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How to Make Your Design Studio Profitable
 Operating a design studio can be an intimidating prospect. If it’s handled poorly, the design studio won’t be profitable.
But when it’s done well, your design studio will be one of the smartest investments you can make ― both financially and from a customer satisfaction standpoint.
My company is often hired to salvage poorly operated studios. We’ve seen just about everything that can be done wrong and we've offered builders dozens of ways to increase the effectiveness and profitability of their studios.
If you want to enhance customer satisfaction and improve the effectiveness and profitability of your design studio, you should focus on making improvements to one — or, if need be, all — of the following fundamental aspects:
- What to Sell: Offer the right products — and increase their perceived value.
- How to Sell: Improve the buyer experience and your sales process.
- How to Show What You Sell: Upgrade your design studio environment.
What to Sell: More Is Not Always Better
Your options list should not reflect everything you’ve priced out in the last five years, nor should it include every product your vendors have ever dropped off in your showroom. Your list should include a reasonable array of strong choices that will yield good results for you and your customers. It should not be overwhelming.
To be successful, your list should only reflect options that:
- Buyers are actually buying
- Yield your minimum acceptable profit level
- Don’t cause delays, problems or costly mistakes in purchasing or in the field
Fully analyze your list and add, delete, repackage and reinvent as needed.
- Stay Ahead of the Trend Curve
Analyze what buyers are buying and why ― and then use what you have learned.
For instance, promote your ability to be a leader in design and innovation by showcasing a “Hot Choice” of the month or quarter. Explain why this option is hot from a trend and a performance standpoint. This is what customers want to know.
Also, offer a special purchase opportunity. If you aren’t offering glazed cabinets, frieze and patterned carpets, warming drawers, iron and wood railings, oil-rubbed bronze or brushed nickel faucets and hand-scraped wood floors, then you’ve been leaving a lot of money on the table.
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A gourmet kitchen, drop zone built-in and laundry room; Touchstone Homes Design Studio. Photo by: Chris Voith | Buyers want options, but most don’t want to spend three hours custom-designing a kitchen cabinet layout from a choice of 75 cabinet styles and finishes, plus 25 a la carte cabinet accessory items, plus four boards filled with cabinet hardware — you get the picture.
Instead, put your energy into staying on top of the trends, analyzing your option sales data and then offering the right styles and finishes that will satisfy the majority of your buyers.
Pre-priced, themed packages (Chef’s Kitchen, Kitchen Convenience, Black Tie Kitchen, etc.) are great ideas that help streamline the process while giving buyers options to consider.
Also, when displaying your options ― your cabinet accessories, for example — have them in pre-determined locations for every single floor plan you offer.
How to Sell: Make It Easy
Why do we make it so painful for our buyers to spend money?
Why do we confront them with overly complex procedures; options lists that need an abbreviation-conversion chart or are presented in purchasing terms; price lists that require a degree in algebra to figure out a counter or flooring price; and unlabeled products?
Think about what adds frustration to the buyer’s experience and then spend the time and money required to make it easy for them to decide ― and buy.
- Use ‘Value-Building’ Nomenclature
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Fireplace lounge; Touchstone Homes Design Studio. Photo by: Chris Voith | Wouldn’t your buyers be more excited about a “Designer Staircase” than about “adding bullnose to stairs?" Wouldn’t they be more inclined to buy a “Laundry Room Workstation” than to “add counter to laundry room?” And who wants to tell their friends they bought CBLHP74A-BN? But they won’t hesitate to tell their friends they bought a “Brushed Nickel Faucet Package” for all the bathrooms.
Emphasize “personalization” and “choice,” not upgrades and price. Don’t even use words like “option” and “upgrade.” Instead, let your buyers know they can choose from a wide array of “included features” and “available personal choices” to personalize their home and fulfill their needs.
The number-one buyer complaint we hear is, “We felt rushed.”
Statistics have shown a direct correlation between the amount of time buyers spend in the design studio and the amount of money they spend on options. And more is better (up to a point).
So, be sure to schedule enough adequate preview time for your buyers prior to their design appointment.
An effective preview should include:
- An orientation tour
- A complete options list with prices
- Enhanced option descriptions
- Product facts, data — and explanations ― to aid buyers in making informed decisions
- Advance information to properly prepare them for a productive design appointment
A buyer who barely has enough time to “order” the required components of his or her home is a buyer who has not had the opportunity to really create his or her dream home. (Note: That buyer will then have lots of time to spend lots of money after closing.)
- Implement Design Consultant Training
We often see design consultants who are too timid to do more than take orders. Most consultants haven’t received the most basic sales training, let alone specific training on how to sell options.
Design consultants must be taught how to:
- Create and build value
- Suggestive sell
- Up-sell
- Use lifestyle and hot-button techniques
- Overcome common design studio objections
You owe it to your team to support them. Invest in training. It will pay off time and time again.
How to Show What You Sell: Create the Ultimate Design Studio
Bring your buyers into a breathtaking and visually-stimulating design center. This will motivate them to create beauty in their new home.
Don’t confuse visually stimulating with overwhelming, however. Buyers don’t want to be in a room where they can see hundreds of choices all at once.
Instead, create comfortable zones with site lines encouraging discovery. Create an easy, natural flow of discovery that supports your process, rather than sabotages it. Think about proximities. Allocate the appropriate amount of floor space to match the return on your investment.
- If You Show It — They Will Buy It
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Tuscan-inspired couryard reception area; Touchstone Homes Design Studio. Photo by: Chris Voith | Even displays of not-so-exciting products, like a central vacuum system or a 200 amp circuit breaker, still provide your design consultant an opportunity to talk about the benefits and value of these items. So don’t hide products in drawers or the back room. Show them.
Most design centers I visit have lots of unused space. Think of ways to put that space to good use.
A design consultant has to work pretty hard to turn a two-inch square of Corian into a $5,000 option purchase. Use large-size samples to show off your products.
If space permits, use merchandised vignettes to showcase products interacting in a real-life environment. This creates emotional appeal and stimulates desire.
Also, create concept boards to display your pre-configured, pre-priced kitchen backsplash patterns and bathroom tile packages. Provide a proper backdrop for every available product, too. Remember to use product photography, lifestyle photography and model home photography to motivate interest.
And this is one point I can’t stress enough. Never allow products to lean up against displays, lie on the floor or be strewn over your beautiful granite countertop. If it looks like you don’t think a product is valuable, why should your buyers think it’s valuable?
Retail shopping studies have shown that ownership begins when a shopper’s senses start to latch onto a product. Have that work for you by encouraging your buyers to touch and try the products so that they can become comfortable with them.
Let them see the multiple body sprays through the frameless shower enclosure. Let them feel the difference between a sun-drenched window with Low-E glass and another with regular glass. Let them hear (or more accurately, not hear) the quiet of your dishwasher. Let them build their own kitchen with an interactive cabinet/counter/hardware display.
Get them hooked.
Finally, be sure to treat your buyers with the respect and gratitude that they deserve. Make them feel special. When you put them in the mood to buy, they will.
Jane Meagher is president of Success Strategies, a Manalapan, N.J.-based marketing firm that specializes in a unique menu of marketing and sales consulting services for home builders. Meagher is a recognized speaker who has lectured on market research, marketing and merchandising. She holds CMP (Certified New Home Marketing Professional) and MIRM (Member of the Institute of Residential Marketing) designations and has taught courses for both. For more information, e-mail Meagher, or visit her Web site at www.opt4success.net.
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