conclusion for my Assignment
The Countertop Shop
Internal and External Analysis, SWOT Analysis, Recommendations, and Implementation Strategy
Page Break
I. Executive Summary
The Countertop Shop is a privately-owned company based out of Monclova, Ohio that opened in 1990. The company started as a cabinet company that primarily did commercial work. Mike Langenderfer, the owner, later purchased another local business that specialized in residential countertops and in 2003 the decision was made to focus on countertops. Since then, The Countertop Shop has evolved to focus on residential work. Currently, Langenderfer described that 20% of The Countertop Shop’s business is builders, 48% is kitchen and bath dealers, 1.6% is commercial and the remaining 22.4% is residential work. The firm has 39 employees.
Three identified competitors of the Countertop Shop are Cutting Edge, Universal Marble and Granite, and Cameo Countertop, Inc.; however, there is little pressure from those competitors because they take a different approach targeting businesses and commercial builders. The Countertop Shop prefers to focus on the residential business. There is some additional competition from the big box stores, such as Lowes and Home Depot, in the residential business space.
The shop owner believes there is an opportunity to expand the direct-to-consumer, retail segment of his business. The company opened a new building in 2015 in a high traffic area off Airport Highway with a public showroom that recently underwent an expansion. The company estimated there was $30-35 million worth of countertops sold in the Toledo market last year and The Countertop Shop is expected to do $8 million in business in the coming year, which shows there is market share to be picked up. He emphasized that the retail segment of his company is underutilized, and he would like to be in a position where demand can match The Countertop Shop’s capacity. He is looking for guidance on how to accomplish this expansion.
One concern for The Countertop Shop is how the move into more of the direct-to-consumer channel may cannibalize sales from their current builders and kitchen and bath wholesalers. Furthermore, even though they have been accurate with their forecasts, this is the first year The Countertop Shop has a marketing budget so there is a lack of historical data to make an effective plan.
Our project goal is to design a market penetration plan that will help The Countertop Shop expand its regional market share of the retail countertop business. A strategic focus will be placed on marketing the business directly to consumers to increase sales. Preliminary discussions indicate that there are major improvements that can be made with web presence, advertising, and customer relationship management.
In order to formulate a market expansion strategy and an appropriate marketing approach for The Countertop Shop, it is important to understand current internal and external positions.
Internal Analysis
II. Internal Analysis
The Countertop Shop has been in business since 1990 and has been successful throughout the years, despite an economic downturn that impacted many businesses. The owner expressed his desire to expand the business, especially into the direct-to-consumer retail market. The company has made several decisions in recent years to support this plan.
Staff
The company has a team of dedicated staff members who are highly experienced at what they do. The front desk staff members are friendly and happy to assist new customers, but they are not aggressive in getting the sale. Customers are free to look around inside the store and browse options. While the sales staff would ideally like to have customers leave the store with a quote, that is not possible without square footage information. In lieu of a quote, customers are given a sample of the products and a business card and encouraged to return. The company also has a top management team that is highly experienced at business development and business administration.
Customer Relationship Management Software
The Countertop Shop uses a software program for countertop fabricators called Moraware, which markets itself as a program “to help fabricators quote and schedule millions of countertop installations every year.” The Countertop Shop uses Moraware’s scheduling software program called Systemize to share information about customers and keep processes moving. While the salesperson described this Moraware system as its customer relationship management program in response to a question, the software company doesn’t describe itself that way. While it does track customer information, the primary use of the software is to track and schedule jobs.
Customer reviews
The Countertop Shop has a strong word of mouth and referrals, as described by the owner, and a number of customer reviews publicly available support that narrative. According to one customer’s review, Scott Hall, who is an employee of the store, went above and beyond to make sure the customer was completely satisfied and included the manufacturer in the resolution of the issue. The manufacturers also responded quickly and efficiently. Amy, who is also an employee of the store, was mentioned to have gone out of her way to guide and advise customers on the right color, material and quality while operating under a strict time. As a result, they were very happy with the courteous customer service that they were extend to.
