Three Keys to Thriving in the New Kitchen and Bath Industry

CompanionCabinet Software, LLC — Fri, 18 May 2012 15:59:00 GMT

So many factors send ripples through the markets, affecting jobs, housing, stocks, commodities, banking and prices. There are opportunities for some, misery for many. Although this year may prove to be better than recent years, it is important to keep your eyes peeled on areas of your business that may need extra attention.

Keeping a customer base, establishing leads, adapting and evolving new sales techniques to continue sustainable cabinet sales is a challenge, but necessary. The dealer has been on an economic tennis court lately, not knowing where exactly the ball will land. Vigilance, adaptability and agility are his best tools.

Be Vigilant

Stay abreast of economic news and be prepared to spot new trends. One modern trend is house flipping. The trend has gone from buying, remodeling and reselling to buying, remodeling and renting. People who have the capital are taking advantage of the bargains in housing and low mortgage rates. They buy, improve and rent - often doubling their monthly payment schedule. Find these consumers, get to know how they work, their approach and help them by extending your products and services to shift work and time away from them onto you. Make yourself, your staff and your product lines invaluable assets to them. Other unique opportunities may lie with: bankers, interior design companies, commercial construction companies and local building inspection offices. As trends shift, follow along to increase your chances of a better year.

Adaptability

Brainstorm design possibilities to generate more leads and grow sustainable cabinet sales. Many homeowners want to stay in their homes, improve them and increase their value. Kitchen remodels are still a popular upgrade (and may be picking up this year), but many homeowners are still in the job market and may still fear instability. They want to upgrade but are uncertain and have a tight budget. Look for ways your cabinet line can be more flexible through door/cabinet combinations, unique design, work flow and utilization of space. Expand a range of options that can fit tighter budgets. When measuring, offer suggestions that may be outside what the customer initially wants. Offer them unique perspectives on designs that will better facilitate the space as well as reduce their costs. Everyone wants steak for hamburger prices. If your customers have a fixed budget and a fixed idea of design, show them how alternative designs may be less costly yet more functional and appealing, while adding to their home's value. Sell hamburger with steak sizzle.

Agility

Generate sustainable cabinet sales with leads. Work the phones daily, don't neglect your email contacts, and harvest possible new leads from former customers. Work with your suppliers to show off new products, lines, advances and changes. Host publicized events to attract new interested customers. Make contacts early and stay close. When new opportunities are discovered, be the first in line and the first in their home.

Now is the time to reinvent yourself and your processes. Stay nimble and responsive and never stop challenging yourself and your staff. There are still sustainable kitchen cabinet sales available (and there may soon be more) as long as you're ready to expand your vision and your approach.

Why Cabinet Dealers Struggle With Marketing

CompanionCabinet Software, LLC — Wed, 16 May 2012 18:26:00 GMT

Sometimes you just need a little evidence to prove a theory. One theory that we hear a lot is that marketing for cabinet dealers is broken. We believe that it's not the marketing, it's the method.

Cabinet dealers are traditionally slow to change with the times. We see it mostly on the technology side, but lately, especially on the marketing end of the business as well.

Marketing, in general, has been the same for 50 plus years. It's not surprising that many dealerships still run their marketing as if they're in an episode of the TV series Mad Men.

It's a New Day

What worked in our fathers generation doesn't work anymore. Radio, TV, circulars, even direct mail are things of the past. Leads generated through these marketing techniques have already done their research - online. If you haven't branded your company properly and positioned yourself as a valuable resource, you are no different than any of your competitors. That means you're competing solely on price. Only, the consumer wins when it's about price.

What We Struggle With

When downloading our free cabinet dealer resources, dealers often willingly provide us with their biggest marketing struggles. A recent random sample of 200 of these responses show that the number one marketing challenge among kitchen and bath industry professionals has to do with finding out how to market effectively.

They tend to do the same thing over and over and expect different results. To get better results, you need to do things differently. Start discovering leads when they begin searching for information.

Enter the New Age

We call this Greenhouse Marketing. It's here where you can grow brand loyalty while the consumer is evaluating and rationalizing their project. It's also here where you become the expert in your market, guiding consumers to your brand.

While marketing may be time consuming, there are still ways to stay ahead of your competition without sacrificing time elsewhere.

Click below to learn about Ceres and start marketing effectively.

Do We Really Innovate?

CompanionCabinet Software, LLC — Tue, 15 May 2012 14:23:00 GMT

There’s a lot of chatter hitting the wire these days about innovation - and how as human beings we aren’t really geared towards taking the risks we need to take because we have an inherent fear of losing, which overrides our desires for gain.

This was first written about in 1979 by two brilliant researchers Daniel Kahneman and Amos Tversky in a paper titled Prospect Theory: An Analysis of Decision Making under Risk.

Face it, losses loom larger than gains

I’ll save you the dissertation about the fascinating human condition. Suffice it to say that people tend to take the safer route and go for the incremental wins, instead of taking necessary risks when for the bigger wins.

Even when mathematically the obvious choice screams to take the risk, people still find that the safer route is the logical conclusion. Of course, this has stumped economists and rational thinkers for decades, and entire books have now been written on the subject of how insane this concept is. Yet time and time again, we defy the logical approach for the safer bet.

Just look at the cabinet industry

Dealers of all sizes have made it their mission statements to look at incremental gains as they improve business as usual with little tweaks here and there. A more improved spreadsheet, a slightly “less difficult to use manufacturer pricing program,” and even new and improved paper forms (this time with better formatting).

And cabinet manufacturers are no different. Sure, they’ll innovate on product and then copy each other, but they wouldn’t dare innovate on a business process, a way to go to market or some other industry-shifting way of moving their product through their dealers. The risk of failing (or getting laid off) is just too high.

For example, did you ever wonder why some cabinet manufacturers still try to get their orders in electronically from CAD, even when facing overwhelming data that electronically ordering from kitchen design software doesn't work? It's because innovation is just too risky - the risk of trying something new is so scary it can even encourage people to continue investing in crap that doesn't work.

