Maybe you've noticed we've been trying some new ideas for this column. Writing 1,200 words a month on showrooms keeps me alert and challenged to come up with new ideas and topics. Sure, there's been some redundancy. Yes, some of my ideas haven't been universally accepted. But overall, I truly believe we've made an impact.
I guess our business, The Plumbery, was a bit unique and ahead of the times when we started it in 1983. But over the 15 years or so that we owned it, a lot of our “radical” ideas and ways of doing business became accepted and in many cases have become the norm today.
I wouldn't be honest if I didn't admit that it makes me feel real good to see a lot of the issues that I've been beating the drum for taking hold today. Nothing pleases me more than seeing showrooms really becoming an important and vital part of many wholesalers' businesses. As I travel giving seminars and doing consulting I'm thrilled to see that showrooms are being taken seriously and being operated the way I believe they should be run.
Every three years SUPPLY HOUSE TIMES does a terrific survey on showrooms. It covers about 50 areas of importance for showrooms. The results of this survey are the only real benchmark for our great industry. The most recent one was published in September 2003. I love participating in the survey and can't wait to see some of the results from the next one, expected to be done in 2006.
But in this article I'd like to conduct a mini-survey of my own. I'd like to promote some dialogue and debate from YOU - the folks that own, manage and sell for showrooms. I'm going to present a topic and then ask you some questions related to that topic.
In next month's column I'll list as many of the responses as space allows. My questions/statements are short - so please keep your responses the same. This should be fun and educational, but only if you take the time to share your thoughts. You can respond to just one topic or all of them!
Please fax your responses to 916-852-8866.
On your mark, get set - here we go:
TOPIC #1
I don't like giving out manufacturer model numbers or product names when doing a client quote. I believe it makes it easy to shop your quote.
Question #1
How do you do quotes at your company?
TOPIC #2
Along the same line, I don't like giving out manufacturer brochures. Most of them show model numbers. They're expensive and hard to maintain.
Question #2
How do you feel about giving out brochures?
TOPIC #3
It took me awhile to start putting prices on showroom display products, and when we did they weren't represented as a manufacturer's list price - less a discount. We referred to it as “our price.” We would explain that every manufacturer has a different discount and it can become difficult to track that way. We would emphasize that “our price” was extremely competitive and that the client would get the advantage of our large wholesale business, etc.
Question #3
Do you price display products? How do you represent it to your clients?
TOPIC #4
I learned very early on that I would have to offer a diversity of products if I wanted to grow sales and especially maintain a high gross profit margin. I knew that only showing and selling the traditional wholesale products wouldn't get it! We expanded bath accessory lines, brought in towel warmers, magnifying mirrors, steamers, saunas and other items related to the bathroom. We even expanded into door and cabinet hardware, kitchen cabinets, appliances, countertops and everything for the kitchen. Our theory was, if we're going to spend a lot of money on advertising and promotions to drive clients into the showroom, why not sell them everything possible for our target areas? Besides, everyone shows and sells all the traditional wholesale products. They've become big volume, low margin products and we wanted high margins.
Question #4
Have you diversified your products? What is working and what have you tried that didn't work? How do you feel about expanding products beyond the traditional wholesale products?
TOPIC #5
I believe showroom gross profit margins should (must) be in the 35%-40% range. I know for a fact that they can be by teaching salespeople how to sell for higher margins and by having the correct mix of products.
Question #5
Do you agree/disagree with this statement? What are your margins? What have you done to improve your gross profit margins?
TOPIC #6
I believe every company should have a written, formal training program for showroom salespeople. My experience tells me that very few companies have done this.
Question #6
Do you have a formal training program at your company? How does it work? (Give details if appropriate.)
TOPIC #7
Another lesson I learned very early on was that I would not be able to achieve my sales and margin goals by selling only to the plumbing trade. When we opened up our doors to everyone it certainly wasn't popular. But over the next several years this all settled down and when we sold our business in 1996 our sales broke out approximately 50% direct to the consumer, 25% direct to the custom home builder and 25% to the plumber. This trend appears to be sweeping across both Canada and the United States.
Question #7
Have you opened up your doors to sell everyone? Do you believe as I do that the plumber will lose the majority of the buy/sell of higher end plumbing products over the next few years? What percent of your total showroom sales are to the consumer? Do you still “protect” the plumbers or treat them in a special way?
TOPIC #8
I believe the showroom business is very retail oriented. Regardless of who pays the bill, it's the homeowner that's making the buying decisions. Based on this, I think the showroom has to be customer friendly in every way it can. That would include location, hours, services, feel of the showroom, how salespeople dress, etc.
Question #8
First, do you agree or disagree that the showroom should be as “customer friendly” as possible? Next, what have you done at your business to make this happen? Please list as many specific things as you can - I'd like to share them with our readers. Have you incorporated any unique services that make you different or special?
TOPIC #9
I always believed that you have to advertise and promote your business in order to attract clients. You want them walking through your front door so you can tell them why your place of business would be the absolute best place to shop. There are a lot of opportunities to spend advertising and promotion dollars. We tried most of them! Some worked better than others.
Question #9
What advertising and/or promotions have you done that have been successful in attracting clients to your place of business? How much (as a percentage of showroom sales) do you budget/spend each year in these areas? Have you done anything unique or different and why have these efforts been successful?
TOPIC #10
I have always been a BIG BELIEVER in goals and incentives. All of our salespeople had monthly/yearly sales and gross profit margin goals. They got a monthly “report card” that told them how they did. And, part of their compensation was tied to their sales and gross profit productivity.
Question #10
Do you have sales and gross profit goals at your company? Is compensation tied to these goals? How does that work?
Do you agree or disagree that goals and incentives are a good thing?
TOPIC #11
As I work with wholesalers across our nation and Canada, I am too often disappointed to learn that the showroom side of the business and the wholesale side of the business don't work well together. Each side doesn't really understand what the other does. They have a feeling of jealousy or competitiveness. It ends up that they work against each other. Too many times, I find that top management hasn't communicated to everyone why the showroom is there, why it's an important segment of the business, and that it will be an ever increasingly important part of the overall business. The showroom and the wholesale side of the business need to work together to maximize results.
Question #11
How is the relationship between the showroom and wholesale side of the business at your company? What has top management done to make this work? Is there anything else that can be done to make it better?
Okay, here's your chance to share your thoughts, comments, ideas and experiences. Your peers in this great industry will be anxious to learn through the experiences of others. So please, take a few minutes to help all of us become better and more professional at this terrific showroom business. <<
