Qualified Remodeler

Sharing Strategies

Whether planning growth initiatives, marketing strategies or new ways of benefiting from technology, networking with other industry professionals can be an essential tool for staying abreast of the latest trends, and discovering new tools to fine-tune one’s business.

This is one of the tenets behind two key industry organizations: K&B Alliance, which is an invitation-only alliance of decorative plumbing and hardware, and kitchen and bath showrooms, and KBx, a national organization comprised of entrepreneurs operating kitchen and bath dealer/distributor companies offering products such as cabinets, countertops, lighting and flooring. Part of parent group FEI and led by Kathy Tilley and Eddie Schukar, these organizations provide unique opportunities for kitchen and bath professionals to share knowledge and insights with fellow industry professionals about trends, growth strategies and more.

This month, four members of KBx and K&B Alliance discuss their views about current business conditions, growth initiatives, the greatest challenges facing the industry, marketing plans and the impact of technology.

GROWTH INITIATIVES
KBx member Howard Kuretzky, president of the Lithonia, MI-based Kurtis Kitchen & Bath, is engaged in both retail and wholesale/builder/contractor sales distribution, with five showrooms in Michigan. He’s encouraged by retail sales that “have shown 8-15% growth trends over each of the last four years,” and has seen even greater growth at his own showrooms, noting, “Our newest showroom for retail sales has grown 50% each year for the last three years. Wholesale sales are growing at a 40-60% rate for each of the past three years.”

Currently, he says, “We are reinvesting most of our profits back into the business in the form of updating showrooms, improving wages and benefits and working to develop better ‘teams’ for the retail centers and wholesale channel.”

Despite the strong growth, he continues to focus on future growth initiatives, such as executing a comprehensive marketing campaign for the retail business, including enhanced online communication with prospects and clients. Additionally, he notes, “We are redeveloping our showroom environments in order to keep ourselves current. We’ve upgraded three showrooms with new displays and electronics. We’ve committed to remodeling one showroom a year.”

K&B Alliance member Thompson Price, principal and CEO for the St. Louis, MO-based Thompson Price Kitchens, Baths & Home, is also enjoying the strong economy, noting, “This year we are ahead of projections by 35%.”

He continues, “The main shift we are seeing in the market is our customers’ demand for us to be a one-stop shop. Our customers want to use one company for multiple projects. For example, we just completed a large kitchen, powder room, laundry remodel and deck project. We must expand our product selections and mix to be relevant, current and easy to do business with.”

As far as growth initiatives, he says, “Our primary strategic growth initiative is diversification in product offering, based on customer demand. We also have a major focus on marketing to tell our diversification story via social media and strengthening our online presence.”

Price sees the K&B Alliance as a valuable tool to help him achieve these growth strategies, explaining, “We continue to look for great ideas from outside markets, and the collaboration approach via the group saves us resources and brings speed, scale and scope to all of our new growth initiatives.”

KBx member Jeff Cox, director of the Portland, OR Parr Cabinet Design Center, has 31 locations in three states, and provides building materials and services to professional contractors and homeowners, as well as cabinets and appliances to homes in Oregon, Washington and Arizona.

Cox has seen business holding steady in 2016, with projected growth in the 6% range. He notes, “Margin growth has been a corporate-wide initiative for over a year, and we are seeing results. We are seeing our clients move toward more custom products and full project solutions. In addition, we have improved efficiencies in order accuracy and delivery. With shortages of labor, installation has shown to be a very profitable segment and an area we have invested additional capital in.”

Part of his growth plan includes enhanced communication with the company’s team leaders. “We find that when our team is exposed to the true cost of the operations and the net result of the margin increase, there is significant improvement in other key metrics. We are also reviewing new markets for entry and looking for acquisition opportunities in our current markets. And, we have a significant advertising campaign to drive retail/remodel traffic in to our showrooms.”

KBx member Drew Tavss is president & CEO of the Washington, DC area Mid South Building Supply, a wholesale distributor of residential building products with seven locations. The firm supplies remodeling contractors and residential home builders and specializes in kitchen and bath cabinetry, as well as windows, doors and siding products.

Tavss has been encouraged by the surge in 2016 business, noting, “We have definitely seen a pick-up in higher-end product. We are seeing greater activity at the home shows; these events are a major resource for home improvement and remodeling for our customers.”