Barely noticeable improvements are the name of the game

We live in an industry where dealers and manufacturers strive for barely noticeable improvements to the ways they do business. While dealers should be changing their operations and improving everything they do in big ways, some still opt for the safer route.

And that’s a huge problem. Safer might feel safe initially, but over time it’s actually quite a bit more dangerous than dealers may realize.

NKBA Relevancy Debate Summary

CompanionCabinet Software, LLC — Fri, 11 May 2012 13:49:00 GMT

In March, a somewhat heated debate was sparked between kitchen and bath industry experts alike. The topic of discussion – How relevant is the NKBA? The responses instantly started pouring in and people quickly set up camp on one side or the other, revealing their reasons for loving or not caring for the NKBA. Responses came through in the ways of blog comments, LinkedIn forums, social media and every day discussions.

Possibly due to the sensitive nature of the topic, some LinkedIn groups removed the NKBA relevancy topic from their forums. But, they weren’t quick enough. We had already gathered an impressive amount of interesting responses.

Sharing is Caring

Naturally, we wanted to share our findings, so we pooled them together into a summary, filled with positives and negatives regarding the NKBA – in many of your own words. It’s important to mention that this wasn't an official study with scientific results, but rather a discussion amongst NKBA members and non-members alike. We decided not to take sides, but rather to lay out the information at hand, and let you all draw your own conclusions.

Hopefully, some of you will get a better understanding of reasons why your peers benefit or feel neglected by the NKBA. Regardless, we couldn’t leave your great responses floating around in cyberspace to be ignored.

Download your free copy of the NKBA Relevancy Debate Summary by clicking on the button below.

Should 20-20 Technologies be a Publicly Traded Company?

CompanionCabinet Software, LLC — Tue, 08 May 2012 14:04:00 GMT

20-20 Technologies faces decreasing net earnings and a market climate where Venture Capitalists (VC's) could be looking for opportunities to take them private.

Sounds crazy, right? But a deeper look into 20-20's financials could tell a somewhat different story.

In today's VC world, taking public companies back private is like eating lunch - they do it every day.

Some Quick Background

We had a VC powerhouse in the Charlotte area review 2020's publicly accessible financial data and here's a summary of our conversation with him:

Q: When you reviewed 20-20's published financials form 2011, what did you notice?

A: Looking at the market data and annual report (FYE October), you can see 20-20's revenues have been increasing the last three years and EBITDA and net earnings are decreasing. The market cap near the end of April was roughly $75 million. If you add back $5.0 million of long term debt, then that provides and enterprise value of $80 million.

Q: So if a VC firm wanted to buy 20-20, what roadblocks might they run into?

A: Typically, when a VC firms takes control of a company, you have to pay a premium of 10% to 50% or more. It all depends on the circumstances.

There is very low trading volume in the company’s shares. And, as I recall from 2010, one or two shareholders at that time owned control or a large voting block of shares. So, regardless of the metrics, a buyer would have to get the agreement from the owners of those shares.

Q: How much capital might it take to buy 20-20 and take it private?

A: You could assume a 20% premium to acquire the company and take it private. That would be a sales price of about $91 million. In the good ole days prior to 2008, lenders were falling all over themselves to lend 7-8 times EBITDA. In today’s market I think it is more like 4 or 5 times. 20-20 EBITDA has been declining from 9.5 million three years ago to 7.5 million last year. So if one were to give it credit for 8.0 million, then one could borrow $40 million of so. If the purchase price were $90 million, then the buy-out equity investors would have to come up with would be around $50 million.

Of course these are just broad, broad generalizations. And 20-20 would have to be telling an inside story to qualified offerees about where costs can be cut, near term revenue enhancements, etc.

Conclusions

Q: From a VC's perspective, should 20-20 Technologies be a publicly traded company?

A: It makes no sense for this company to currently be public. There is very low trading volume, so no one can buy or sell shares without causing a large market price variation. They probably can’t access the public capital markets for these reasons.

Also there is a very large cost associated with being public from both a dollars perspective and a visibility perspective. Any large shareholder would have a hard time getting liquidity, so taking the company private makes a lot of sense.

Could we see 20-20 reverting to a privately held company? Let us know what you think in the comments below!

KBIS 2012 State of the Industry Address Summary - Part 2

CompanionCabinet Software, LLC — Mon, 07 May 2012 18:14:00 GMT

In part 1, we summarized the first section of Michael Werner’s State of the Industry Address from KBIS 2012, including data points and some of what we can look forward to. Part 2 digs deeper into the intended message.

“As times change, so do consumer preferences”

Werner reviewed with us how things are no longer how they were in the past. The things people want have changed, and lifestyles have changed as well. Some key quotes Werner spoke about during the address, reminding us of where we’re headed are, “As form follows function, lifestyle will follow technology,” “New technology makes life easier, more productive and more fun…people are going to embrace it and eventually they’ll depend upon it.”

Not only will technology impact consumer decisions, but also businesses. A prediction was revealed that “one day soon, very soon, technology will radically change how your showroom and design centers look and operate. The winning showrooms and designers of the future will be those who learn how to successfully integrate technology into their daily businesses.” We no longer live in a day where we can be slow. Consumers want instant gratification, so we need to fulfill their needs by altering the ways in which we do business.

Digital Omnivores

The visual term “digital omnivores” was used to describe people today. With access to technology more now than ever before, we are able to do so much research before even stepping foot in a showroom. Customers utilize technology to research home products as we do with any other product. Customers care about convenience and have made technology part of their everyday lives.

During the address, we were also introduced to the Zero Moment of Truth (ZMOT) which is where people make buying decisions based on information they first find on the internet. They use everything from reviews to websites, ads, social media and online data to learn everything they want to know about products. “For designers and showrooms, this zero moment of truth represents a unique opportunity to reach out and to touch consumers while they’re in the act of gathering information.” This is what we like to call the Greenhouse Phase.

In a quick survey of the room, Werner asked people to please raise their hands if their business currently does not have a comprehensive internet strategy… one third of the room raised their hand, although I’d be willing to bet there were a lot more who were embarrassed to raise theirs. If we want to grow our business, we must be willing to adapt to change. The internet is phenomenal at generating traffic. You just need to make sure you know how to use it to your advantage.

