Working your showroom marketing budget isn’t as fun as it’s cracked up to be. Many manufacturers hold funds close to the vest until you provide the plan that makes them want to set those dollars free. Over the years, I have found a few things to be true.
The program isn’t always the program. Manufacturers spend a fair amount of time and effort spelling out what is and what is not covered and how they can help your business grow and how they cannot. Maybe 20% of that is black and white. The rest is up to the better showrooms to leverage.
Almost everyone’s written policy is that you will have a budget representative of a percentage of purchases available for advertising, marketing, merchandising and physical improvements. If you didn’t sell their brand last year, that does you no good. If you showed but didn’t push their brand, that doesn’t help you either. If you had to sell at 7% to match Lowes and avoided the brand at all costs, again, it did you no good. If you were in the proper place with their brand the previous year, no problem, right?
Let’s say you had $200,000 worth of business with brand D last year, have 2% marketing funds, used $1,500 on web searches and a printed ad for hosting a designer night. You have $2,500 left by normal reasoning. Several manufacturers want to match at 50%, meaning that if you want to use that $2,500, you have to put in another $2,500 of your own money for a $5,000 display fund. You want a display that will likely cost $10,000 to build. If you enhance brand D’s displays and focus on the product line, you believe you can grow its business by 75% because you have a builder willing to use the brand as well.
It pays to have all the numbers and a plan assembled before you ask. Tell your rep that you didn’t have this opportunity last year. Tell your rep that you have a builder, maybe more than one, who wants to use their product as a standard and that you are investing in the builder with the pricing you are providing. You need brand D to cover $7,500 of the display cost and you will cover $2,500 or you can use brand B, which is not on the floor but will cover the full display cost if you give them a shot at the builder. At this point, hand the rep for company D the plan, product list and the showroom layout on paper. You want to help them grow their business with you, but it is going to take them investing in you to do it. The plan will likely be explained to the rep’s boss. The rep may get yelled at by his boss, but he will come back with an OK. You are happy because they have better displays and your outlay went from $7,500 to $2,500.
This happens every day with almost every manufacturer out there. The key is finding an opportunity for growth with the manufacturer, selling them on your vision and then getting them the results you promised.
Now let’s take a look at what I outlined at the beginning of this article. Candidly, I don’t like 2%. I want more. I want closer to 5% as a regular number. I simply prep my expansion or improvement plans ahead of time, draw them up, give them a product list and ask for help. Will they give me what I want every time? No. Can I get a good deal every time? Yes. Just be creative.
It pays to be creative. This time, we are working with company T, which isn’t currently offering display or showroom improvements. The owner was explicit on that. I am on great terms with this company, though. I tell his vice president how I am going to grow the following year and what I need to do it. I show him my reasoning on paper. I share my vision, plead my case and ask if I can have enough of a reduction on the price of the product I am purchasing. Now, the funds are coming out of a different pocket. I get my funding, my displays and grow the business by about 30% the following year. We all win.
It pays to know your competition and what is and what is not on display in your market. In this instance, I have expanded one of my showrooms (mostly due to a change in a dead space) and the net result is a 22’ x 17’ empty corner that was not there before. I am well represented on the floor with the brands I want to support. There are a couple I am looking to include but I do not have a relationship with them. All my competitors have one of the brands but no one within 75 miles has the other. I make a point to go to a buying group meeting where they are showing the new brands. I meet the rep and I get to meet his boss. He shows interest when I tell him where I am located. He is hungry for business and I tell him if I put his product in the showroom, I could probably set him up with a group of designers that could work with the products as well.
It pays to go to any event where you can meet a manufacturer’s rep’s boss or that person’s boss. They invariably offer to help you any time you need it. In my experience, this type of offer has an approximate six-month shelf life but if you use it, you get to continue using it. If you don’t, it expires. Go back home and take a week or two to draw up a plan. Send the manufacturer your plan and the product you will need. Tell them you do not have the budget to do it for a year but could probably shift priorities if necessary. In this case, the manufacturer sells you $7,000 worth of merchandise for $1,000 to get you to do it faster.
Study your market. Know what sells. Prepare a plan to get it. Get a price to remodel. Improve your showroom. Improve your sales.
Start all over the next year.