In addition to outstanding customer service, the firm also has been reported to have high quality products that are worthy of the customer’s investment. One customer mentioned that countertops commodities bring quality into a home. By this he meant that he could not compare the quality of the store’s commodities with those from another store since they were so different in terms of quality. He also added that the store offered highly competitive prices on most of their goods and would therefore prefer the store to others anytime.
Another positive review is based on the firm’s ability to offer one-stop-shop services. According to a review posted by a customer, the shop saved him time by providing all the services he needed right from purchasing of goods, installation and after sales services. He didn’t need to go around in search of other products from other stores since The Countertop Shop offered them all and they also had a variety to choose from. Also, the firm has been reviewed to have great displays of beautiful pieces to match according to your own taste.
When it comes to the negative reviews, The Countertop Shop was reported to have excuses for not being able to deliver on time. According to one disappointed customer, they love to use the “we have a new girl” excuse. She says that they failed to show up for an appointment and never bothered to call or communicate with her. This was highly disappointing for her. Also, as part of the negative reviews, the store was reported to be quoting false prices. According to this customer, she was overcharged without clear explanation of where the additional charges were coming from. She was therefore disappointed and rated the store negatively because of the bad experience.
The store also has been negatively rated for categorizing some customers to make them feel as if they would not be able to afford commodities such as granite. According to this review, the customers were rushed through and denied attention simply because they appeared simple. Their interests were not prioritized, and they ended up having a bad experience with the store.
Facility
The Countertop Shop moved to its new location on Airport Highway in Monclova, Ohio in 2015. This new location is on a state route with heavy traffic and allows incoming traffic full visibility of The Countertop Shop’s sign and building. According to the Ohio Department of Transportation, the average daily traffic for this part of Airport Highway is 15,500 to 20,500 vehicles. The new facility is divided into two areas: the retail showroom and warehouse and fabrication.
The Countertop Shop retail showroom leaves plenty of space for customers to move around and examine the materials while displaying excellent variety of countertop products. The easy to navigate store along with friendly but not high-pressure sales staff creates a comfortable environment for walk-in customers.
The company carries out in-house fabrication, which enables it to allow customization in term of size and shape when requested by customers.The firm also aims to get the most out of every piece of raw material. The leftover sections of the stone from cut counter top sheets, which are called remnants, are sold to low volume purchasers at a lower price. The company can reduce waste and salvage cost at the same time.
Marketing experience
Despite their eagerness to increase marketing expenses to further their expansion plan, The Countertop Shop acquires most of its clients through word of mouth and builders’ referral. The Countertop Shop has very little experience doing advertising beyond word of mouth. the only past advertising has been in small ads in the bulletin of the church that the owner attends. There is not much data on the company’s approaches to marketing, their costs, and the effectiveness of each approach on the company’s bottom line.
III. External Analysis
A better understanding of The Countertop Shop’s target market will benefit the firm as it looks to grow sales to meet capacity. Important facts about the target market that the company will need to be aware of include tastes, preferences and purchasing power parity, among a host of other things. What’s more, there is a need for the management to understand the impact of economic factors on the business.
Demographic Data & Market Size
The company is headquartered in Monclova, Ohio and information on the income of the population closest to its retail store will help management to begin to project what sales volume it can realize and the amount of work that should be put in sales and marketing (Madhavaram, Hunt & Bicen). According to the United States Department of Commerce, the average household earnings in Monclova, Ohio is approximately $109,189. The median income for the age group 45 to 64 is $90,682, which is the homeowner target customer age range.
Monclova, Ohio
Median Income Under 25
$ 19,315
Median Income 25-44
$ 75,566
Median Income 45-64
$ 90,682
Median Income Over 65
$61,125
Average Household Income
$109,189
Table 1: Household Income and Average Income by age group (U.S. Department of Commerce)
According to The Countertop Shop’s owner and sales representative, most customers are divided into two age groups; 60-65 and 30-35 years old. The United State Census Bureau’s 2016 American Community Survey reports a five-year estimate of 120,741 and 118,393 people who fall within the age demographics of 60-69 and 30-39, respectively.