In closing, Werner left us with this thought, “If we leverage the power of technology and the internet, the future of the kitchen and bath industry will be very, very bright. And yes it’s in our hands to connect with more people and build more business. All we have to do is link up and work together.”

If you need help leveraging the internet and your online presence to generate more business for your kitchen operation, we have solutions.

What Happens When a Designer Resists Change?

CompanionCabinet Software, LLC — Thu, 03 May 2012 12:44:00 GMT

Episode 19

Brent, Chris and Nick discuss part three of making the transition from a designer to a salesperson. Find out what happens when designers resist change.

Is KBIS a Dead Dog?

CompanionCabinet Software, LLC — Wed, 02 May 2012 18:01:00 GMT

Many think KBIS is dying a slow, ugly death. Just about everybody has mentioned it at one point.

So is that the case? Are we seeing less and less each year or will KBIS make a recovery?

Here were my random observations as a last minute exhibitor at KBIS this year:

Having gone to many of the shows it was apparent to many of us how small it was this year. Personally, I'm ok with small and I found it worked better. Sometimes when things are too large people just get lost in the confusion of it all.
The manufacturers may have pulled out on exhibiting, but they were certainly there poking around. Even if it was just for a day or two. I wasn't sure what to expect here, but it was a positive sign that they see value in going to the event.
The use of more seating areas (probably because of the lack of exhibitors) was excellent. It gave many of us comfortable and private areas to discuss with prospects. In previous shows this could usually only be done by renting some sort of expensive, off-site meeting room. I found the layout of KBIS this year much warmer and welcoming, and worked better for exhibitors.
I heard several exhibitors complain of extra charges from the show, but they seemed to resolve these satisfactorily. We experienced the same, but most people associate this with Chicago unions more than KBIS itself. Personally, I still can't figure out why anyone would run a show in Chicago when other non-union cities would bend over backwards for the business.
I noticed a strong trend that manufacturers and dealers alike are not only struggling, but they're starting to really do something about it. It seems that the industry is finally coming to grips with things most people would find obvious (use of social media, doing things differently, technology, etc.). This encouraged me because most of our industry up to this point is bassackwards. :)
I was excited that this year's state of the industry speaker actually talked about technology, urging companies to market more creatively. That was awesome and we all wanted to get up out of our chairs and clap (but we thought that would be awkward). Not just because we're a technology company, but also because people in our industry are finally getting it. After all, if what you're doing now doesn't work, continuing to do things the same way is madness.

We haven't exhibited at KBIS for years - mostly because we're pushing dealers to market online now. But I will tell you we found the experience surprisingly positive for the money we spent (we co-exhibited, so it was much cheaper for us).

The event is sound, the economics are not

Overall, I think the event is sound, but the economics of the event are not for most companies. I think event coordinators sometimes miss that events like this are predominately for market awareness. And even though sales are made, market awareness doesn't necessarily have an immediate return on investment.

But in this day and age, every company in our industry is micro-managing their marketing dollars so they can try to get an immediate return on investment. We can argue that viewpoint in another article, but right or wrong, that's where things are out of sync with KBIS.

What KBIS should do

If I were running KBIS, I'd be trying to knock out expenses for exhibitors like crazy. People clearly want to come to the show; the old KBIS pricing model just doesn't work. They should be looking for smaller towns or areas outside of major cities in suburbs close to downtown. People in our industry don't really care that it's downtown -- in fact we find that a pain in the butt because of the travel expenses and downtown madness.

Besides, if I have to take a 15 minute cab ride to KBIS to fight downtown traffic, then I’m more than willing to take a 15 minute cab ride from a suburb to downtown to party like a rockstar.

I think if KBIS found a way to cut their exhibition fees in half, you'd see resurgence in people wanting to exhibit in the future. Remember, KBIS like many other traditional industry events, is up against online marketing now. And I suspect if changes aren't made to the event's pricing model, more and more people will just want to attend instead of exhibit.

Then we’ll all be mulling around with nothing to look at – but each other.

KBIS 2012 State of the Industry Address Summary - Part 1

CompanionCabinet Software, LLC — Tue, 01 May 2012 15:21:00 GMT

KBIS may have seemed smaller this year, but the message emanating from the 2012 State of the Industry Address by Globe Union’s president and CEO, Michael Werner, was anything but - with a heavy stress on how technology is affecting the world and the way people buy and sell products and services.

Werner started off by breaking the ice with a creative entrance about how he was just car shopping online with his wife (during the intro speech), and then captivated the audience’s attention with an action scene clip from Luc Besson’s 1997 film “The Fifth Element,” depicting a glimpse of a crazy New York City cab ride in the future of flying cars – a metaphor for our journey into technology. Werner added that this future journey will be “one part familiar, one part new and one part a very exciting and wild ride.” He immediately stressed that technology and the internet are likely to impact us all in the future, an ongoing theme for this address, and we couldn’t agree more.

The state of our industry

As can be expected with any State of the Industry Address, we were reminded of recent years, which were terrible in the housing market. But, Werner gave us hope for the future by bringing us good news of the market having recently stabilized with gradual improvement and assured us that, “the future is starting to look very, very bright.”

Werner then gave us an overview of his speech, which was divided into three important sections. The “See” section represents the industry as we now know it (where we were and are today and where we’re heading in near term). “Change” is the section which Werner described as exploring new technologies that are creating exciting opportunities for the kitchen and bath industry, and will transform our marketplace. Lastly, “Connect” summarizes how we can all benefit by leveraging the internet to, “not only connect the industry but literally create a new business model.” “Our industry is on the cusp of an exciting transformation,” were some enlightening words spoken.

The housing numbers

Werner presented us with inspirational charts, graphs and data predictions that blew a refreshing cool breeze our way. Here are a few key points that were mentioned:

According to Hanley Wood, 2012 housing prices should grow by double digits - 14%.
Housing experts such as Ivy Zelman are also projecting that by 2015, residential housing starts will recover to 2007 levels - 1.2-1.4 million.
With so few current starts, new home inventories will continue to be at record lows further augmenting the resale market, especially as foreclosed homes continue to be absorbed over the next few years.

