My last post outlined FOUR SHIFTS resulting from the COVID-19 that I feel will have a big impact on lighting showrooms. They were:
- SHIFT ONE: Geographic barriers will weaken
- SHIFT TWO: Health and “staying well” climbs to top-of-mind
- SHIFT THREE: Trust established prior to in-person meetings
- SHIFT FOUR: Vendor & Showroom consolidation accelerates
This post addresses SHIFT ONE.
I studied product adoption life-cycles in my MBA classes. In simple terms, new technology tends to have adoption in phases. The “Innovators” (which make up about 2.5% of the population) adopt first, and they often adopt just because something is new…. even if it’s unproven. The “Early Adopters” (about 13.5% of the population) watch the innovators, and if things don’t look too bad they’ll switch without being compelled. The “Early Majority” (34%), and “Late Majority” (34%) come next, followed by the “Laggards” (16%) who won’t try something new until there is no other choice.
The Early and Late Majority don’t tend to jump until they’ve had a compelling reason to TRY something new. Unlike the Innovators, the majority needs to be compelled to try a new way of doing things. If it goes reasonably well… then they’ll make the switch.
That’s important. Prior to COVID-19, an estimated 13%-18% of lighting purchases were made online. The lighting industry was probably near the tail-end of the Early Adopter group relative to finding help and actually purchasing lighting online (though 84%-87% of consumers RESEARCH lighting online before buying… so that part of the buying cycle was already through the Majorities and down to the Laggards before COVID).
And then… quarantines.
In fell swoop, the Early and Late Majorities were compelled to go online for assistance and to do a lot more of their shopping. Includes for lighting fixtures (ready to or not). If they don’t have a negative experience, much of the Majority will stick now with an online-assisted shopping model.
The web doesn’t confine us to a geography, so people WILL jump outside their local market for assistance and to purchase lighting. Here is how I plan to adjust:
ADJUSTMENT 1 – BE THERE WHEN THEY’RE READY
Boy was I ever wrong.
Even though I’m a big technology guy, I thought I had plenty of time to adopt online communications tools like web chat etc.
COVID changed that idea in a hurry. We need to be ready to assist WHENEVER and HOWEVER potential lighting buyers are ready… and increasingly that means online communication via chat and responsive text, etc.
I’m moving as rapidly as possible to get up to speed and implementing the following:
(note: if you don’t have a website with up-to-date product and pricing… stop here… go get one. This may seem self-serving because I’m the founder of XOLights… but I promise you it’s not. Whether it’s Lights America or XO or something else, you need a website with continually updated product data and that’s just a reality. I genuinely feel showrooms who continue to lag on this won’t make it.)
- ONLINE CHAT
I added chat to our website a number of weeks ago and I’m astounded at how many good leads and sales we’re getting (yesterday we made a $350 sale off Chat in the first 5 minutes of business… all from items out of overstock). But what REALLY surprises me is how important online Chat is for PROTECTING EXISTING ACCOUNTS.
Very literally a few minutes ago I stopped typing this post to help a woman using the Chat tool on our website. She wanted to purchase two Westinghouse pendants right away. As I got her information I discovered that she’s building a new home with a custom builder we service. Her house isn’t close to being ready for lights but she was piecing together her lighting order online because she found some items she likes. She stayed on our site because we had a chat tool that allowed her to ask questions of a real human… if we hadn’t been there, she’d be chatting with and buying from someone else right now. (this is the 2nd time that’s happened in the last two days BTW)
Increasingly people want to communicate without committing to a visit or phone call. I’m going all-in on getting Chat up to speed on our website ASAP. The technology is cheap and has a great ROI (the hardest part is scheduling people on the showroom side to be ready to respond in-person… more on that in the bullet below).
It took a pandemic to show me how foolish I was to wait.
NOTE: Chat traffic doesn’t come without decent web traffic. Email me if you need help or ideas there (if you don’t know how to check your website traffic let me know – it’s free to set up Google Analytics).