As far as growth initiatives for this year, Tavss is seeking “a modest growth objective of 10%,” adding that, “A major growth strategy for us this year is market expansion through new locations.”

To help achieve this goal, the firm is adding a new showroom in Midlothian, VA, which is a satellite to Richmond, and moving its Charlottesville location, while also celebrating the company’s 50th anniversary “by hosting several customer-centered events during the year tying in vendor and KBx partner involvement.”

CHALLENGES
While the industry continues to gain ground due to overall economic growth, several key challenges remain, particularly in the area of staffing. It’s not just a shortage of manpower, it’s also about being able to find the right people for the job, and invest the necessary training to get them up to speed.

Kuretzsky notes, “As the ‘old-timers’ of our industry begin retiring, we will likely replace these seasoned veterans with less experienced salespeople. These people need extensive training…which no one ever has time to provide since we are all running at full speed ahead with our current projects.”

Price concurs: “The greatest challenges to our industry today are finding, training and educating the right people. This includes installers, designers and salespeople. While we have arrived at the computer age, we still cannot rely on them to get personal with the customers and create that special space. This is only going to happen with a one-on-one sit down and getting to know the right questions to ask and how to implement the best design to the desired budget on time and to the satisfaction of the client.”

He continues: “The installation team today [needs to be] problem solvers as well. Installers must have the ability to foresee concerns before they arise and come up with a solution to prevent the project from being delayed.”

Home affordability is another key challenge, according to Tavss. He says, “Although new construction is moving in the right direction, we are still not catching up to what will be an escalating demographic demand. That said, the supply of existing homes for sale on the market will remain lower than it should be. Both of these will impact the cost of homes and may impact our top line.”

MARKETING & TECHNOLOGY
There’s no question that the digital experience is changing how the industry goes to market. More immediate and fluid than other, more traditional forms of marketing, the digital world – from email queries to social media – has changed the expectations that consumers have when shopping.

That doesn’t mean TV, radio, print ads and hard copy marketing pieces don’t still fill a need in the market, the two organizations’ members say. According to Kuretzky, “Marketing to retail clients still relies on a TV presence, but the supporting media is now entirely Internet based. We now use digital advertising, social media and various programs that provide prompt responses to e-mail inquiries and appointment requests.”

Speed is not just desired, but expected, he adds, noting that, “Prospects want immediate responses to their inquiries – they have no patience for delays, inaction or scheduling issues. And if you can demonstrate your ability to accomplish this, you have really separated yourself from the field. The best news I can get from a prospect is: ‘Wow – that response was fast!’”

Price agrees: “The marketing of our company has changed in the past few years. More people start the shopping experience online and rely on social media to select the companies in their area to visit first.”

Cox believes that the best marketing approach mixes traditional and digital elements, including live events, noting, “We continue to buy radio ads and host events in our showrooms for both remodel professionals and end consumers. We also are making significant upgrades to our social media platform and website.”

Technology provides other new tools to improve everything from efficiency and customer service to recruiting of new employees.

For instance, Kuretzky notes, “The Chat tool on our website has become one of our largest appointment-setting tools. It’s manned by selected Kurtis team members – so the answers to prospects’ inquiries are targeted and to the point, versus the canned response of a marketing service.”

He continues, “Our installation department uses a cloud-based CRM database to manage, schedule and direct all of the trades. Clients can view the schedule and the progress for their installed project on line, which keeps them in constant communication with us and informed about the status of their project. Keeping in regular communication takes a great deal of stress off everyone involved with installed projects.”

Cox finds software a big help in creating consistency – especially important in a business with multiple locations in three different states. He explains, “We have made a major push to incorporate CRM software and are continually looking for ways to enhance our process through technology.”

Tavss also sees technology holding great promise for the future. He notes, “With storage becoming so cheap and available, I envision the day when we will have records of all of the homes for which we have installed kitchens and be able to market to the owners of those homes years in the future when they are ready to be remodeled. We were recently contracted to renovate apartments that we had renovated 25 years ago. Wouldn’t it be nice to have all of the layout and designs that we had done years before? I believe technology and planning will be great marketing tools for the future.”

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