Does Luxury Mean Anything Anymore?

Does your showroom sell luxury products?  If you believe it does, you may have another "think" coming.  Sebastien van Laere of the Future Laboratory recently wrote that the term luxury has been so overused that it no longer has meaning.  Luxury is defined as "an inessential, desirable item which is expensive or difficult to obtain or a pleasure obtained only rarely," by the Oxford English Dictionary.  If that definition is accurate, then any product in your showroom that is offered at a substantial discount by an online etailer or competitor cannot be considered luxurious.

 

Millennials create another challenge to using luxury nomenclature.  The largest generation in US history is generally not attracted to products just to show them off.  For Millennials, conspicuous consumption is a negative.  Throughout the luxury world, manufacturers and retailers are changing the narrative to align with new consumer expectations and desires.  Van Laere notes that cultural changes have spawned anti-luxury approaches.  Tiffany employed a rapper to promote its new Paper Flower products and its new London concept store features fragrance vending machines, neon lights and sneaker-wearing sales professionals.

 

Using the word "luxury" to describe a product or a showroom no longer has cache.  But it is more than nomenclature that needs to change.  The entire customer experience needs to follow suit as well by delivering high-quality, sustainable and memorable moments that are remarkable. What do you offer to customers that will make them want to talk about their experience to neighbors, peers and friends?

 

Email or Call? That Is the Question

When you want to establish a relationship with a prospective client, be it a builder, multi-family developer or single-family homeowner, what's better for an initial contact - email or phone call? After all, you have only one opportunity to make a first impression, so you want to make sure that it is a positive one.  Robert Graham, author of Cold Calling Early Customers, recommends sending an email because it does not require the recipient to respond immediately.  Plus, you can use an email as a reason to make a follow-up phone call.  

 

Another reason to email first instead of calling is it provides the opportunity for your showroom to explain your value proposition and convince the prospect that you are a better solution than the one they may currently be using or are considering.  Realistically, few of your prospects are going to take a call from a showroom they may never have heard of before or may not be interested in.

 

Google trends is a great tool to gauge how well your brand is recognized in your market territory.  Log on to Google Trends to determine how many times your company's name has been searched versus the searches of your top competitors.  If you are blogging at least weekly, chances are your showroom is getting significantly more visibility because there is a strong possibility you are appearing on the first page of Google searches.

 

You can skip the email or phone debate altogether though if you can use a contact to introduce you.  If you don't have a contact, check out the prospect's LinkedIn profile, Twitter or Instagram accounts and start to engage them by using social media to demonstrate how you can add value to their project.

 

Regardless of your strategy, make sure you know who you are contacting and what their needs are.  Researching a project's prospect enables you to craft personalized messages that address their needs.

Leadership + Innovation > Entrepreneurship, by Phil Hotarek (Lutz Bath & Kitchen), an Education Committee Member

For decades, companies have been pitched the concept of entrepreneurship as a method for harboring innovation.  You may have heard of several inspiring stories spawned from "rebels" such as: the Sony Playstation, Skunk Works, the Gmail search feature and the post-it note.  While one great idea may be born from a brilliant mind, the real key to a "post-it note" idea being born is developing a culture that embraces innovation with strong, open-minded leadership.  Innovation must be a company-wide venture with 100% buy-in from top to bottom.  It is a permanent function within an organization that is constantly seeking ways to improve operating processes, market strategies, and company growth.

A potential side effect of the entrepreneurship sales pitch is the development of an "anti-corporate" mindset that could inspire an employee to swim against the tide resulting in a potential company divide.  While the idea of being a company renegade is enticing to some, the reality is it ends up adversely affecting cyclical innovation and employee retention.  Companies also want to avoid depending on one "superhero" mind to fly in and save the day.  Instead, organizations need to be committed to a system that continuously innovates.  Most importantly, innovation within a company can not be disconnected from the larger operations, but holistically embraced throughout the organization.