- AFTER-HOURS COMMUNICATION
Many of the hottest leads come between 6PM and 11PM. That’s when designers aren’t on-site meeting with clients, project managers are at a computer searching for products and suppliers, homeowners are home from work researching styles, etc.
Now that I see how much chat is used, I plan to train someone who can “man” our chat AND text requests after hours (BTW many, many marketing experts are saying that responsive text is the next retail-communications wave… I’m moving on that now rather than wait like I did on Chat). An after-hours person or team needs enough lighting knowledge to filter out stuff that isn’t a legit sales opportunity (for every good sales opportunity there are multiple time-wasters) and then seamlessly hand quality leads off to the sales staff. I’m working on this in earnest.
(INVITATION: if you want to go in with me on this, send me an email. If enough showrooms go in together, we can drive the costs of daytime and after-hours chat and text down to something very manageable for each of us)
- GOOGLE AD-WORDS
I resisted Google Ad-Words for a lot of years. I thought Ad-Words were expensive and ineffective. They can be if you don’t know what you’re doing, but Google is really starting to bring the cost down and give preference to smaller local businesses.
There are a few keywords that you should definitely purchase. First is your showroom name for your local service area. That will likely only cost a few cents per click, and if someone local Googles your name directly, that’s a red hot lead that you don’t want finding anyone else.
I recommend that you also explore purchasing keywords for a few of the staple vendors and items in your area. I’m exploring even purchasing some of the common item numbers that my showroom and my local competition sells (if an electrician is installing a bunch of 5842MRSN flushmounts, and needs another to finish a job, there’s a decent chance he’ll Google the item number and I want him finding me first).
ADJUSTMENT 2 – HEDGE THE MIDDLE
Contractors and Designers that build between 10 and 500 homes per year aren’t typically large enough to warrant big national purchasing deals yet they usually don’t want the hassle of their customers buying online (tracking shipments, backorders, broken glass, walk-throughs, RGA’s etc.). I’m finding many remodelers and disaster recovery companies to be in the same camp.
I call these the mid-tier accounts.
I’m now working aggressively to pursue more mid-tier accounts and protect our existing mid-tier accounts by deploying CRM and a strategy we call QRS Service (more detail on both below).
In my view, the mid-tier is a safer foundation to build on for most lighting showrooms. E-tailers and publicly-traded blood-suckers like Amazon and Wayfair (that don’t seem to value profits) are plundering small-ticket retail sales away. Meanwhile, large-volume national builders are being courted away by vendors with national deals and big rebates.
Look for accounts that aren’t so big that they land on vendors’ radar but that are big enough to need deliveries, walk-throughs, quick-response service, and/or selection beyond a few packages. Showrooms add clear value to mid-tier accounts that is hard for anyone else to duplicate or compete with. It’s a good foundation to build on.
(note: we’ve used the “be the dog” pitch with HUGE success to pick up accounts in the mid-tier target. Here’s a post on that: https://showroomtips.litliving.com/sales-marketing/how-to-pick-up-high-value-accounts-by-being-the-dog/)
ADJUSTMENT 3 – QUICK RESPONSE SERVICE PROGRAM
My team and I are implementing a service protocol we call QRS: Quick Response Service.
When a client communicates a problem to us, our objective is to have an action plan back in their hands (literally… a message via text or email telling them in writing WHAT we’re going to do to solve the problem and WHEN we’re going to take the next action and report back) within an hour.
QRS doesn’t necessarily mean we plan on delivering replacement lights/glass/parts etc. within the hour every time there’s a problem (though we will if it’s truly needed). It means we’ll confirm understanding of the problem and time frames… and then communicate an action plan within an hour.
Communicating QUICKLY AND WITH A PLAN may not seem like a big deal, but it is. Here’s why…
The greatest challenge most of us face every day is OVERWHELM. We have so much to think about and keep track of all the time that it’s almost impossible TO keep track of it all.
We often can’t.
