“We aren't selling any,” Pete told us.
“Why not?” the owner asked.
“We aren't advertising,” Pete said.
“Why aren't we advertising?” the owner asked me.
“No budget,” I answered.
“Good point,” the owner allowed, then circled back to Pete. “We need sales so we can give it a budget.”
“So we can advertise,” I added.
“We won't sell any,” Pete stated again simply.
We were discussing our new product line—closet systems. It was a line that the owner himself had brought in, so he was very interested in seeing it take off. The idea was that since we sell interior doors and trim to our contractors, why not outfit their closets as well.
While it made sense to us, we were finding that our contractor customers didn't want to be bothered with closets. They wanted to finish the house, close on it, and move on to the next one. And our homeowner customers just never thought of us for their closets.
To address the first concern, we put a pricing program in place to make it financially rewarding for our contractor customers to put the closets it. But still, until the home buyer asked for it, the contractors weren't interested.
Which brought us back to Pete's point about advertising.
“Why not try a little advertising first,” Pete suggested.
“Oh no,” the owner said.
“Why not?” Pete asked.
“Can't put the cart before the horse.”
That was one of the owner's favorite sayings. He used it whenever money was on the line. He preferred to spend on things that had a proven track record. The investment, be it advertising, new equipment, or inventory, was the cart and the horse that drove the investment was the profit returned to the company.
When there was dependable return, he invested heavily, but he tried not to put the cart before the horse.
So with our new product line, we were stuck. Following the owner's rules, we couldn't invest in advertising until we knew there was some money to be made. But Pete didn't think the sales staff would sell a significant amount until we advertised.
Sometimes adding product lines doesn't require much additional monetary commitment. If it's a product category we already sell, it fits easily into our advertising budget, it's just a matter of pushing the new product instead of the old. But when adding a product or service that falls outside of the existing sales structure, it often becomes necessary to invest up front in advertising and marketing. I didn't think the owner really thought that through before he brought this new product offering into the operation.
“Well,” said Pete after giving it some thought. “We brought this product in so we wouldn't have all our eggs in one basket, right?”
“Go on,” said the owner.
“And we've already dangled the carrot for our contractors,” he continued, referring to our pricing program. “But they still seem to be letting a sleeping dog lie on the whole closet thing.”
“Well, no need to make a tempest in our teacup,” Pete continued, having finally found a language that spoke to the boss. “We just need to dip our oar in the water. Not a large investment, just one ad to get the ball rolling. That way we can keep our powder dry until we're ready to separate the wheat from the chaff, and go for broke.”
It was an impressive list of proverbial phrases as well as a logical argument.
“Good point,” the owner said. “We'll run some ads and see which way the wind is blowing.”
“And we won't take any wooden nickels,” Pete added.
“Don't press you luck,” the owner said as he walked away.
I was shocked. Pete had taught an old dog a new trick.