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Home » Darlington on Showrooms: Know Your Competition
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Darlington on Showrooms: Know Your Competition

April 30, 2002
Hank Darlington
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Doing an in-depth study of your competition is an art that you need to learn and put to work for you.



How many of you have "shopped" your competition? Have you really taken an in-depth look at your competitors - all of them?

Knowing everything about your competition is a big part of your market research responsibility. The more you know about them, the more you will be able to out-value and out-sell them.

It doesn't matter whether you are a wholesaler, an independent kitchen-and-bath dealer, a plumbing contractor or a "big box," you have to learn everything possible about anyone that has a showroom and sells the same products you do.

I would encourage you to shop each and every competitor at least once a year - twice a year is better. Depending on your marketplace, it can be a bit tricky. In a large marketplace not everyone knows each other. The showroom manager or an experienced salesperson may be able to do the "shopping" without being recognized. But in a smaller marketplace where everyone knows each other you may need to hire someone to do the "shopping" for you, or, periodically, if you have friendly competitors, and you are personally known, call the competitor and ask if it's okay for you to visit his or her showroom. Since turnabout is fair play, invite him or her to visit your showroom also.

The purpose of learning everything you possibly can about your competitors should be obvious. What do they look like? How do they merchandise their products? What products are they showing and selling? What price are they selling them for? How do their salespeople dress? How long does it take to get waited on? Is the showroom well maintained? Are there "holes" in the displays?

When you shop a competitor you will come away with a long list of things they're doing well and some things they could do to improve. You should also come away with two or three ideas and "things" you can do better. A long time ago, I learned that if you steal an idea from someone it's called plagiarism - that's not good. But if you steal an idea from two or more, it's called market research. Your job is to do a lot of market research.

Here's a list of ideas on how to get started:

  • Make a list of all the competitors you want to shop, with names, addresses and directions. Be sure to include everyone (wholesalers, independents and "big boxes").

  • Decide who will do the shopping: an in-house person, or someone unknown to the competitor. You could hire an interior designer, or simply ask a friend to be your shopper.

  • Develop a "report card" that lists every aspect that you want to learn about the competition. This should be a written list leaving room for a rating (1-10) and comments.

  • Go over this list in detail with the person who will be doing the shopping. Make sure he or she understands the mission.

  • Set a time for the shopping experience. The shopper can do one or several stops on any given day.

After you or your designated shopper has completed "market research" on each and every competitor, score the showrooms visited based on the questions I have listed in this column and discuss the findings in detail with your staff.

I personally loved doing these surveys. I always learned a lot. Most of the time I came away feeling really good about how my business was run. But I also learned a lot - and would almost always find one or two ideas that I had liked and would incorporate them into how I ran my business (market research--right?)

I especially liked shopping the big boxes. I would always pay particular attention to pricing. The big boxes are diabolically bright in how they price products. They will always have some key lead items - usually the very popular water closet, lav, kitchen sink, etc. They heavily discount these. The lead items are always white and chrome, very seldom colored or special finish fixtures or faucets in polished brass, etc. The big boxes have been very successful at developing a perception that they are the lowest-priced place to shop. I underline the word perception. The fact is, they know how to make money! Their gross profit on sell is in the 37% range. (That's a whole lot better than most wholesalers and kitchen-and-bath dealers). Sure, they may buy better - but they also sell smarter. You can do exactly the same thing they do. Develop a perception that your prices are as good as or better than theirs. Here's how: Pay particular attention to their popular leader items. Price these items $1.00 less in your showroom. When the client has shopped the big box and then comes into your showroom, you'll be a buck less. The perception will be that your prices will be lower across the board. To make it work, you have to know how to charge more for the non-leader items.

Don't wait! Start today learning everything you can about your competitors and put this new knowledge to work for you.

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Darlington

Hank Darlington, owner of Darlington Consulting, writes several monthly articles for magazines, teaches seminars, and offers a full range of small business consulting services to kitchen and bath dealers, distributors and manufacturers. Hank Darlington was inducted into the Hall of Fame by the National Kitchen & Bath Association in April 2004. He can be reached at 2010 Granite Bar Way, Gold River, CA 95670. Phone: 916/852-6855, fax: 916/852-8866, e-mail: darlingtonconsulting@gmail.com.

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