Welcomed Thoughts from a Fellow (Jeff Valles): Websites Only Take my Jobs on Price! Horse Pucky…

Last week I wrote an article with the opening line, “So why is it that 47% of top interior designers purchase products online?” and most of the comments from fellow DPH professionals were that the websites offered free freight and lower prices.  Wake up gang, that isn’t the major reason designers are buying online.  We are losing more business to digital savvy designers that are specifying and buying on the Internet.  Jobs that we will NEVER know about.  Sure, there are top shelf luxury designers that are price obsessed, but most are looking for easy access to information when and where they want it.  

 

Every time you lose a job to a low-ball bid, you hear about it directly from your customer.  It hurts badly and sticks in your mind!  All that time, all that effort, amounted to nothing.  What about the job at that same design house that was completely specified and purchased online?  You knew absolutely nothing about it and were not involved at all.  What is worse for your business, losing a job to a low balling #@!*#**, or never getting a whiff of a large job as it was all worked on online? 

 

After the recession, website companies remained unsophisticated and price was their key advantage.  Now the surviving sites, and new designer-oriented sites, offer an addictive  combination of an easily navigable user interface and anywhere, anytime accessibility with live solid phone and chat support.  This has absolutely nothing to do with price. Do not mix these two up.   Price competition is not going away, but in the luxury market it is not as big an issue as we portray it.  People will take the easiest path first.

 

If a customer comes in and says they want to order a bathtub from lowestofthelow.com, just let them.  Make a note on your calendar to check back when the job is trimming out and ask how that worked out.  I think you will remind them not to do that again.  I suggest not fighting individual pricing debates, unless it happens often.  There will always be sites and stores that offer silly pricing.  It is really not worth your team’s time, and you are worth your profit.  Take the energy and focus it on the future.

I was not aware how many talented designers were specifying products online until we started to receive RFQs that were 100% built on websites.  When we reached out to these good clients, they told us it was nothing against our team or showrooms, it was that our website was hard to work.  So they matriculated their favorite brands’ websites that offered them the intuitive interface they craved.  Now that hurt.  We did everything right except offer our good customers the tools they wanted.

 

We have to believe big.  Big like when we opened the business.  We knew everyone would come because our look was so damn good. Let’s take that same attitude and build magnetic web sites. 

 

Note: Please take another look at the proposed strategy to build a better understanding of what your always changing customers need.  It will limit the hurt in the long run.  “So why is it that 47% of top interior designers purchase products online?”   

Lessons Learned in Rebranding Chipotle

Chipotle’s brand suffered major hits from several food safety challenges,  causing the stock price to free fall by nearly 67% and forcing the company to rebrand and rebuild its reputation.  It’s been a remarkable turnaround.  The current stock price is up 90% in 2019.  In a recent interview, the company’s chief marketing officer Chris Brandt explained the strategy used to rebuild Chipotle’s reputation and re-earn consumer confidence.  

Brandt stated that Chipotle has always been a disruptive brand.  His goal was to promote what makes Chipotle special.  He moved the branding away from comparing Chipotle to competitors, opting instead to focus on what makes Chipotle great.  Brandt believes that effective marketing involves innovation, storytelling and collaboration.  “You have to find the stories of the brand and tell them, because today’s consumer – particularly at Chipotle where almost half of our customers are Gen Zers or Millennials – want to know the story behind the brand…People not only want a conversation, they expect you to have one and understand what the brand stands for,” Brandt said.

Chipotle’s story relates that the chain uses real, unprocessed ingredients that are responsibly sourced using classic cooking techniques to make delicious food.  You will never see a microwave, can opener or freezer in a Chipotle.  Brandt helped enhance the Chipotle story by focusing on what happens behind the scenes.  He compared the preparation process to a farmer’s market and wanted to show customers how Chipotle uses real culinary skills to make delicious food every day.  That was the inspiration behind the company’s highly successful “Behind the Foil,” advertisements that feature real employees talking about what makes Chipotle great and what they value the most. 

But how can we take this lesson and bring it into decorative plumbing and hardware showrooms?  

• Consumers want to know what your brand stands for and, for many DPHA members, there are compelling stories to tell.  You don’t simply sell tubs, faucets and vanities, you help make lives more enjoyable.
• Personalize the experience by determining what is most important to your clients, which is not something that can be obtained online or through a home center.
• Have an ongoing conversation with your existing and prospective customers.  That’s one of the reasons DPHA provides an easy button to do so by publishing the customizable blog for members every week that members can use as their own.
• Take advantage of DPHA’s smart purchasing guides that answer the questions that your customers ask most often, promote your ability to be a trusted advisor and make their bath and kitchen renovation process easier.  

