'Traffic Forecast' Looks Promising

Like finding the mythical Bigfoot, the search for new customers can sometimes feel like an endless venture that offers plenty of false starts and stops, without ever quite leading to the real thing.

Indeed, prospective clients have been so hard to come by these past few years, some kitchen and bath dealers have joked that they were beginning to miss the tire kickers. But finding potential clients is finally getting a little bit easier, and dealers expect to see increases in showroom traffic, number of leads, quality of leads and consumer confidence in the next 12 months.

That’s according to a recent KBDN survey that looked at how dealers seek out prospective clients, what factors impact their ability to find potential clients and what they expect the coming year to bring. The survey, which polled nearly 200 kitchen and bath dealers, showed a growing optimism about the coming year in terms of traffic, lead quality and consumer confidence. A shift toward a greater focus on referrals from both past clients and allied professionals was also among the trends noted by dealers.

FINDING PROSPECTS

The good news is that finding prospects will likely begin to get easier over the coming 12 months. In fact, of those surveyed, 38% said they expect finding potential clients to be easier in 2013 than it was in 2012 (see Graph 1), while 45.2% expected it to be about the same. Only 16.8% said they expect finding clients to be more difficult.

Likewise, closing a sale will likely either be the same as last year or easier, according to those polled, with 30.1% saying they expect closing a sale to be easier this year than last, and 48.8% saying they expect it to be about the same (see Graph 2).

Another positive note was noted in dealers’ response to how they see leads evolving over the next 12 months, with half saying they expect to see increases in the number of leads (see Graph 3), and nearly half projecting increases in showroom traffic (47.8%), consumer confidence (46.6%) and quality of leads (44.4%). While converting leads to sales remains a challenge, more than one-third of those polled (34.3%) also expect to see increases in conversions in the coming year.

Although showroom traffic has long been a staple in how dealers find prospects, it’s certainly not the only way – or even necessarily the most effective one. In fact, when asked what venues they rely on to find new clients, it was referrals, not showroom traffic, which topped the list (see Graph 4). Some 89.3% of dealers say they rely on referrals from past customers to find new clients, while 61.8% rely on showroom traffic and 60.7% rely on referrals from allied professionals.

The next most common source of new clients was print ads, cited by 34.3% of those surveyed, followed by social media (33.7%), home shows (20.8%), special promotions (19.7%) and online ads or apps (19.1%).

As one dealer stated, “We still spend the majority of our marketing budget keeping in contact with past clients. It’s cheaper and the conversion rate is better. We have two-thirds to three-quarters of our new sales traced to past clients through referrals and repeat business.”

Another dealer concurs: “Referrals are by far the best source of leads for us, and we don’t see this changing in the near future. These can come from colleagues, clients, social media connections, etc. But right now, it’s all about meeting people face to face at networking events or on social media, and asking clients for referrals.”

So, why are referrals so important? As one dealer explains it, “In tough times, trust becomes more important than ever. People are looking for someone they can trust, and a referral from a friend, having someone they know and trust say, ‘This guy is okay, he took good care of us,’ carries a lot of weight.”

ONLINE PRESENCE

Dealers’ online marketing efforts are on the rise, with more than half of those surveyed (50.6%) saying they will increase their online marketing efforts in the next 12 months (see Graph 5). By comparison, a mere 1.2% plan to decrease their online marketing in the coming year.

So how are they doing that? According to the survey, 44.9% hope to raise their profile by increasing their social media efforts. While there are many benefits of using social media, its cost effectiveness is high on the list; with most sites, there is no charge to build a company profile and post photos and updates – except for the man hours required to maintain the company’s presence on these sites.

But not everyone is focusing exclusively on “freebies.” In fact, more than one-quarter (27%) of those polled say they plan to increase their advertising or marketing budget over the next 12 months. This may include increasing print advertising, updating the firm’s Web site/SEO, attending more home shows, investing in online ads or apps, participating in community or charitable functions, holding more showroom events/seminars/cooking demonstrations or spending on radio or TV ads.

Several dealers pointed out the importance of diversifying one’s marketing efforts, pointing to some potential dangers with investing exclusively in the online world. As one pointed out, “The presence of a negative online presence can create a bad reputation for companies that otherwise should have a good reputation. There are always those customers who you can never make happy, and with online reviews, they can falsely lead consumers away from [a good business].”

Since statistics show dissatisfied customers are far more likely to write a review than those who are satisfied, this can skew the company’s online image. By contrast, many dealers believe that personal referrals from clients or allied professionals can give a clearer, more honest picture of a firm’s capabilities.

As one dealer stated, “People do look at online reviews, but there is an anonymous quality to these. People are far more likely to trust the word of someone they know – a friend, a family member, a contractor. You should never forget that you’re going to be in someone’s home, and that makes this a very personal business.”

LOCATION, LOCATION

When it comes to finding prospective clients, dealers surveyed agree that it’s all about location. In fact, more than 80% said their business location is either “extremely important” (40.9%) or “somewhat important” (39.6%) in finding prospective clients.

Interestingly, location was equally important regardless of whether the dealer is located in an urban area or a rural one, with 41.2% of those located in urban areas and 40.5% of those in rural areas rating location as “extremely important.”

As one Midwestern dealer concluded, “Although a big project like a kitchen or bath isn’t generally an impulse purchase, stopping in to look at showroom displays can be an impulse decision, and that can lead to a sale. We were located somewhat off the beaten track, and recently moved our showroom to a new location that is closer to a restaurant and several upscale stores. Our traffic has improved and we are seeing more ‘impulse browsers.’ Sometimes they are just tire kickers, but other times they get intrigued by what we have to offer and they come back with their husbands and, before you know it, they are doing a bathroom or kitchen renovation!”

For more details about what dealers are saying about how they find new prospects, visit our Design Talk blog at www.For ResidentialPros.com/designtalk.

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