The company’s location means it mainly serves customers from the northwest Ohio region, reaching as far as southeast Michigan. The area includes the following counties Lucas, Wood, Henry, Fulton, Ottawa and Sandusky in Ohio and Lenawee and Monroe in Michigan. Table below lists median household’s income in the region by county:
County
Median Households’ Income
Lucas County
$47,308
Sandusky County
$49,032
Ottawa County
$54,580
Henry County
$54,941
Fulton County
$55,860
Lenawee County, MI
$56,515
Monroe County, MI
$59,290
Wood County
$60,382
*Noted Lucas County has the lowest median household income in the region.
Data from the Census Bureau will help The Countertop Shop derive potential countertop market size within their targeted demographic and create reasonable forecasts for sales and marketing according to their position in this market.
Industry Trends
While specific data related to countertops and even remodeling is difficult to find, our team did find a few resources to assist with identifying trends.
Euromonitor Passport categorizes all home improvement together in the United States. Since the lowest point in 2009, spending on home improvement hit an all-time high of just more than $80 billion in 2017. A strong renovation market was partially due to a lack of new affordable housing. The prediction is that the market will continue to grow through 2022 when it will be as high as $95 billion.
The 2018 U.S. Industry & Market Outlook Report for NAICS 33711 – Kitchen Cabinet & Countertop Mfg. Industry by Barnes Reports also yielded some interesting trends and demographics. The estimated number of kitchen cabinet and countertop manufactures in the state of Ohio is 237 and Michigan has 142. Total estimated sales for Ohio is $452.4 million for Ohio and $119.2 million for Michigan. Total establishments estimated for Toledo, Ohio in 2019 is 13 with total estimated sales of $17.1 million.
Remodeling and new home construction
Although The Countertop Shop did not seem interested in expanding its business beyond the direct to consumer market, it’s important to look at the other market options for both new construction and kitchen and bath remodelers in the area. Table 3 show a sample of home builders in the northwest Ohio and southeast Michigan region.
Home Builders
Market Served
BBB Rating
Google Rating
Business Location
Decker Homes
NW Ohio / Michigan
A+
4.5
Lambertville MI
SABA Home Builders
NW Ohio
A+
5
Toledo, OH
Moline Builders
NW Ohio
A+
NA
Toledo, OH
Homes by Josh Doyle
NW Ohio / SE Michigan
A+
4.7
Whitehouse, OH
Mavillino Custom Home Builders
NW Ohio
A-
4.6
Perrysburg, OH
Table 3: Sample of home builders in NW Ohio / SE Michigan
Forecasting of new home construction or remodeling can help The Countertop Shop make long-term plans. The National Association of Home Builders has a Remodeling Market Index (RMI) that is updated quarterly from surveys sent to remodeler members of the association. The RMI survey asks remodelers to rate a variety of aspects of the remodeling market as ‘higher’ or ‘lower’ than three months earlier. Each question in the RMI survey is measured on a scale of 0 to 100, where an index number of 50 indicates equal numbers of remodelers report activity ‘higher’ and ‘lower’ than the previous quarter. Information related to the country and Midwest segment can be viewed in Table 4 below.
Period
NATIONAL RMI
Midwest RMI
1st Qtr. 2016
54
57
2nd Qtr. 2016
53
51
3rd Qtr. 2016
57
58
4th Qtr. 2016
53
56
1st Qtr. 2017
58
59
2nd Qtr. 2017
55
57
3rd Qtr. 2017
57
55
4th Qtr. 2017
60
58
1st Qtr. 2018
57
54
2nd Qtr. 2018
58
63
3rd Qtr. 2018
58
58
Table 4: RMI Index for nation and Midwest segment
Competition
The Countertop Shop is located in Monclova, Ohio. Its closest competitors are:
COMPETITORS
ADDRESS
DISTANCE
SALES (2017)
Cutting edge
1300 Flagship Dr.
Perrysburg, OH 43551
12.2 miles
NA
Universal marble and granite
27511 Holiday Ln. #101
Perrysburg, OH 43551
14.2 miles
457,053
Cameo countertop
1610 Kieswetter Rd.
Holland, OH 43528
1.0 miles
3,703,005
BIG BOX STORES:
COMPETITORS
ADDRESS
DISTANCE
SALES National (2017)
Lowes
5501 Airport Hwy. Toledo, OH 43615
5.1 miles
$68.61 billion
Home Depot
5900 W Airport Hwy. Toledo, OH 43615
4.6 miles
$100.9 billion
The Countertop Shop provided a list of its primary competitors: Cutting Edge, Universal Marble and Granite, and Cameo Countertop. In addition, big box stores such as Lowes and Home Depot also are direct competitors for the portion of the business they wish to expand.
