Modern Woodworking Magazine

I came across a great article in Modern Woodworking Magazine.  The article featured another great Dallas company, William & Wesley – manufacturers of high-end furniture.  W&W’s custom

furniture and draperies can be seen in luxury homes, hotels, and resorts from Las Vegas to the Caribbean to the Middle East.  A truly magnificent company, William & Wesley’s success during the recession caught the attention of Modern Woodworking Magazine, and by proxy, me.

It’s important to benchmark your company’s operations off other successful companies and industries – preferably ones related to you.  As a plantation shutters manufacturer, I felt W&W’s business model was especially relevant.  The opening line of the article really struck a chord: “With so many U.S. furniture manufacturers moving production to China the last thing needed would be another furniture manufacturer doing the same thing.” I really wanted to see how W&W had responded to globalization (and, in fact, reversed its effects by being outsourced from countries in Asia, Europe, and Africa!).

It’s an incredible article, and you can read the full version here.

Here are some of the lessons I learned from William & Wesley:

William & Wesley, Manufacturing Fine Wood Furniture

1) Stand Apart

Really, that’s Marketing 101, but that lesson was reiterated again and again in how W&W responded to furniture outsourcing.  As I mentioned earlier, it’s important to benchmark your operations against other successful ones.  In 2001, when W&W’s founders, Bill Lawrence and Jarrett Ouellette, founded the company, they saw the furniture manufacturing industry as so poorly run they refused to benchmark off it.  They decided to stand apart and develop a unique business model – one where furniture wasn’t what they sold.  They decided to sell something different: TIME.

“We sell time,” says Ouellette.  Obviously furniture provides the income, but what makes W&W stand apart is that they can provide luxury furniture from scratch in four to six weeks – versus the sixteen week norm for importing product from China. “Quality is essential, of course. . . you can’t play in this arena unless your quality is extraordinary.  What separates us from our competition is our additional focus on time.”

W&W rightly discerned that people “people just don’t want to wait sixteen weeks.” By focusing on the niche concerned with quick turnaround for one-of-a-kind custom furniture, William & Wesley set themselves apart and attracted the clientele they were after.

What sets your company apart?

2) Stand and Deliver

Selling to a niche is great, but it’s useless if you can’t actually do what you claim.  William & Wesley said they could produce high-end furniture in four to six weeks, and they delivered on that promise.  Says Ouellette in Modern Woodworking’s article: “Manufacturing is not about machinery, but rather about understanding the bottlenecks.  We took that premise from [the book] ‘The Goal’ and put it to work in furniture manufacturing.  We have a very rudimentary job shop, but it allows us to be totally flexible.”

William & Wesley decided that they could deliver on their promise and took the steps necessary.

Can you feasibly provide what you’re promising?  What steps are necessary to bring this to being?

3) Stand Ready

William & Wesley’s business model was new, and in the eyes of designers and architects, unproven.  Lawrence and Ouellette didn’t deny that; rather they took a sales approach that encouraged these companies to give them a try in situations where produce was absolutely needed in haste.  For example, if a designer made a mistake, it could take their usual vendor another sixteen weeks to provide a replacement.  W&W made themselves available to build a “fill-in” to satiate the customer’s immediate needs.

By encouraging a “try us when you need us” mindset, W&W slowly began to win the respect of its clients.  Eventually, people began dropping their usual vendors from overseas to buy exclusively from William & Wesley.  This is evidence that the patient acquisition of industry respect is imperative to long term success.

Do prospective clients know you’re available to help them in their time of need?  How can you reinforce the “try us when you need us” mindset?

There are many more lessons to be learned from William & Wesley.  I encourage you to read the full article at Modern Woodworking Magazine’s website.

The Sun is Rising.

Be thankful for the past.  Be proactive in the present.  Be mindful of the future.

Recognize that what worked then may not work now.  Adapt quickly.

What is Your Egypt? What is Your Promised Land?

I was flipping through my Bible the other day, and I found an intriguing story that seems to parallel where our industry is right now.