• Leadership committed to an inclusive and innovative culture
• The ability to provide necessary resources
• The requirement of clear articulation of a proposed idea with data driven results
• Implementation process and planning
• Tracking data and incentives of innovation cycles
• Recruiting top industry skill and talent for business development

By embedding the above elements, you create a strong company identity that embraces a culture of consistent innovation.  The benefits of this strategy?  You end up with highly motivated employees who remain challenged, engaged, team oriented, and drive company growth with creative thinking skills. 

A Brilliant Marketing Idea

What's the goal of your marketing efforts?  The traditional marketing path relied on advertising to make a business more visible, but visibility and memorability are not one and the same and one does not necessarily beget the other.  Today's marketing for decorative plumbing and hardware showrooms, which must account for the fact that consumers control a businesses' brand, should focus on creating memorable customer experiences.

 

Bernadette Jiwy, in another brilliant blog post, related the story of a new bakery that decided to eschew traditional advertising, opting instead to promote its brand by offering a weekly bread basket to one lucky customer, who received a week's supply of different breads and goodies to share with their family.  But that's not all and the "not all" is a stroke of genius. Each customer who won the bread basket then got to nominate the next person to receive the free bread and to document the reasons why they chose their friend, colleague or neighbor in a notebook at the bakery.  The free weekly giveaway, Jiwy points out, did not simply promote the bakery's brand, it connected friends and neighbors and made them feel like they mattered.  

 

The lesson for decorative plumbing and hardware showrooms? Why not offer a weekly gift to a potential or former customer?  Why not partner with a faucet, cabinet knob, shower head or other manufacturer and provide a bath improvement basket?  Why not have your customers nominate a colleague, friend or neighbor to win the next basket and have them write the reasons they should win the basket on a notebook in the showroom, and on your web site?  Why not?

Winning the Zero Moment of Truth

In 2011, Google coined the term, Zero Moment of Truth, that refers to the point in the buying cycle when consumers research products or companies, often before the seller even knows that they exist.  If you don't believe that the customer buying journey has undergone a complete transformation in the last several years, consider this: on average consumers review 22 sources of information before making a purchase, and that number is more than 40 sources in categories such as travel and hospitality.  

 

Winning the zero moment of truth involves implementing the guidance Marcus Sheridan provided at the 2013 DPHA Annual Conference.  Your web site and social media posts need to answer the questions that customers ask most often, and provide helpful content that makes the buying journey easier and also builds trust with potential customers.  This may include the following:

• Solicit performance and product reviews from customers and distribute those among third-party review sites, e.g. Yelp, Google, Angie's List and Houzz.com.
• Have your showroom sales staff be brand ambassadors, reviewing products on your web site and offering guidance to make purchasing and renovation processes easier.
• Be constantly present and relevant by blogging about issues that address customer concerns and issues.
• Daily publish social media posts.
• Develop an email marketing newsletter.
• Implement email drip and trigger campaigns.
• Participate in paid social media search ad campaigns.

Effective content marketing helps build communities and create brand advocates that result in more sales and higher profitability.

Millennials: Forget About Em?

Millennials get a lot of press and for good reason. They represent the largest generation in U.S. history and will eventually be a major market for decorative plumbing and hardware showrooms.  However, at the moment, they are not as important as two other market demographics who are:

• Women
• Baby Boomers

Women are the primary purchasers of most everything.  In her groundbreaking book, Why She Buys, Bridget Brennan claims that women make the buy, or are the key influencers, in about 80% of all consumer purchases in the United States. However, few businesses and marketing messages are crafted to appeal to the unique needs of women.  What are you doing to specifically craft messages, services, designs, merchandising and displays that appeal to women?

