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MANAGING FOR
MONEY
Decorator
Territories
The next big thing to beat competition?
by Steven C. Bursten
Territory assignments
for decorators have never caught on for independent window coverings
business owners. There are plenty of reasons to say why it will not
work today. It is hard to have enough leads for each decorator—whether
the decorator is a single business owner or member of a 20-decorator
team. Then to add a second variable—enough leads per decorator
within a specific area—means a complication that seems impossible
to manage.
Or, is it?
WHAT’S THE BENEFIT?
First question usually asked is, Why bother? What is the benefit of
decorator territories? Here are some good ones:
• Increased decorator willingness to join networking groups and
develop business without advertising. This is the primary benefit.
• Pride in territory ownership—knowing the area belongs
to the decorator and he or she will receive all the appointments that
come from the territory.
• Easier to balance advertising cost because territory is the
primary determinant of leads, rotation is secondary.
• Less time driving all over the area. With less driving time,
more appointments are comfortably possible.
• Easier to attract and assign new decorators in underserved
markets.
IS THERE A SUCCESS MODEL?
With good reasons to consider the idea, is there a model for successful
territory assignment? Is it working anywhere? Will it work for my
businesses? The answer is, Yes, yes, and yes.
The model for successful territory assignment is franchising. It is
being done every day. Territory assignments are usually by ZIP code,
but that is the beginning. The real assignment should be by neighborhood.
Neighborhoods are where the action is. Most window fashions retailers
know intuitively where the hot neighborhoods are—new homes going
up, established homes with a lot of executive transfers, or older
areas where teardowns and remodeling are going on. But having an intuitive
awareness is not a strategy. To make your intuition actionable you
need to understand the principles, believe in the logic and persist
through the early stages until you experience the payoff.
SOLVING THE MYSTERY OF TERRITORY ASSIGNMENTS
The key is to understand that territories should be liberating, not
limiting. Borrowing from franchising, we adopted territory assignments
for our Exciting Windows! National Network Members. The base policy
we and some franchises follow is: “Customer is King.” Every
customer can have any decorator they want. The foundation of window
fashions decorating is the personal relationship between decorator
and customer. You do not want any policy to get in the way of that
principle.
• Assign Territories by ZIP Code Sales Potential
You can assign enough territory for each decorator to achieve realistic
sales goals. For most personal business owners with no decorators,
sales potential of $300,000 to $500,000 is about right. For non-owner
decorators, assign a smaller territory.
How can you know the sales potential in a ZIP code? There are national
formulas derived
from knowing the window coverings industry is about $9 billion in
total market sales and there are just over 100 million households,
or $90 per household. I use this as a starting point. Having worked
with hundreds of window fashions retailers in all types of markets,
and knowing their actual sales, I matched real life experience against
national calculations.
Then I developed a simple, proprietary formula for individual business
market share that you can find at www.custemers.com/potential. Send
me a note if you have questions at steveb@custEmers.com. Remember,
this is not total market potential for all competitors in a ZIP code.
It is the sales potential for a single business properly marketed.
• Money and Ownership Make It Work
The key to assigning decorator territories is to give the decorator
incentive to stir things up. A lot of retailers try to give decorators
a bonus when they get their own leads. It never works. Either the
decorator does nothing to get leads, or when there is a lead, it is
disputed where it originated and whether a bonus is earned.
Territory bonuses are different. The decorator receives a bonus on
all leads from a designated area, usually one ZIP code community.
For example, if you decide on a five percent bonus commission on a
10 percent regular commission, then word it as a 50 percent bonus
on every dollar earned. That is a much higher perceived incentive,
and allows you to compensate on a sliding scale for gross profit.
Of course, you will allow a broader area for advertised leads where
they will not receive a bonus. This is the key: an “A”/“B”
territory assignment. The “A” territory receives the 50
percent bonus. The “B” territory does not.
The goal of this system is for the decorator to join networking groups,
put out flyers, knock on doors and generally to develop an area without
high-cost advertising. The business owner should help with a budget
for neighborhood bulletins, fliers, business cards and other printed
collateral for the decorator to distribute to beauty shops and neighborhood
events.
Will it work? Will decorators do it? Yes, and no. Some will. Some
will not. The beauty of this system is that it rewards the ambitious
person with a pleasant personality who wants higher sales. It takes
the monkey off your back as being the only source for them to survive.
Responsibility is transferred to the decorator who wants more and
will work for it. This system may not work as well with decorators
you brought in under your present culture, but it will attract decorators
who want the chance to make more money when they put out more effort.
• You Must Manage It. Bonus Alone Is Not Enough
This system requires you to manage and encourage results. Franchises
are doing it every day. Many new franchised business owners sell $100,000
to more than $300,000 in the first year. They start with no following
and have no experience. But they are trained how to market. With little
advertising, they promote in high potential neighborhoods. If you
attract decorators who want more money, and you recognize their achievement,
you can make it work in your area.
BEST WAY TO BEAT COMPETITORS
Beating competitors is what this system is all about. Neighborhood
territory assignments cut off customers before your competitor knows
they exist. Why? Put yourself in a customer’s place. Pretend
you have been thinking about new window products. You would like something
nice, but are not sure what to buy. You haven’t started shopping
yet and don’t look forward to visiting a lot of stores. You don’t
really want to call three people for estimates to decide whom you
trust. Frankly, you don’t want to call at all. You hate answering
machines and salespeople who don’t get back to you for hours
or days. You don’t like large companies with voice menus that
transfer you around. In fact, you dread the idea of calling, so you
put it off as long as you can.
Then one day you receive a flyer on your door with a decorating tip
and special savings on wood blinds. You see a photo of a smiling decorator
who makes home consultations without charge or a measuring fee. Why
not give the decorator a call? It makes your life easier. Maybe you
don’t like the game of haggling and comparing estimates to save
$100 on a $1,500 purchase. Maybe what you really want is a nice, friendly
person who knows how to make your home more beautiful and has reasonable
pricing. If you are that kind of person—and there are a lot of
them— then a neighborhood decorator is just what you want.
 This
article is based on Steven C. Bursten’s actual experience with
sales and financial information working with hundreds of window coverings
businesses. Whether you are a sole manager who aspires to higher sales
or you manage 50 window fashion decorators in a multi-million dollar
business, this series will help you manage sales better and increase
your profitability. Bursten is the retired founder of Decorating Den
Interiors and author of a how-to book on new business start up, “Bootstrap
Entrepreneur,” and is a leading expert in window coverings marketing,
sales systems and sales management through his company, custEmers.com.
Questions and comments welcome: steve@custemers.com or (888) 333-8981.
For a report, “Why your customers love shop-at-home, and so should
you,”send a request with your business name and address to sah@custEmers.com |
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