers’ perceived value of your business.

The bottom line is that each individual customer will evaluate your business.  Having a metric to determine how your business is perceived will improve your customers’ experiences and help you develop effective strategies to address weaknesses.

A version of this article appeared in the January issue of Kitchen & Bath Design News

Is Everyday Discounting Good For Your Brand?

Why would anyone purchase anything at list price?  Today’s marketers continually believe the best way to move merchandise is to put it on sale.  Stories no longer seem to be thought viable. And we all thought Amazon was to blame for the price dropping game.

Every marketer knows that email remains a powerful tool to build brand awareness and the email’s subject line is your brand’s calling card.  Do you really want it to be all about how much today’s discount is? Can your brand only motivate people to open your marketing emails by shouting your products are marked down? 

So after a consistent barrage of XX% off and free freight on any purchase, do you really think people are going to look at your brand as anything but a discount brand?  Even powerhouse home brands such as Restoration Hardware and Williams Sonoma seem to run 50% off sales every other day. Why do I want to buy something that no one else wants? 

Then think of the poor salespeople in the brick and mortar showroom.  The first thing they must do every day is check to see what is on sale today.  It is just like working in a supermarket and we all know how low their margins are.  It is not sustainable.

As long as sales volume and product turnover remains high, these companies can get away with thinning profit margins but when a slowdown comes and sales drop 5%, that low, discounted margin might not be able to cover overhead and viola, losses appear.   Then what happens? The markdown habit a brand gets into in good times are nearly impossible to break in bad times. Quarter to quarter planning is not a good play in the long game.

Vendors, May We Please Improve Training

The quality of training in the showroom business is all over the place. Training is not like selling; they are two distinct talents.  A few companies create solid content but have not trained their trainers on how to train (say that fast three times). Other vendors weakly educate the local representative and tell them to go forth and educate all involved. They send them in with catalogs and some samples.  Really, is that how a brand should be presented?

Here are some notes:

  • No one looks forward to product knowledge training sessions.  Showroom salespeople are extremely busy and do not want to give up the time during the day.  Also, no one wants to come in early or stay late.  
  • Abide by the Venture Capital pitch 30/30 rule.  No font should be smaller than 30 pts. and no presentation should be longer than 30 minutes.  In a perfect environment our minds can only stay focused for a maximum of 20 minutes. So build a solid 20 minute presentation and leave time for questions. Do not overreach, you will not gain a thing.  In fact, you will lose what you gained in the first 20 minutes.
  • Do not train on a product that is not yet on display or ready to ship.  The salespeople will forget all the information by the time you are ready to receive orders, even if it is just a week away.
  • Beta-test your training content in the field.  Present your new training program to a few local showrooms, then note and implement the feedback.  
  • Train your own customer service team first.  Present the training draft to them first and gain their feedback.  Then, when a showroom salesperson calls with a question that references the training, everyone is on the same page.
  • Do not hand out any reading material during the presentation. You want the trainees to look at the presenter, not at a price book.
  • Recap, ask questions and offer rewards during the 20 minute training.  Questions keep them engaged and rewards help all stay attentive throughout.
  • Do share actual product samples…LOTS of samples.  It is proven that if people have product in their hands they will remain engaged.
  • If offering food, save it for AFTER the training.  If they have food during the session, they will focus on that.

Finally, if you really want to do it right, hire a 100%, full-time trainer.  As we noted above, your talented sales people and representatives are not always adequate trainers.  Do you really want to get into an automobile with new brakes that were installed by a mechanic that was trained by the brake manufacturer’s local salesperson?  Then why do you ask talented salespeople to educate the salespeople that sell your brand’s story to design and building professionals?  

If your training content and presentation are solid, you’ll always get the best product knowledge training time slot and the showrooms salespeople will gladly attend ready to learn.

A version of this article appeared in the February Issue of Supply House Times

Where is the Space?

So much of bricks and mortar merchandising is about the products we sell.  We vehemently believe we have to have a lot of them. We have to have more than that other company  If we have some empty space, we find something to fill it ASAP. Imagine a pawn shop case versus a product presentation at Tiffany.  The product quality could very well be the same but the presentations are so very different.

Why do we do this??  Is more really better?  Is there to be no place for the customer’s eye to rest and download all these products? 

It is no wonder that people will continually buy the same products over and over.  With such an onslaught of products we are not able to notice something new, something that might be better for me and my needs.  

We have grown so used to going to the store to buy, not shop; we get just what is on our list and get out.  Never thinking to see what might be new and interesting.  

Instead of working to make sure every little space is drenched in product, why not focus on improving the presentations of what sells and where we make more margin.  Big brands are nice but I think making money is better.  

Why not incorporate an interactive screen where customers can swipe to see what is new in the store?  Why not mark new products where they sit on the shelf? The combination of the two will let customers know that you are the source for what is new and innovative.  

Anybody can show a lot and sell, sell, sell, play the price game and hope to survive on razor-thin margins.  If you work to tell your story and help you customers discover new products, you will set your store apart and above.  Your store will be THE source for product and information. The brand that attracts customers that are looking for new, better and different.  