Cutting Edge Countertops — Cutting Edge is the largest of the direct competitors with locations in Ohio, Indiana, and Michigan. The company has just completed a massive renovation and addition to its location in Perrysburg. The firm’s website is attractive and has helpful information for consumers. Online reviews are generally positive across Google, Yelp, Houzz, and Facebook and the company has an A+ rating from the Better Business Bureau.
Universal Marble and Granite — Universal Marble and Granite is located in Perrysburg and has only one location. It is difficult to gauge the size of the company and business from its website. Only three employees are listed under the team, but there must be more based on the company’s service offerings. As with Cutting Edge, reviews are generally positive on Google, Facebook, and Mapquest and the company has an A+ rating from the Better Business Bureau.
Cameo Countertop — Cameo Countertops has locations in Holland, Ohio and Grand Rapids, Michigan. Very little useful information can be obtained from its website, which is severely out of date with the most recently visible date on its main page listing 2008. Cameo has very few reviews online and an A+ rating from the Better Business Bureau. If it is a direct competitor, it’s not obvious where Cameo gets its business from.
Big Box Stores — Home Depot and Lowes have numerous locations through the northwest Ohio region. Each store has an area that can sell countertops to consumers. They have a large advantage in physical presence, number of locations, and market awareness.
While the owner of The Countertop Shop failed to fully identify the competitive environment they are in and other competitors in the countertop market. There are additional countertop companies that compete in the same geographical region as the firm.
Granite Palace Tops — Granite Palace has two locations in Toledo, Ohio and Plymouth, Michigan. The firm has an attractive website with consistent theme of color that is very informative, providing product information and clarity on the buying process. These components are superior to The Countertop Shop website. As of October 2018, details such as a discount coupon and free installation also are explicitly viewable on its website. Besides countertops, Granite Palace also features faucet and cabinet accessories on their website.
ABC Countertops – ABC is a small business located in Toledo, Ohio. There’s little information on the company and they don’t have an official website. The firm’s Facebook profile features photos of its products and past projects.
Granite Design – Granite Design, as its name indicates, only offers granite as material for countertop. However, it also does business serving kitchens, vanities, fireplaces and outdoor bar/grill. Its website is not as extensive as Granite Palace Tops; however, it does allow customers to view current inventory through a direct link to Dropbox, something unique to the firm.
To get a better idea of the competitive environment for countertops in the Toledo metro area, Table 5 shows information related to the companies’ online presence/performance:
Comapany Name
Yelp’s Rating
Google Rating
BBB Accredited
BBB Rating
The Countertop Shop
2
4.4
No
A+
Cutting Edge Countertops
4
4.4
Yes (Since 2006)
A+
Universal Marble and Granite
3.5
4.8
Yes (Since 2006)
A+
Cameo Countertop
N/A
4.6
Yes (Since 2010)
A+
Granite Palace Tops
5
4.1
Yes (Since 2015)
A+
ABC Countertops
3
4.3
Yes (Since 2001)
A+
Granite Design
N/A
3.1
Yes (Since 2002)
A+
Builder relationships
The Countertop Shop’s long-term plan is to be able to obtain customers on its own. However, when presenting his business plan at UT, the owner specifically emphasized his concern for potential competition for customers with their partnered builders. The business is highly dependent on builders’ referrals and The Countertop Shop currently has good relationships with its network of builders. It remains unknown if an aggressive push for direct-to-customer retail would damage that relationship and hurt the company sales in the near future. The company should continue to growth and strengthen its relationships with builders.
