authors Janice Costa | May 2, 2016
Despite an ever-growing array of marketing tools, including numerous digital options that allow for very specific targeting, most of today’s kitchen and bath dealers and designers seem to be taking a lackadaisical approach to the marketing end of their business. Indeed, two-thirds don’t even have a formal marketing plan, half don’t do any kind of targeting with their marketing efforts, and 20% don’t do any digital marketing at all (see related Editorial).
At the same time, nearly one-third have increased their marketing budgets in 2016, and four in 10 plan to increase it in the coming year to help them grow their business.
That’s according to a new study conducted by the Research Institute for Kitchen & Cooking Intelligence (RICKI) in conjunction with Kitchen & Bath Design News. The survey polled some 341 kitchen/bath dealers and designers about their marketing plans, strategies, preferred tools and more.
While planning ahead is generally viewed as the most desirable way to run a business, when it comes to marketing, “decide on the fly” seems to be a more apt description of how most dealers and designers actually handle their marketing decisions. In fact, of those polled, only 34% said they have a formal marketing plan in place (see Graph 1) – and independent designers are even more likely to “wing it,” with a whopping 81% admitting to having no marketing plan, instead just making decisions as they go along.
Additionally, even those with a marketing plan generally don’t look too far into the future, with 66% having a one-year plan or less (see Graph 2), and only 11% having a plan in place that covers the next three years or more.
Neither do dealers and designers seem to be investing much in their marketing efforts: On average, those polled spend a mere 2.6% of their annual revenue on marketing.
While all of this might seem discouraging, the good news is that dealers and designers are increasingly aware of the importance of gearing up their marketing game. Indeed, some 30% of those polled said they increased their marketing in 2016 compared to 2015 (see Graph 3), and 40% plan to increase their marketing budget in the next 12 months (see Graph 4).
Of those planning to increase their marketing in the coming year, 78% said they’re doing so because marketing is important to growing their business, while 38 percent are doing so because business is better, 33% are increasing marketing because they believe the economy is improving and 23% are trying to keep up with the competition.
While the argument can be made that a struggling economy is an excellent reason to increase one’s marketing efforts, the survey results suggest that many dealers and designers see a growing economy as an even better reason to gear up their marketing. And with 68% of those polled expecting business to improve in the coming year (compared to 4% who expect it to worsen and 28% who see it remaining about the same), many kitchen and bath dealers and designers are seeing this as a good reason to ramp up their marketing.
The world may be going digital, but as far as kitchen and bath dealers/designers are concerned, it’s still all about relationships. So it’s no surprise that despite the plethora of options out there, the number one marketing tool among those surveyed was referrals/word of mouth, with nearly three-quarters (73%) citing this as a key tool for marketing their business (see Graph 5).
But while some firms are lucky enough to survive on referrals alone, most need to pursue other avenues as well to stay competitive. To that end, some 68% named their own website as a top marketing tool, while half pointed to Facebook, 49% cited Houzz and 38% said print ads were key for marketing their business.
Additionally, home shows were cited by 22% of those polled, while 18% each named the Yellow Pages, Pinterest and trade shows as marketing avenues for their business, and 17% pointed to direct mail and email campaigns as tools they market their business with.
Interestingly, outside of Facebook, Houzz, and Pinterest, dealers and designers seemed less enamored of social media channels as a way to market their firms, with only 11% saying they use Twitter for marketing purposes, 10% citing Instagram and 9% using YouTube.
Likewise, paid online search – considered by many industries to be the gold standard for digital marketing – was cited by only 11% of dealers/designers polled, and online ads were used by only 12% of those surveyed.
Neither did texting or mobile advertising see much interest among dealers/designers, with only 3% saying they used this as a marketing tool.
At the same time, many more traditional avenues like radio and TV ads also scored low marks, each being named by only 11% of dealers/designers polled.
However, the most commonly used marketing tools may not be the most effective. For instance, while 50% of those polled said they use Facebook for marketing their business, only 28% rated this tool as very effective (see Graph 6). Likewise, only 11% of those surveyed said they use TV ads or radio ads, yet TV ads were rated the second most effective marketing tool of all (with 63% believing these to be very effective), and radio ads were fourth on the list of most effective marketing tools (with 47% deeming these to be very effective).
Referrals/word of mouth were seen as the number one most effective tool, named by 93% of those polled. Also high on the list were the firm’s website (54%), Houzz (43%), Angie’s List (42%), print ads (41%) and cold calls (40%).
Among those viewed as the least effective marketing tools were Pinterest (8%), Instagram (6%) and Twitter (3%).
One of the greatest benefits of today’s digital universe is the ability to target marketing toward specific groups. Unlike live events such as home shows, or print, radio or TV advertising, where the entire universe of readers, viewers or attendees receive the ad, digital marketing allows for very specific targeting based on anything from location, age and income to gender, marital status, ethnicity or even specific interests like “kitchen remodeling” or “contemporary design.”
For those seeking a specific demographic, this kind of targeted marketing can narrow in on potential clients without wasting time or money marketing to those who would be less likely to be a good fit.
Yet surprisingly, 49% of the kitchen and bath dealers/designers polled do not target their marketing to any specific group. This may be due in part to lack of knowledge about how to use targeting functions, or it may simply be that in the wake of the recession, many dealers/designers are still casting a wide net to maximize their success.
Of those who do use targeting functions, 34% go after high-income homeowners, 29% target Baby Boomers (50-59), 21% target Gen X (36-49), 10% target Matures (60+), 8% target families with children, 6% target Gen Y (under 36), 3% target singles and 2% target specific minority groups.
Designers or dealers associated with a showroom are less likely to target specific groups with their marketing, perhaps because having a showroom allows for multiple displays aimed at showcasing a diversity of styles and price points aimed at a wider range of clients.
Digital marketing has made huge strides in recent years, due to its immediacy, ability to laser target specific sections of the market and potential cost savings. Some options, such as many social media sites, are free (though there’s still the cost of investing time and alotting staff to learn and monitor these accounts, which must be accounted for).
Still, the wealth of digital options, which seem to grow almost daily, as well as the challenges of learning these ever- changing platforms, can be overwhelming for some dealers/designers. This may be why some 19% of those polled don’t use digital marketing at all, and another 18% say their use of digital marketing is minimal.
At the same time, there are many who see digital marketing as a more modern and affordable option for reaching potential customers in places they spend a lot of time – on their computers, cell phones or tablets. In fact, of those polled, 10% only do digital marketing, while another 41% say they are actively trying to mix digital marketing into their overall marketing plans, and 12% say they have limited integration – they do use digital marketing but it’s not well mixed into their overall marketing plans.
When asked what’s keeping them from doing more digital marketing, 32% cited a lack of knowledge/skills, 26% felt it took too much time to implement, 24% said business is doing fine without it, 21% were unclear about the benefits, 17% said it was too expensive, 13% felt there were too many choices and 12% said it wasn’t important to their clients. KBDN