Consultative Approach Increases Profitability

The August “Bettering Your Bottom Line” column looked at how the showroom can be used to represent substantial proof of a kitchen and bath dealer’s professionalism and value, setting the firm apart from the competition.

In the second in this two-part article, we’ll look at how dealers can utilize a consultative approach to increase profitability, and how the right presentation and a well-appointed conference room can help you achieve this goal.

In today’s competitive climate, with price cutting an ongoing concern for many dealers, service is more important than ever before. That means not just offering a wide selection of great products, but also educating potential clients about the design and remodeling process, the differences between products and the value you are offering.

By educating the client, you not only prevent future misunderstandings or communication gaffes, you also are able to maintain higher profit margins because the clients truly understand the value they are getting when they buy a kitchen or bath from you.

USING YOUR CONFERENCE ROOM

The conference room is an essential part of this educational process. Not only does it provide a quiet place to speak with clients about what you offer, away from the distractions of the showroom, but it also offers an opportunity to show your clients how your firm is different.

In the Signature Kitchen & Bath showroom, the roughly 12’x12’ conference room features a series of single door wall and base cabinets separated by tall vertical panels that are painted the same as the taupe-colored walls. Instead of counters, clear Plexiglas panels top off the base units.

I call this display the “Cabinet Comparison Wall.” When bringing a client here, I’ll explain, “Cabinetry often represents as much as 60% of the cost of a new kitchen. The least costly line we carry is at the far left, with the most expensive – which could be 4-5 times more costly – on the far right. Yet all cabinets must be priced right for value received. So let’s examine the differences in construction between these several brands so you can make an intelligent first and second choice in cabinetry should you decide that you would like to invite us out for a home consultation. That way, if we can come up with a possible design configuration when we are out there, knowing your cabinetry preferences will enable us to also develop a realistic budget range together for your project.”

I’ll then spend the next 20 minutes making an objective presentation of the various cabinet lines. Seeing the cabinet constructions side by side makes it much easier for prospects to understand why one line is more costly than another. Before leaving the conference area, I’ll explain how the firm regularly holds seminars here for 10-12 people on a variety of topics, including “How Much Should a Good Kitchen Cost?” Presenting seminars like this is essential to the process, as when prospects are informed about everything that goes into a project, they can make the best decisions for their families.

Offering this high level of education shifts prospects’ view of you from “just someone trying to sell them something” to a true consultant and partner.

Alongside the Conference Room area is a handy Materials Selection space that features cabinet door racks; slabs of granite, stone and tile on wall-mounted wood ledges; and freestanding towers of various faucet styles. Showcasing a wide variety of products in this area makes it clear that our firm has everything under its roof that the client needs, and a well-thought-out presentation makes them realize that they are getting expertise as well as product.

We also use a series of wall panels to showcase information about our company; photos that represent our work; a Project Needs Analysis form; a New Kitchen Budget Analysis form with estimated figures for cabinetry, countertops, sinks, appliances, installation labor, plumbing, electrical, etc.; a Design Agreement Form; several preliminary plans and sketches; before and after photos, and a testimonial.

Clients see all of this information and think, “This is obviously an extremely professional company. They offer so much information up front so I can comprehend the complexity of doing a kitchen project and what to expect at each stage. They seem to manage all of the details so well.”

They may think, “We weren’t educated nearly as well at the other places we visited. The $67,000 estimated price for that sample kitchen was a little more than the $50,000 that friends warned us to expect to pay for a decent kitchen remodel. But, clearly, this firm is flexible with the range of products they handle and their approach of developing two to three layouts.

“Furthermore, they hold themselves accountable for the estimate they produce. And, we like that they make it standard practice to offer cost options; they don’t care how much we spend as long as we understand fully what we are receiving. Right now, Signature is looking like they are head and shoulders over the competition. Let’s hope we can afford what they come up with.”

The Home Consultation

Having created a dynamic where you’ve set your firm apart from the competition and helped the client to understand the value of your knowledge and services, rather than just focusing on price, the next step is to set up the home consultation.

Here’s how we do it: We are with our client in front of the firm’s “Client Information Center.” It’s a wall rack of booklets with different titles: Buying A New Kitchen … Buying New Cabinetry … Relax During A Remodeling … The Importance Of Good Lighting … Buying New Appliances, etc. There are also copies of our magazine titled Signature Kitchens & Baths.

We’ll take a Signature Pocket Folder out from a cabinet drawer below the wall rack, insert our business card and begin to fill it with the magazine and several of the booklets. We also add literature on the client’s two cabinet preferences and hand them the packet. Again, the client is reminded of the value being offered: This is way more valuable reading material than what they received elsewhere.

Then we’ll say: “Thank you for visiting us today. I enjoyed learning about the exciting project you have under consideration. I hope you received good value for the hour or so you spent here. Do you feel comfortable enough with what you have seen in the way of product, and in us as your potential kitchen design firm, that you would like to schedule an appointment now for a home consultation?”

You already know the answer. It’s a definite yes.

 

Ken Peterson, CKD, LPBC, is president of the Chapel Hill, NC-based SEN Design Group and an instructor for the “Road to Recovery: Best Business Strategies for 2011” seminar, co-produced by KBDN. Peterson can be reached at 1-800-991-1711 or kpeterson@sendesign.com.

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