Construction and remodeling partners in the greater Toledo area include:
S.NO
POTENTIAL CUSTOMERS
ADDRESS
BBB
YELP
BUSINESS AREA
1
Canaan Companies Incorporation
328, 21st St.
Toledo, OH 43604
A+
5
1
General Construction
2
WS design Kitchen & Bath Studio
901, Jefferson Ave.
Toledo, OH 43604
A+
NA
5
Kitchen and bath Remodelers
3
Kitchen Design Plus
2729, N Reynolds Rd. Toledo, OH 43615
A+
1
5
Kitchen and bath remodelers
4
KSI Kitchen & Bath Toledo
6710 Central Ave.
Toledo, OH 43617
A+
2
3.4
Kitchen and bath remodelers
5
Handy Hubby
2010 N Reynolds Rd.
Toledo, OH 43615
A+
4
4.7
Home remodelers
6
Professional Remodelers Association
6755 Central Ave. #105
Toledo, OH 43617
A+
NA
NA
NGO Association for remodeling. Would be a great way to meet potential customers
7
Arnolds Home Improvement
1770, Termainsville Rd.
Toledo, OH 43613
A+
5
3.1
Home remodelers
8
Home builder’s association
1911, Indian Wood Circle
Maumee, OH 43537
A+
NA
5
NGO Association for remodeling. Would be a great way to meet potential customers
IV. SWOT Analysis
From the internal and external analyses plus secondary research, we conducted a SWOT analysis to identify the company’s strengths, weaknesses, opportunities, and threats.
Strengths
· Experienced sales staff
· Strong word of mouth business
· Established partnerships with builders and name-brand product suppliers
· New showroom in high-traffic area
· In-house fabrication that allows for customization
Weaknesses
· Lack of paid advertising experience to appeal to consumers directly
· Ownership unable to identify a specific target market beyond Toledo region
· Low quality website
· Lack of social media presence and engagement
· Public negative reviews of service provided by the firm.
Opportunities
· Targeted advertising in local media to increase name recognition
· Enhance website and leverage new content on social media
· Grow reputation with earned media exposure
· Spending on home improvement reached all-time high of more than $80 billion in 2017
· Average household income in Monclova, Ohio is $109,189
Threats
· Pushing into the direct-to-consumer market could affect relationships with builder referral business
· There are several competitors in the Toledo market with more sophisticated websites presence and difficult to compare value
V. Recommendations
In order to meet the goal of increased direct-to-consumer sales, The Countertop Shop needs a more robust outreach strategy to raise customer awareness about its products and services. The firm has traditionally relied on word of mouth and referrals from builders to bring clients to its doors, but it is now appropriate for the firm to add a push strategy to get it in front of consumers in addition to its previous pull strategy in which the customers come to firm.
Changing consumer niche and prices
There is a need for Countertop Shop to alternate between niches and develop the right products to suit different tastes and preferences for customers. The first step in changing consumer niches is conducting market research and development to allow management and operatives of the company to be better aware of the nature of products the market can accept as fast moving. What’s more, when it comes to pricing, the company must take advantage of the benefit that comes with pocket friendly prices. If The Countertop Shop makes a point of embracing second mover pricing strategies in the market, customers are bound to be appreciative and make repeat buys.
Changing consumer niche to gain more customers does not mean that The Countertop Shop will turn a blind eye to the needs and wants of its current customers. It simply means that the company will make more strides toward opening additional brick and mortar stores and increasing its online presence to increase its market share (Leonidou & Hultman, 2018).
Upgrade website and social media engagement
Website is a basic essential for any modern company. Having the best product without reaching out to potential customers is a big blow to any business wishing to earn both profit and reputation. Personal engagement with the people who wish to buy your product is critical. To do this, it is prudent to have a clear and unique strategy to attract them and there isn’t a better way other than having a top-class website design.
As it upgrades its website, The Countertop Shop should emulate the experience of an e-retailer website. The popularity of e-commerce sites such as Amazon and eBay have made features such as ability to view different products, their specifications and price estimates directly on the website “must have” features for any successful website.