 

In crafting messages, women for the most part prefer narratives that cohere and stir their imagination.  Women are more concerned with, and will be attracted to, products and sales approaches that explain what a product will do for them instead of its technical capabilities. Typically, women are not going to connect with features and benefits such as gallons per minute or PVD finishes. Focus instead on the health, relaxation and emotional benefits that showroom products offer. Explain how products will make her life and the lives of those that she cares most about easier, more enjoyable or more relaxing.  Men, on the other hand, relate better to tables and rankings.  Brennan observes that "Women are females first and consumers second." The importance of this to the decorative plumbing and hardware universe is that when women buy products, they are not only buying for themselves, they also are purchasing for everyone else - spouses, kids, friends, family and often their older parents, which multiplies their buying power and influences.

 

Washington Post journalists Bob Woodward and Carl Bernstein were aided in their Watergate investigation by a source whom the reporters dubbed, "Deep Throat."  The informant turned out to be FBI Associate Director Mark Felt, who advised the Post reporters to "follow the money."  That sage advice rings true for decorative plumbing and hardware showrooms in 2018.  While Millennials are getting most of the press from marketing gurus because they are the largest generation in history, DPH showrooms are urged to follow the money.  

 

Consumers 50 years and older have 47 times more money than consumers under the age of 50.  Those turning 50 in 2018 are expected to live another 50 years. They are just getting started. What compelling messages are you crafting to appeal to this demographic?

Lessons from Brookstone

Brookstone recently announced that it is closing its 100+ mall stores to focus its energies on the 30 brick-and-mortar airport locations and ecommerce.  It's another sign of a niche brick-and-mortar retailer throwing in the towel.  For more than 40 years, Brookstone offered quirky, niche products ranging from drones and all types of remote controls to 3D printed pens.  Similar to Shaper Image and Radio Shack, Brookstone did not adapt to the changing retail paradigm that has resulted in a significant decline in shopping mall traffic.  But it would be a disservice to Brookstone to blame online competitors and Amazon as the primary reason for its restructuring and substantially smaller footprint.

 

Brookstone did not sell many things that people needed, points out DPHA Conference Workshop Leader, the Retail Doctor Bob Phibbs.  Instead, they sold products that people wanted.  There are few items sold in a decorative plumbing and hardware showroom that consumers need.  Almost everything featured in a showroom falls into the category of wants.  A key to continued success is to determine the motivation for a "want".  Doing so will enable you and your sales team to overcome objections such as "it costs too much".  When price is questioned, determine why a customer considers the price to be too high. Determine if they want to make unique design statements in their home and the goals they want to achieve.   When you can change the dialogue, you can transition the conversation from price to how the products you recommend will make your customer feel and how much enjoyment they would derive from those purchases.  When you can determine goals, motivations and reasons for objections, you can easily overcome price and other reasons not to buy.  

 

Phibbs points out that anyone standing in front of a decorative plumbing and hardware sales professional made an effort to travel to the showroom.  There is a reason they made the trip.  Most objections come at the end of a conversation, which most of the time reflect that the sales professional did not bond with the customer or transition from someone trying to sell stuff to a trusted advisor. There's a good chance that many of the sales professionals at Brookstone mall stores did not transition to trusted advisor.  They were simply order takers.  

 

To help your team better connect with your customers, have them write down what customers object to and brainstorm how you and your team can respond to them.  More skill and savvy are required to convince consumers to purchase products that they want instead of need.  

 

Smarter Is as Smarter Does

In his new book, The Excellence Dividend:  Meeting the Tech Tide with Work That Wows and Jobs that Last, acclaimed business management guru Tom Peters references an Oxford University study that found in the next 20 years, nearly 50% of American white collar jobs are at risk of going away due to automation or artificial intelligence. To many, that's a frightening thought, but one that also points to the need for constant learning and reinvention.  

 

Creating new opportunities for your team and yourself have become a necessity to attract and retain top-tier talent.   What skills and training would help team members to become more effective?  Reach out to your peer network to determine the sales skills and technologies that are becoming more important.  Talk to others in luxury businesses as well.  They are competing for the same disposable income dollars as decorative plumbing and hardware showrooms.  What trends do they see emerging?  How are they responding to new paradigms? 