There was a famine in North Africa. An Egyptian ruler named Joseph had wisely saved his resources, and so he invited his family to move to Egypt and stay with him.  This family eventually grew into a large people group known as the Israelites.  Egypt became comfortable for them; it became home.  Howver, the Egyptians soon began t0 despise the Israelites and evenutally enslaved them.   There home is no longer a welcoming place for the Israelites.  So God sends Moses to lead them out of Egypt to a new land where they will flourish – the Promised Land.

The Israelites braved all forms of danger on their journey and finally reached their destination. A group of spies went into the land to check it out, and they returned will tales of the beauty of their new home.   However, there was a problem.  The inhabitants of the land were really, really big, and were pretty mean too.  Rather than continue their journey, Israel began to tremble and begged Moses to RETURN them to their slavery in Egypt.

Looking back instead of advancing forward became Israel’s downfall. Because they decided that the familiarity of slavery was better than the uncertainty of a free future, the adult population ends up wandering around the desert for 40 years.  Eventually, their children  returned to the Promised Land to defeat the giants and settle down.

In summary:

• Egypt was a great home at one time for the people of Israel.
• Times changed; people changed. Egypt was no longer suitable for the Israelites.
• The people made a bold move and left their home in search for a better place.
• When the Israelites encountered an obstacle, they immediately began experiencing selective memory and wished to could go home to Egypt.

So, what does this mean for us as we operate our window treatment businesses?

• The way we used to operate was good.

The world of the late 90’s and early 21st century had its own unique needs.  For example, if homeowners wanted to buy plantation shutters they almost certainly had to buy from a U.S. source.  American manufacturers were the dominate providers of the product back then!  Furthermore, consumers were more inclined to trust the opinion of an interior designer or home furnishings retailer (instead of trying to find a credible manufacturer who wouldn’t steal their deposit!).

Plantation shutter manufacturers responded by building healthy wholesale relationships with retailers and design firms and thrived from the business they were brought.

• The world has changed.

The introduction of foreign made plantation shutters into the U.S. market began redefining the window treatment landscape.  Cheap labor, low government regulation, and high production volume allowed Chinese factories to sell shutters at a fraction of what U.S. factories sold for.  Window treatment retailers took advantage of lower prices (and potential higher margins) by switching to foreign made products.  There were trade-offs: limited finish color selection, longer delivery time, etc. with Chinese product, so interior designers, etc. still always kept a local manufaturer in their roledex to handle truly custom projects.

• The way we used to operate enslaved us.

Many U.S. manufacturers refused to accept the changing environment.  Owners and managers denounced the  foreign product and fervently argued that the Chinese pricing strategy wasn’t sustainable.  ”They’re bluffing!” was the industry mantra.  ”There is no way an American company can compete with those prices!” was the war cry.  ”If we keep doing what we’ve always been doing, eventually we’ll drive these low-priced companies out!” was the business model.

• We began the search for a new home.

As it became obvious that foreign competition was here to stay, some companies responded by altering their strategy.  Some pursued specific niche markets with luxury woods (like Kirtz Shutters in Stillwater, Oklahoma).  Some developed superior synthetic shutters with features unmatched by foreign competitors (like Danmer Custom Shutters with multiple locations in California).  Others pursued e-commerce solutions.  Some sought to meet Chinese competitors head on by producing a line of shutters with limited options in such high volume that a profitable low price was achievable.

Some manufacturers moved away from selling wholesale and began selling direct to the public, passing along the savings that came from cutting out retailers or designers.

• As challenges arose, many companies returned to what was comfortable.

As companies experimented with new ways of doing business, some of their efforts were successful and some were not.  Change requires tackling challenges in logistics, pricing, marketing – everything.  Because of the difficulty faced, many companies decided “it just can’t be done,” and returned to their old business model – a model that had become an endangered species.  It was only a mtter of time.

As the sun of economic recession rose, it began to burn away all unhealthy companies.  Those with antiquited business models have perished. Some companies are barely surviving.  And some are adapting and joining the ranks of the manufacturing elite.

The Lessons:

Be thankful for the past.  Be proactive in the present.  Be mindful of the future.

Recognize that what worked then may not work now.  Adapt quickly.

The Sun is Rising.

Stephen Wade, Director of Marketing, Sewell Shutters, Inc.

You may have seen last Thursday’s Bloomberg release about the shifting homebuilder focus.  If not, you can read it here.

