The Kitchen Sales Coach Issue #23 - Complicate Your Designs, but Simplify Your Business!
By Robert Foltz, CKD
Raise your hand if you've ever sat in a seminar where the speaker said "Today's consumer is more educated than ever." Consumers are more educated, and the Internet has made it ridiculously easy for them research you and your product, compare pricing and determine value. The sooner we realize that the better. I like to say we are moving from the information age to the "recommendation age."
That's why you need to simplify your processes. The more you simplify your business model, the more complicated your designs can be! Execution of even a simple design is difficult in a complicated business structure (look at the big box stores for leadership in this regard). Have you noticed how the leading design firms in your market execute complicated designs flawlessly? That's because their business systems are simple and easy to explain, leaving the prospect focused on the design. We all know that if the prospect thinks you've hit a home run with your design, then the price moves much lower on their list of priorities.
The three most important things you can develop to simplify your business clearly defined services, a clearly defined product niche, and uncomplicated pricing models. Add a quick turn around qualifying technique and your business model will be simple to present and execute, leaving you more time to play with the design.
Offering clearly defined services is the first key to simplification. Define what your company will and will not do. Limit what you do to what you do well-period. A top ten firm in my market in Florida will not install countertops or perform construction services of any kind. A top firm in the Colorado market will not install cabinets. Both have dominated their markets for decades. If you offer construction, then have charts that show the project timetable in way that's quick, efficient, and easy to understand. The prospect will immediately see what you do and decide if it's a fit for them. Changing your procedures just to gain an important sale will often lead to problems later. Quietly test and retest new procedures before introducing them to the market. Don't risk your reputation unnecessarily.
Having a clearly defined product niche is the next key to simplification. Identify your market and your ideal customer, then find the products that fit that market and customer. Have one product line for each price point. Too many dealers have many product lines that they rarely use just to get that "awesome linen glaze" that their major product line doesn't have. Or a salesperson/designer you just hired insists on adding a cabinet line because s/he knows it so well. A good salesperson/designer can sell anything and will take the time to learn your products. If your average Kitchen Cabinet Sale is $20,000 for 30 'boxes' installed, then have additional products that will do the job for $15,000 and $25,000 installed. At least a 15 to 25 percent spread between lines is key. Most of your display space should be dedicated to three or four cabinet lines and product niches. A "good, better, best" scenario is easy to explain and illustrate the value to the prospect.
Creating uncomplicated pricing models are the third key to simplification. I had a big developer tell me once, "You should be able to estimate the cabinets installed in my houses in 30 minutes and be within 10 to 20 percent of your final bid." At first, I thought this would be impossible, but I learned how to do just that, and it's a great method for quickly qualifying your prospect.
Later, I had a very large interior design firm ask me to come to their office and "pick up some plans" to bid on a project they had. I sat down in the designer's office, performed my calculations based on the work she requested, filled out an estimate form, and submitted a 10 percent design deposit request within 30 minutes! She was shocked and asked "You're not going to do any drawings?" I replied, "You know my work and I know your style. With the door, finish and wood specie you requested, the preliminary investment parameter is between $30,000 and $45,000, installed with our usual amount of great accessories." I've had my designs stolen, copied, and even won awards I wasn't aware of by unethical interior designers who passed my work off as their own and then bought cabinets from a competitor. This method of deposit first, design second is the same method used by most interior designers and their clients, and it works well for our industry, too.
I call this the "recommendation age" because your reputation and references are easier to track than they've ever been before. You should be able to quickly explain how your business differs from the competition. Offering a "good, better, best" scenario and an easy-to-calculate pricing formula for your prospects will not only save you time, but will separate you from the pack in the marketplace. It will help you focus on the customers who'll make you more money. I think the veterans of our industry agree that knowing when to walk away is as important to your business as picking up the check.
Focus on Sales: A Tale of Two Companies
The law of attraction is a principle that I've learned, everyone agrees with, and most think they practice. However, let's do some soul searching. Do you blow off new representatives or salespeople that come into your office because "you're too busy." Do you forget to make time for your employees or designers when they have questions or concerns?
What you reap is what you sow! If you're spending valuable time worrying about a light bulb that costs too much, or, spending hours negotiating a price savings of $50 when you could be generating a $5,000 sale, what kind of prospects and clients are you attracting? This isn't a lecture; I just want you to think about your approach. Focus on sales and manage your costs.
Let me tell you a tale of two companies to illustrate my point. These are actual companies, and their principals don't know that the energy they put into their businesses each creates a very different effect.
The owner of the first company was complaining to me about how hard the cabinet business is. After digging into this, I found two things. Neither the owner nor the other principals have any experience in the kitchen business. They don't understand the complexity of the business and managing client expectations. They're constantly putting out fires, instead of having systems in place to prevent the fires. And they treat their vendors horribly. Running them down, not paying the bills, and then wanting free this, free that! Price, Price, Price.
This business is not undercapitalized. Yet they value haggling and getting something for less. The result is it attracts other cheap prospects! Not only that, but the good reps in the area won't even walk in the place, so they're stuck with the problematic companies and reps in the marketplace. This owner is focused on his cost and how much every light bulb is running up his overhead. Meanwhile, the sales staff is unmotivated and tired of all the yelling-the negative energy is incredible. Treating others in business like you want to be treated is natural law, and you'll attract exactly what you put out.
The owner of the second company has one concern: sales. He never compromises his profit margin or on what his company does. He doesn't deviate from his business plan. He recruits and pays top dollar for top talent. He works them hard, and is very demanding. He once told me, "I want people to be their best, so sometimes I need to push a bit." Everyone in the organization pushes sales and excellence in project management. From the installer to the designer to the back room staff, they all know that only 100 percent effort will do. When mistakes happen, no one yells or gets mad-they fix it, learn from it, and move on. If he finds value in a new display, of course he'll ask for it for free. If it's not offered, he justifies the value. Value for this owner is "How many sales will this product bring me?" The reps that deal with him have to make an appointment, be brief, and bring value. Start talking about the football game or whatever, and you're wasting his valuable sales time! He focuses on sales and monitors his costs.
The law of attrition is real and alive in the Kitchen Business. If you're unethical or mean to your vendors, then you'll only attract like-minded vendors and their reps. The same is true for staff and clients. Problems create problems because they attract problems.
Business in Florida is not what it was. I have to keep reminding myself and my clients that if we focus on what we don't have, then there will be more things we don't have. If we focus on opportunities, then we'll have more opportunities.
Keep your mind focused on forward thinking ways to serve and add value to your clients!
About Robert Foltz, CKD
Robert Foltz, CKD is experienced in all areas of the retail kitchen and bath business. As a manufacturers' representative, his experience and expertise can help improve your business. He also works as a sales trainer, consultant, and personal coach.
With 23 years of experience in every area of the kitchen business, he has personally experienced the most common mistakes all business owners and sales people make. He has used that experience to develop a formula that will help you avoid those common mistakes and to dramatically accelerate your success.
Robert can be reached at and his work can be seen on www.KitchenSalesCoach.com.