John
This has been (is) such an interesting thread, thank you for starting it and taking the time to put so much into it. So far I have ‘taken’ quite a lot of the information and now I hope in some way to redress the balance by putting something back in.
As you may know I worked for a decade or so in marketing and as a result have a very strong understanding of brand development, consumer and retail marketing. I saw your question about the merits of a showroom and thought I would put down some thoughts as to the pros and cons from a business management perspective. I hope that it isn’t too dogmatic or full of dreadful management speak.
Please note that the use of You or I is simply for clarity – I can’t bear ‘one’ so these comments are not about you or me or our businesses (unless specifically stated)
Broadly, there are two types of showroom, which could be described as ‘The Enticer’ and ‘The Confidence instiller’. Briefly, The Enticer is the shop front where potential customers get drawn in to have a look at your products whereas ‘The confidence instiller’ is more about reassuring customers who are already interested in buying your products that they are up to the standard they are after and that you are also unlikely to disappear overnight. It goes without saying that the Enticer has to also incorporate the confidence instiller.
The big question is in effect twofold – Do I need a showroom? and if so, which showroom do I need?
I’ll only deal with the first question in this section because otherwise it will go on for ever (and may anyway)!
Do I need a showroom?
This is the pivotal question which spawns a whole load more. The good thing is that these questions can all be answered by objective, economically based answers although there may be some emotional reasons which overrule the more rational ones – such as ‘because I want one’. However, by addressing the rational ones first you can quickly assess how much the emotion is costing you and choose to go with your gut or not.
To answer this question fully, it is necessary to establish the overarching objective of what the showroom will ultimately achieve.
If for example, the hypothesis is that it will be used to gain better paying, more affluent customers then you need to be sure that these potential customers use showrooms as their key (or one of the key) methods of deciding what to buy. If they do then you have to be able to or be prepared to compete with the other showrooms out there.
This necessarily means diversifying your business and becoming a retailer as well because these customers will expect you to be pretty hot at that too - if you don't look as impressive as the other showrooms then the implication will be that your furniture or work won't be as good either. That also means being in the right position to secure maximum footfall, have the right type of stock in the showroom and have the right person manning the place who you trust to present your business to these customers in at least as good a way as you would (unless of course you are intending to manage the showroom as well as make the furniture!).
All of that adds up to a fair amount of cash (not forgetting that you will still need to promote the showroom and your business as well anyway).
Doing a quick bit of back of fag packet maths, let’s say that to lease a high street showroom costs a conservative £50k a year. Add onto that all the other costs – manager’s salary, insurance, utilities, changing stock, promoting the showroom, first year shopfitting costs etc and I don’t think it would be too difficult to get to a figure approaching £100k.
That’s a lot of kitchens just to cover the costs. On top of that I imagine that one of your business USPs (and I am talking about you, John and me and probably most other single or two team furniture makers) is the personal touch ie hand made for them by you.
Therefore the next question is can you make enough of these kitchens in a year to cover those overheads without farming out stuff to other makers, which aside from removing the truth behind your USP also reduces the profitability of each job (although granted it may still improve your overall financial position). It also means another diversification of your business which you may or may not wish to do.
Plus, if someone comes into a showroom to buy one of your kitchens (or have it revamped), how quickly could you do that for them? Most people who go into a shop expect to be able to purchase relatively quickly ie in the mood to buy. If your leadtime is 6 months (which is potentially feasible given how many kitchens you'll need to be making if the showroom is to be successful) then you need to gauge how many of these potential customers will be prepared to put down their 45% deposit that far in advance.
Another key question to answer is why would the customers you want, come to you rather than go to others who offer similar products?
I’ll come clean now to the rest of the forum, I was the guy who PMed John in the first place to get some advice which started this thread. I had been approached by someone to quote on a new kitchen for them and I knew it would be high end, however didn’t know enough about the quoting side of the kitchen business so asked John.
Anyway, one of the reasons that she wanted me to quote on this (and you could replace ‘me’ with ‘an individual maker’) was that she didn’t want something that looked like it had come straight out of a showroom and nor did she want to have to deal with someone who wasn’t actually going to make it themselves. So in this instance, actually having a showroom may well have removed me from the quoting opportunity. (I don’t know what the outcome of our meeting is yet – I’ll let you know).
My rambling point is that if the high end customers want to feel like they belong to a private members club and have special things made for them (and them only in their minds) then they don’t necessarily want to see their kitchen on the high street.
So to round this off (I didn’t realise I was going to bang on so long – sorry), to open a showroom is a colossal, long term risk that needs significant investment. You could do a lot of advertising for the same level of investment or even put in a couple of kitchens in that social circle for reduced rates to act as showrooms in themselves. You also don’t need to do a lot wrong with your showroom to sink the business and if you decide it doesn’t work for you and you’d be better off not having one again, the very act of closing the shop (not the business) can send very negative signals to the public.
I am of course happy to have these comments shot down or debated since they are only a view and are not necessarily ‘right’. I also hope it doesn’t come across as patronising which of course its not meant to, its just that a lot of good marketing is in effect common sense and therefore often obvious, which then sounds patronising.
Cheers
Tim
