Showrooms are an integral part of many remodeling businesses and while kitchen and bath specialists and design/build remodelers would appear to have a particular need to showcase a variety of products and designs, exterior contractors who specialize in roofing, siding, windows, doors and related products find showrooms equally beneficial.
For all the current talk about online presence and social networking, an old-fashioned bricks-and-mortar presence is still very much part of the marketing plans of remodelers of all types and geographical locations.
A survey of Qualified Remodeler readers reveals that showrooms are important to respondents. Nearly half of those who said they operated a showroom in conjunction with their business had done so for more than 10 years. Less than 5 percent reported closing an existing showroom in the past year. Of those who did close a showroom, only 17 percent said they did so because they didn’t feel it was effective.
Remodelers with showrooms are generally happy with their investment. A quarter of respondents ranked the effectiveness of their showroom at 10 on a scale of 1 to 10, with 10 being the most effective. Another quarter ranked effectiveness between 8 and 9.
No Single Standard
There is no single standard as to what makes a showroom or how it works for a remodeler. Kitchen Kraft Inc.’s showroom in Columbus, Ohio, is unique, president Jim Deen says. “We’re in a historical part of downtown, and we’ve taken a brick home built in the late 1900s and converted the first level into a design studio — not even a showroom but rather a studio. We have a couple of vignettes and all the samples for cabinetry, wood flooring and hardware, but that’s really about all we show here.
“We’re more of a boutique or a design studio, very humble and very personal,” he says.
For plumbing, lighting, appliances and countertops, Deen refers clients to other showrooms.
The studio’s central location in downtown Columbus is an additional advantage. “We’re not in a suburb catering to only that suburb,” Deen says.
The 1,000-sq.-ft. showroom helps reduce overhead. Deen doesn’t believe that a larger showroom necessarily translates to more sales. Further, the necessary overhead for a large space can undo a remodeler in difficult economic times. “If I were in a half million dollar showroom with a million dollars invested in real estate, I don’t know if our doors would be open right now,” he says. “I know of a lot of people who did close their doors because they couldn’t maintain the overhead.”
Nevertheless, Deen believes a showroom is important. “I don’t think size matters,” he says, “but you need to have a physical presence and be able to show your clients what a cabinet is going to look like and how it is constructed,” he says.
Deen didn’t always have a showroom, he relates. “We started out 15 years ago with some laminate samples on a key chain and maybe four cabinet style samples in the trunk of a car. We’d set up appointments, go to the house, do the design on a laptop with 20/20 CAD and close the deal,” he said.
Of course, he says, “We were selling $10,000 kitchens. If I tried to do that today with $50,000 kitchens, [potential clients] are going to laugh. It just doesn’t work at the higher end.”
Work Your Way Up
Deen advises designers and remodelers to start out like he did. “Start from the ground and work your way up,” he says. “If you’re a seasoned designer and you can do high end, it might be nice to set up with a cabinet dealer in town and use their showroom. You’re going to pay a little more because you’re not buying direct, but you’re going to save a lot in overhead by not having your own place.”
At his own showroom, Deen encourages appointments but will try to accommodate walk-ins. “I think today people want to see, feel and touch, and they feel more comfortable with a physical location,” he says.
Alan Lutes, GMB, CGR, CGP, CR, president of Alpha Remodeling, a design/build remodeler in Ann Arbor, Mich., concurs with Deen about overhead. “We find first off it’s a fair commitment to overhead; there’s no doubt about that. You’ve got to be able to generate the business to support that overhead, so I would recommend that remodelers approach it very cautiously,” he says.
“When the economy was doing very well, there was absolutely no problem justifying the expense for the showroom, but as things tightened up there is certainly a lot of fixed expense every month in overhead. We have focused on products that we sell a lot of and products we are able to get the best margins on,” he says
The showroom is important, however. Lutes’ clients tend to be high-income professionals who like the efficiency and time saving of making the majority of their selections at one location.
“We feel it shortens the design cycle by at least 20 percent, and we’re able to make additional money off the product sales that we wouldn’t otherwise make [without the showroom],” Lutes says.
Asked if he could imagine doing business without a showroom, Lutes says that he could — but it would be a very different business model. He adds that he’s decided not to move away from his current business plan.
Nevertheless he says, “I think that a small contractor who is very efficient and runs a very low overhead with small office space or from their home — and keeps their volume at $1.2 million or below — can be a very profitable operation.
“I think to justify a showroom, it has to be a larger operation — $2 million and above — where the numbers start to justify the overhead. There’s a whole additional management set of issues that comes along with it. There’s a budget for materials; there are people who have to staff the showroom; additional hours that it may need to be open; and finding and compensating qualified people to do that. There have to be rewards to justify it,” Lutes says.