These customers will pay a bit more for finding the new, the unique, the cool products…not the same old, same old.

No, No, Not That Mask, Oh Vendor, Oh Vendor!

A large vendor had just entered our market and we were just crushing it.  We had no displays. When a customer sounded interested, we brought them into the warehouse and opened boxes to present the products.  Every time, the product captivated both the customer and the sales associates.  This was going to be good.  

Then, the corporate mask descended over the product line.  The rules and conditions of their “program” appeared.  To become a full-fledged distributor, you HAVE to display this, and it MUST be supported with these products.  Oh, and the display WILL look like this.  

A large portion of the line was not for our customer base, and the display looked like an alien spaceship.  It was…unique.  We pleaded our case and were politely informed that they would think about it.  A few months later a quasi-competitor brought in the entire program and we were told to order from them.  By then, sales had diminished to nothing.  It was an opportunity missed.  Even more frustrating for me was that I had done the same stupid thing in my early years at Phylrich.  It was a hard lesson learned.

Each DPH showroom is unique for the simple reason that they are all owned and managed by confident, assertive individuals.  On paper, luxury businesses may focus on the same target markets, but their styles, product mixes and cultures are crafted by their owner.  Today they are referred to as entrepreneurs.  They are not generic individuals, their businesses are not generic businesses and they should not have to follow a generic program.   

Let’s also not forget the premium and luxury market clientele, whom many of showrooms target.  Interior designers and style-conscious homeowners do not gravitate to “factory displays”.  Stylists and style lovers are attracted to knowledgeable people presenting dynamic displays.  I cannot even begin to number the times a person of these talented professions would tell me that they were so turned off by that sterile “generic display”.  

Please do not make successful showrooms wear the corporate mask of what a remote merchandising person concocted as best for the general market.  There is not one general luxury market.

Meet with your distributors and co-create a go-to-market strategy backed with numerical goals and targeted market penetration.  With a program in place, both parties can get to work and make it happen.  Please stop trying to put a constraining mask on a successful entrepreneur and their company.  This is a sure-fire path to mediocrity.

So on November 1, 2019, after the ghosts of the past have settled back home, let’s stop with the black and white ideas and rote proposals and let’s work together to surprise and delight the style-conscious individuals by removing the generic mask and let the showrooms unique style shine.

A version of this article appeared in the November 1, 2019 issue of DPHA Connections.

Did You Know Design Professionals are Purchasing 47% Online?

Photo by TOPHEE MARQUEZ from Pexels

Anna Brockway, co-founder and president of Chairish shared the following data in her presentation at Business of HomesFuture of Homes 2019 Conference in New York.

  • 84 percent of professional designers start their sourcing online.
  • 81 percent of designers buy high-end items after first viewing them online.
  • 47 percent of all products in a typical design project are purchased online.

After sharing the data, Ms. Brokway reflected. “Considering that furnishings are the third-largest spend after the household itself and cars, the shift to online should come as no surprise.”  I would venture that any significant purchase somehow involves the Internet. 

Before you start looking for a buyer for your showroom let’s dig in a bit.  These statistics do not say where the designers spend a majority of their time shopping nor what type of website the purchases were made.  Were they purchased from internet only sites or the internet site of their preferred showrooms? We continually hear that customers want to buy when and where they want.  In a designer showroom, on the phone, by email or online. Your showrooms must be where your customers are. Your showroom and team is the most knowledgeable in your market and it is time to investigate a digital expansion. I think it is time for designer showrooms to better understand their target customers and what they expect.

I suggest meeting them individually, starting with the key interior designers in your market.  Please do not only select designers by dollar sales. Quite a few designers use a DPH showroom to make or confirm their specifications and then send the specification list to the homeowner or the build or the plumber.  You know who I am talking about.  

Here are some helpful questions to get what you both need to work together effectively:

  • How can we improve our bricks and mortar showroom to make it easier for you to work with and without your clients?
  • How can we improve our website to make easier for you to work with and without your clients?
  • Many “A” designers ask their clients to visit specific websites and note what they like.  It is a big time saver.
  • Do you want access to your quotes online?  If so, what information do you need?  
  • What information would you like us to send you in a monthly product DPH update?  New Products? Best projects finished? Top sales people selections and comments…

Take all that glorious information (data) and save it. 

Then repeat the process with the builders that build what your top designers specify and might be purchasing.  This is not about only your good builder accounts. Talk with those that are in your target market even if they do not buy from you.  You will learn a lot. 

Now you have a lot of data that you need to work through and decide what your next steps will be.  

This is not the simple path but, I strongly feel, an important opportunity to grow your business.  It would be a shame to let this business go to another just because your bricks and mortar business is so strong but missing business that you can capture on the Internet.  The Internet is not going away and it will continue to gain market share.

A version of this article was published to DPHA’s Connections 10/18, 2019, https://dpha-sales-thoughts.blogspot.com/2019/10/welcomed-thoughts-from-fellow-jeff_16.html