The Kitchen Sales Coach Issue #19 - The Importance of Brand Identity
By Robert Foltz, CKD
As a manufacturer's representative in Florida, it's amazing to me the criteria tthat dealers use to pick the brand they want to design, show, and sell in their businesses. This article is designed to help you choose a brand based on actual marketing and pricing strategies for your business and its customer profile. Big, well known name brands have a cost-benefit component to them that all dealers must weigh. Some of the cost-benefit components are local market penetration, potential profit margin erosion, and brand advertising positions.
Local market penetration is what I define by how many other dealers for that brand are in a 75- to 90-mile radius of your dealership. Are the display/showroom criteria consistent within your market? Is a neighbor undermining your brand or enhancing it? I believe that competition is great and having a couple of dealers strategically placed is better for both the dealers and their prospects. With more than one or two dealers for your brand in a market area, you'll have less pressure from the manufacturer and the brand recognition increases.
However, I've seen a couple of brands with as many as 18 dealers in a 125-mile stretch of I-95 in Florida. I believe that dilutes the brand and the dealers become a commodity broker; where price is compared easily among shoppers in any given local market. This puts you in the cabinet business instead of the service business. If clients can easily shop based on price, you become a commodity broker, and upselling your service and design become less of a factor in the consumer's mind. Remember, all of your prospects have many friends that "know a great kitchen guy" and it often isn't you!
Potential profit margin erosion is a real key factor in the big box store brands. Major brands that can afford to put their product in the big box stores can cause a natural cap in the margins that smaller dealers can charge for the same product. I've heard it over and over again. "I can only upsell my design and service so far because the consumer won't pay more than the big box store's prices." If you take on a big box brand, my strategy is to have other brands that offer better quality and design options for not much more money. Big box brands are fine when there aren't many dealerships in your local market area, and you straddle the brand with others that meet your prospects' design needs and increase your profit.
Be particularly careful when hiring designers with only big box experience. They tend to be indoctrinated and will default to these brands more readily because they are familiar and easier. This results in higher pay for them and less margin for you as the owner! Training, training, and more training is the key to increased profits for the dealership here.
Brand advertising positions are a great way to take on a cabinet line. The more the consumer is aware of the brand, the more the brand-conscious consumer will gravitate to your business. Small businesses with small marketing budgets should consider having these brands because so much of the marketing is done for them. Luxury brands offer great marketing aids to consumers. These brands advertise heavily in home magazines and shows and then direct consumers to the dealerships via their websites. Smart dealerships have an equally impressive website when carrying these brands to capture the prospect's attention and maintain their brand's market position.
Be authentic with the brand you're taking on. Be aware of the local market penetration for each brand you carry and on the higher end, always have a less expensive alternative to offer to your prospects for comparison. Leverage the brand name, but like the big box brands, straddle the cabinet line to fit your market and your customers' needs.
Each dealership is different, as is each marketplace. Knowing the profile of your target customer and the market and pricing strategy of your business will direct your choice of brands. In these challenging economic times, you have to search for new ways to streamline your showroom and business mindset and maximize the profits on each and every sale.
Project Coordination Systems
In these challenging economic times, kitchen and bath dealers need to maximize profits on each and every sale that closes and they need an edge over their competitors! When a prospect walks in the door, you must be prepared to separate yourself and your business from the competition.
How do you do that? First, get the prospect to understand that you're prepared to handle as much of the project as they want you to-nothing more, nothing less! It's no longer prudent to tell a prospect what you won't do because they'll find someone who will. My strategy is to teach the dealer to always offer to be your prospect's advocate.
If your business doesn't perform construction management or coordination, now is the time to start! It's easy money, and your clients will love you because you'll become their advocate. You'll avoid the general contractor conflict because the client is contracting directly with the GC, just under your supervision!
Many of you reading this are thinking, "Why would a client pay more to do that?" You've established a trusted advisor relationship with them. You know their needs, the parameters of the job, and the subcontractors and GCs. For most of your clients, these kitchen or bath projects will be the biggest investments they've ever made in their homes and their first time dealing with so many subcontractors. Many have had bad experiences with subcontractors in the past from dealing with inexpensive, unprofessional types, so you'll be protecting them and their investment from many potential headaches for a fee. Any issues or complaints go through you and they gain peace of mind. This is where you both win.
If the prospect doesn't want you to be the project coordinator because they already have a trusted advisor, such as a GC, architect, or designer, or they're confident in their own abilities and they don't want to pay your reasonable "actual cost plus" fee, then you and their appointed advisor are put on notice of exactly what the kitchen designer's responsibilities are and are not on the project! This will save you a lot of money when subs make mistakes on the job. You'll only be responsible for the subs you're supervising for a fee. You both still win because the responsibility was spelled out at the start of the job, not when a problem arose!
About Robert Foltz, CKD
Robert Foltz, CKD is experienced in all areas of the retail kitchen and bath business. As a manufacturers' representative, his experience and expertise can help improve your business. He also works as a sales trainer, consultant, and personal coach.
With 23 years of experience in every area of the kitchen business, he has personally experienced the most common mistakes all business owners and sales people make. He has used that experience to develop a formula that will help you avoid those common mistakes and to dramatically accelerate your success.
Robert can be reached at and his work can be seen on www.KitchenSalesCoach.com.