What can catfish teach cabinet dealers about today’s economy? A lot! These fish frequently deal with droughts and have two survival strategies that are perfect models for cabinet dealers who are dealing with this economic drought. Catfish either skedaddle or hunker down. When you strip everything else away, cabinet dealers only have the same two choices. Let me explain.
How Catfish Survive
In Southeast Asia there is a breed of catfish called “the walking catfish.” The walking catfish lives in rice paddies, ponds and swamps, the kind of environment that “dries up” when a drought occurs. As the water recedes, there are too many fish trying to survive in too little water.
Does this feel familiar?
Soon, both the quality of the water and quantity of food begin to diminish. Once “the walking catfish” detects its pond is drying up, it does something bold. It gets out of the water and “walks” to a new and more promising pond.
Cabinet dealers can use the same strategy. Many cabinet dealers are already migrating. When business was more plentiful, many dealerships expanded into new “ponds” or communities around them. Today many of these smaller communities no longer have the level of business required to support a satellite office and prudent dealerships are withdrawing from these small ponds and “walking back” home.
A slightly different version of this same strategy is open to the cabinet dealerships who defined their market as new construction builders. This pond shrank and those dealers who focused on builders needed to migrate to the higher margin remodel market. The remodel pond requires different skills but the customers will let the dealer work at a profit.
The second catfish strategy is to hunker down. The African lungfish is the perfect example of this. When a drought occurs, the lungfish digs deep into the mud and buries itself. Then the catfish goes into a stupor, stops feeding and becomes inactive. The cocoon of mud keeps the fish from de-hydrating and their inactivity slows their metabolism. Although they may appear to be in great peril, their chances of survival are good because they are prepared to deal with the harsh conditions. They are in a state that allows them to survive with little food or water. After the drought lifts, the water returns and the lungfish becomes active.
Cabinet Dealer Survival Strategies
Many dealers have begun adopting the lungfish’s survival strategy. These dealerships have trimmed back staff and lowered their economic “metabolism.” By lowering their “metabolism” these dealerships survive on less revenue and cash flow. They also “cover up with mud” by trimming the quantity of people they are doing business with and burrowing into their most loyal customers. They “root out” what little cash is left in their shrinking pond of customers. When the drought lifts, these dealerships, like the lungfish, will have survived and be able to return to their former levels of vitality.
No matter what catfish strategy you choose, winning most of the business that you get a crack at will be an important success factor. Three activities are key.
First, you must target your customers. To build your business you need to narrow your focus to a smaller set of customers and prospects and service them well.
Second, review your kitchen sales activities and ensure you are “servicing” as well as “selling” your prospects. Servicing is creating designs and responding to prospect’s requests. It is a part of getting the prospect to buy, but it is not the most important part. The selling part is what gets the prospect to buy from you rather than the competition. Your salespeople have to sell by:
- Positioning themselves as experts
- Positioning your company as the preferred place to do business
- Getting the prospect to make a buying decision now.
And finally, you have to deliver your customer compelling value. Reputation in tough times is everything. The cabinet industry is a cyclical business and when times are good, customers learned to deal with bad service. Now that times are tougher, service must be impeccable. Your customers’ experience must be so outstanding that they tell their friends about you. That is called word of mouth advertising, it’s free and it’s your key to survival.
There you have it- a catfish’s guide to economic survival. I hope you enjoyed my analogy. Please consider your situation and adopt a strategy. I love this business but I’d love to see you talking about how you survived the drought in years to come.