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Creating Long Term Success by Differentiating Your Firm

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Creating Long Term Success by Differentiating Your Firm Creating Long Term Success by Differentiating Your Firm Chris Ramey Stairbuilders and Manufacturers association April 25, 2018 Santa Fe, New Mexico USA “Differentiation is one of the most important strategic and tactical activities in which clients must constantly engage. It is not discretionary. And everything can be differentiated, even so called ‘commodities’ such as cement, copper, wheat, etc.” Ted Levitt Harvard Professor Considered one of the ‘Fathers of Marketing’ What do Blockbuster, Sear’s, Borders & thousands of other business have in common? They failed to recognize the future. Major Influences . Technology . Poverty . Terrorism . Economy . Demographics . Consumer trends . Online purchasing . Standards of living . Healthcare . Politics . Renewable resources Unemployment . Growth of Asia . Capacity for credit Home affordability . Design trends Remote customers . Divided government . Demise of bricks & Consumer confidence . Unemployment mortar . Inflation . Excess real estate . etc. Spending by Age of Head of Household $50K $40K $30K $20K $10K $ 0K < 25 25-34 35-44 45-54 55-64 65 + Henry Dent “The Roaring 2000 Investor” Shifts in population “In the years to come, millions of people, thousands of businesses, and tens of billions of dollars of net income will flee high-tax blue states for low-tax red states.” Wall Street Journal April 24, 2018 Shifts in population “In the years to come, millions of people, thousands of businesses, and tens of billions of dollars of net income will flee high-tax blue states for low-tax red states.” Wall Street Journal April 24, 2018 Disruption Usually occurs when someone outside the category rethinks the category. With stairs, it’s a battle for the attention of the consumer. Creating Long Term Success by Differentiating I. Your brand is sacred Your brand is the sum of every touchpoint; everything you, and everyone in your company does and creates. We’re going to lose to brands: • Kitchen appliances • Washers and dryers • Mattresses • Decorative plumbing/bath • Passion products (jewelry, cars, art, apparel, etc.) Creating Long Term Success by Differentiating I. Your brand is sacred II. The past doesn’t reflect the future The luxury market grew 14% in 2015* ‘Designer Furniture’ lags most categories. * Inserted slide is from Bain & Company ‘High-Quality Design’ lags most categories. * Inserted slide is from Bain & Company ‘High-Quality Design’ continues to lose share of luxury dollars. * Inserted slide is from Bain & Company 1. Travel hospitality $45b 19.2% 2. Automobiles $40b 17.0% 3. Art $25b 10.3% Passion products 4. Jewelry Watches $25b 10.3% and objects 5. Private aviation $23b 9.8% 6. Yachts $22b 9.4% 7. Apparel $15b 6.4% 8. Accessories $12b 5.1% 9. Home $ 8b 3.4% Insignificant 10.Wine / Spirits $ 8b 3.4% 11.Food $ 7b 3.0% Bought often 12.Beauty $ 4b 1.7% Total spend $234b You don’t sell to the affluent They choose to buy from you. The only thing certain is products for the home are diminishing in importance as they’re neither passion products, recognized brands or bought often. We are ‘bottom of mind’ businesses. Competitive advantage is increasingly based on an organization’s ability to change. What makes you better/unique/innovative over than any competitor? 1. Service 2. Quality 3. Selection 4. Price The most grievously overused terms in business That’s what everybody says... What do you have that is unique, distinct and special that I can’t get anywhere else? Who cares about another ‘me too.’ That’s what everybody says... What do you have that is unique, distinct and special that I can’t get anywhere else? Who cares about another ‘me too.’ Hyper competitive environment Successful brands are… “changing the rules of the game to embrace the new values of the customer.” Claudia D’Arpizio Partner Bain & Company Creating Long Term Success by Differentiating I. Your brand is sacred II. The past doesn’t reflect the future III. Identify and communicate your USP/DNA/POV ‘Hamlet’ Act IV, Scene III Two choices in business: 1. Own and market your unique DNA 2. Be a commodity “Instilling DNA is essential to brand sustenance.” Luxury Daily February 11, 2014 Every touchpoint is an opportunity to differentiate/demonstrate your DNA. If you only do whatever the client wants then they need hire only a handyman. What do these individuals have in common? • Kelly Hoppen • ZZ Top • Dolly Parton • Karl Lagerfeld • The Beatles • Moe Howard My Way Recorded by • Paul Anka • Samantha Jones • David Bowie • Shane MacGowan (The • Herman Brood Pogues) • Mika Nakashima • Gabriel Byrne • Mina • Jay Z • Oscar the Grouch • Jon Bon Jovi • Elvis Presley • Julio