MANAGING
FOR MONEY
Housing: What to Do Until It Returns
If your sales are down, turn them around.
by Steven C. Bursten
Housing hasn’t hit bottom yet. Maybe it won’t for months. The climb back to bubbly levels could be two to three years. It is not something to do nothing about.
Negative? Not on your life. Action oriented? You bet. When you get to my age you see these cycles for what they are: just another phase to manage. It’s kind of like playing blackjack in Las Vegas. Survive; stay in the game until the hot streak comes. Well, I want to take you one better. Let’s turn this downturn into the opportunity of a lifetime.
If your sales are solid and growing, count your blessings and congratulations on your good management. But, if you are like a whole lot of dealers today, your sales may be sliding and it’s time to change! This month, I want to quickly trace the nature of these sad construction cycles and tell you what is different this time. Then, I want to share opportunities to turn lemons to lemonade—how to use this phase to position your business for permanent prosperity.
HISTORY REPEATS ITSELF, KIND OF
I’ve seen cycles from the long, steady growth in the ’60s to the shock of the oil embargo in ’73 to the standstill of 21 percent interest rates in 1981 to the California bust in ’91. (“Stay alive ’til 95” was the catch-phrase then. But, it was two years short; the economy did not really recover until ’97.) Of course, if you haven’t been in business at least 10 years, you’ve never experienced a downturn. It’s all been froth and glory. Good! Time to toughen up and learn what to do when the next one comes.
There are two differences this time. The first is permanent. It’s a growing demand for luxury. Baby Boomers’ education, income, unquenchable appetite for million-dollar homes, Prada purses and flat-out luxury is unprecedented and continuing. Sure, 20 years ago J.C. Penney and Sears talked about “trading up.” This is different. It’s a magnitude of big-money buying never dreamed of just 10 years ago.
The second difference is our first industry downturn since the explosive innovation of shadings products and a split into two camps of alternative products and draperies or soft products, each with their own skill specialties. Today, they are separate businesses and only a tiny percentage of window coverings specialists have the skills to sell a balanced product mix to homeowners.
I call balanced as being about 40 percent in the minority product. In other words, if you are a drapery specialist, you sell about 40 percent blinds, shadings and shutters. If you are a blinds specialist, you sell about 40 percent in draperies, valances and fabrics.
HOW TO MAKE MONEY WHEN HOMEBUILDING GOES SOUTH
There are two ways to make money in this market. First, is the obvious. Shift marketing to the replacement and refurbishing or remodeling segment. How? It ain’t easy.
If your entire business career has targeted new home construction selling $3,000 in whole-house blinds to price-conscious customers who are comparing competitors, then, frankly, the culture shift may be a challenge. But if you’ve been selling privacy, light control and function. Your new market will want more: it will want beauty and emotional satisfaction.
The second opportunity is to move into soft products. Again, it ain’t easy. But, it is not as hard as you may have been told. The way to lift yourself above competition is to combine the two categories and add one more element: Beauty.
When you help customers experience a beautiful room and the praise of their friends, you sell them something that is priceless. You lift yourself out of the rat race of competition and build a quality clientele that will buy again and refer you to others.
EDUCATION: TICKET TO CHANGE
Remember the definition of insanity? “Doing the same thing over and over and expecting a different result.” If you want to pull out of your funk today and position your business for a solid future, it means change. Change only happens when you get sick and tired of being where you are now. As human beings, we don’t learn from success. Only failure and setback inspires us to change. That is what makes us different from most all other animals—the ability to adapt.
Your ability to adapt—whether you are an auto worker in Detroit, or a blinds salesperson selling new homes—will determine your survival and success. There are two steps to change:
1. To be unhappy where you are and sincerely decide to change
2. Educate yourself to new skills to make the transition.
This short article cannot give you the education, but it can tell you the skills you need so you can educate yourself.
MARKETING TO EXISTING HOMES
Marketing to existing homes is not as easy as marketing to new home construction. You can see a home under construction. You can buy a “movers” list. Finding homes ready to refurbish is different. There are clues:
• Look for subdivisions more than 10 years old. Homeowners begin replacing after eight years.
• Look for neighborhoods with turnover from executive relocations, target realtors and homeowners with realtor signs.
• Watch for older, upscale areas with tear-downs, homes with remodelor signs out front.
• Check your referrals in good, established areas. One of your best opportunities is customers who bought blinds from you a year or two ago. They are possibly ready for soft, colorful over treatments today.
This leads us into the second opportunity.
Adding draperies to your product mix means getting rid of old fears and baggage. It means opening your mind to a huge and growing opportunity. You can learn it yourself allowing 12 to 24 months to dip at it little by little. It’s sort of like learning to use a computer was a few years ago. You got by in a few weeks, then over time you figured out more and more by just doing it. Same for soft products.
The other choice is to develop a strategic alliance with a drapery specialist—either a decorator or a workroom. There are lots of them out there. Attend a WCAA meeting. Join up. Attend local chapter meetings. You will learn more about draperies and possibly find someone you’d like to team up with.
OPPORTUNITY KNOCKING
While blinds specialists are struggling, businesses with a balanced mix of hard and soft products are setting sales records. I know it seems impossible, but I see the reports. Targeting the upscale, luxury market with all window products and using professional skills to create beautiful windows puts you in a rare league with few competitors. It is a real opportunity and one that any business owner or consultant can learn. No, it is not easy. It is not quick. But, you have a whole career ahead of you—even if you’re in your ’60s.
This is the first day of the rest of your life. If you start now with the tools at hand, you will get better as you go along. By the end of this year the housing market may be heading down, but your business can be heading up. As Darwinian principles weed out the weak and uneducated, you will move up as a professional. When the bubbly boom comes around again you will be a leader and there will be fewer competitors.
Yes, you can do it! Now you know what you need to know—start learning today and prosper tomorrow. Send me an e-mail if I can help, steveb@excitingwindows.com.
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: steveb@custemers.com or call (888) 333-8981. |
