The New Quality Paradigm: 2009 Kitchen and Bath Recession Planning
By Don Dunbar, President, Building Material Services
Albert Einstein said, “In the middle of difficulty lies opportunity.” The housing downturn that began in 2007 has become the Wall Street collapse and economic recession of 2008. It will likely last well into 2009. Yet it’s possible for kitchen and bath chain suppliers to find opportunities in the midst of the downturn.
What were the behaviors that landed the housing industry and economy in trouble? First, a “more is better” mentality resulted in loans to people who simply could not afford what they were buying. The result was a frenzy to see who could sell the most homes and lend the most money. In the new residential housing segment business was so plentiful in 2005 and 2006 that many materials and service providers got caught up in a “quantity at the expense of quality” philosophy along with the belief that “if we build it, they will buy it.”
In response to the recessionary crash of 2008 and the green movement that was already underway, I believe a new trend will emerge. Consumers will begin to demand “quality first.” This evolutionary paradigm change will occur as a result of job losses, the decline in housing values, loss of wealth in the stock market, and the poor quality materials and workmanship that consumers simply accepted as the norm. Consumers will become more discriminating and will seek high quality materials that are durable, renewable and environmentally safe. Distribution and labor services will have to be on time and complete (OTC) with the highest level of workmanship to satisfy this new demand for quality. In other words, consumers will want genuine long-term value that does not degrade the environment.
If you subscribe to the idea of a new quality paradigm, now is the time to up your game to surpass your material and service competitors. Quality in the kitchen and bath industry for both new residential housing and remodeling has always had a high perceived value but many manufacturers have failed to deliver orders OTC and of uniform quality. As a result, installing contractors have been unable to stay on schedule and complete jobs in a timely manner. The solution is to align with manufacturers and suppliers that stress OTC and uniform quality supported by maintenance of internal performance metrics.
In practical terms, installing contractors can ensure that they are OTC and deliver quality materials, by implementing the following costly but necessary measures. Order early so that you may inspect every cabinet prior to delivery to the job site. If necessary, reorder in time to meet your customer’s deadline. Inspection procedures should include popping the tape on every cabinet carton to peer inside, ensuring that there is no concealed damage and that the color and style are correct. (Unboxing cabinets is too time consuming and may in itself result in damage). Retape the carton and store until the job is ready or initiate a reorder if necessary. Deal only with manufacturers and suppliers that will expedite the replacement parts or cabinets in time for you to meet your customer’s installation date. Your cabinet supplier must support your efforts to provide the outstanding service your customers expect. If that is coupled with equally great workmanship, you will exceed their expectations compared to the industry at large.
Provided you have the correct cabinets with no damage and good fit and finish, the quality of the installation becomes paramount. An installer can not properly complete the job and meet the customer’s deadlines without the proper supplies and equipment. Materials such as proper caulk, extra trim moldings and touch-up repair kits are sometimes overlooked necessitating a return visit to finish the job. Nothing irritates a customer more than to have a job that is almost done but waiting for a repair or adjustments. The OTC job should include all the cabinets installed with doors, drawers and bumpers properly adjusted and caulking and trim molding done. Do not forget to thoroughly clean the cabinets inside and out. This final step will leave a positive lasting impression with the customer.
If you use employee installers or pay subcontractors for return trips to the jobsite, material and labor cost overruns will vary in directly to return trips. So OTC has the significant double effect of increasing customer satisfaction and reducing cost making it the most significant action you can take to increase sales and reduce cost, dynamically affecting profit.
The current reality in the kitchen and bath industry is that fewer than 50% of jobs are done OTC with adequate quality. If you are not already delivering superior OTC and the highest quality workmanship, there is an excellent opportunity to secure new customers and retain existing customers who may be comparison shopping.
Finally, when prospects compare you to the competition, remind them to consider the total cost of ownership when buying kitchen or bath cabinets. Explain that you deliver the best value based on your quantifiable OTC and high level of workmanship. Tell them about the quality control metrics utilized by the manufacturers you deal with. Keep your own OTC metrics and then go a step further by using one of the strongest sales tools at your disposal: recent references from satisfied customers. You will be assured of retaining more customers while at the same time developing new customer relationships.
By implementing the processes discussed herein and preparing now for a shift in consumer preferences, you will be positioned at the forefront of the new quality paradigm and will be able to capitalize on a hidden opportunity that exists in the midst of the current economic difficulties.
About Don Dunbar
Don Dunbar is President and Founder of Building Material Services, a building supply chain analysis firm specializing in operational efficiencies, new product development, business diversifications, start-ups, geographical expansion, and ownership transitions. For more information, visit www.BuildingMaterialServices.com. A retired Vice President of Masco Contractor Services, Dunbar can be reached at (386) 235-1095 or at .