Welcomed Thoughts from a Fellow (Jeff Valles) - Why Can’t We Work Together?

In the early 90’s I was working with the president of a fabrication company in Peoria, Illinios. We were discussing Phylrich’s part needs and how we might have to alter a few of his staples to fit into our product assembly system. Then, to my amazement, this gentleman projected his spreadsheet on the wall and listed his cost breakout on each part, then totaling each one including his overhead. I sat there stunned - I had never witnessed such vendor-buyer honesty. 

 

I then joined the “what-it-costs” game by opening our books to him about our cost to market. After a bit of jousting, we agreed on the prices and continued to work together for many years.

 

Later, when I asked him why he opened his books to me, he replied that his largest customer was Caterpillar and that is the way they had worked together for a long time. They had always been fair with each other. Put simply, it worked for both companies because they trusted each other. Now let’s turn to our beloved industry, where it seems we cannot share data between like-businesses.

 

A few years back, a DPHA member showroom asked roughly 20 other showrooms to share their costs, operations and income numbers with no branding company information. The data would be sent to a relative of theirs not associated with our industry at all, and they would crunch the data and then send each of us a dashboard showing where we were relative to the other participants. GREAT INFORMATION! As I recall though, only three showrooms shared data - three! A wonderful opportunity to learn that was thrown away.

 

This was a missed opportunity, both then and especially now. Our large competitors, real and perceived, have access to large amounts of data, and the technology to use it in order to improve all facets of their businesses. Most importantly, they use their data to take away our market share. The only time we seem to talk numbers is at the bar (my sales were $675,456,334,000 and we ran a gross profit of 62%). 

 

Unfortunately, I do not know of a magic potion to help us communicate more effectively, but we could all benefit so much by working together. I do not think our niche businesses can continue to provide the best products and services by standing alone in our individual markets. Going it alone will continue to be a very tough road. Can’t we just all get along?

 

If not now, when? 

 

If anyone, vendor, showroom or representative is interested in tackling this, please email me at jwvals@gmail.com. 

 

And by the way, that wonderful company in Peoria, Illinios? They donated the land under their first factory to the Peoria minor league baseball team, and then recently sold the business for a nice chunk of change.

Dealing With People Who Are Right 100% of the Time

You know the type. They are always right regardless of the issue, problem or solution. Dealing with these people can be especially frustrating in client situations. If your client wants to believe they know more about bath design than you do, it is only natural to scratch your head and ask yourself, "Why did they hire us?" A better approach though is to lend legitimacy to their opinions. "I can see where you are coming from. Have you considered x, y or z? What downsides, if any, have you considered with your approach?" This response tends to neutralize what otherwise could prove to be an intractable conversation.

 

Recognize that it is difficult for most people to overcome confirmation bias. Confirmation bias is the tendency to interpret information in a way that confirms someone's preconceptions even if there might be overwhelming evidence to the contrary. In other words, people want to believe what they want to believe regardless of what the facts say or what the evidence points to. 

 

The best way to deal with confirmation bias is to recognize it for what it is. Everyone's truth is their truth. That's why listening actively to what others are saying is critical. Active listening creates a comfort level that enables people to consider alternatives. Even if you believe that the other point of view is wrong, crazy or worse, never let them know that's how you feel. You may never be able to convince someone that their opinions or ideas are not accurate, but you can minimize the impact by not overreacting, acknowledging what others believe and then presenting possible alternatives to provide a common ground.

Welcomed Thoughts from a Fellow (Jeff Valles) - Hope Is Not a Strategy!

Your alluring showroom is targeted to captivate your market’s best architects, builders and designers. You know you display THE best product mix in the market.  Or do you operate more on the “gut feel approach” - “I hope the product I selected at ICFF will captivate my good clients?” Hope is a prayer, not a business strategy. Data added to your market knowledge increases your chances for a WOW product mix. Good data can only make your business better.

 

But where does this good data come from? How do I get it? How do I use it?

 

Let’s keep it simple and focus on which finishes are your foundation - those that are starting to trend up and maybe (if you have the space) a handful of classic styles in their most royal, garish look. If a finish is not selling, there is no need to waste the space. When that unique customer comes in looking for satin chrome, your team is talented enough to control the sale. A finish sample will work just fine.

 

What finishes do you actually sell, what is selling in your regional market and what is trending in New York, Los Angeles or Miami that you can show to keep your well-read trade professionals happy?

 

Step #1: What data do I need?

• Bathroom Fixtures: Simply look at lavatory faucet sales finish data.
• Bathroom Accessories: Every bathroom needs a paper holder, so focus there.
• Cabinet Hardware: With this category’s diversity, this total finish breakdown is best left to the wisdom of the crowds. Ask your top six cabinet hardware vendors for their finish sales in dollars and compare it to yours and get to it. Look for trends here. This segment is all over the place.
• Door Hardware: With the diversity of door hardware styles (really, no finish has a historical dominance), use the same process for Cabinet Hardware above, focusing on door knobs and levers, only.

 

Step #2: How do I collect the data?

• Download the last 18 months of sales data, filed as noted, from your database for each product category listed above.
• Contact your key vendors in each product category and ask them for their last 18 months sales reports by finish (filtered as noted above) in North America, your market only and New York, Los Angeles and Southern Florida. 

 

Step #3: Review the data:

• Walk your showroom and see what could be removed, changed and what needs to be added.
• Review the data with your sales purchasing teams. They all have their individual perception and seeing the actual sales data will help them see the market a bit clearer.

It is paramount that showrooms and vendors work together on this to present the most viable products to the trades and engaged homeowners. These are the people that specify and buy, so show them what they want to see, not what a vendor or showroom thinks might be “hot."