To summarize, homebuilders are responding to an ever-growing frugal customer base by scaling back their product lines.  To quote IHS Global Insight economist Brian Bethune: “The high end isn’t moving, so builders have got to dumb-down their designs and put in Formica kitchens and the bare-bones carpeting.  New-home buyers are being conservative — they’re not willing to pay for extras because they’re worried about the economy.”

Homebuilders have typically been a source of consistent work flow for companies selling plantation shutters, especially in Dallas.  Because they carry the aura of being a more luxurious window treatment than blinds (along with the functional benefits few other window treatments offer), plantation shutters have been used in spec homes by homebuilders such as Paul Taylor Homes and Highland Homes.  However, in light of demands from consumers for less expensive homes, lower expensive blinds are poised to take greater market share away from interior shutters.

What should the response by plantation shutter dealers be?

• Sell the builder the upgrade, not the spec.

In the past, companies would sell builder purchasing agents and sales managers on the advantages of installing their higher priced products in spec homes as a way to lure prospective buyers.  The promise of free granite countertops and stainless steel appliances would encourage buyers to close during a specific quarter, saving the builder on carrying costs and helping them reduce inventory and meet sales goals.  Now the same homeowners are wondering why a homebuilder, who obviously covers the cost of the “free” upgrades in the purchase price, doesn’t just remove the extras and offer a discounted price.

Since using your upgraded window treatments is going to be a much more difficult sell to homebuilders, the best option is to sell the builder on offering your product as an upgrade in their design center.  Many homebuilders are open to this idea, as it costs them very little to host your product.  Your proposal to builders should also include a plan to help them sell the product.  Builders want to maximize their design center space.  If they can’t sell your product, they will ditch it for something they can.

Convincing a builder on including your line of products in their design studio is a much easier sell (and costs less marketing wise) then convincing them to include it in their specs.  It’s also more safe for your bottom line.  If you write a deal with a builder to install X amount of plantation shutters in Y amount of homes, you will likely be asked by the builder to give a volume discount.  This isn’t a problem if you sell an essential product (like carpet), because it’s unlikely to be cut out of the house.  But if the subdivision you wrote the deal for isn’t moving homes, the builder will begin slashing upgrades to increase their margins – and guess what will go: you’re upgraded window treatments.  Without finishing out the contract, you won’t obtain the critical mass of installations necessary to profit – or even break even.  Several of my friends who had mass contracts for flooring and countertops with national homebuilders went under once the volume of homes produced decreased and they couldn’t produce enough volume to sustain themselves.

However, if you sell in a design center you don’t need a volume contract - because it’s a case by case situation.  The builder’s purchasing agent will be less inclined to demain a large discount from you.

• Pre-sell the homebuyer for the builder.

The marketing budget needs to be diverted away from a focus on selling homebuilders to selling homeowners.  Remember!  Homebuilders are listening to their customers. If the public wants a more frugal solution to their new home, the builder will give it to them.  However, if the public is demanding a certain upgrade – or more preferrably, YOUR brand of upgrade, the builder will respond to that as well.

The key is to convince the homebuying public to ask their builder for your product, while making yourself available to the builder to handle the requests once they begin coming in.

There are a variety of strategies for accomplishing this form of pull-through marketing.  At Sewell Shutters, we use an eclectic group of online sources to brand our name and encourage consumers to ask for our line of plantation shutters from their homebuilder or interior designer.  Using search engine optimization and social media, we are able to engage the general public in conversations and hopefully demonstrate to them why purchasing from us is a great investment for their future.  We offer free advice for current shutter owners who need DIY help for repainting or repairing their product.  We host product knowledge deminars.  We make appearances at a limited number of tradeshows.  We want people to know the Sewell Shutter brand, see value in it, and ask for it from their homebuilders.

And it’s working.  Just the other day, Regent Homes called us and said they had a buyer demanding they install a Sewell shutter in their house.  No other plantation shutter would do.

Stay the course.  The Sun is Rising.

For lunch the other day, K-Mac and I joined a church planting round table hosted by Fellowship Bible Church Dallas to listen to Senior Pastor Gary Brandenburg speak on leadership and vision.  I found his insights encouraging, challenging, and applicable, not only in a church planting context, but also in business.