More kitchen and bath data points from Werner's speech

Employment is finally moving in the right direction. Four million jobs have been created since 2009.
While banks aren’t exactly loose with credit, loans are getting more plentiful for credit worthy borrowers, and rates will remain at record lows.
49% of future sales will be high priced homes.
80% of markets see stable housing prices.
Consumer confidence has also been steadily growing as the housing labor and financial markets have each improved. 72% Feel now is a good time to buy a house.

Werner then reviewed some demographics which speak to a “robust future housing market.”

NAHB estimates More than 2 million homes of pent up demand – people not yet ready to go out and buy.
An increase in home re-sales will also contribute to recovery and remodeling – many undertake projects within first 2 years of buying existing homes.
Although 300 billion dollar remodeling market fell 25% during the housing crash, it’s rebounding and projecting to grow at a 3.5% compound rate for several years.
As consumers stay in their residences longer, especially the 60% of baby boomers who plan to age in place, they’re eager to improve their homes.
Kitchen and bathroom remodels consistently top the list as most desired projects with more than $40 billion spent annually.
Remodeling activity will also be driven by the increasing age of US housing stock – which, at a median age of 37 years, is now the oldest in history.

And a favorite statistic from the speech: “Nearly 80% of homes are at peak remodeling age.”

Looking forward

After reviewing the past, we then took a dive into the future. This section was very inspirational, as Werner incorporated futuristic video clips of Microsoft’s kitchen of the future, a shopping experience of the future, and even a clip on 3D printing. He also introduced us to augmented reality and haptic technology, which may be years away, but are coming faster than we know it. The point? The future holds a great deal of opportunity, but things are going to be different, so we all have to be prepared to embrace technology in kitchen showrooms as well as online.

We’ll cover the second half of Michael Werner’s State of the Industry Address in Part 2.

Is Your Cabinet Dealership Aging Painfully?

CompanionCabinet Software, LLC — Fri, 27 Apr 2012 12:36:00 GMT

Last weekend I had the pleasure of ushering in my fortieth birthday with two shots of cortisone in my lower back. I guess it was either that or a trip to the islands for some free diving. When you step back and look at it…I mean who can resist long epidural-like needles into your spine?

While I was waiting in the prep room wearing the equivalent of a speedo with no backing, a gown that must be see-through it’s so thin and an IV in my arm, of course I started thinking about the cabinet industry. I could feel myself getting geared up for the procedure (hey, who doesn’t hate needles) and in pops the thought that this must be what cabinet dealer owners feel with their businesses. Then someone stuck me with something akin to Valium and I was just happy to be there. I was so numb I don’t remember much of what even happened.

Feeling the Pain

My thought before I started down toad’s wild ride of euphoria was that you cabinet dealer owners must get pretty geared up too. All these things you want to do differently yet sales are struggling, lead generation is probably not very consistent and the mistakes of the business still eat into your precious margins.

As your dealership grew, shrunk then even started growing back slowly, you had to work on other areas of the business to keep things running. You know, fun stuff like payroll, taxes, legal, accounting and maybe even building a culture (if you even had that luxury).

Instead of dealing with the old pain points head on, however, I’ve witnessed many of you decide to take the numb route. It’s called disconnecting – that’s when you’re sufficiently removed from the pain such that it doesn’t feel as bad as it once was.

Take the Shot of Cortisone, You’ll Love It

The pain you felt in the early years when you were on the front lines was intense. Like the pain your employees feel now. And in those years you witnessed the struggles of the cabinet business in all its glory and wished it could be better. You struggled, toiled, stayed late and even worked on weekends. It took hours to do the simplest of things. You may have even promised yourself to one day fix it.

But since you’re so disconnected you’ve effectively put cortisone in your operation’s nerve center. Hey that stuff really works, you know. Your team complains like you once did. They’re living what you lived back then, but now even more complexities, tougher markets and exhausting competitors. And sure you remember some of it – but living it every day like they do is different.

Will You Remain Numb

Being numb to the pain feels good, but it doesn’t really change anything. It disguises your pain, turning a problem into an after thought – something on the top of your seventh priority list.

So while I won’t be taking up football as a sport anytime soon because of my back injury all those years ago, I can move around freely for the next few years. But I remember always that my injury is still there and I might still damage it further.

Your operation and its pain aren’t as permanent as my back injury. Staying disconnected from the realities your team lives day in and day out might even feel good for a while. But remember that if you don’t deal with the inefficiencies of your marketing, sales and operations now, you’re doing real damage to your business.

Who knows, maybe your operation is different. Maybe you can market and sell more effectively without changing anything substantial. You know, just do nothing and wait.

Unless of course your operation turns the equivalent of forty like I did.

Why K+B Dealers Need to Understand Greenhouse Marketing

CompanionCabinet Software, LLC — Thu, 26 Apr 2012 13:41:00 GMT

The tide is shifting. Traditional marketing, or outbound marketing, has always had us finding customers. Consider the ways in which we do that today:

Direct Mail
TV and Radio placement
Newspaper Ads
Phone Book Ads
Outdoor advertising
Static websites

Most would agree that these have been tried and true strategies for many years. But consider that we can also call outbound marketing "interruption marketing." The advertisement itself interrupts us from something we’re doing, such as reading the newspaper, driving down the highway or listening to radio or TV. And it ain’t cheap!

If we do our homework as business owners, we know what each kitchen and bath lead generated costs us down to the campaign. We can then measure what each captured sale costs against the outbound marketing method to get an ROI on the media used. If a $10,000 sale costs us $500 for the lead, is that acceptable on today’s diminished margins?

Enter the New World

Greenhouse marketing is a strategy of getting found by customers. While outbound marketing interrupts, greenhouse marketing seeks permission to engage.

Today’s kitchen shopper is often assembling information up to 24 months in advance of crossing someone’s threshold. If we can engage them in our local market through blogs, downloadable guides and social media events, we have the opportunity to make them brand specific-to our brand. Careful nurturing through greenhouse lead generation, grows affection for our brand.