Inglesias • Frank Sinatra • Sid Vicious (Sex Pistols) Creating Long Term Success by Differentiating I. Your brand is sacred II. The past doesn’t reflect the future III. Identify and promote your USP/DNA/POV IV. Be a marketer Anonymity is a poor strategy. "Because the purpose of business is to create a customer, the business enterprise has two - and only two - basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.” Peter Drucker The Practice of Management In a competitive market, the best marketer always wins. In a competitive market, the best marketer always wins. Stairbuilders and manufacturers are not excluded from market forces. “Shifted from a society of many long-term loyalties to a society of transactional relationships and ephemeral contacts.” Timothy Keiningham Lerzan Aksoy əˈfem(ə)rəl/ Lasting a short time. Creating Long Term Success by Differentiating I. Your brand is sacred II. The past doesn’t reflect the future III. Identify and promote your USP/DNA/POV IV. Be a marketer V. Serve design professionals; you need each other You don’t sell to design professionals They choose to buy from you. Architects and Interior Designers provide value by being experts in their category: . Selling or specifying your brand . Acting as your brand Apostle . Increasing your sales and profitability . Stakeholder in your business Considerations • The most important brand in your life/showroom is your Interior Designer’s brands and your Architect’s brands. • You curate to their needs. Each profession brings different responsibilities, perspectives and challenges. What creative people are really good at: 1.Observation 7.Creating narratives 2.Framing problems 8.Envisioning unseen opportunities 3.Prototyping solutions 9.Casting visions of future. 4.Working with imperfect data 10.Synthesizing information 5.Focusing on people 11.Systems thinking 6.Caring about details 12.Abductive (logical) thinking ‘Business Needs Design Now’ by Stephen Anderson I’m going to create the most amazing home and stairs ever designed. And I’m going to protect my client to ensure they get a good value. An architect is a person who plans, designs, and oversees the construction of buildings. To practice architecture means to provide services in connection with the design and construction of buildings and the Architects space within the site surrounding the buildings, that have as their principal purpose human occupancy or use. The budget is tight. My subs are great, but the client hated the decorative plumbing. Back to the drawing table. I better go to …. An Interior Designer must comply with state and local building codes, including building and energy codes, indoor air quality and the Americans with Disabilities Act requirements, among other health and safety issues. Interior designers are trained to work in a specific element of the built environment — the interior space within the building envelope — and have accrued years of education, training and experience to become experts in interiors. Unlike many architects, interior design students take classes in anthropometrics, schematic interior design, furnishings and finishes, lighting and many other courses specific to interior Interior design. Designers Are tested to ensure and affirm specific knowledge, skills and abilities. What do Interior Designers provide for consumers? According to ASID, an interior designer provides real value by: • Saving you time • Sharing sources and resources • Answering your questions ASID website What are their credentials? Architects: 5 year degrees; Explorer 20%, Engineer 60%, Creative 20% Interior Designers: Educated; Explorer 30%, Engineer 20%, Creative 50% How do they make money? Architects: Interior Designers: What do they need from you? Specific information, bandwidth, fast answers, samples, images, communication skills, ideas to make them look great, etc. Quick, fast and to the point Raison d'être 1. Good Service is cost of entry 2. Measurable superior quality 3. Expanded Brilliance & perspective 4. Price doesn’t matter as much because nobody does what I do. Commonalities? Resourceful team Your firm’s strengths/traits Architects: Interior Designers: Know and empathize their plight Architects & Interior Designers • Hyper-competitive market filled with poseurs • Profits are squeezed • Starved for time • Legislative battles • Consumers are less inclined to commission design professionals Architects & Interior Designers Join their tribe(s) Organizations • ASID – American Society of Interior Designers • IIDA – International Interior Design Association • IDS – Interior Design Society • Preservations Society • Institute of Classic Architecture and Art • Etc. Architects & Interior Designers Intellectual resource What do you know that mitigates risk? What do you know that mitigates risk? • Expertise
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