Welcomed Thoughts from a Fellow (Jeff Valles): Design Professionals are Purchasing 47% Online

Did you know design professionals are purchasing 47% of their project materials online?

Anna Brockway, co-founder and president of Chairish, shared the following data in her presentation at Business of Homes’ Future of Homes 2019 conference in New York.

• 84 percent of professional designers start their sourcing online
• 81 percent of designers buy high-end items after first viewing them online
• 47 percent of all products in a typical design project are purchased online

After sharing the data, Ms. Brockway reflected, “Considering that furnishings are the third-largest spend after the household itself and cars, the shift to online should come as no surprise.”  I would venture that any significant purchase somehow involves the Internet. 

Before you start looking for a buyer for your showroom, let’s dig in a bit.  These statistics do not say where the designers spend a majority of their time shopping, nor what type of website the purchases were made.  Were they purchased from internet-only sites or the internet site of their preferred showrooms?  We continually hear that customers want to buy when and where they want.  In a showroom, on the phone, by email, or online.  Your DPH showrooms must be where your customers are. Your showroom and team are the most knowledgeable in your market and it is time to investigate a digital expansion. I think it is time for DPH showrooms to better understand their target customers and what they expect.

I suggest meeting them individually, starting with the key interior designers in your market.  Please do not only select designers by dollar sales.  Quite a few designers use a DPH showroom to make or confirm their specifications and then send the specification list to the homeowner or the builder or the plumber.  You know who I am talking about.  

Here are some helpful questions to get what you both need to work together effectively:

• How can we improve our brick and mortar showroom to make it easier for you to work with and without your clients?
• How can we improve our website to make easier for you to work with and without your clients?  Many “A” designers ask their clients to visit specific websites and note what they like.  It is a big time saver.
• Do you want access to your quotes online?  If so, what information do you need?  
• What information would you like us to send you in a monthly product DPH update?  New Products? Best projects finished? Top salespeople selections and comments? 

Take all that glorious information (data) and save it. 

Then repeat the process with the builders that build what your top designers specify and might be purchasing.  This is not about only your good builder accounts.  Talk with those that are in your target market even if they do not buy from you.  You will learn a lot. 

Now you have a lot of data that you need to work through and decide what your next steps will be. 

This is not the simple path but, I strongly feel, an important opportunity to grow your business.  It would be a shame to let this business go to another just because your brick and mortar business is missing sales that you could capture on the Internet.  The Internet is not going away and it will continue to gain market share. 

If you would like to discuss this, please email me at jwvals@gmail.com.  

P.S. I believe the site  Business of Home and its podcast are a must reference for the DPH industry.  We have a tendency to separate ourselves from the “other” decorative showrooms but they are fighting many of the same battle you encounter every day.  They cover smart, talented, design industry leaders who share their issues and discuss and detail their next steps. 

How should success be defined, and can anyone be successful?  Business consultant Rick Houcek responds with an affirmative yes, believing that everyone in the U.S. is created equally, but recognizing that conditions can be different and unequal.  Houcek makes the argument that if you grow up in an environment of poverty, crime and lack of parental/adult guidance, that does not mean you are destined to live in those conditions your entire life.  Those impediments make achieving success more difficult, but they do not eliminate the possibility of being successful.  Houcek points out there are millions of people who grew up in adverse conditions and succeed greatly.  Oprah and Ralph Lauren are two famous examples.  

What’s luck got to do with success?  Not a lot, claims Houcek.  Instead, he points to winning behaviors such as intense drive, life purpose, focused goals, plans of action, grit, determination, effort, overcoming obstacles, unjust criticism, persistence and on and on. As Thomas Jefferson noted, “I’m a great believer in luck, and I find the harder I work, the more I have of it.” 

Winning behaviors are personal choices that have nothing to do with luck or birth.  There are millions of people who were born with advantages who lose them because they did not have to work for them or struggle.  That helps to explain why the percentage of third generation family businesses that remain viable is 12%, and that number falls to 3% when the business transitions to the fourth generation of family members. Once you become successful, continued success is not guaranteed.  It requires a continued commitment to the winning behaviors Houcek identified every day of the week, every month and every year.  Success can be fleeting, elusive and uncaring.  “Get sloppy and let your guard down – you’ll pay a price,” Houcek observes.  Success is never guaranteed.  