 

Finally DO NOT LEAVE THE SALES REPRESENTATIVE OUT OF THE LOOP. If they are guessing on what to present on their trade calls and miss the mark, vendors and showrooms lose.

 

Finally, all data is important and should be actively shared, reviewed and evaluated every six months. Why guess?

Respectfully Agree to Disagree

In the past, if the GM Board of Directors unanimously approved a decision on their first vote, the company's legendary Chairman, Alfred Sloan, would never accept the decision. Sloan believed that a board comprised of intelligent and monumentally successful captains of industry could never instantly agree on anything. He required opposing views, believing that better quality decisions result from honest disagreement.

Sloan’s belief is backed by considerable research. Ori and Rom Brafman write in their book, Sway: The Irresistible Pull of Irrational Behavior, group conformity is rarely good. Productive dissension leads to richer debate and better decision making. Playing the role of a devil’s advocate produces a healthier and more productive conversation, and forces leadership to evaluate different options, identify potential threats and make more intelligent decisions.

There is the other side of the coin, however. Some people like to disagree simply to be disagreeable and others don't like to be challenged regardless of how valid the opposing point of view might be. That's why the most effective leaders welcome opposing views, but demand that they are presented in a civil, gracious and dignified manner. The opposition should not be personal or mean-spirited. The goal should be to disagree respectfully, but ultimately support whatever decision is reached even if you don't believe it is the right thing to do.

Checking one’s ego at the door makes encouraging, and subsequently profiting from, opposing opinions possible. There’s a reason that there are written opposing and supporting positions for every Supreme Court decision. If you want to make better decisions, invite opposing points of view.

Welcomed Thoughts from a Fellow (Jeff Valles) - How Do You Forecast?

Today’s venture capital companies are constantly looking for new style trends and products to improve their portfolios and market shares. These businesses are managed by savvy entrepreneurs who constantly harvest the latest data and then add market knowledge to help them create and implement best strategies. Sounds like a good formula, right? Is this how your business works?

 

In our DPH world, each vendor and showroom has its unique ways of market testing, and the most popular process is each business’ perceived reality is intuition or gut feelings. You know it well; over a short period of time, a few showroom salespeople sell a job or two in a matte black finish. Then they frantically search for manufacturers that offer matte black finishes and run to management proclaiming “We absolutely have to have this on the sales floor NOW! This is getting really big! 

We all thought rose gold would be the next oil rubbed bronze. Well, we all know what happened with rose gold. Before adding new finishes or products, do you look at the showroom sales history and your product quote report? How about calling a handful of manufacturers and simply asking them for a “most popular finish report”, noting percentages with a 3 to 6-month percent change? Would that help? Why in the DPH world is DATA not the foundation for market evaluation, merchandising and forecasting?

 

I can hear the words ringing in my head - “I know what is going on in my business and my gut instincts have gotten me to where I am.” This is the way so many DPH showrooms and manufacturers have governed their business since the 1960’s. Granted, a lot of those businesses are still quite successful. However, would you invest in a business with intuition as its sole source of market research? 

 

Perceived reality plays a large part in all of our lives, but it should be based on solid business data, key vendor partners and monitoring popular style media. Understand that it takes time to dig through sales figures and quotes, as well as sharing vendor information and referencing 10 good style sources. But at the end of the day, don’t you want to have the right product on display at the right time? Don’t you want your customers to know your showroom is the place to see the popular, new and classic looks?

 

Suggested style emails subscriptions (they are FREE!):

• Design Milk
• Wallpaper Magazine
• Interior Design Homes
• Domino
• Introspective by 1stdibs

How Smart Brands Improve Customer Experience

There’s been volumes written about the need for brick-and-mortar retailers to enhance their customer experience.  Guess what?  Not many retailers have been up to the challenge.  Two recent research reports produced by Forrester and Nunwood found that in the last two to three years, across multiple industries, customer experience has barely changed.  In a recent Brainfluence podcast, Colin Shaw, CEO of Beyond Philosophy and author of four books on customer experience opined about why customer experience has not improved. 

Shaw explained that most organizations don’t understand what drives and/or destroys value in their businesses. One big reason is there is a huge difference between what customers say they want and what they actually do.  Shaw illustrated this point by pointing to Disney.  If you asked customers what they want to eat at Disney World, many would recommend adding a salad option. However, Disney knows that most people don’t eat salads when they go to Disney World - they eat hot dogs and hamburgers.

The danger, according to Shaw, is that people too often tend to focus on the obvious things such as price.  In all the research Shaw has performed for clients over the past two decades, he stated that price is never the key issue.  We suspect that this is also the case with decorative plumbing and hardware, because if price were the issue, your customers would be shopping at Lowes, Home Depot or some online discounter.  Just like theme park attendees who say they would like to eat salad, decorative plumbing and hardware customers who tell you that price is the main issue generally have not been convinced of the value of your offering and recommendations.  

Shaw also explained that the human touch drives value and very few brick-and-mortar retailers focus on that. However, those same retailers don’t believe that is the actual case.  When someone calls your showroom, can they speak to a human? When callers are put on hold, how long does it take to speak to someone who knows what they are talking about?  When someone enters your showroom for the first time, is there a standard operating procedure for welcoming them, goals set for the initial meeting and standardized processes for follow up?  

Think about your showroom and your competitors. Everyone claims to deliver exceptional customer service. What do you actually do for customers that your competitors do not?  What do you do to earn your customer’s trust that is distinctive or different?  What drives value for your showroom? What drives value for your customers?  Answer those questions accurately and you have the framework to truly deliver incredible customer experiences.