January 15, 2024

Revolutionizing Kitchen/Bath Sales with Interactive Project Budgeting

In the kitchen/bath industry, the traditional sales process is long overdue for a major overhaul. Designers typically invest six to eight hours over several weeks to develop a plan and price, yet this effort only yields an estimated 40% average success rate in signing project agreements. This approach is not just time-consuming but also highly inefficient.

A New Strategy: Interactive Project Budgeting

The key to transforming this process lies in interactive project budgeting, a strategy rooted in core marketing principles:
• Collaboration is Key. Engaging consumers through collaboration builds trust and stronger, more productive relationships.
• Differentiation through Delivery. The unique delivery of products or services sets companies apart from their competition.
• Value is in the Impact. The value of a designer’s service is measured by its impact on the consumer’s needs.
• Consumer-Centric Sales Process. An effective sales process should prioritize the prospect’s project needs over the designer’s need to be compensated for their time.
• Understanding Prospect Needs. Kitchen/bath prospects’ two most compelling needs are an attractive design solution at an acceptable price, delivered promptly due to their busy lifestyles.

The Traditional vs. The New Approach

Traditionally, our industry starts with a plan to estimate cabinetry and overall project costs, focusing solely on communicating value. However, this approach does nothing for creating value. True value creation comes from deeper discovery and collaboration with prospects.

By adopting a kitchen/bath sales process that eliminates non-value-added activities, designers can save weeks of time on projects that don’t close, time which can be redirected to potential new clients. This concept of eliminating non-value-added factors, highlighted by John Barkhouse, CEO of Cabinetworks, in a recent NKBA online interview, emphasizes the importance of efficiency.

First Meeting, First Budget

Imagine developing a realistic project budget interactively with your prospects in the first meeting itself. One based upon a collaborative not-to-scale design sketch derived from the prospect’s homework assignment. This discovery approach not only speeds up the process but also establishes whether the prospect is likely to become a client.

As a young designer, I found this method far more efficient and rewarding for both parties. Transparency in cost per product and service category, along with offering several options for each, educates consumers, builds trust and enhances credibility in the final cost range.

This new approach led to an improvement in closing percentages from 35% to 70%, time savings of 75%, annual sales increase of 100% and much fatter bank accounts for my team of 14 sales designers. It also led to the establishment of three additional showrooms over a five-year period, all operating at 51.5% average gross profit margins.

Additional Benefits of the Revamped Sales Process

Putting the complete sale ahead of the formal design development phase also offers other advantages:
1. Perceived Exceptional Service. Consumers view this interactive budget collaboration as a superior customer service and are often willing to pay more for a complete project. In my experience as much as 30-40% more.
2. Accelerated Designer Development. Freshly minted designers can become competent sales producers much more quickly.
3. Retention of Veteran Designers. With increased income, reduced time for earning client commitments and improved work-life balances, veteran designers are less inclined to leave and/or start their own businesses.
4. Scalability. A replicable sales process is essential for robust business growth, including the development of satellite studios, which adds greater enterprise value for owners.

At the SEN Design Group, we’ve been advocating this good-better-best sales process for quite a while. Our business school also teaches optimal pricing strategies for kitchen and bath projects, ensuring owners the proper return for their overhead structure and valuable designer services.

Paradigm Shift & Technological Integration

This selling method has been successfully implemented nationwide in various urban, suburban and rural markets, catering to both affluent and blue-collar customers. Interactive project budgeting, especially during the initial discovery phase, leads to less price resistance and more motivation for clients to proceed immediately with their projects.

Recognizing the potential of innovative sales strategies, SEN has formed a partnership with operateIT, an industry-specific technology services firm, to develop and market an automated version of this proven sales process. As a value-added provider, SEN will feature DesignAlign technology in a series of one-day sales seminars scheduled across nine major metro areas in 2024. This collaboration underscores the SEN commitment to furnishing advanced tools and educational resources to enhance the kitchen/bath sales process.

Industry Impact

About 40 years ago, CAD was introduced to speed up the design of kitchens. It revolutionized the entire industry. In 2024, DesignAlign is being introduced to speed up the sale of kitchens and baths. It’s likely to become an equivalent disrupter, revolutionizing the sales cycle for greater efficiency while boosting the industry’s overall sales and financial performance.

—By Ken Peterson, CKD, president of the SEN Design Group and co-founder of operateIT

Photo credit: operateIT