Becoming More Profitable in 2019

I hope you had a great holiday season and took some time to recharge your batteries.

Now is the time to get back to work, the uncertainty with our government and economy is making today the day that You start to put the systems in place that will make you more profitable in 2019.

This is the first of a series of posts that will hopefully give you a few simple ideas that you can put into action to increase your bottom line.

Good – Better – Best Pricing Strategy

According to HBR there are 3 ways to use this price strategy.

  1. Going on the offensive
    • You can dramatically increase profits by creating higher-end “Better and Best” options.
      • For example – Six Flags Amusement Park has standard, gold and platinum passes. Gold reduces wait time by 80%, Platinum by 90%.  The idea is that at least half of the customers will upgrade to a “Gold” pass increasing profits by not actually doing any extra work.  Some ways customers have successfully put this strategy to use is selling higher end panels or decorative hardware.   More to come on this, keep reading.  🙂
  2. Going on the defensive
    • Is there a new lower price competitor in the your market?  Rather than reduce all of your pricing, creating a “Good” option is a solution.  You might find only 15% of your customers opt for the “Good” solution, and 85% are buying the better option which was your standard offering.
  3. Consumer psychology
    • 3 tier pricing helps differentiate you from the competitor.
    • People tend to choose the middle option.

Following are some areas of your business that you can use the GBB strategy.

Belts, Ties and Valet Rods – When it comes to your everyday accessories most homeowners don’t know what type of belt, tie or valet they are getting.  All they know is that they want one.  Rather than sell a $25 belt rack with every job, (that I hope you are charging at least $50 installed) maybe when doing a white closet you offer a $10 option (that you are selling for $25).

I know as you are reading this you’re thinking that you’re actually losing money by installing the less expensive one, but the reality is you could be pricing those high end accessories out of your customer’s budget.  They might opt to buy something on line and install themselves or worse give the job to a closet company that is offering less expensive options.  That high end belt and tie rack might not land you a job, but it could cost you one.  Our top selling “good” and “better” options are

Stay tuned for my weekly post on “Becoming More Profitable in 2019.”

I love hearing from you – please let me know your thoughts.

Do you have questions, comments – post below or email me at RDeMarco@Richelieu.com.

Thx for reading!!

Happy Holidays!!

As we all race to the end of the year I wanted to take a minute to wish you and your family a Happy Holiday!

I really appreciate your support and promise to continue to develop new programs specifically for the closet industry.

  • How has your experience been with the new closet hardware board?
  • Are you using our new stock drawer box program?
  • Have you started focusing on multifunctional spaces?
  • Is on-line ordering saving you time?

Looking forward to your responses – hopefully we added to your profitability. 🙂

Can’t wait to show you what we have coming in 2018.

From my family to yours – Happy Holidays!!

 

Closet Summit 2017

Last week I attended the Closet Summit in Austin Texas and it was a great 2 days. The summit isn’t like your typical trade show. Jeff Klein has built a tight knit community of closet owners that meets annually and looks forward to sharing best practices, learning new processes and trying the local IPA. 🙂

A reoccurring theme this year was “How do I get more leads?”

We all know our closing percentage so if we can get more appointments than we can grow our business, but is that always the case?

  • Do you have the designers to effectively handle more sales calls?
  • Will your closing percentage drop?
  • Do you have the capabilities to manufacturer the extra work?
  • Do you have the installers, vans – and the list goes on…

The easiest way to make more money without adding more overhead is to sell your current closets for more money.

How do you do that? I’m glad you asked –

You have to do something to your closet today that you weren’t doing yesterday.

Examples of easy upgrades –

Stop selling wire pulls and other basic decorative hardware. If you can sell a $10 handle to half of the jobs you install how much more money would you make this year?

Offer premium material. Selling white closets is great, but installing Italian melamine doesn’t take any extra effort and can easily increase your sale by 30%. It also helps you get into other rooms in the house – think wall units, mudrooms, laundry rooms etc… Customers pay a premium for those spaces.

These are two of the 7 strategies we discussed.

If you would like more ideas on how to sell a more profitable closet please comment below or send me an email at RDeMarco@Richelieu.com

As I always say one of the favorite parts of attending trade shows is catching up with friends.

The next closet show is March 27th – 29th in Pasadena. I hope to see you there.

3 Things to Think About This Week

Santa Closet

Ready or not the holidays start tomorrow – today for some of you.

I truly appreciate all of your attention this year – whether you are a long time follower or a new one.

Thank you for spending a few minutes each week reading and sharing my posts!!

With the finish line in sight – I thought today would be a great day to share 3 questions that you can think about while sitting in holiday traffic or watching Christmas Eve Football. (What is better than that!)

What did you accomplish this year?

Take a minute to enjoy your wins.  Did you finally get that additional truck on the road?  Purchase that new machine, update your website?  It’s ok to brag a little!! 🙂

What slowed you down?

Is there something or someone causing you constant pain?  A difficult employee or business partner.  Come up with a plan to fix that next year.

What are some goals for next year?

List 3 – 5 things that you would like to get done.  Is it increasing marketing, updating your showroom, or adding a new product line?  Write the list down and keep it on your desk this way next year that list can be moved to accomplishments!  You know I love helping you succeed – let me know what I can do.

In case you missed this – here are my top two posts from 2016 –

Successful Closet Companies are Doing This – Are You?

Part II – Successful Closet Companies are Doing This

Thank you for your loyalty and support this year.

Happy Holidays to you and your family!

I can’t wait to see what 2017 has in store!!

New Vertiko Closet System In Stock…

Vertiko Wall System

Many of you have asked me about the “closet without verticals” or the “European Closet System.”  It’s in stock just in time for you to freshen up your showroom for the new year.

It’s something that you should definitely be showing because if you haven’t been asked for a system like this yet – you will be soon.

The Vertiko Closet System has a short learning curve and is pretty easy to install.

There’s plenty of adjustment built into the stanchions to follow the bows in the wall and the slope of the floor.  We have brackets for cabinets, shelves, closet rods and every combination.

This short video will show you how easy it is –

This is also a great system for entertainment centers because you can easily hide the wires behind the back panels.

If you have questions or need more technical info please email me at RDeMarco@richelieu.com.

Thanks!