So we find solutions that allow us NOT to have to remember things or keep track of things for very long. I believe one factor driving Amazon’s growth in recent years is overwhelm. We need to get stuff coming and off our mind the moment we think of it (or we might forget it).
Think about it. The last time you thought of something you needed soon but not right away, did you wait until you were near a store in town? Maybe set yourself a task or reminder to pick it up later?
Or did you grab your phone and order it from Amazon while it was fresh on your mind?
Price or quality didn’t drive that purchase… overwhelm did. Getting the item ordered when it hits your mind gets it on its way and that lets you forget about it until it shows up at your door.
The QRS initiative at Hansen Lighting is built around rapid communication of an action plan. Then being stone-cold “consider it done” reliable following through and reporting back. Our goal is for clients to get problems off their minds as fast as they can communicate them. I’m counting on that liberated brain-space being so valuable to our golden-goose accounts that they won’t want to spend a single cycle even THINKING about going elsewhere… even for a slightly better price.
NOTE: I’m also developing marketing materials and a pitch around QRS to take to trade accounts we don’t service… yet. It’s part of our BE THE DOG pitch: “Even if you didn’t buy the lights from us we’ve got your back! Call or text our QRS number and we’ll have a solution in place in the hour!”
ADJUSTMENT 4 –
With “geography” barriers breaking down, relationships aren’t the most important thing… they’re EVERYTHING. At Hansen Lighting I’m moving us all-in on Client Relationship Management (CRM) software that doubles as our lead-tracking tool. My goal is to get EVERY quality lead, EVERY target account we’re trying to pick up, and EVERY account we service into our CRM so that we don’t let accounts or leads slip through the cracks. Ever.
Used well, CRM reminds when we need to contact each account and with what. It also helps stay on top of leads, never letting a good one slip away. CRM helps teams to be strategic (rather than random) in their communications and follow up. It also becomes a centralized “bin” for all useful information (contact info, history, previous communication, personal details, etc.) needed to build and maintain a quality relationship with each account.
(note: we’re using HubSpot CRM. It’s free and fairly easy to learn. If you would like me to set up an online training webinar on how to set up and use CRM like HubSpot, email and if there is enough interest I’ll put something together)
ADJUSTMENT 5 – DROP SHIP PROGRAMS
I’m planning to ask vendors to keep their drop-ship programs in place even after the COVID-19 tapers off, and to start utilizing those vendors who make drop-shipping easy and affordable for showrooms specifically. As we’ve started more consistently utilizing social media posts (I’ll have more on that in the post on SHIFT #3), our website Chat, our blogs, etc. I’m finding that we cannot prevent people from outside our local service area from asking to buy from us.
I intend to take full advantage of the vendor drop-ship programs while they last, and to ask that they make them permanent (I know that a LOT of vendors give e-tailers big shipping breaks).
ADJUSTMENT 6 – SHARED ONLINE MARKETPLACE
I won’t go into great detail here, but I’m working on a large e-tail marketplace FOR showrooms. An e-commerce website that rivals (in both functionality and marketing spend) the largest e-tailers in lighting… but I’m planning to push all sales through to local showrooms.
There are a few advantages we’ll have (collectively) over a stand-alone e-tailer:
- Local inventories. Items people can pick up immediately.
- The option to ship to showrooms rather than drop-ship (much more cost effective)
- Selection and variety (collectively, showrooms have access to far more brands/lines than any e-tailer)
- Local warranty & service
Email me if you would like more information on this initiative.
Jason Petersen owns Hansen Lighting Inc. a lighting company with multiple showrooms in Utah.
Jason acquired Hansen Lighting out of near-bankruptcy in 2004 and turned the company around by implementing outside-the-box systems and ideas. The company is now one of the fastest growing companies in America (#3087 on the Inc. 5000 Fastest Growing Companies list) and has been recognized as one of the most profitable privately-owned retailers in North America.
Jason is also the co-founder of XOLogic and Lit Living Inc.