They say that the definition of insanity is doing the same thing over and over and expecting a different result. If that’s true, then there are a lot of insane folks in the kitchen and bath industry.
As an industry sales professional, I imagine it’s safe to say that you have some sort of budget in place for 2012. Now that you’ve got the “X” million dollars in sales number to shoot for, it’s time to decide what you’re going to do differently this year to get there. Do you know what is going on in your market? Do you know what your competition is doing? There are so many areas to analyze, but here are three in particular that deserve some focus.
Don’t limit your options
Know how much construction is going on in your market by pulling and studying builder permit lists. As a someone trying to be successful in this industry, you need to get that list frequently and review it. Find out who the permits were issued to and decide if it is someone you could potentially get involved with. Whether it is a new builder you’d like to learn more about, a remodeling contractor who happens to be ramping up business, or even someone remodeling their home in a subdivision that you’ve worked in before, these are all opportunities you shouldn’t pass up. Think of them as free potential leads.
You may already study these lists, but don’t limit yourself like you may have in the past. If you were limited to new construction in previous years, look into the remodeling market now. Maybe you had two or three counties that you focused on before and can now expand your reach to focus on five or six. Does it make sense to drive 60 miles for a $12,000 dollar job or is there enough business in your traditional market to make it pay off? Evaluate your options.
Utilize marketing and advertising
What is your plan going to be for 2012 in the way of marketing and advertising? Did you just throw a sales number out there and cross your fingers, or are you going to do something to actually market yourself? There are plenty of effective and inexpensive ways to market your cabinet dealership – even on a tight budget.
Your advertising can begin with getting flyers out to those 12-15 year old subdivisions in your market. Many people aren’t able to move at this time, so put a spin on your message by reminding them that they can get that “new home” feel with a kitchen remodel. Offer promotions such as a free housecleaning service with every completed kitchen remodel, or gift certificates to a great local restaurant. Get creative this year by thinking outside the box.
Tighten your operations
So let’s assume that you hit your sales number goals. What are you going to do operationally to make those sales pay off? One obvious controllable expense is your product line. Make sure you’ve analyzed your suppliers and chosen the most effective product line for your business. And when you look at the net cost for a particular line, be sure to include service and warranty costs. Many owners are surprised to find that the line with the lowest multiplier is often not the best value when you factor in the costs related to construction and finish quality.
Another expense you can control is labor – a function of productivity. Vow to put a plan in place to measure the productivity of your staff. Figure out how much it costs in hours to deliver a kitchen and how many hours on average your team is spending while designing a $15,000 project. Set a goal to improve these numbers by 10%. Do the same with material costs. Look at all of the ways you overspend on material costs or lose money on product cost (a dropped cabinet when received, a delivery to the wrong place, etc). Track and measure your findings and display them for your entire staff to see. Bringing these findings to light will allow your company a better chance of improvement.
It’s a new year, and with a new year comes new beginnings. You’ve survived this far in a down market, so make sure you don’t blow it by neglecting important areas of focus. Keep your mind open, your creative juices flowing and your operations clean.