How Do We Make the Switch?

By creating and providing valuable content for our consumers
By keeping our website fresh and giving consumers a reason to return
By promoting our noteworthy content and building customer relationships in the greenhouse
By creating a pull toward the consumer such that they cannot think about anyone else to work with on their project

Greenhouse marketing strategies create awareness for your brand. They expand your local Search Engine Optimization and build customer relationships in the greenhouse that establish your business as a credible, knowledge leader.

“Focus on the core problem your business solves and put out lots of content & enthusiasm & ideas about how to solve that problem.”-Laura Fitton, Founder, oneforty.com

Guest Blog - Interior Design Legislation Issues Explained

CompanionCabinet Software, LLC — Fri, 20 Apr 2012 20:05:00 GMT

Guest commentator: Christina Birkentall, IIDA, CKD, LEED Green Associate

Cat Fight? Turf War? Evil Cartel? Or just an evolving profession seeking respect and equal opportunities?

There has been much mis-information out there about what Interior Designers are seeking when they forge ahead with registration or licensing legislation within their individual states.

Overall, the NKBA has taken a stance that Interior Design legislation is unnecessary, and harms their membership. "While NKBA members do not generally call themselves "interior designers," the broad definition of interior design contained in these proposed laws clearly covers the services and work that our members perform on a daily basis. Our members would therefore be regulated by these laws.” Their viewpoint can be further reviewed here - NKBA Industry Legislation.

While I respect their desire to make sure that their members are not adversely impacted by laws, what they have not defined in their argument is that most of the existing and future legislation has nothing to do with residential interiors and instead mostly focuses upon those designers who compete with architects within the commercial interiors arena.

The history of the movement has clear intentions and began in the early 1990’s when Architects began enforcement of new rules (within many state statutes), which defined The Professional Design Firm and outlined ownership of these firms be by only “Licensed Professionals.” This put the non-licensed Interior Designer, mostly owners of smaller firms, into an uncompetitive environment. This, along with supervisory rules regarding construction documents, all but tried to put the commercial design firms out of business.

Understanding the players and the issues is vital if you plan to take sides.

The issues vary state by state and are often quite confusing. Issues for occupancy, egress, permitting and ownership all factor into the discussion. Almost all states who have passed or are looking to pass Interior Design legislation provide retail and residential exemptions to allow vendors (cabinet dealers) to continue to provide design services as part of the installation documentation required for a permitted project.

I urge one and all to take some time to learn what your state has done regarding the issue and also to realize that no one wants to put anyone out of business. Interior Designers are seeking credibility and respect as part of the building team. They have been forced to do this on a legal basis, just as Architects are licensed. Perhaps they should have gone the self -certification route (like the NKBA did); but that would not allow them to keep their businesses or provide the services they had always provided.

- Christina is both a Registered Interior Designer (IL) and a Certified Kitchen Designer. She has practiced in commercial settings however her current practice concentrates on residential K&B, focusing on sustainable and universal design. She has been involved in ID legislation issues since the late 80’s.

Who Wants to be a Millionaire? Aurora's Million Dollar Challenge

CompanionCabinet Software, LLC — Thu, 19 Apr 2012 19:48:00 GMT

Aurora's million dollar challenge

Many of you know us not just because of our kitchen software, but due to our writing and consulting in the kitchen & bath industry. Over the years, we have become a little, shall we say, cocky when it comes to what we say we know about the business. After all, it takes a lot to live up to the ‘Guru’ title…

A challenge for the big dogs

After having been invited on site so many times, our CSI Team (Cabinet Scene Investigators) is pretty confident that we can find a hole or two in the floor of any operation. So much so, that we’re willing to find you a million bucks or make you look like it.

The ground rules

They’re really pretty simple (click here for a complete listing of eligibility and guidelines). We’ll find $1M of potential value in your $20M operation, or we’ll outfit you in a custom tailored suit (with our tailor flown on-site for a fitting). For dealers less than $20M (and a minimum of $5M), we’ll uncover at least $50K per million in revenue.

You really can't lose

If we find errors, margin loss, time savings or other quantifiable opportunities in your business you will be smiling. If we only uncover a portion, you still smile and yet win a free suit. Think about it; this is a win/win!

While we would like to do this for all, we have a limit to the number of times we can do this in 2012. This is a first come, first served offer, providing dealers meet eligibility requirements.

Cue the Who; the CSI team is coming to a dealer near you!

To sign up for Aurora's Million Dollar Challenge, click on the blue button below.

Visit Us and Earn CEU Credits at KBIS This Year

CompanionCabinet Software, LLC — Thu, 19 Apr 2012 13:37:00 GMT

Has it already been a year since Las Vegas? Time sure flies. But that same time has allowed us to grow, and this year we have much more to offer you.

Get CEUS

As many of you may already know, CompanionCabinet’s 4M Sales Process is NKBA certified, and this year, due to a high volume of requests to learn more about the 4M Sales Process, we decided to host seminars for CEUS at KBIS. Each participant will be eligible to earn .1 CEU credit after attending one of our hour long seminars at KBIS. Here are some details:

Booth #: 3951
CEU Credits: .1
Seminar Times:Tuesday, April 24^th and Wednesday , April 25^th – 11:00 AM and 2:00 PM, Thursday, April 26th - 11:00 AM (Classes will last an hour)
Description: Participants will learn what it takes to effectively maximize closing rates and simplify the kitchen buying experience. Take away a general understanding of what happens in each stage of the 4M Sales Process, and learn to sell more effectively.

A little bit about 4M

The 4M Sales Process^® is the kitchen sales process used by many of the highest closing kitchen designers in the industry, or the “naturals” who consistently sell over $2 million per year regardless of market conditions. The 4M Sales process allows kitchen designers to learn how to organize seemingly random conversations into a repeatable, predictable sales process.

