Learning from Mistakes

There's a fine line between risk taking and stupidity.  Many of the great CEOs in today's corporate world, including Amazon's Jeff Bezos, Netflix' Reed Hastings and Coke's James Qunicey believe in the power of failure. If you are not taking risks, you are not thinking creatively enough they argue. One of Bezos' great competencies (and there are many) is that he is quick to pull the plug on projects that don't appear to pan out. As Scott Galloway points out in his new book, The Four: The Hidden DNA of Amazon, Apple, Facebook and Google, Bezos divides Amazon's risk taking into two types: 1) Those you can't walk back from ("This is the future of the company."), and 2) Those you can ("This isn't working, we're out of here.). 

You can't innovate if you don't take risks. As Bill Taylor points out in a recent HBR blog, "If you're not prepared to fail, you're not prepared to learn." Given how fast the world is changing, constant learning is key to survival. Why do most companies stay the course, rely on the tried-and-true and are adverse to taking risks? The reason is their fear of failure. Most people won't try a new idea because if it doesn't work, they believe they will be considered failures. How many of your team members are reticent to try something new because it may not produce desired outcomes? Great writers often produce a lot of bad copy that enables them to write best sellers later on in their career.

Failure is a necessary condition for success. The keys are to cut the cord quickly if the risk will not pan out and to learn from your mistakes in order to make your organization better.

Avoiding the Trash Can

Emails are no different than any other type of interaction. You only get one chance to make a positive first impression and for emails that first impression usually is made in the subject line.  Avoid using all CAPS, more than one explanation point or words such as "warning", "you need to take action or else" or similar types of messages.  Use the subject line to inform recipients how they can benefit from opening your email.

 

Get to the point and your call-to-action in as few words as possible.

 

Trial-test emails to make sure they provide the appearance you want on all devices, including desktops, tablets and smart phones.

 

Make sure the message matches reality.  You may believe you are the best decorative plumbing and hardware showroom in the world, but that's difficult to prove and most likely will not be believed. However, if you were recently honored with industry awards, that's something to boast about.

 

Always use the recipient's first name, if you know it, when crafting your messages.

 

Don't ask for the sale in an email.  Next time you go to Starbucks, observe those people in line.  Most likely you will find that many of them are reading their emails.  Do you actually believe your request to have a contract signed would be well received by any of those folks?  Use email to inform, educate and build relationships. Above all, email campaigns should always look through the lens of the customer and be 100% about the customers and their needs.

 

Never insult the competition.  Instead describe why it is in the client's best interest to rely on your services as opposed to the showroom down the street.

 

Emails are comparable to commercials on television and radio. They serve to interrupt.  A better way to engage is to ask for permission to continue a conversation by providing information that is useful to the prospect.

 

What are some of your best email campaign tips? Please share your thoughts on the

DPHA Facebook page or with our LinkedIn group.

 

More Lessons From Doug Stephens

DPHA 2017 Conference keynote speaker Doug Stephens (The Retail Profit) wowed members in Phoenix.  Stephens told DPHA members to expect dramatic and significant changes in the retail landscape, explaining that online sales are compounding at a global rate between 12 and 35 percent, and that within 15 years he expects ecommerce sales will exceed purchases in brick-and-mortar stores.  Virtual reality and the Internet of almost everything will make common everyday purchases automatically.  Stephens explained, "The three quarters empty bag of dog food in your home will suddenly have the capability to re-order itself.  Using the third-to-last diaper in the carton will trigger the order of 40 new diapers delivered to your door.  The light bulb that's going to burn out will order its own replacement, taking into account shipping times from your online provider.  Sensors in your running shoes will measure tread depth and trigger a reorder when necessary.  By 2025, 30% of everything in the center aisle of a grocery store will be purchased automatically."