A showroom, Lutes says, can be both a means to generate business and a resource to close sales.
“It does generate business although we aren’t open all day on the weekends like many showrooms are,” he comments. “We use it primarily as a design center where we prefer appointments with clients. That doesn’t mean that we don’t get a fair amount of walk-ins, and we also generate a lot of calls because people see that we have showroom.”
Instead of looking for a remodeler, some homeowners go about deciding on kitchen projects by shopping for cabinets and countertops first because they feel that is the key element in the project, Lutes notes. “That’s where they begin the process, so by having a showroom we are more likely to attract those clients.”
Having a physical location is a plus — and a minus. “We’ve had many of our target demographic choose us because we look like a substantial organization. We’ve been around awhile, and we look successful. Therefore, they have a high degree of confidence in our company,” Lutes says.
However, he adds, “We’ve actually lost business because people have told us we look too good or too expensive, and they think we wouldn’t be interested in their small project — which isn’t necessarily true.”
Remodelers who want to incorporate a showroom into their business should start small and build gradually. “I’ve seen several instances where remodelers have made large jumps into significant showrooms, and they couldn’t sustain the overhead,” Lutes says.
“It’s got to be part of a business plan that is planned and budgeted for, and it really requires an organization that has separate management personnel associated with it to oversee those things,” he adds.
Lutes also advises working closely with manufacturers and representatives to look for opportunities to maximize displays, noting that because of the down economy he’s had manufacturers offer free or discounted displays to create space in his showroom for their products.
Not Just Kitchen Designers
Showrooms aren’t just for product-intensive remodeling work such as kitchens and baths, however. An impressive number of Qualified Remodeler’s Top 500 remodelers who specialize in exterior contracting — roofing, siding, windows, etc. — report having showrooms as well.
Jim Sipes, owner and president of Nebraska Seamless, Inc. in Lincoln, Neb., moved to a new showroom about three years ago and doesn’t regret for a moment the investment he made. Like most remodelers, Sipes started out modestly. And like many, in the early days he operated out of a warehouse in an industrial neighborhood. His first showroom was a partitioned space in the warehouse with a carpeted floor, an extravagant comfortable couch and soft lighting.
Nebraska Seamless now has a showroom that highlights not only its seamless gutters but also windows, siding, leaf guards and more. “The showroom is set up like a little neighborhood,” Sipes explains, with five simulated houses that showcase the company’s products.
The showroom has had a significant impact on sales this year, Sipes feels. He stresses, however, that the showroom is only a part of the overall package, including service and credibility, that helps close sales.
“Our customers feel more comfortable with us. It [the showroom] just gives us a standing in the community vs. just a business working out of a garage or a warehouse in the back of an industrial park,” he says.
Nebraska Seamless is open from 8 a.m. to 8 p.m. and gets a fair amount of walk-in business on a street that sees 6,600 cars pass daily. To capitalize on that, Sipes installed a 5- by 11-ft LED sign to call attention to current specials and sales.
Sipes aims for excellence in everything he does. “We feel the showroom plays a big part because when you walk in it’s extravagant; it’s very beautiful; it’s very elegant,” he says.
Do it Right
“If anybody is going to set up a showroom, set it up so it’s done right, first of all. Use it in your advertising to drive people to it. Make sure it’s got a decent location, and don’t set it like a home show. Think about it when you walk into a department store vs. a thrift shop. There’s a difference; you feel like you’ve been in something special. I think that feeling gives the customer a sense of security.” Sipes comments.
People still buy quality, Sipes contends, but you have to show it to them, not just tell them about it. The showroom plays a big part in that, he says.
“I think the showroom has helped us create a higher profit on the bottom line. We’re able to get more than your average guy because of the security and safety that a customer feels [because of the showroom]. The expense is entirely justified and worth it,” Sipes says.
S&K Roofing, Siding and Windows’ showroom in Eldersburg, Md., isn’t limited just to what’s within its walls. Different shingle styles are displayed on the outside along with covered gutter systems. A wrap-around deck displays decking materials from several manufacturers.
Like most other remodelers, S&K moved to its present location a couple of years ago from much more modest accommodations. It’s no surprise that Charlie McCurry, director of sales, advises, “Take it slow. Don’t start a company on Monday and expect to have this kind of showroom right away. It took us years to figure out what customers want. You can only show so much material,” he says.
“And don’t assume if you’re a roofer that you know what a showroom should look like,” he admonishes, explaining that S&K hired a marketing company to advise. “It’s as simple as getting a trained eye in there and saying this is what we want to accomplish; how can we make it happen? As much as the idea for building a house in our building was mine, I knew I didn’t have the expertise to make it happen so I called in people who are much smarter than I am with regard to design and they drew it out. It took several months; we didn’t just stumble into this thing,” McCurry recounts.