Let’s briefly unpack his main points.

• Exegete the Culture

  • “A culture can be defined as the sum total of shared experience.” Gary makes a valid point.  As window treatment professionals, do we know our customer profile? Who are we trying to sell to?  Furthermore, does the culture we currently are engaged in needwant what we have to offer?  Most of us aren’t in the business of selling people what they don’t want, so if we are positioned in a culture that doesn’t want our products we either need to move social spheres, change our product lineup, and/or influence the culture in a positive direction.  Whatever the case, KNOW YOUR CUSTOMER PROFILE!
  • “Pay attention to the power of shared experiences.” Consumers talk. Are YOU listening? Are you responding to their needs?  Are you promoting your product / service in a way that speaks to their experiences?  How is your vision for your company reflected in this? Great vehicles for exploring what people are talking about include becoming engaged in online conversations via Blogs, Twitter, and other new media.

• Establish Your Priorities (& Communicate Them Wisely)

  • My mother raised me on a very basic maxim: “If you aim at nothing, you will hit it every time.” My father further built on this foundation by reminding me to “establish what is central.  If priorities are like a dart board, determine what is central and then spread out from there.”
  • “Remember that early statements have a disproportionate impact on how you are perceived.” Gary’s reminder is potent.  At Sewell Shutters, it’s almost comical the way a number of our brainstorming sessions take form.  Doug Sewell, our Production Manager Jimmie Byers, and I will regularly find ourselves discussing future investments, staffing issues, pricing considerations, etc. and inevitably someone will at one point in the conversation call a timeout and declare emphatically “Now, we’re JUST TALKING here!” Point of fact, I’d feel like something is missing if that line didn’t come out during a meeting!  The reason for this is that we’ve all learned in the past that what one person proposes for consideration can easily be taken by someone else as a statement of fact.  I remember one time Doug and I discussed moving one department under my supervision.  I took it as a done deal, and the next day (while Doug was out of the office) proceeded to inform the department of a policy change.  They, however, weren’t appreciative of the move, and I was soundly correctly upon Doug’s return with the now famous “I was just talking!”  Vision casting take-away: Remember that what you consider inconsequential  may be received as earth shattering to your constituency (employees, customers, vendors, and even competitors).  CHOOSE YOUR WORDS WISELY!
  • “Don’t promise too much too soon.” We’ve all heard the warnings about over promising and under delivering.  There is definitely truth to painting a wildly wonderful vision and giving it too short a timetable.  For example, declaring that we will relegate our top two competitors to the dust heap of history by next month might be a little ambitious.  Furthermore, when it doesn’t come to pass, low level disappointment can set in and trust is damaged.  The flip side of this is to under promise and over deliver.  While this definitely helps to protect us from the downside, it also can adversely affect potential growth, especially as we develop a reputation for being overly cautious.  The solution is striking a balance.  Envision Confidently and Deliver on that Vision! In other words, lay out the plans for a spectacular tower, calculate the costs, be reasonably confident you can afford it, and then begin construction.

• Plan Your Preaching (or Promotion)
  

  • “No pastor ever plans to fail but many fail to plan to succeed.” Strategically written and promoted content is king! If you hope to lead your constituency toward reaching the vision you’re laying out, it is imperative that you plot out a timeline of targeted messages that build on each facet of the vision while continually reminding people of the the overall goal.  For example, Gary loosely plans out his sermons six to twelve months out.  At Sewell Shutters, we are constantly looking into the future and planning content that will further build on our vision.  Be on the look-out for an e-book we plan on releasing closer to the fall!
  • “Preaching provides three weekly opportunities.” Gary refers to Aristotle in listing these opportunities as establishing credibility, communicating competency, & casting a clear and compelling vision. Aristotle teaches that successful rhetoric has three aspects: Ethos, Logos, Pathos – or appeal based on character, logic, and emotion.  Your marketing content should establish your credibility, persuade consumers with objective logic, and move them to action through emotional appeal.

BOTTOM LINE: Establish your vision considering the culture, carefully establish and communicate your priorities, and strategically develop marketing content that spreads your vision to your sphere of influence.