Leverage Small Data to Protect Your Firm

by Ashley Lapin Olian

Ken: After nearly 50 years in this business, I still love learning from peers! That workshop on “How Big Data Is Changing Our World,” conducted by Robb Best, CKD, of Elkay Cabinetry at the SEN Spring Conference, delivered some of the best content I’ve ever heard about preparing your business for the future. Huge changes coming!

Leah: I heard similar comments from lots of the attendees. Some were truly scared about their future in selling kitchens and baths. To think that technology is so powerful that it is even possible today to feed data into a computer and, presto, it delivers the best design in seconds!

Ken: That’s right, no more two to three weeks of consumers waiting for a plan. It’s proof of Moore’s Law. Specifically, the Intel founder predicted in 1965 that technological advancement will double computing capacity every two years. Through something called ‘problemistic cognitive computing,’ a sales designer’s job in the kitchen/bath industry will be dramatically changed forever. It may take another 5-10 years, but it’s going happen. Unless we take substantive action, our industry could go the same way as the photographic film industry. Today it’s extinct because digital technology took over.

Leah: Consumers are way too busy to wait two to three weeks for a plan and a price. Speed will always kill the competition. Even complete industries. Technology alone evaporated some five million jobs over the last 25 years or so. Did Robb Best offer any solutions to counteract the effects of Big Data taking over our industry?

Ken: Indeed, he did. Robb talked about the importance of harnessing “small data” now to make your sales designers far more productive – and your business far more efficient. The accretion and application of small data pieces can generate enormous power to offset Big Data technological effects. The result is called “force amplification” – like if you line up a series of dominoes, knocking them all down will deliver a huge visual effect. Whereas knocking down just one domino barely will register a ho hum.

Leah: What kind of small data pieces?

Ken: He cited several examples. First, the use of Google Analytics to gin up your website marketing efficiencies. Then the use of a CRM (Client Relationship Manager) tool to measure showroom traffic and lead sources to refine one’s marketing. It still amazes me how few owners actually use a CRM to measure the effectiveness of their marketing investments and productivity.

Leah: Coming from the digital marketing world, I share your concern. Kitchen/bath owners need to shine a bright light on their lead sources to make better use of their marketing dollars, which as a percentage of overall revenue is way too low in this industry to start with. Did he have any other suggestions?

Ken: You bet. Robb has become an expert in applying neuroscience revelations to sales and marketing. Because research shows that the brain retains pictures up to six months, he encouraged the expanded use of social media sites like Houzz and Pinterest. Consumers can easily remember photos of jobs you’ve designed and produced. But words you’ve said, not at all. He also strongly recommended the tracking of “lead time” and “run rates.” The former refers to the amount of time it takes to get back to prospects with a plan and price; brain research shows that people lose interest rapidly the longer something takes. The second metric refers to how long it takes (in minutes) for a sales designer to develop one lineal of a kitchen or bath design.

Leah: That certainly plays into Robb’s prediction that computers will soon be producing the best kitchen design in a matter of seconds based upon the inputting of specific project data.

Ken: True. Robb made several other suggestions, too. He hoped dealers would develop a Work Management Chart to develop factory-like efficiencies for annually producing more kitchen and bath projects. And, having cited a 28.5% average industry closing percentage on leads, dealers should track closing percentages for all of their sales designers. If that percentage can be increased to 40% through greater efficiencies, it would have an enormous positive impact upon the profitability of a kitchen/bath firm.

Leah: You’ve always been a numbers guy. I can see how this workshop was right up your alley.

Ken: It was. Robb’s final thought was something dear to my heart. He advocated tracking “floor space versus cash yield.” In other words, measuring the return on investment of each showroom display investment by recording the sales volume each display produces. Then dividing that total each year by the display’s cost. In doing so, owners can set a minimum ROI percentage. If a display falls below that ROI percentage, it must be replaced.

Leah: So how would you sum up Robb Best’s workshop message?

Ken: Good question! In short, take the time to track small data. Then leverage it through the use and power of technology to speed up the delivery of a “plan and price,” making it a more meaningful and far superior customer experience. It will separate you from the competition and insulate your business from the instantaneous computer designs of the future. That way, your business can be assured of continued revenue growth and enhanced gross profit margins. This validates the continual need for “sharpening the saw.” Owners of kitchen/bath and design/build firms, plus key personnel like sales designers and project managers, need to be exposed regularly to new ideas and strategies. They need to get away from the daily grind of selling and running jobs. Like attending the NEXTgen Conference this fall in Austin, TX. The educational programming there should speak to these kinds of efficiencies.

Leah: The agenda is set, and we are so excited that our friends at the National Association of the Remodeling Industry (NARI) will now be a NEXTgen Partner Sponsor! ▪

Ken Peterson CKD is founder and president of the SEN Design Group, the industry’s first buying and business development group. Leah Peterson joined her father in 2013 after a decade in corporate sales and marketing; she is now the company’s executive vice president. Peterson & Peterson will be addressing industry issues for KBDN in their quarterly column, NEXTgen Business Matters. For more information on the NEXTgen Conference, to be held in October, contact Leah at [email protected] (1-800-991-1711). The Petersons welcome comments, questions or concerns.

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