After several of the worst economic years in decades, things are finally looking up for kitchen and bath professionals. In fact, more than half of dealers and designers recently surveyed reported an uptick in business over the past few months (see Graph 1) – a trend that has held solid across virtually all geographic and demographic segments.
Equally encouraging, nearly three quarters of those polled expressed confidence that business will continue to improve this year (see Graph 2).
The newly released study, which polled some 360 kitchen and bath designers and dealers all across the U.S. about their business practices, was conducted by Kitchen & Bath Design News’ research partner, the Research Institute for Cooking & Kitchen Intelligence (RICKI), a Charlotte, NC-based organization of manufacturers, retailers, wholesalers and others whose revenues derive from activities that take place in the kitchen (see related Editorial, Page 5).
LEARNING TO ADAPT
While business appears to be back on the upswing, the way kitchen and bath professionals do business may well have been changed for good. In fact, a whopping 82% of those surveyed said that the economic conditions of the past few years have either “dramatically” or “somewhat” changed the way they do business (see Graph 3).
As one survey respondent explained, “The worsening economy has actually made me a better business person. I actually have paid attention to the business [where] before it just took care of itself.”
When asked about the biggest change they made in the way they do business, 17% of those surveyed said they’ve altered their sales/marketing strategy, 16% downsized, 16% changed their target market or types of jobs handled, 12% offered more discounts/promotions or lowered prices, and 11% selected lower-cost products or budgets (see Graph 4). Another 7% focused on enhancing efficiencies, 7% said they used more social media/technology to improve business, 6% became more flexible, 5% engaged in more networking, and 4% either added or changed product lines, added fees or changed their price structure,
While the vast majority of dealers and designers polled agreed that being proactive has been essential, and will continue to be essential in the future, individual respondents also had very different takes on what the most important changes were for helping their businesses to thrive in challenging conditions.
For instance, one stressed the importance of taking on smaller projects along with traditional full remodels, yet another said, “I’ve learned NOT to take on small projects to fill the voids in my schedule [because] they take too much time and don’t generate enough income to justify the hassles involved.”
Several talked about collecting a design fee to eliminate tire kickers, or otherwise focusing more on improving the qualifying process, while others focused more on internal improvements: As one dealer explained, “We’ve instituted a better definition of who we are, updated our Website marketing and updated standard operating procedures.”
“More hand holding and reassuring clients about their investment” is also essential these days, according to one of the designers polled.
Others survey respondents cited a variety of strategies that they felt were worth implementing – everything from closing the showroom and going to a “virtual showroom” model to shortening project time lines to cutting utility bills and setting up payment plans with vendors.
WHAT DESIGNERS WANT
In a rapidly changing market, kitchen and bath designers and dealers are eager for help, particularly when it comes to marketing support, insights and new prospects. And many look to manufacturers to be marketing partners in these aspects of their business.
In fact, the majority of those polled (61%) said they are “extremely” or “very” interested in manufacturers providing them with marketing support, and another 28% said they are “somewhat” interested in receiving marketing support (see Graph 5).
As far as the specific type of support they’d like to see, dealers and designers ranked trend information at the top of their list (cited as “extremely” or “very” helpful by 67% of those polled), followed by names of qualified prospects (64%), content for marketing efforts (52%), marketing research (52%), assistance with social media efforts (44%), direct mail to targeted prospects (44%), help with CRM (44%), email addresses of subscribers to shelter publications (41%), and assistance with their Website or marketing/communications plan (38%).
When asked about the helpfulness of specific marketing tools provided by manufacturers, 81% cited an extensive Website as “extremely” or “very” helpful, 73% cited a full brochure on specific products, 69% mentioned a complete product catalogue, 47% noted a one-page sales sheet, 45% wanted a video of the product in action, 44% cited an iPad or mobile-enabled presentation and 25% mentioned a PowerPoint presentation (see Graph 6).
Technology has long had a foot-hold in the kitchen and bath community, but the recession may well have intensified the impact of technology on marketing by providing more cost-effective ways of reaching large numbers of prospects. Whether through email blasts, Facebook communities, blogs, apps or Tweets, technology has created a whole host of opportunities for getting a message out without having to go any further than one’s computer.
And, while not everyone is jumping on the marketing technology bandwagon, survey results suggested that kitchen and bath professionals are increasingly exploring options for marketing by technology.
In fact, according to the survey, some 73% of kitchen and bath dealers and designers polled market their firm through their Website, 54% market their firms through social networking sites, 20% use email campaigns, 19% invest in online advertising, 16% produce an e-newsletter, 14% are active with blogs or forums, 8% use videos to market their firms and 6% use paid search (see Graph 7).
Not surprisingly, “leading edge designers” – those who identified themselves as almost always using the latest product and materials, and creating unique designs most of the time rather than sticking with the “tried and true” – were far more likely to use social media, blogs and forums to market their businesses than mainstream designers.
However, not all social media sites are created equal. While the majority of those polled said they use both Facebook and LinkedIn at least occasionally, a whopping 84% said they never use Twitter at all, and 76% never use the popular video site YouTube.
Additionally, nearly seven in 10 designers polled (69%) said they use a smart phone for business – a 50% increase compared to the results of similar survey conducted in September 2011. Apps, however, did not fare as well, with only 43% of those with a smart phone saying that they actually use mobile apps for their design business.
As important as technology is to the marketing process, if the survey is any indication, it’s not the be all and end all of marketing. In fact, some 41% of those polled said they rely on more traditional marketing avenues, including referrals, live networking and local advertising.
The survey also asked dealers and designers what makes new products appeal to them. Not surprisingly, the results showed that designers are a tactile tribe, and prefer to see and touch products they are considering adding to their showroom. As such, the vast majority of those polled said they are “extremely likely” or “very likely” to pay attention to a new product introduction displayed in a showroom, specialty dealer or retailer or magazine ad, compared to something that offers less of a sense of emotional or tactile resonance.
When asked what would make them more likely to pay attention to a new product introduction, 65% cited a showroom, specialty dealer or retailer display, 59% cited a magazine ad, 52% said an email with visuals and 47% mentioned a direct mail piece.
Kitchen and bath designers and dealers surveyed also noted the same preference for strong visual elements in their own showrooms, citing everything from innovative displays fully “tricked out” to look like living spaces to creative ideas for providing samples, color blocks and the like.
That said, smaller showrooms seem to be another impact of the last few years’ economic challenges, so kitchen and bath designers and dealers have been forced to get more creative in providing maximum visual impact even when display space is limited. As one noted, “Since floor space is limited in our showroom, I use large photographs of kitchens that our firm has done.” Large, flat-screen HDTVs, project books and online photo galleries were other ideas cited by respondents for creating visual appeal in the face of space limitations.