 

Stephens told DPHA members that physical retail will no longer be a channel for buying because the vast majority of daily and weekly needs will arrive automatically without purchaser involvement.  Physical stores will have to reinvent themselves and become places where consumers go to learn, be inspired and see and try new things.  These new "stores" will have to deliver more compelling physical and emotional shopping experiences, Stephens said. 

 

Apple founder Steve Jobs explained, "design is a funny word.  Some people think design means how something looks.  But, of course, if you dig deeper, it's really how it works."  Apple embodies the change in retail that Stephens believes is the key to continued brick-and-mortar success.  Apple recreated the retail experience.  Its stores are open and bright and enable customers to freely interact with products, receive expert advice and have problems solved.  There are no cashiers at Apple stores, a trend that will accelerate across all channels and another sign of the paradigm shift in brick-and-mortar retail operations.

 

Decorative plumbing and hardware showrooms have a leg up on most other retailers because DPH showrooms have the ability to engage customers on more than one sensory level.  Stephens advised DPHA members to change their focus from store to story and to stop thinking about products and start thinking about productions.  Shifting the focus of a brick-and-mortar store from selling products to selling experiences that involve products will enable the showroom of the future to differentiate itself and become the destination of choice for its market.

 

Can We Take Advantage of Burberry's Strategy?

Burberry CEO Marco Gobbetti announced this week that his company is doubling down on its luxury products and raising prices of its luxury products across numerous categories.  Gobbetti believes the premium sector is tantamount to hell.  He said, "Today's customers are polarizing between luxury and mass market.  The mid-market used to dominate. It no longer has a place with the consumer, and this polarization will be reflected in our pricing."

 

Gobbetti is moving Burberry away from mid-market products and pricing and focusing on producing more higher-priced leather bags and accessories and personalized shopping that gives customers immediate access to products they debut at fashion shows. 

 

Burberry was a digital pioneer among luxury manufacturers, being the first to use Facebook and Snapchat to promote the brand, and the first to live stream a runway show for its customers.  Being first in digital marketing for a luxury brand paid dividends for Burberry, which saw its revenue jump 27% in 2011.  Since then growth has slowed and currently it is not increasing at the same rate as its competitors.  That's why the company is rolling out a new strategy to focus on higher-priced, higher margin products.  Burberry plans to remain active digitally but focus more on improving the customer experience instead of "flash."  This will be accomplished by creating a personalized product feed on the Burberry e-commerce platform that is going to be launched later this year and a universal mobile checkout system ala Amazon Go. 

 

Burberry plans to use its digital channels to build itself as a luxury brand and using social media to appeal to entry-level customers who may look to trade up.  Burberry is betting on its ability to produce more upscale products more frequently. 

 

Is there a lesson for decorative plumbing and hardware showrooms?  Are your customers moving away from mid-market products to either trade up or trade down?  Would it be a good strategic move to position your brand as a true luxury player?  Please share your thoughts on the DPHA Facebook page or with our LinkedIn group.

 

Teaching Your Team to Upsell

Most showroom sales professionals sell in the same manner as they buy. If your sales professional is a value buyer, he or she is likely to be a value seller. Conversely, if your team member trades up for the purchases that are most important, he or she is likely to recommend top-of-the-line products to customers.

 

Most owners want their team to upsell, because higher-priced merchandise typically delivers higher margins. Sales professionals may not be as enthusiastic. They often gravitate to what's easiest to sell or the lines they know are most reliable without regard to margin and profitability. 

 

Your team may not upsell because they don't up-buy, or so they believe. In a recent blog, Retail Doctor Bob Phelps explains that almost everyone up-buys. McDonald's understood the value of upselling and was able to scale its business by asking one simple question "Would you like fries with that?", which has not only contributed to the growth of McDonald's across the world, but also has become an iconic catchphrase on its own. 

