'Packaging Services' to Improve Margins

Years ago, I was asked to consult on gross margin problems in a high-end kitchen dealership with an absolutely gorgeous showroom. While interviewing one sales designer, a prospect walked in and the designer excused himself to greet the potential client. As a result, I had an opportunity to observe his sales approach.

After a 30-minute tour of the showroom, with the designer spouting the benefits of his three cabinet lines, I heard the prospect ask: "How do you work?"

The sales designer reached up into a wall cabinet and pulled out a roll of yellowed drawings. Spreading them out on a conference table, and using books to hold down the corners of the plans, the designer proceeded to explain the firm's design process. A frown developed on the prospect's forehead - and mine.

How unprofessional, I thought!

The caliber of people we employ, and the quality of services we offer as independent kitchen and bath firms, are our greatest strengths. But, even today, in showroom after showroom that I visit, I find the marketing - or "packaging" - of our people and services is almost non-existent. In truth, however, the proper delivery of these strengths would have a profound impact on prospects, enhancing their awareness of a firm's value and their willingness to pay for its services.

Everybody in this business promises good service. But those who offer something other than the spoken word have far more credibility.

Do you think your customers truly comprehend the efforts that go on behind the scenes to have projects ordered, acknowledged, scheduled, coordinated, and installed properly so they fit like a glove? Do you believe prospects would comprehend any better the hoops your firm must go through to accomplish this feat if you verbalized all the procedures you follow? On both scores, I think not.

Research has demonstrated that people retain visual information nearly 70% better than auditory information. So why not clear out some wall space in your showroom to visually depict the development of a new kitchen from start to finish?

In the advertising business, "storyboards" are used to lay out a 60-second TV commercial from beginning to end, to convince the client of the ad's value. The same concept can be successfully applied to the kitchen and bath industry. In doing so, you are communicating two subliminal messages:
1. Attention to detail is critical every step of the way to ensure a project's success, and,
2. Your company is unique in the management systems, division of labor, and services deployed to control this detail.

In effect, you are educating the prospect on the right way to buy, order, and install a kitchen. The following might represent the headlines of each storyboard:
Step 1: The Showroom Visit … Getting To Know Us.
Step 2: The Home Consultation … Getting To Know You.
Step 3: Preliminary Plans … Broad Strokes.
Step 4: Project Documents … The Finishing Details.
Step 5: The Installation … Bringing Your Plans To Life.

The best way to present each of these steps is to use a case history of a typical job. Reproduce the forms, sketches, plans, documents, checklists, etc., that were used in the creation of the project and mount them on the appropriate storyboard. Be sure to include photos of your staff designing, ordering, delivering and installing the project. Include a testimonial of satisfaction from the client in the final storyboard.

There are other ways of visually presenting this information. Client information binders and videos can accomplish the same purpose, although the latter can be quite expensive when produced professionally. In any case, prospects will gain a much better appreciation for the value of your service and become far less price sensitive by going through the exercise I've described.

These marketing tools, in which a case history is featured, help condition prospects for the entire process, enabling them to become comfortable with the notion of giving you a retainer check up front.

Another effective vehicle recommended by marketing experts is seminars - where, for example, a designer's proven expertise can be projected to an audience. Yet another is a published book or brochure on design ideas or buying advice.

By publishing booklets that provide worthwhile advice, you can teach consumers the right way to buy a kitchen or bath, and how to determine the value between competitive proposals. Most consumers today are well-educated and enjoy getting informed on such subjects prior to making a large purchase. Research has shown repeatedly that the written word conveys greater credibility to the reader. Most believe what they read.

Kitchens and bathrooms are largely intangible products in the sense that the consumer can't "test-drive" their preferred model in advance, like a car. Since displays are only surrogates for the real thing, customers really won't know how well a kitchen plan is going to satisfy their needs until the project is finally installed in their home and they have paid for 90-100% of the purchase price. When you think about that, it's a lot of risk for the client to assume when they haven't done business with a company before!

Because of this, experts strongly recommend that marketers of intangible products like kitchens furnish tangible proof of the value of their service in as many ways as possible. The more methods that are used, the greater the opportunity of achieving higher margins.

From my experience, dealers who have finally packaged their services properly have added at least 10-12% to their gross profit margins. Now, that should be motivation enough to take a second look at what you are doing - and implement changes!