 

Put into practice (as soon as possible) the new skill sets and knowledge that you and your team members have obtained from online learning or other training that has a direct relationship to effectiveness.  That's why DPHA structures its educational programs at the Annual Conference to provide information that can be learned on Friday and Saturday and implemented in the showroom on Monday.

What Drives Showroom Growth?

We all know the impact ecommerce has had, and will continue to have, on brick-and-mortar retailing. The consensus of ecommerce leaders such as Amazon and brick-and-mortar stalwarts such as Nordstrom and Best Buy is that retail is not an "either or" proposition.  Why else would Amazon purchase Wholefoods and open brick-and-mortar grocery stores and book stores?

 

Retail research and metrics firm Custoria recently surveyed more than 100 of its retail customers, 500 million end user customers and $150 billion of retail transactions.  The survey looked at the following key performance indicators:

• Customer acquisition
• Average order value
• Order frequency
• Retention rate
• Reactivation rate

Custoria found that revenue increased on average 17. 2 percent.  The retailers surveyed were most successful at increasing their number of new customers and least successful at selling to lost customers.  Custoria discovered that order frequency was the most efficient driver of growth.  For every one percent increase in order frequency, there is a corresponding 2.8 point increase in revenue.  Existing customers that repeatedly order is the key performance metric that yields the biggest bang.  

 

Retaining existing customers and luring customers who had left the nest had no effect on revenue growth. This means offering discounts is not enough to move the needle to attract prior customers.  Instead, retailers need to promote their value propositions with former customers and rebuild relationships.

 

Lessons for decorative plumbing and hardware showrooms - your repeat customers are your best source of sustained revenue.  Focus your marketing efforts on this clientele, because we have all learned it is easier to sell an existing customer than trying to acquire a new customer.

Increase Productivity

How many times after working a full day do you believe that you did not accomplish as much as you wanted to? Have you ever wanted to add an additional day to the week or a few extra hours to a day in order to get through your "to do" list? A challenge in improving your and your team's productivity is to determine how you currently spend your time. There are a number of apps that can assist such as Be Focused Timer, which is free, and which enables you to track blocks of work and track past work history. Another app, Focus Booster ($2.99/month individual, $4.99 month professional) tracks where your time goes and can link revenue, projects and meetings to your to-do list tasks. There are literally dozens of other applications and of course, there is always the option of tracking your time the old-fashioned way - by recording it on a spread sheet in hour or half hour increments.

Strategic multitasking can help improve productivity. And recognize there have been numerous studies that claim you can't effectively do more than one thing at a time. That may be the case of certain activities such as preparing a proposal for a new multifamily project, but you can multitask other activities easily. You can listen to a podcast while walking a dog, exercising or preparing meals.

Learn to combine business and personal relationships. We all have business relationships that have turned into personal relationships as well. Networking at industry events is an opportunity to combine the amount of time spent with both friends and business acquaintances.

Don't be a slave to email. Feeling the need to have to respond to every email you receive immediately can place a huge damper on your productivity. A tactics to consider is to allocate a certain time of the day that you focus on your business' highest priorities or your most urgent deadlines, and consider that time email free. If you have regular client communications, let your clients know that you won't respond to emails during these times. Once you get in the habit of avoiding emails at certain times of the day, it can be liberating.

 

Identifying which activities generate the most stress will enable you to delegate more tasks or reshuffle priorities so you can focus on assignments where you can exercise your strengths and capitalize on distinctive competencies.

The old expression "you can't improve what you can't measure" certainly holds true for individual productivity. The first step is to record what you do in a given day over several weeks. You'll see patterns emerge that will enable you to more effectively allocate and schedule time that results in increased productivity.

Neat Idea of the Issue

Here's a great way to improve the quality of your customer service. Task every member of your team to document the best and worst customer experiences they encounter in a two or three-week period. Have them present their positive and negative experiences at a staff meeting and discuss how you can take advantage of the best examples of customer service and how you can avoid emulating the worst examples.