Once considered a flashy sales tool with a debatable return on investment, showrooms are fast becoming the norm in the building material supply industry. Why? Pro dealers that have recently pulled the trigger on a showroom/design center investment are finding that they're not just about window-dressing anymore; increased revenues, higher margins, openings into new customer segments, and value-added opportunities such as installed sales go far beyond the glitz. For these pro suppliers, the showroom is the sales bull's-eye.
“The biggest reason we built our showroom is because our customers dictated it. They're demanding a place where they can touch and feel and operate a product,” says Steve Coleman, president of single-unit, $15 million Alcoa, Tenn.–based Anderson Lumber Co., which boasts a 6,600-square-foot showroom featuring windows and doors from Andersen and Eagle, flooring from Boen and Alloc, Tamko roofing, and ABTCo. siding.
“Years ago I thought showrooms were probably a little bit of a luxury and pretty expensive, but I don't think that way anymore,” says Coleman, a 35-year industry veteran who estimates it took five years to recoup his $600,000 investment in the facility. “I'd do it again in a second.”
Other pro dealers that have recently launched showroom ventures agree, and they've got the increased revenue to back it up. Take San Antonio, Texas–based Allen & Allen Co. Lumber & Hardware, for example. The $20 million, two-unit firm has seen sales jump 30 to 40 percent among the lines it shows at the $2 million, 10,000-square-foot showroom it launched on the city's booming north side in 2001.
Then there's Danvers, Mass.–based Gove Lumber Co., which nearly doubled sales to $9 million company-wide since opening its $800,000 Marvin Window and Door Showcase two-and-a-half years ago. “It's been a great asset for us, especially as a smaller company, to create a niche market and really build our business,” says Sandy Gove, vice president of sales and marketing at the two-unit operation. “With what we've done, we are the proof in the pudding.”
New Business Models Of course, deciding to build a showroom is a business decision, and the pro dealer that takes the showroom route needs to think about where the new facility fits into the business fiscally, not just physically.
“We spend a lot of time up front talking to people about the business model itself before we'll go ahead with [designing and launching] the Showcase,” says Keenan Burns, vice president of Enfield, Conn.–based A.W. Hastings & Co., a two-step distributor of Marvin windows and doors that's dedicated to helping its dealers set up the manufacturer's signature Showcases, which exclusively display Marvin products. “You really have to decide: ‘Am I going to have this be complementary to my business, or am I going to actually have this be a business [of its own]?'”
The decision can be a critical one, because for the boards-and-boots pro dealer, opening a showroom means extending customer services and sales efforts beyond the traditional contractor account. Your new customer is more likely to be a client sent by your pro customer, including architects, designers, and high-end/high-maintenance homeowners. Unlike taking another faxed-in order from a contractor who needs 10,000 board-feet of Southern yellow pine, the showroom model often involves more sophisticated sales efforts on the part of the dealer to close the deal.
“With contractors, it boils down to price,” says Jim Tener, a regional sales manager for Dubuque, Iowa–based manufacturer Eagle Window & Door. “But when you're selling a homeowner a $70,000 window package, you have to present a certain image to them.”
Which means you'd better bone up on your customer service and get your sales force up to speed, because the consumer is a whole different breed of buyer, he adds. “When that homeowner comes in to see us, she's been on the Internet and she's already got a notebook full of specs,” explains Anderson Lumber's Coleman. “She has a lot of product knowledge, and she knows what she wants. If you don't keep updated, you're going to know less than she does, and that's going to make your contractor look bad.”