Design Duo Takes Global Approach to Business

ATLANTA, GA— To Mike Toth and Alejandro Lugo, it is a small world after all. Indeed, recognizing the increasingly global nature of business today, kitchen and bath industry veterans Toth and Lugo developed an international design business that spans not only the U.S. and Canada, but also Latin America and beyond.

Their firm, One World Kitchen Design, offers design services to kitchen and bath professionals looking to outsource this part of their business – and through phone, fax and e-mail, the firm is able to service a clientele that extends around the world.

The firm utilizes a Latin America-based retail arm to maximize efficiency and minimize costs. These costs savings can then be passed on to the trade, helping to make design professionals who use the firm’s services more competitive.

According to Toth, the firm was created with the goal of helping designers around the world by quickly and inexpensively making 20/20 design quotes available to them.

He explains: “We realized that we needed to get design quotes in as many customers’ hands as possible because these are all extremely competitive markets and [the industry is becoming increasingly] price sensitive.”

However, he notes that many design professionals struggle with the time and cost of creating designs for prospects who often end up being little more than tire kickers. He figured if he could find a way to offer designers these services at a discount, the design firms could gain more potential clients, and focus more on their selling efforts.

He explains: “We ended up selling much more by ‘designing quickly and practically,’ especially because the competition devoted too much time to customers who would never buy.”

He continues, “We use Interiors SA [the pair’s retail arm, with facilities in El Salvador and Costa Rica] to maximize One World Kitchen Design’s resources, and local skilled designers to devote the time and effort necessary to work with customers who show a very high potential to buy.”

But whether servicing clients here or abroad, One World Kitchen Design’s business philosophy is simple: To make design services more efficient and, in turn, allow business owners to sell more projects.

And the firm has done just that, with a current customer base that includes over 63 kitchen and bath dealers, three major manufacturers and two “big-box” retailers, according to Toth.

He continues: “One World Kitchen Design’s primary mission is to be a ‘back room’ designer that allows a dealer or manufacturer to get the design quote to the customer quickly and inexpensively. Basically, our job is to make sure dealers and designers sell kitchens.”

Toth notes that the firm averages 1,200 to 1,600 designs per month, and expects that number to reach 2,500 per month by the end of the year.

He reports: “Since our company was created by successful veterans of the traditional kitchen and bath retailing business, its entire business concept is to ensure that our customers sell more projects.”

In order to accomplish these lofty goals, Toth and Lugo implement a very specific customer service-based approach, including kitchen, bathroom and closet designs for all manufacturers using a 20/20 catalog. Likewise, the firm offers countertop design and quotes, as well as design/quotation status reporting. This can include designs per month, average quote amount, cost per linear foot/meter, turn-around time and quotations per designer/showroom.

Toth continues: “We’ll also take the initial design and make all customer changes and we will talk and work directly with the client to complete the final design. The design is then sent to the retailer and final customer.”

According to Toth, the process eliminates design inconsistencies because One World Kitchen Design’s projects are uniform throughout, specifically due to standardized training. Process-oriented system designs are typically completed in 48 hours, which greatly reduces lead times as well, he notes.

No Depression

For Toth, the One World Kitchen Design business model has, in many ways, been instituted at the ideal time, mainly due to the economic hardships facing the global economy.

He explains: “One World Kitchen Design’s origins were to help sell more in the difficult Latin American economies – and it worked very well. Now, the U.S. economy is facing many difficulties and many of its current customers see the value of a centralized design service that enables them to quote more while actually lowering their fixed design costs. Today’s customers are shopping around much more, so the first objective is to design quickly and practically so you’re ‘in-the-game’. One World Kitchen Design and its customers have systematized the design process to confront these difficult times. As a result, our dealers and designers customers are getting more quotes out.”

He continues: “Dealers definitely cannot work the same way in 2009 as they did in 2006. Before, they could never really quantify their design costs – or even gauge the effectiveness of their designers. One World Kitchen Design provides these dealers with a database and the statistical information that they need to operate their businesses efficiently. Now they know how many quotes they make per month, the average quote amount, sales follow-up dates, etc.”

But while his company allows design firms to outsource this work, Toth quickly adds that dealers are not reducing staff as a result of his and Lugo’s services.

“In fact, they are using the skills and knowledge of their designers to either work with sales, or to supervise and coordinate the design flow from One World Kitchen Design because the amount of quotes has increased.”

He adds: “One World Kitchen Design helps dealers through these tough times by lowering their design costs. We can provide a design for one-third of the cost that a dealer can make in-house. So, these dealers are selling more because they’re able to get more quotes in customers’ hands.”

He says: “A centralized design facility whose owners have not actually had to sell kitchens or understand the ‘nuts and bolts’ of running a kitchen and bath operation will be merely a company that makes computerized images and nothing more.”

Cabinet Cure

While kitchen and bath dealers are a big part of the firm’s clientele, Toth and Lugo believe their approach greatly helps both small and large cabinet manufacturers, as well.

Toth offers: “Small manufacturers need to continue introducing new products, but in-house employee costs to create 20/20 catalogs for their dealers are very high. We will do these 20/20 catalogs so the manufacturer’s in-house staff can focus on new product designs and customer support.”

As for larger cabinet manufacturers, he adds: “More large manufacturers are offering to make designs for their dealers to help them focus on sales. Our role is to facilitate a deeper commitment between the dealer and manufacturer while increasing sales and lowering costs.”

Of course, the business model would not be as viable had it not considered an online contingency.

Toth explains: “Manufacturers can sell less expensively online because their costs are lower – and busy customers like to get designs and quotes from the comfort of their computer. A centralized design facility is necessary to receive all of these customer’s design requests and process them.”

The firm can also design directly online using WEBEX. With this, a preliminary design is done and sent to the customer and then any needed changes can be made after the customer reviews it.

While he admits that his firm is not the traditional kitchen and bath design firm, he believes there is a need for this niche, and concludes that this global outlook is definitely the way of the future.