Stop and Talk to Us About

In addition to the 4M Sales Process seminars, we are also looking forward to connecting with many of you in general. Feel free to stop by to chat in general, or even to discuss one of our many offerings:

Aurora Software - Aurora streamlines all aspects of your operation and adds powerful business management capabilities so you can make your customers happy.
CereSolutions - Your industry specific solution for growing better kitchen sales leads.
Phoenix - eliminates the need for manufacturers to maintain design catalogs
$$$ Our Million Dollar Challenge – Challenge CCS to discover at least $1M dollars of potential value in your organization. We find you a million bucks or we’ll make you look like a million bucks.

We're looking forward to a great show this year – hope to see you all there!

To sign up for the KBIS 4M Sales Process session, click below:

K+BB Collective - Why We Buy Kitchens

CompanionCabinet Software, LLC — Wed, 18 Apr 2012 13:48:00 GMT

What is the reasoning behind a consumer purchase? This is an important piece of the puzzle; a necessary piece of every successful kitchen project. How and why is this such an important detail in kitchen remodeling? Finding consumer motive will help you successfully narrow the options, allowing you to deliver your consumer's kitchen needs more efficiently.

In Nick Ritota's latest article published in the K+BB Collective, he digs deeper into the science behind customer motive and discusses the importance of uncovering these hidden details.

Access Nick's article here: Why We Buy Kitchens

An Ode to Aurora's Second Birthday

CompanionCabinet Software, LLC — Tue, 17 Apr 2012 19:01:00 GMT

Aurora, it’s your birthday
Another year has passed
Advancing more and more each day
You’re growing really fast

You’ve added many features
Since last year’s birthday rhyme
Making dealer’s lives better
And saving them more time

Service Orders are a snap
Receiving is a breeze
Just two of our new updates
Putting dealer’s minds at ease

So many new essentials
From printouts to exports
And dealers are more organized
With all your new reports

There’s even a new help blog
For making details known
And these are just a few
Of many ways you’ve grown

You’ve made a new friend, Ceres
Who helps to grow new leads
Together you’re a perfect pair
Addressing dealer’s needs

Aurora, you’re so helpful
With everything you do
It’s still so hard to believe
This year you’re only TWO

4 Reasons You Should Travel to Cabinet Industry Trade Shows

CompanionCabinet Software, LLC — Tue, 17 Apr 2012 14:20:00 GMT

With kitchen cabinet dealership sales still down, it has become extremely easy to find excuses to avoid traveling to professional trade shows: your car won’t survive the trip; the airfare is too high; your family needs you at home, etc. You may, however, be missing out on a positive opportunity for your career as a kitchen cabinet dealer. These trade shows, such as the Kitchen & Bath Industry Show (KBIS) and the International Builders’ Show (IBS), could help revitalize your kitchen cabinet dealership during these hard economic times by offering education, networking, marketing, and rejuvenating opportunities.

1. Education:

With discouraging trends in the kitchen cabinet dealership industry and the subsequent increase in competition, it is even more vital now than ever to stay on top of your game. Education is one way you can do this. Both the KBIS and IBS trade shows offer a variety of educational opportunities. For example, you can earn KBIS continuing education units through presentations at exhibitors’ booths. IBS offers over 200 education sessions related to sales and marketing. A former attendee speaks to this on the KBIS website: “I went to KBIS to learn one new thing and I was blown away with all the information I brought back with me that will help my business. It was a great show!"

2. Networking:

Trade shows also offer a variety of opportunities to network with individuals in other industries, other kitchen cabinet dealers, and suppliers. KBIS, for example, draws individuals from architecture, building/remodeling, cabinetry, dealerships, design, fabrication, home centers, installation, plumbing, and hardware. The IBS convenes over 50,000 professionals from over 100 countries. Networking at these trade shows could lead to partnerships and future business leads, as a former attendee attests: “This was my first visit to KBIS and I absolutely loved it. It was great to see so many products in one place. I was able to network with some of my suppliers and meet new ones! It was inspiring to see the new trends. I was pumped to get back to work on my designs!"

3. Market Your Kitchen Cabinet Dealership:

Attending trade shows also gives you unique marketing opportunities. At IBS, for example, you can exhibit your kitchen cabinet dealership, giving you the opportunity to also be featured in an additional press release. Your plan doesn't have to involve an expensive exhibition, it can be even more beneficial to get a showroom pass and have the freedom to walk the entire floor and network at your own pace.

4. Rejuvenate:

When business is slower than usual, it can sometimes be hard to remember why you entered the kitchen cabinet industry. Attending a trade show will help you rediscover that passion as you continue to learn, network with others, and market your kitchen cabinet dealership. “KBIS is like a drinking a Red Bull,” one former attendee claims. “It gives me a burst of energy that lights up my imagination. Look out customers, here I come.”

For more information about these trade shows, visit the KBIS and IBS websites! Come visit us at booth 3951 at KBIS.

NKBA To Launch Virtual Design Tool...for Consumers

CompanionCabinet Software, LLC — Fri, 13 Apr 2012 13:27:00 GMT

Sometimes this stuff writes itself

So, we’re in the process of compiling all of the NKBA relevancy discussion comments and data from our loyal listeners and readers, and in pops this tidbit of news - Coming Soon: NKBA Virtual Design Tool (NKBA Newsletter 4/12/12).

One of the bigger negatives we heard from feedback was that the NKBA did not do enough to promote its members and, especially, its designers. Since this benign announcement yesterday, those that pay close attention to these things have been lighting up groups, and our (well, mine in particular) email. It seems that designers feel a bit discouraged and disempowered by this move, albeit without knowing all of the details.

The case against this move

The design community may feel that this is one more nail in the coffin of their art. After all, if anyone can put together something as uncomplicated as a working kitchen (hang on, hang on; don’t you recognize sarcasm from a New Yorker when you hear it?), then design truly becomes a commodity. The very core of what a K+B shop perceives as its crowning difference becomes moot.

We all know that it’s not that easy. But still, what motivation lies behind this move? Certainly, this solidifies the close relationship between the NKBA and 2020. And, 2020 certainly benefits by getting exposure to its planner on a national website. But, since they already have a virtual lock on the design software for the majority of us who practice our art, is there more behind this?

