In recent discussions with my fellow dealers about the future of the kitchen and bath design industry, I have discovered the news is pretty much the same across the country: Every business is slow, and getting traffic into showrooms is more difficult than it has ever been.
To survive, we’ve been forced to contemplate what we can do to generate business. We need to create ways to help our customers that might also provide us with new opportunities.
In truth, there are a number of things dealers have been doing during this economic downturn to keep their businesses in the black. Following are a few of them.
Embracing Partial Work
While many of us have said no to certain customer requests in the past, tougher economic times have forced us to reconsider. One repeated request we have all received has been for partial work – anything from adjusting cabinet drawers to creating all but a completely new kitchen.
In the past, our company was busy enough with complete projects that considering partial work wasn’t necessary. In addition, the profits for this type of work never appeared to be strong enough to support the effort. We have done an about-face, however. Today, we are happy to get any type of work to keep our staff busy and pay some bills.
Past customers are a great source of leads for this type of work. A connection – a sense of trust – already exists with previous clients. It’s time to dig through those old files and develop a mailing list.
Another source of leads is the Web site www.blockshopper.com. The site makes available the names, addresses and telephone numbers of people in a certain neighborhood, with the most current names of the homeowners. Armed with this information, dealers can create mailing labels.
One dealer I know has developed a letter that goes out to the neighbors of recent customers. It mentions the recently completed work and explains the company’s services. The letter also invites the recipient to visit the firm’s showroom or Web site.
At my company we have developed a marketing letter and are targeting clients whose projects we did in the 1980s. These kitchens are ready to be refurbished with new cabinets, countertops and appliances. We installed a lot of laminate cabinets and countertops back then, and people have been calling us for years to reface them or replace them with wood.
In our marketing letter, we mention we will consider any type of renovation or repair work that needs attention, and we will be happy to send someone out to take care of whatever is needed. When people call us with their requests, we ask about the type of work and, if we believe we can give them a cost for it, we will. If not, we will work on an hourly rate, plus materials.
Sometimes, assessing the work isn’t possible over the telephone, and we go out and look at what is needed. However, it is important to qualify the client beforehand so you don’t waste your time.
We are more open today to do countertop replacements, wet-water fixtures, appliances and new hardware for doors and drawers. I know a few dealers who are offering to reface existing cabinets. While this is the sort of work most kitchen and bath firms have the ability to do, we’ve never needed to look at it as a source of income. However, if this type of work gets you in the door, then why not provide it?
While you are adjusting the way you do business and attract customers, you might want to consider tweaking a display or two, as well as the products you offer, to meet a broader range of clients.
One dealer I know has installed a laminate countertop in HD and a solid surface sink bowl that can be top mount or undermount with laminate. While this laminate countertop is the only one they have on display, I don’t think this dealer would have shown and sold this product a few years ago. Today, however, anything that can give you an edge is worth trying.
Dealing in ancillary products is another area worth investigating. Items such as decorative hardware, faucets and wet-water fixtures, ceramic tile, lighting and even chairs and stools can be additional sources of revenue. Belonging to a buying group can provide an even larger profit margin on these items.
Appliances have never been particularly popular items with kitchen and bath dealers when it comes to showing and selling; they are not as easy to display and discuss as other items, and the profit margin is traditionally less. However, it is important to remember you are an expert on built-in appliances – at least to your potential clients. Now is the time to capitalize on that knowledge and expertise.
Cabinets traditionally provide the largest profit margin for dealers, and now is the time to stress that these products can be installed outside of the kitchen and bath. Closet storage systems, entertainment centers, laundry room areas, home offices, family room cabinets and even pre-fab fireplaces are all possible ways to expand cabinet offerings. All of these options should be displayed in your showroom.
To help us during these difficult economic times, at my firm we are embarking on a new deadline-oriented marketing strategy. We will begin offering discounts to customers when they purchase a project by a certain date. We will be advertising this in our print ads, and stressing to our customers that our cabinet manufacturer is offering this discount for a limited time only. This same ad will also include a $2,500 rebate with the purchase of a new kitchen.
While we don’t know if this approach will be enough of an enticement to get people to come in and place orders, and we’ve never done this in the past, we are willing to give it a try.
Speaking of ads, it is important to remember this is not the time to cut back on your advertising. It is, however, the time to negotiate for better advertising rates.
Since business is a bit slow, it is time to update your showroom and, more importantly, your Web site. Unless you have someone working on your Web site on a daily basis – and who among us does? – the information on your site is probably outdated. The majority of kitchen and bath dealers don’t use their Web sites to their best advantage. Take this down time to check out the Web sites of similar companies. I guarantee you will find at least a few good ideas you can add to your own site.
Another way to promote your company and develop new business is through education.
I know of a dealer who has been doing home shows in his city for the past 25 years. Every year, he is a featured speaker, and he talks about things of interest for consumers. He does about three seminars a day for the length of the show, which is usually about five days. He puts together a very professional PowerPoint presentation and includes handout material. Through this type of venue, he is able to provide consumers with information about kitchens and baths while he generates a good amount of leads for his business.
He has begun to place these presentations on his Web site, which allows him to educate visitors to his site. While they are reviewing the educational material, they are also learning about his company and what it offers.
Another dealer I know offers seminars one Saturday morning each month that focus on remodeling. The seminars include information about all of the types of services that the company provides. The firm also brings in specialists who talk about interior design, plumbing, painting, closet storage systems – anything that might bring clients to the showroom.
The key to survival in tough economic times is to try to keep busy – any way you can. We are not in a position to sit back and wait for the phone to ring, or for people to just walk in the door. Be creative and use your business skills, because you want to be in a position of strength when business returns – which it always does.