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Wisdom in brief, Fall 2012

Material Insights rules. Here’s a summary of the last four posts that’ll get you the scoop and get you going to a faster finish. If you’re still craving more, there’s a link to the original post following each new rule.

Fresh finishing business insight condensed for a quick read.

Also, we took the summer off to completely revamp the Material Insights blog so you might notice the gap between dates of the posts related to Rules #1 and #2 below.

New Rule #1:
A RARE message for your finishing business

Positioning helps you select the kinds of customers you desire for your business. When you control the message that shape people’s opinion, your company will 1) stand out from the competition and 2) create a special place (position) in the customers’ mind.

To improve your positioning, work on what you’re putting out. Create messages deliberately. It’s a critical and strategic exercise that warrants persistence and knowhow—but it’s not easy.

Anyone can have a website, launch an email campaign or blab about themselves at a trade show. But if you want to create messages that give back control, make them RARE. Make your messages:

  • Relevant—minimum requirements are reliable, credible and appropriate
  • Authentic—customers are well informed/keep it honest and genuine
  • Resonating—people are pressed for time/make it interesting and engaging
  • Enhanced—raise the value of your messages/offer a benefit

“Consistency” is missing but it should be obvious and therefore doesn’t make my short-list of “RARE” must-haves. Want to put it in overdrive? Create messaging that is RARE and “timely.” It’s unbeatable!

[Read more. See “4 Ways to gain control of your finishing business”—May 2, 2012] 

New Rule #2:  
A designer’s take on “Kitchen trends”

“Kitchen Trends” is a regular report produced by Becker Acroma. In this post we wanted to see if the marketplace was agreeing with the observations and predictions published in the company’s December 2011 report (almost a year later). To do this I called upon Julie O’Brien, a very respected, very successful interior designer who targets the high-end, custom residential market to respond. Here’s an extract from the post:

Becker Acroma stated:

Dark stained finishes continue to be most popular among industry professionals, while white painted and medium stains are vying for second place. Glazes, though decreasing in popularity, are still specified by kitchen designers followed by colored paints and light colored stains. Distressing techniques continue; but are subtler and not as popular as the aforementioned offerings. Look for driftwood grays to increase their presence.

Julie O’Brien, designer, responded:

“The big change, or trend if you want, is the move to cool neutrals. Those hard to identify colors except to say they’re neutral in hue. Of course neutrals have always been popular but now they’re shifting from warm to cool tones. That creates a ripple effect because the cooler tones accept colors like the blues or purple and purple-gray. We’ve seen the blacks and browns emerge over the past 10 years in furnishings, now you see it in more permanent materials and finishes. I think the aging and distressing look has earned its place but the trend has passed in favor of more lighter, cleaner lines and finishes.”

O’Brien summed it up, “The public is not 100 percent foolproof though predictions over the long haul have always been very close. It takes a while to see if the public agrees—and their response is usually an emotional one.”

[Read more. See “Customers dictate kitchen trends that stick”—August 29, 2012 

New Rule #3:  
Without trust no one cares about you or what you’re offering—not really

To be effective in sales, we have to cut through customer’s natural defense barrier and convince them to care about us.

Customers ultimately choose who they buy from on an emotional basis. As customers, we care about ourselves. Ultimately, we’ll choose a product based on how we feel about it. The decision to buy depends upon how much we have learned to trust the seller.

From a sales point of view, if we try to close before we’ve established trust we can only hope for a transactional relationship. The mistake is the seller believing the buyer will act on a purely rational decision—he will not. A strategic relationship is the alternative and it is superior because it generates a lasting revenue stream and it leverages resources. The best “transaction” occurs when we focus on the customer to build trust. The result is a budding strategic relationship that creates a habit of commitment (the transactions you seek) and a higher level of emotion and respect.

Forget today’s transaction and think longer term. Create trusting relationships—a strategic bond between you and your customers.

[See “Two ways building “trust” delivers consistently more”—September 21, 2012] 

New Rule #4:  
Two ways to finish with a profit

Sometimes not making a profit is your own undoing. Ye olde business, at least the way it’s currently functioning, may be what’s robbing you of a fair take. To stop the assault add perspective. The trick is to seek the feedback that fits both your comfort level and your business model.

Profit is rarely inconspicuous to the small business owner. But when it becomes harder to find, there’s more than one way to adjust your perspective.

The micro approach

When finishing is just one of your deliverables you can try narrowly analyzing that process “separate from the rest of a job.” It may help illuminate system flaws or production waste that were previously inconspicuous. If finishing makes up more than say 10 percent of total revenue, consider also how similar or dissimilar your finishing orders tend to be. If you’re finishing doors or other similar flat line work day in and day out you’ll likely benefit from a micro perspective.

The macro approach

In the blog I offer eight different suggestions on how to improve your profit. Here are three:

  • Embrace the 80/20 rule—80 percent of your profit will likely come from just 20 percent of your customers. And, the opposite is true: 80 percent of your variable operational costs can likely be attributed to the 20 percent as well
  • Know what productivity looks like—the line might be moving along smoothly but if defects are piling up on the end that’s not employee utilization
  • Be careful what you outsource—adjust the way you engineer your product to match your business model. If you outsource pre-finished doors does it make sense for you to finish the boxes? Or, if you could turn a job in half the time by paying someone else to do some part of it, would you profit more in the end?

[Read more. See “Two approaches to profit for the small shop”—October 16, 2012] 

Look for “New Rules” each quarter. Stay with us.

I welcome your comments, questions or more discussion.