Use Technology To Enhance Profit And Productivity

Imagine that you’re a consumer interested in remodeling your kitchen. Over the last month, you’ve collected lots of worthwhile information on the Internet, clipped photos from magazines and targeted possible kitchen dealers in your town to do the work.

Last Saturday, you and your spouse visited four showrooms. You were impressed enough with the products and services of three of them to set home consultation appointments.

Presenting a Solution

You liked the first two firms that visited you. Their representatives were knowledgeable, friendly and listened well to your needs and preferences. Each spent about an hour and a half with you, asking questions, making notes, taking photos and getting measurements. Each offered a couple of clues of how your kitchen could be redesigned, then promised to have a design and price for you within a week or two.

The last firm coming tonight has prepared you for a 2-3 hour meeting; Lucy, the designer, even said that she would try to come up with a probable layout solution and budget range for the project while she was there.

After a thorough interview for about an hour, Lucy pulls out an iPad and starts sketching a conceptual layout. While Lucy cautions that she has not yet taken any measurements, and the “smart plan” is just a concept, you begin to see how your 1970s kitchen can be transformed. Then she shows you digital photos of kitchens her firm has completed that demonstrate how certain sections of this “smart plan” could look in your house.

The Purchase Price

You and your spouse love what you are visualizing! So naturally, you ask: “How much would a kitchen like this cost?” In response, Lucy pulls up another digital file she calls her “Good-Better-Best Kitchen Budget Analysis.”

Lucy then leads you through the budget analysis by product category and labor category selection. She starts by saying: “Remember when you were in our showroom, you preferred the Dura Supreme Designer inset shaker door style in a light maple stain? You can see on this chart we should budget that product quality in the ‘best’ column at $1,120 per cabinet.” With 17 probable cabinets in this concept layout, she inputs a couple of numbers and a subtotal of $19,040 magically appears in that column.

She then proceeds to plug in $673 per cabinet for Kabinart in a comparable door style and $939 per cabinet for the Medallion Designer Series. Presto, the “good” column shows a cabinet subtotal of $11,441 and the “better” column reads $15,963. You like experiencing firsthand the flexibility in product selection and price range from this firm. And you are impressed with Lucy’s command of this technology that wasn’t at all in evidence with the two other designers.

Indeed, with each step of involvement in the budgeting process, you and your spouse are both becoming increasingly more confident with Lucy and her company. That’s because you realize that you can actually put this project design and total cost together just the way you’d like. You are in control and Lucy is your professional facilitator, empowering you to make informed decisions that are best for your family and your pocketbook.

In the end, you feel very comfortable signing a design agreement with Lucy and give her a retainer check “to take the project into the next phase.”

Automated Systems

Harnessing technology to proven consumer purchasing psychology like this will drive significant revenue and gross profit margin increases for progressive kitchen and bath dealers. It will also increase sales/designer productivity, closing percentages and annual commissions. But, frankly, that’s just the beginning of what a total marketing and management software program can do to bring kitchen and bath operations into the 21st century of best practices.

These are just some of the functions that can be automated to make your business run more efficiently

  • Accessing complete contact data on all clients and prospects;
  • Having all major vendor specification/pricing catalogs mounted on the platform;
  • Providing accurate estimating of projects, including access to a labor database;
  • Accessing a complete photo library of vendor products;
  • Generating specifications and contracts for customization;
  • Electronic ordering of all products and services for quick and accurate tracking;
  • Integrating with Quickbooks for accurate financial performance reports;
  • Scheduling of installations, job completions and warranty work;
  • Generating reports to measure marketing and sales designer performance;
  • Determining your break-even point per month; generating accurate cash flow forecasts.

There’s a wealth of automated programs that can help you to apply technology to make your business run better, streamline your operations and build your bottom line.

It’s been my experience that many progressive kitchen/bath dealers who have done extensive technology research report that despite the abundance of programs out there, there is nothing that addresses all of the functions listed above in a single, industry-specific program. Indeed, one of the challenges with automation in our industry is the piecemeal nature of it, i.e. many firms will use one program for client relationship management and another for production scheduling.

However, I do know today of a complete and affordable management software program under development exclusively for this industry that will debut in Spring 2013. For more details, those interested may contact me at kpeterson@sendesign.com.

 

Ken Peterson, CKD, LPBC, is president of the Chapel Hill, NC-based SEN Design Group and an instructor for “Best Business Strategies For 2012: Competing & Thriving In The New Economy” seminar that is co-produced by KBDN. Peterson can be reached at 1-800-991-1711 or kpeterson@sendesign.com.

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