Word on the Street by Kevin Carty
An Open Letter to Custom Houses
This week, I want to address a particular group: Custom Houses.
Classic Exhibits has been in business since 1993. Over those years, Custom Houses have been some of our best customers, not only for Classic Exhibits, but also for ClassicMODUL and Classic Rentals. For that we are very thankful. But I have a question for this group — How do you view “system sales” and manufacturing as we roll into 2012? Whether it’s simple systems like a pop-up, modular systems like the Euro LT Laminate, or more complex systems like custom hybrids?
I had a conversation this past week with someone whom I respect not just professionally but personally. He owns a well-respected custom house on the East Coast, and I feel fortunate to call him a friend.
We were talking about adding a new employee to his organization. This person would be responsible for handling system sales for their existing accounts as well as regional outreach to new sales. In the course of our call, we chatted about the current impression of “systems” with his AE’s as well as within other custom houses in his area. His comments were both refreshing . . . as well as bewildering.
As the owner, he was interested in adding someone to lead systems sales in his company. His reasons? First, he views 10×10, 10×20, and 20×20 sales as foundational business, meaning, in his words, “Someday that client will grow with our help and will need a large custom build.” Secondly, because custom AE’s will often take a lead on a smaller exhibit but not pursue it aggressively, he needs someone who would — especially for their in-house clients. Just that week, one of his custom AE’s got three system leads on Monday but hadn’t contacted them by Friday. Thirdly, you never know when one of your in-house clients will go elsewhere for their smaller exhibit needs. The “elsewhere” may be able to handle their larger custom needs as well. Then he loses the client entirely.
I don't get it!
Confused and Bewildered
I’ve been at this for 17 years. During that time, I have grown to appreciate our custom house distributors. Not just for the business they bring to Classic, but also for the challenges they bring us, challenges that force us to think outside the box and grow our manufacturing capabilities. But I have also always questioned the mentality that says a 10×10, 10×20 or small island is not a viable sale for a custom house because “that’s not what we do.” That bewilders me particularly when looking back at the past 36 months.
So, respectfully, I ask why? Why not see the value in smaller sales? For revenue purposes, current client retention, and/or new client development? I know many of you know what I am talking about because you do see systems as valuable. But some of you don’t, so I am curious why?
I’m going to offer some advice, not because I’m smarter than you, but because I’ve worked with more than 100 custom houses over the past 17 years. If you own a custom house, manage a custom house, or simply work for a custom house, AND you care about retaining your customers and you care about selling display solutions, regardless of the size, here’s what I’ve learned from those custom houses that are successful.
I know this is going to rub some folks the wrong way, but margins are margins. Successful custom houses want to make money and recognize that 40 percent for doing very little such as processing a $9000 portable hybrid is $3600 they didn’t have before. Plus, if they store the exhibit, the money just keeps rolling in. I’ve never fully understood the logic of turning away business if the business doesn’t “turn saws.”
Closing a sale, whether it’s a custom sale or a portable/modular sale, takes expertise. You have to know what you’re talking about, and you have to engage the client. Successful custom houses designate someone in-house as the “systems expert.” That person either does the selling or serves as the project manager for system sales. They know that the Perfect 10 assembles without tools, and that Aero Table Tops pack in a lightweight shoulder bag. They understand the difference between a Quadro S and a Quadro EO. It’s their job to know and that knowledge makes portable/modular sales painless and profitable.
Those custom houses that expect a custom AE to know about portables . . . and to care about portables . . . always fail. We’ve seen it time and time again. I can show you example after example where an in-house systems expert leaves and annual sales plummeted from $800,000 to $80,000. Some days I think I could make a living just consulting custom houses on how to make $600,000/year just by hiring a $55,000 sales person.
Relationships matter with your manufacturer. Many custom houses view portable/modular manufacturers as necessary evils. They don’t respect what we do, and frankly, that attitude is insulting. It’s our job to make your job easier. Truly. We want you to sell our products, which is why we provide you with free design services, project management, and comprehensive marketing tools. When you bounce around from manufacturer to manufacturer, tossing an order to this one or that one, never learning the products or developing a working relationship, it becomes a self-fulfilling prophecy. Systems sales become bothersome and hard.
Yet, they aren’t. Those custom houses that work with us all the time tell us that we make their lives easier. We get to know them. They get to know us. The communication shortcuts develop and the work is fun. Over time, they rely on us for rentals, aluminum extrusion, economical custom components, and systems. We become partners.
We’re not all the same, any more than custom houses are all the same. Each company has a distinct culture as well unique products and designs. You need to find a company that matches your culture and your client’s needs. We hope it’s us . . . but it may not be. We can’t be all things to all people, nor does our style fit all custom houses. That’s OK.
This isn’t really a rule, but a promise. We work our asses off every day. Our designers are creative, our project managers organized, personable, and smart, our production team inventive and caring, and our administrative staff loyal, knowledgeable, and helpful. We can’t convince every custom house to see us as “partners,” but we can (and do) operate our business as if they are partners. That’s our promise. That’s who we are.
I would love to hear from you whether you agree with me or not. Please share your comments.
Let me leave you with something someone said to me at TS2 in Chicago back in 2009. I asked them how business was and how they were still maintaining sales in the recessionary economy. At the time, they managed one of the largest locations for a National Custom House. The answer, “I woke up one morning after we had lost a few big opportunities to shrinking budgets, looked in the mirror and said ‘I am a systems sales person’. And it was hard, but if we were to maintain sales levels I knew we had to do it.”
Many of the clients they gained during that period now have larger budgets and are buying very large custom programs in the new recovering economy!
Hope you all had a great weekend!