The case for design in a consumer's hands

Believe it or not, there is a way for this to work. Picture the old “When E.F. Hutton talks, people listen” commercial (if you’re old enough!). I could tell you how this could work, but then I would also be the marketing genius behind two more companies (or one company and a national organization, both nameless, of course).

No, you’ll have to stay tuned for that one…

Can Designers Make the Transition to Salespeople?

CompanionCabinet Software, LLC — Tue, 10 Apr 2012 13:43:00 GMT

Episode 18

Brent, Chris and Nick discuss part two of making the transition from a designer to a salesperson.

Opportunities Will Be Knocking on Your Showroom Doors - Part 3 of 3

CompanionCabinet Software, LLC — Mon, 09 Apr 2012 17:28:00 GMT

Obviously if more people start making the magazine cutouts they’ve glued to their vision boards and reference books into real-life replicas, you’re going to have to gear up for an up-tick in business. That means, it’s time for you to take a long hard look at your operations.

How would you do if a wave of requests came right now? I’m not talking about another housing bubble. With business the way it has been in the industry, it won’t take a huge leap to feel like a major shift. Are you ready for even a mild surge in business? Things have been slow for quite awhile, and there is no doubt you’ve cut back on staff and funds. If you’re not ready – well, you’ve got work to do.

Preparing doesn’t mean you need to go on a hiring spree; it means you need to make the best with what you have (or get better resources) and examine your crew with a fine-tooth comb. Make sure your sales staff is equipped with the kitchen sales tools they need , and that everyone knows what is required of him or herself. Your sales people need to be well prepared for your business to thrive with vitality.

Get through the sales process quickly

Your team should already be doing this, but if not, this year they’re going to be in for a rude awakening. You should insist that your sales team quickly and accurately qualify all leads who walk into the showroom without scaring them off. They’ll need to have the ability to connect and listen intently to the needs of the prospect, quote quickly, and hands down, be the first ones in the house – not metaphorically speaking – they literally need to be in the house taking measurements before anyone else has a chance to lure your future customers away with the “great deals” they offer.

Be prepared for Prospect Prima Donnas

People who start their kitchens this summer (or anytime this year for that matter) are likely going to decide what they want quicker than ever before and want what they want, when they want it. Think about it –people have been dreaming of redoing their kitchens for…well, years now, and you can darn well bet they’ve been doing their research. Once again, this is another reason you need to get through the process quickly. If you don’t give them the answers they want right away, they will go to someone else who can. Obviously some of these kitchen buyers will come with misconstrued perceptions of price, product and time frame (for starters), so it is your job as an industry expert to skillfully draw them back to reality right from the beginning.

Now is the time to prepare for success. It’s been long enough, and your company should be eager to fill that unwelcome sales void that has made itself at home for the past few years. Opportunities will soon be knocking at your showroom doors – will you be ready?

Opportunities Will Be Knocking on Your Showroom Doors - Part 2 of 3

CompanionCabinet Software, LLC — Thu, 05 Apr 2012 15:15:00 GMT

In part I of this series, we examined some new and existing home sales data setting a slightly more positive tone for the rest of 2012. In mid February, the NAHB/Wells Fargo Housing Market Index (HMI) released information that home builder confidence in the market for new single-family homes “increased for the fifth consecutive month in February, rising from 25 to 29.” In an article published by NAHB, they stated, “It is the highest level the index has reached in more than four years.

In mid march, the NAHB also released an article stating that construction spending and GDP are on the rise. Their article mentioned that, "In the fourth quarter of 2011, the Multifamily Production Index continued to show improvement, increasing for a sixth consecutive quarter, reaching its highest level since the fourth quarter of 2005. The Multifamily Vacancy Index declined for a second consecutive quarter, suggesting declining rental vacancy rates for apartment building owners." The following graph shows the NAHB multifamily production index and multifamily start:

Of course those aren’t the only numbers we care to see rise, so we found some other numbers that will hopefully settle your stomach a bit more.

Residential Remodeling

Below, take a look at the data trends in the BuildFax Residential Remodeling Index showing residential remodeling throughout the different regions in the US.

As this graph shows, all areas, with the exception of the Northeast, are showing a positive lift with Western remodelers taking the lead and looking better than ever regardless of the economy. And don’t fret, Northeast, your numbers may not be as uplifting, but they are showing a flattening, and if all goes as we’re hoping, you’ll be turning that point a notch upward by late spring/early summer.

The BuildFax Remodeling Index explains, “In October 2011, all four regions - West, Midwest, Northeast and South - had gains. The West is at a new all time high, and is up 52% year-over-year. The Midwest is near an all time high, and is up 20% year-over-year. The South is up 11% year-over-year and the Northeast was up from September but is still down 4% year-over-year.

In addition to the data and graphs, there is more reason to expect a change in the near future. There are many policies in the making. And, don’t forget…it is election year, which means candidates will be making promises through the roof in the hopes of getting elected.

If our outlook is accurate, this will require some changes on your part. Stay tuned for Part 3 where we will discuss what a possible uptick will mean for your kitchen cabinet dealership.

Time for Revolution in the Kitchen and Bath Showroom - Part 2

CompanionCabinet Software, LLC — Tue, 03 Apr 2012 13:33:00 GMT

In part 1 of this series, we looked at the marketing engine that needs to be created to drive leads to our doorstep and it’s definitely different from Dad’s shop. Now let’s look at the sales process that we need to ensure that we close our opportunities. The key word here is process.

In most K&B dealerships we talk about process, but we have no means to measure the output. The old adage in business is if you can’t measure it, you can’t manage it.

Let’s suppose that you spend $10,000 a year on phone book advertising, which is one piece of your marketing plan. Certainly not an unusual number, considering the number of books that may cover an area and the ad size you need to get noticed. Now if you got 100 walk-ins a year based off of that ad, each lead would cost you $100; that’s not a cheap lead!

The 4 step sales process

Let’s further break that down into a 4 step sales process (we recommend the 4M Sales Process for K&B dealers). You would now want to know where you may lose that $100 lead investment.