Most DPHA members run successful businesses, and part of the reason for their success involves an unbridled commitment to winning behaviors, including taking advantage of the industry’s most successful practices, keeping their fingers on the pulse of developments and having a network of peers who are industry leaders.  Do you need additional reasons to attend the DPHA Annual Conference in Seattle?  

We got the Incentives!

More than 30 manufacturers that are exhibiting at the 2019 DPHA Product Showcase November 7-9 at the Hyatt Regency Seattle are offering head-turning incentives ranging from free displays to “you must be crazy to ignore,” limited time pricing.  DPHA has compiled the incentives into a 20-page booklet that is being emailed to all dealers who have registered for the conference.  Conference attendees are the only dealers that can take advantage of these margin-enhancing opportunities.  Do you need another reason to reserve for Conference?  

Click here to reserve now!

Welcomed Thoughts from a Fellow (Jeff Valles): AI is Coming to Help Soon. Let’s Start Getting Ready Now.

“This is a race. It’s a race to be relevant. The big difference between today and yesterday is speed. You need to be much faster on the execution.”  Arthur Sadoun, CEO of Publicis told the Financial Times in June 2017.

 

Today’s available Artificial Intelligence (AI) is not HAL-like, but instead is a way to take data and churn it so that when you ask your AI a question and it returns your answer correctly at lightning speeds.  See how quickly Alexa or Siri can tell you the longitude of Timbuktu.  How can AI be used in your business?  Your questions can cover all facets of your business and help you effectively peek into the future. However, to achieve this goal, your data must be clean, consistent and well-integrated. Remember the phrase, “garbage in and garbage out”?  That has not changed.  

 

Many luxury DPH showrooms take the time to inspect each received product.  Each piece is carefully removed from its shipping container and painstakingly inspected then returned to its box to wait for the customer to arrive.  This attention to detail separates your showroom from the competition and makes your clients happy. 

 

Do you take the same care when you collect your customer data?  Do you check the information to make sure it is correct and siloed in the correct slot in your computer program?  Do you enter notes on each visit, carefully recording the points discussed and any information that might help you and your team better know each customer’s unique style and needs?  

 

If you are thinking it takes too much time, think again.  If you have time to meticulously inspect each order to delight good customers, why not work to get to know those same customers better and exceed their expectations. Your data is a prime foundation of your business and, as the world slowly adopts Artificial Intelligence, good data will become your key to delivering great customer service.

Vendors, your data is also key to the growth of market reach.  You, too, take the time to design and handcraft each beautiful product.  Then your team inspects every item and carefully packages them so all arrive in perfect shape.  Yet your data systems are not in line with today’s customer’s demands.  Delivery changes, before and during the manufacturing process, are hidden from view.  When a product misses its acknowledged delivery date, no one knows until the date passes and the reactive “I am sorry call” begins to upset good vendor and showroom customers.  When vendors leverage their good data proactively, they will make life less painful for all involved.

 

This journey starts with your teams.  Quality, comprehensive data entry must become part of your company’s culture.  If you can educate your team members on how recording data accurately and consistently will save them time and strengthen their customer relationships, then it will allow them more time to do what they do best...Sell!

 

I believe that AI will be a part of successful showrooms in the next five years and foundational in no more than 10.  How smart will your AI be?

The Art of Upselling

Upselling gets a bad rap.  When a decorative plumbing and hardware sales professional suggests either more expensive products and/or additional products that will deliver years of pleasure to clients, that should be viewed as a positive and differentiator to deliver compelling customer experiences.  There’s nothing wrong with suggesting a complete line of bath accessories, bathroom lighting, steam systems, towel warmers, mirrors, storage solutions, or a host of other products beyond basic plumbing fixtures.  Every bathroom needs lighting.  Every bathroom benefits from a toilet paper holder, towel bars and robe hooks.  If your showroom does not provide them, the client will be forced to source them elsewhere and that other place may be a competing decorative plumbing and hardware showroom, or even worse, online or a home center.

