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22 | Kitchen & Bath Design News October 2014 Bettering Your Bottom Line { Ken Peterson, CKD, LPBC } M ore than 20 years ago I was in Germa- ny to research the success of European buying groups in the kitchen indus- try. I was taken aback by the scale of the dealer members in those groups. Indeed, most dealerships had chains of 15- 20 showrooms, with revenues in the tens of millions of dol- lars and earning 47%+ gross proft margins – very diferent from the single shop, mom- and-pop $1-2M design frms that populate the landscape in our kitchen/bath industry! How could there be such a diference in development between the European and U.S. kitchen industries? In my interviews with German and Dutch kitchen business owners, I discovered one key factor common to all of them: their sales designers were re- quired to follow a precisely written sales process. In the U.S., I believe a col- lective lack of discipline has characterized our kitchen/ bath industry since its incep- tion, consigning American kitchen dealers to a lifetime of marginal proftability. I also believe this continued lack of discipline is holding back the industry from realizing its full growth potential despite the recent upturn in the economy. AN UNDISCIPLINED BUSINESS An undisciplined business is one in which the same is- sues, processes and systems are handled diferently every time. These operations are characterized by displays without discernible themes, incomplete displays, samples strewn around the showroom, an absence of helpful signage that describes the company's mission or process of doing business, and sales designers who fail to acknowledge your presence in a timely and pro- fessional manner. The vast majority of kitch- en/bath frm owners spend their time putting out fres in the feld, chasing checks to make payroll, dealing with irate customers, procrastinat- ing on major decisions, hiring staff without adequate due diligence or organizational support in place, buying un- necessary things on the fy and cancelling appointments or educational seminars be- cause they're "too busy." Many exhibit such behav- iors because they've failed to take the time to design, document, train and clearly communicate how prospects are to be approached, de- veloped, sold and handled throughout the conception and birth of a new kitchen or bathroom. Rather, they ignore the preparation of an annual budget, lack a strategic plan, conduct business without a written Operations Manual, prefer to hire fully trained personnel rather than develop their own and fail to articulate their corporate culture. As a result, sales designers follow whatever sales proce- dure they feel comfortable with, regardless of whether it's efectively designed around the target customer's needs. A WRITTEN SALES PROCESS American kitchen dealers would do well to have each sales designer (1) write down their sales procedure step- by-step, (2) track how many hours on average it takes to get a signed commitment (and retainer check), and (3) track how many days on aver- age it takes from point of lead to signed commitment. Then they should ask themselves: • Does each team member follow the same process? • If "no," which process is the most efcient time-wise in securing a commitment/ retainer check? • Does the most efficient sales process take more than 3-4 hours to land a signed commitment? • Does the most efficient sales process equal or exceed a 75% closing rate on all leads initiated by an appointment in the show- room or consumer's home? The value of a written, ef- fcient and successful sales process that everyone fol- lows is manifold. First and foremost, it ensures that all prospects will be treated in the same professional man- ner, regardless of which sales designer they engage; commonality of positive experience is critical if you aspire to operating multiple showrooms. Consistently using the most efcient, cus- tomer-friendly sales process will increase the closing per- centages of all sales designers and, as a result, each of your sales designers will increase their individual sales volumes, so you'll have a happier sales team with a much higher per- sonnel retention rate. Finally, your company reputation will spread, making it easier to plant an additional showroom in a promising secondary or tertiary market. DEALER SYSTEMS AUTOMATION I liken the development and production of a new kitchen or bath to that of a car, with both built from an assembly of hundreds of parts. Henry Ford "industrialized" the process of assembling cars, injecting a huge dose of per- sonnel discipline into it. Each person on the assembly line had a specifc task and could be held accountable for per- forming that task properly. As a result, the quality of each car improved dramati- cally, many more cars could be produced, the automo- tive industry blasted of and "team-building" became a new consulting enterprise. The kitchen/bath industry is just about ready to blast of because a comparable pro- duction line has fnally been developed. It's been nearly 30 years since computer-aided design (CAD) was introduced – but there hasn't been much in the way of new software technology since then. One stumbling block has been the lack of automated management systems for the k/b dealer to link CAD on the front-end with an accounting package like Quickbooks on the back-end. That dealers have had to perform over a dozen key procedures manu- ally – from client interview to job estimating to contract writing to cabinet ordering to installation scheduling – in- vites errors, delays and poor customer service. The lack of systems auto- mation has not only hindered dealer revenue growth, but also reduced gross profit margins when there has been growth due to errors from the increased workload. At this year's KBIS, an in- dustry-specifc management software was introduced that embraces a proven "Good- Better-Best Selling System" and embodies best dealer business practices while linking with both CAD and Quickbooks. The Europeans may have much larger and more disci- plined kitchen dealerships with chains of satellite show- rooms. But this new systems technology will give Ameri- can k/b dealers the missing tool to catch up quickly. Ken Peterson, CKD, LPBC, is president of the Chapel Hill, NC-based SEN Design Group. For more info about the Good- Better-Best Selling System, please contact Peterson at 1-800-991-1711 or kpeterson @sendesign.com. Peterson also welcomes comments, questions or concerns. "A written, efcient and successful sales process ensures that all prospects will be treated in the same professional manner, regardless of which sales designer they engage." Read past columns and features and send us your comments about this article and others by logging onto our Web site: www.ForResidentialPros.com The Value of Having a Written Sales Process Having a consistent, written sales process can provide numerous advantages for kitchen and bath dealerships, including a more organized sales process, higher closing percentages, increased proftability and an improved company reputation.