The year 2008 is shaping up to be a very interesting one. Nationwide housing starts are at 20-year lows. Recently, we have seen the stock market rise to record highs and then, in more recent months, plummet by hundreds of points at a time in a pattern that economic pundits refer to as “market corrections.” Banks and lending institutions have announced record foreclosures and tighter lending policies, making it more difficult – and expensive – to obtain a mortgage.
In the meantime, the subprime mortgage meltdown continues to wreak havoc across all segments of the economy. Depending on the region, the nation’s economic outlook is tenuous at best and recessionary at worst. Contributing to economic woes is the loss of consumer confidence, the rising cost of oil and sky-high domestic manufacturing prices. And we are in an election year. If history holds true to form, the economy will be flat in 2008, as this has been the case every year in which two non-incumbents vie for the presidency.
Despite the uncertainty about where things are heading, certain segments of the decorative plumbing and hardware industry do not apparently believe that economic conditions apply to them. This is evidenced by their desire to increase sales anywhere from 10 to 30% in 2008 – and their confidence in their ability to do this.
While a 30% increase in sales may not be realistic in some areas of the country, times of economic uncertainty can create opportunities for the best companies to shine. Manufacturers, reps and dealers must recognize and understand that now, more than ever, we must work together if we are going to respond effectively to the hands we are being dealt.
Manufacturers need to provide the tools necessary to maintain and expand market share. These include targeting architects, designers and custom builders through aggressive marketing and advertising campaigns, introducing new and innovative products and, most importantly, making it easy for dealers to specify and sell products.
Making Sales Easy
Making it easy to sell products begins with understanding what motivates showroom staff to specify one product over another. One of the valuable lessons that the Decorative Plumbing & Hardware Association has taught at its annual conferences is that selling high-end products has little to do with the product itself. Rather, the relationships established with buyers are key to selling products.
Representatives establish relationships by creating “comfort zones” for showroom staff to sell specific lines. Through training and maintaining a constant presence, reps teach showroom professionals to believe in a product, understand its nuances and be confident presenting a product line to end users.
Reps shine when they not only teach sales staff how to sell a product, but focus on the keys to selling to luxury consumers in a luxury environment. This is accomplished by ensuring literature is up to date, describing how to use price books and offering quality after-sales support.
The best reps understand that a typical showroom has hundreds of lines. In order to feel confident selling a particular product, members of the showroom staff need to appear to be experts to their customers so that their customers become repeat clients. If they don’t know how to use literature, or are not familiar with a product line, they won’t direct customers to those products. The rep’s job is to create a comfort zone with a line that helps ensure sales professionals look good in front of their customers.
It’s unreasonable for a manufacturer to expect showroom staff to learn a line in a single training session. Lasting relationships result from working one on one with sales professionals, walking them through new literature page by page and pointing out new products. Success is obtained by highlighting different aspects of a line in each showroom visit.
Often, the time allotted is limited, making it necessary to have a constant presence in the showroom through frequent visits, newsletters, e-blasts, new product announcements, formal and informal training sessions, Webcasts and news updates.
Easing Customer Pain
Making products easier to sell also requires an understanding of what causes customers “pain.”
Companies cause pain when they issue an e-mail stating, “Effective at the first of the month there will be a 10% increase across the board. Add the increase to orders when you submit them.” Dealers incur pain when their literature is out of date. Dealers and reps incur pain if customer service departments can’t answer simple questions and if delivery deadlines are not met. Manufacturers inflict pain if they fail to produce new products.
Manufacturers ease pain if they comply with the DPHA Data Standard, which uses standardized Excel spreadsheet columns to transmit pricing and product information, including specifications, pictures, installation instructions and parts.
Making products easier to sell in an iffy economy also requires offering specials, display upgrades and discounts and new products to replace tired lines. According to several manufacturers we represent, products introduced in the last five years represent 70% of the sales volume of their customers. Manufacturers that want their showrooms to increase sales by 10-30% need to have new product offerings that can help achieve those goals.
Reps in the field create value by providing technical assistance that avoids problems and tells showrooms that a rep is there to cover their back.
We all know that many installers don’t read installation instructions. Reps who have the expertise to answer technical questions build relationships with showrooms. They also build relationships by visiting job sites and resolving installation shortcomings, and create value by training installers and walking them through the nuances of today’s highly sophisticated decorative plumbing and hardware products.
This year is not the first time that the industry has faced a difficult economic climate. Nor will it be the last.
Unfortunately, when the economy dips, there’s a tendency to blame sales managers and reps. We will see sweeping changes because too many people in the industry still don’t realize that it’s the relationships that sell product.
Partnering together, manufacturers, dealers and representatives can help ease the pain that a down economy brings, ensuring that when opportunities arise, they are capitalized on.