 

The key is to explain to your team that they up-buy every day. How many members of your team have an iPhone? Those who do may not realize that they spent $700 to $800 when they could have purchased a Samsung or other model with comparable benefits for $100. Does your team stop at Starbucks on the way to the showroom? That's an up-buy too. A stop at 7-11 or Dunkin Donuts would be half the cost. The sound you hear is opportunity knocking.

 

The difference between your employees purchasing a phone at 700 to 800 percent more than a competitor or a cup of coffee at two to three times the cost of somewhere else without a corresponding increase in taste, value or convenience is because using an iPhone has cache and going to Starbucks makes them feel good. When customers come to your showroom instead of visiting a lower-priced competitor or shopping online, they do so in order to feel good. How would your team respond to the question, "Don't our customers deserve to have an iPhone experience at our showroom?" You can deliver that experience by providing the best quality products that fit their budgets. Michael Silverstein, in his book Trading Up: The New American Luxury, found that consumers will spend 300 percent more for products they are emotionally connected to.

 

Taking note of the cars customers drive to the showroom, the clothing and jewelry they wear, the handbag that they carry, where they vacation, their hobbies, etc., will provide a window into the customer's willingness to up-buy. If your customers up-buy on major purchases, why would they want to settle for less than the best on the two most important rooms in their home?  What prevents your team from asking, "Would you like steam with your new shower?"

A Solution Driven Approach, by Phil Hotarek from Lutz Bath & Kitchen (an Education Committee member)

Establishing a niche through problem solving has become an effective method in the consumer market.  Some of these recently developed solutions were for small problems I did not even realize existed until they were revealed to me, to which I discovered the added comfort and convenience in my life with their presence.  We are seeing this approach in various consumer products such as: voice activated electronics, food prep services, vacuum insulated bottles, direct to order fabrics, etc., and the list goes on.  While industries may be different, commonalities are evident in that consumers are drawn to products and services that solve problems.  Manufacturers can effectively use this strategy by developing products with unique solutions, and showroom professionals can make a deeper connection with a client by identifying a problem and selecting the right product.  

 

Functionality

From bathrooms with small footprints to families with complicated schedules, the way products function has peaked consumer interest.  Efficient storage solutions increase space efficiency and can even save time with better organization.  Some products demonstrate their functionality features through energy conservation.  The bottom line is - better function is a key indicator of superior design with the end user in mind.  

 

Concealed and Clean

A minimal look is in and the more we can conceal the better.  Products that solve clutter, are easy to clean, and show less hardware appeal to the modern day consumer.  You may also hear designers describe something as having "clean lines," meaning that the design is smooth and has little disturbance in blending along the surface.  The attention to detail will peak interest while highlighting uniqueness in the product.  

 

Low Maintenance and Longevity

Where a product is made carries more weight in today's market.  Consumers are willing to pay more for a product that has a storied history of quality craftsmanship.  It gives peace of mind knowing that maintenance is minimized and it will be one less thing to worry about in the foreseeable future.  This feature is the key to progressing the experience from a purchase to an investment.  

 

High Tech

Advancements in technology continue to progress at a high pace and have become more relevant in plumbing.  Technology is integrated in added convenience features as well as problem solving features.  UV cleaning lights, electrical outlets with USB conveniently placed in storage ports, heated mirrors, mirrors with a TV, bluetooth and WiFi capabilities, and so on.  Even when some technology seems ridiculous at first, the comfort added to our lives almost makes these features a necessity at the end of the day.  Technology yields endless possibilities in creativity to the manufacturer and can solidify a showroom professional's reputation for always being ahead of the curve.  

 

Closing thoughts

Problem solving can come in various forms as long as the mindset is consistent.  When product design is solution driven, the benefits come full circle for manufacturers, showroom professionals and consumers.  The pressures of staying ahead of the crowd can be a burden to those who resist change and a blessing to those who are passionate.  Showroom professionals can effectively use this strategy to establish a connection with potential clients by actively listening to what is important to them.  And manufacturers can do the same by staying connected to the demands of the market while anticipating what may be important in the future.