June 12th, 2019
When the Market Slows, Marketing is the Key to Making Sales Goals
Single family home sales are slowing down this year, mainly due to a decrease in affordability. This is due to a number of factors, including labor shortages, higher lot prices and rising costs for materials. At the same time, spending for home improvement and repair work is also expected to soften, since it shadows expenditures of new and existing homes. So, will growth of door and window sales follow suit? The answer is yes in terms of units sold, but it doesn’t necessarily have to be in terms of sales dollars and profits.
So how do you aggressively grow your sales figures when growth in the overall market is slowing? The two biggest factors are:
- Introducing new products; and
- Shifting sales strategies toward higher-performing products.
As I visit customers, the first question that usually is asked past the initial greeting is: “What’s new? Salespeople love hearing this question, unless the answer is: “Nothing.”
If you are representing a leading-edge company, then your customers expect that the company you are selling for is actively studying market needs and is designing new and exciting products to meet those needs. Nobody admires stagnation. But remember, part of this responsibility belongs to every salesperson. As you are out in the marketplace selling and servicing your customers, you owe it to the company you represent to report back to them on market trends and the potential needs of customers. Some of the best ideas for new products come from salespeople who are on the front lines and know what customers want. By the same token, some of the worst ideas for new products are conceived by upper managers who sit in meetings every day and rarely get out to interact with customers. It doesn’t matter how much a GM owner loves a new product. It simply will not sell unless there is a sizable segment of potential customers out there who will embrace it.
The second factor that enables one to outpace market growth is increasing average selling prices – simply getting more dollars per unit sold. Every successful window salesperson has a premium window, a mid-range product and a drop-down window. When it comes to navigating those options through the sale process, there are two types of salespeople.
A salesperson will offer you the high-end window at a higher price. As soon as the average salesperson gets some pushback there, he or she will go to the mid-range product and attempt to close the deal on the basis that it is almost as good as the best, but costs a bit less. If there is pushback on the midrange product, the average salesperson will then offer you the step-down window and tell you that it will fill the opening, operates well, lasts a long time and that the price can’t be beat.
The best salespeople, on the other hand, know all of the features of the high-end window and how to sell them. He or she will explain to you how each feature will either save you money, increase your comfort level or enhance your viewing experience. At the end of the day, the best salesperson will not only convince you that you need the higher end window, but that it is actually the better bargain given the extra benefits it provides at such a modest increase in price. At the end of the day, the best salesperson will bring in more dollars and higher gross profit margins than the average salesperson, thereby enabling your company to achieve higher than average growth in both sales and profits. Indeed, investment in sales training programs really pays off, as do salesperson compensation programs that reward higher average selling prices.
Ultimately, both sales training and new product development are two key factors which fall under the marketing umbrella. I have been in the fenestration business since 1986, so I have seen the ups and downs, and I have always felt that marketing is the life blood of every organization. When business is booming, discussion centers around manufacturing: “We don’t want to talk about marketing. Just tell me how to make more windows in a ten-hour day.” But when market growth slows a bit, thoughts switch to marketing: “Tell me how to bring in more dollars and profit in a 10-hour day.”
The key is marketing!