Is it upfront in the Meet stage (first meeting where you record information and qualify the prospect)? Is it in the Measure stage where you go to the home (your best shot at winning a deal is if you’re first in the home)? Or could it be in the Match phase (where you present a quote) or Make the Deal phase (where you close)? Knowing where you win or lose is crucial to your success.

Here, the process allows us to quantify who wins what and, more importantly, where. Even though that prospect cost me $100, I would much rather lose it in the meet stage if he or she is not a qualified buyer (remember we flush that out early). Here, not spending time on an unqualified lead allows us time to close more qualified customers. If I don’t measure this, then I have no access to where I win or lose and how much that costs my business.

You need a sales process

7 Steps to Ensure Successful Selling:

1) Don’t lead with design. Design is a commodity and
everyone competes on this same ideal. Your design is not
the reason people buy in today’s competitive
environment.

2) Don’t try to sell to everyone. The most successful
salespeople learn early that you don’t want every job that
comes your way. Qualify, qualify, qualify.

3) Don’t ask closed-ended questions. Allow your prospect to
expand their answer as a natural result of the questions
asked.

4) Listen twice as much as you talk. We sometimes think that
silence is a bad thing. In selling it’s important to
understand the power of silence.

5) Find the pain and sell to the why. If you listen, consumers
will tell you why they want to buy. It’s your job to package
that why into a project that answers their need.

6) Never leave a client meeting without next steps clearly
defined. This gets easier with experience but often goes
overlooked in the selling process.

7) Ask for the sale. This can come at multiple occasions in the
process: “I understood that if we did x, y and z, this project
would meet your needs. Is there anything that would keep
you from buying from me if I met those needs?” Flush it
our early.

Now in this whole example mistake number one would be phone book advertising of that scale! We would much rather see a social/blogging strategy that interested the consumer in your business early in the consumer buying progression. That aside, a sales process allows you to:

Find the pain and sell to the why. Finding out what the customer wants to experience when the project is complete allows you to fill in the why. I.e. I want a kitchen that will be a showpiece of the neighborhood.
Address the budget early in the process. It’s not about lifting money out of your client’s pockets; it’s about designing a project around their budget.
Explain your process and why that differentiates you in the market. Showing completed project pictures, articles written about your company, testimonials, license and insurance information establishes you as serious about the business and proves you’re not a hobbyist!

Addressing these and other concepts in the Meet phase helps you qualify a prospect quickly. Asking how they heard about you allows you to track the benefit of your lead source. And, as the process tightens, your dashboard will provide you with information that allows you to push more highly-qualified, lower-cost leads through the showroom door.

Hoping that we get the right customers is OK but, remember, hope is not a strategy!

Nick Ritota, CKD-CBD is Director of Sales and Marketing for CompanionCabinet Software a marketing, training and software company specific to the kitchen and bath industry. For free dealer resources, visit: www.CompanionCabinet.com/tools-for-cabinet-dealers

K+BB Collective - Why Sales Has a Bad Rap in the K & B Business

CompanionCabinet Software, LLC — Fri, 30 Mar 2012 18:45:00 GMT

Today, K+BB Collective published an article written by Nick Ritota in their Designers’ Corner titled, “Why Sales Has a Bad Rap in the K & B Business.” Nick’s article introduces us to the classic “designer vs. salesperson” motif, but sheds light on the fact that in order to be successful in today’s kitchen and bath industry, everyone needs to sell, and we all have to change.

The old way is messy

As most of you are well aware, closing a sale in the kitchen and bath industry has always meant a long drawn out process filled with paperwork, design after design, mistakes and re-quotes. Customers are shuffled around from salesperson to designer while presented designs filled with gadgets and gizmos galore. The designer’s intent has always been good, but the outcome is an indecisive, confused consumer, leading to a postponed close-date.

In his Designers' Corner article, Nick uncovers ways to speed up the whole process, while closing more deals in the meantime.

For more on how to close more sales in today’s market, read Nick’s article here:

Why Sales Has a Bad Rap in the K & B Business

Book Burning Next for Cabinet Industry?

CompanionCabinet Software, LLC — Fri, 30 Mar 2012 12:38:00 GMT

It's a sad day, really

It seems censorship reared it's ugly head in the kitchen and bath industry as some LinkedIn groups deleted people's opinions after we posed a question of how relevant people thought the NKBA is (or is not).

And the discussion is heated no doubt. People have real emotions and feelings on the matter. People voiced their opinions as hundreds of emails, LinkedIn, Facebook and Twitter comments hit the wire.

But some groups didn't like it

And then some groups decided that your opinions are dangerous things. And they began deleting people's posts. One group deleted an entire discussion thread with over 20 people's comments on the topic. Why? Because like Hunger Games, the shift of power from larger groups to individuals can be a scary thing especially when those opinions challenge the industry status-quo.

There was a time when things like this went unnoticed. When people could get away with censorship in secret corners and stamp out discussions that they deemed "too radical". A time when social media and the Internet wasn't around to give power back to the individuals.

We believe it's time to change

We believe everyone's opinion is their content. And that means they own it and no one can deny them that right. People have a right to voice their opinion. People have a right to disagree. Debate is okay - and healthy.

So we welcome this discussion. It's on our turf now. A level playing field where all can participate. Where everyone, no matter how different their opinions are, has a voice.

We believe this industry has too many old players. Too many old thinkers. Too many people who think they can reign in discussions because they are under the false impression that they have some sort of power over what individuals can say.

Well, here's what we say to those of you who want that control:

Gone, baby, gone

It's too late for that world. Wake up. It's a new day. And on the horizon is a wave of people with their own ideas. Their own beliefs. Their own opinions. And no matter how unjustified you think they are - they're legit here.

And they always will be.

Feel free to share your comments below. We promise we will only remove the ones we don't agree with (just kidding). :)

Prospecting Mid to Long Term Leads

CompanionCabinet Software, LLC — Thu, 29 Mar 2012 17:55:00 GMT

Episode 17

Brent, Chris and Nick discuss what prospecting mid to long term greenhouse leads can do for your business. They also discuss part one of the need for transition from designer to salesperson.