Upselling often has a negative connotation that a sales professional wants to pad a bill by suggesting additional purchases.  Too often sales professionals predetermine what a client is willing to pay, or place values on products based on their preferences and biases.  They sell through their wallets instead of the client’s.  When someone makes an effort to visit a decorative plumbing and hardware showroom, there’s a reason.  They know they are not at a home center or wholesale distributor.  Consumers come to showrooms for advice, for affirmation and for peace of mind. The come to showrooms to satisfy wants, not needs. 

Let’s agree to eliminate the term upselling and change it to making a complete sale.  The additional items that may be desired to make a complete sale are easily identified by asking the right questions and actively and intently listening

Making a complete sale provides additional benefits and enjoyment possibilities for showroom clients.  It will help clients live a healthier, happier and less stressful lifestyle.  Making a complete sale helps showroom clients get everything they may want or need for their bathroom renovation.  When you can provide a complete service by leveraging your knowledge, expertise and experience, you provide a service that can’t be matched online or by competitors whose skill sets are limited to taking orders.  And when you provide a complete service, your average sales, margins and commissions increase, and so do customer loyalty and referrals.

Don't Miss Your Opportunity to SAVE!

Early bird registration for the 2019 DPHA Annual Conference in beautiful Seattle ends next week. The rate will increase from $825 to $925. The special room rate of $199 also ends next week, so make sure you book your room now! Register and book your rooms by clicking here.

And as if you needed another reason to attend...we are having a CASINO NIGHT! Send Jim off in style with a Saturday night gala like none other! Enjoy great food, dancing and casino games such as craps, roulette, blackjack and poker. Top three winners for the evening will win Visa gift cards!

Welcomed Thoughts from a Fellow (Jeff Valles): Are you Ready for the DPH Holiday “Get-It-Done” Season?

It's October and the DPH Holiday shopping season starts now.  During the next eight weeks people will be laser-focused on preparing their homes to impress all who enter. Builders will be diligently working to finish their projects.  Homeowners will be hunting for products that will make their home more stylish and function flawlessly.  Aging kitchen faucets will be upgraded.  Guest bathrooms will see new fab faucets accented with just the right accessories. Attractive new cabinet hardware will be selected to make the kitchen look like it was recently installed.  So many improvement projects to make their holidays shine...and disrupt even the best prepared DPH businesses. 

  

Here are my suggestions to make this profitable season a bit more manageable:

 

For Vendors:

• Email distributors a timeline, noting when certain products need to be ordered to ship by November 20^th and by December 11^th.  I have found these two dates allow sufficient time for the products to arrive and trade professionals have them installed by Thanksgiving and the prime Christmas - New Year’s Eve party season.
• Kitchen faucet and cabinet hardware vendors: Set up a “holiday inventory program” for your distributors.  It should be structured to allow the distributor to increase inventory levels to supply the increased holiday needs and return the unsold after January 1^st with no restocking charges.  This will allow the late or must-have-it-now shoppers a larger selection of your products to buy now. 

For Showrooms:

• Make sure your teams are on top of their clients’ projects and when they need to be completed.  Being proactive now will save all from possible pain later.
•  Share all holiday order/shipment deadlines with your salespeople and customer service teams and review your expedited freight policy.
• Review your kitchen faucet inventory.  We sold roughly 50% of our inventoried kitchen faucets in the 4th quarter.
• Review your cabinet hardware inventory.  Some kitchens require up to 70 cabinet hardware pieces to complete a refresh.  It would be a shame to lose these jobs due to lack of inventory. 

For Representatives:

• Your task is simple.  Do the best you can to make sure both your vendors and showrooms know how they can work together to make this a very profitable Holiday season.

The Holidays are hectic in so many ways and people are stressed.  If you prepare properly, it will be a profitable season and you will earn great brand word-of-mouth.

Buffet's Keys to Success

There are only a handful of people who are more successful than Warren Buffet.  At the last Berkshire Hathaway Annual Shareholder Meeting, Buffet and his right-hand man Charlie Munger identified their keys to success.  Munger advised to go through life with a simple philosophy.  Figure out what works and do it. To figure out what works, Buffet and Munger do three things:

1. They read everything they can.  Buffet spends 80% of his day reading, which he claims allows him to make more rational and less impulsive decisions.  Reading, he believes, helps determine what other successful people do.
2. Understand human nature.  When the stock market swoons, Buffet sees opportunity.  His mantra is to be proactive when others are afraid, and when others are proactive, be afraid.  Be greedy when others are fearful, and fearful when others are greedy.  
3. Associate with people who are smarter and better than you are.  They lift you higher, Buffet said.