The Countertop Shop should adopt a consistent theme color to modernize its site. First impressions make a difference. According to Biotnott (n.d), who is a digital consultant, colors are known to evoke unique emotions. Be very specific in choosing statement colors for the website and make sure it is consistent with the established logo and brand of the firm.
As firm updates its content, it should include more keys words and expanded infographics. The strategy will work best when mobile-friendly designs are incorporated. As Boitnott of Inc.com points out, the reason why images should be given a priority, it is has been discovered that human brain has the capacity to perceive an image thousands of times (60,000) faster than plain text. The company’s website (countershop.net) should therefore consider adding more of infographics rather than dominant plain text.
The firm should highlight testimonials to show proof that the product is selling and that there are satisfied customers who have chosen your products and are excited to recommend them to others. This information is crucial in building potential customer confidence in the brand. If the information is included, it should not be treated as trivial and therefore confined at the edges of the website. It should be clearly displayed and customized to include colorful and eye-catching graphics. In that same vein, the company should highlight its social media conversations on its website to continue the conversation and show an authentic and transparent relationship with its current and potential customers. It should include share buttons that make it easy to share countertop designs with a significant other or save them to a Pinterest board for a future look.
Once the design and content of the website are upgraded, there is opportunity to enhance public visibility using search engine optimization to move the website up in Google searches to get in front of more people. There also is great opportunity to collaborate with do-it-yourself bloggers or establish the company’s own blog to provide fresh content to keep people coming back to the website. The same is true for social media accounts where The Countertop Shop can have conversations with clients and take advantage of the DIY trend. Facebook, Twitter, and Pinterest could all be channels to share and engage in conversations about unique remodeling ideas (Quinlan, Babin, Carr & Griffin, 2019).
Another aspect of online presence is credibility. The Countertop Shop can enhance the credibility of its website by getting accredited by the Better Business Bureau (BBB). Although the BBB charges an annual fee between $500 to $1,155 for small businesses with fewer than 200 employees, it has been around for more than 100 years and is widely recognized by customers. Therefore, being able to display the “BBB accredited” logo has the potential to increase the sale conversion rate of any website. The BBB also can act as mediator should disputes arise and thus adds another layer of confidence to the customers. While positive reviews (on various websites such as the BBB, Google, and Yelp) can be beneficial, the company should avoid negative reviews and/or getting the BBB involved. Instead, the company should be proactive and utilize social media as a platform to make sure customers’ opinions and issues are heard and addressed.
Invest in Advertising
Making investments in advertising is usually expensive in the short run but cheaper in the long run because more customers need to be aware it exists in order to be drawn to the business. Following the upgrade to its website and social media content, The Countertop Shop should invest some marketing resources into paid promotions on its social media platforms. Because it doesn’t already have a large organic following, the firm should promote its posts to get more interaction. It is relatively inexpensive and there is a wide variety of options depending on how much money is set aside for a social media campaign. For example, a $20 spend on Facebook can reach 3,000 people for low impact content and up to 8,000 if it is engaging and performs well. Facebook also has an easy targeting option of people who like the page and their friends to engage the audience and people close to the account. Facebook is a good channel for the older clients whereas Twitter would be more engaging for the younger target age group. Twitter ads can cost anywhere from $1 to $10 depending on the scope of the ad buy.
The Blade is Toledo’s daily newspaper and would be a good outlet to target the customers in the 60-65-year age range in the print product and the younger target of 30-35-year-olds with digital advertising. The sales staff shared that most of its customers are in those age ranges because they are either empty nesters looking to freshen up their homes or young families getting started in their homes. The prices for newspaper advertising vary greatly depending on the size of the ad and if it is part of a campaign or a single advertisement. The Blade does not publicly share its prices as it negotiates with clients for their rates. The Countertop Shop should negotiate an ad buy that includes advertisements placed in the “Homes” special section to reach that demographic and takes advantage of the marketing team on site to assist with the design and development.
Additional advertising options include television commercials; however that is a greater expense. The firm would have to pay an agency for the creative to concept the ad and the production. Once created, there is a cost associated with airing the commercial. As an example, a local company that does advertise with Buckeye Cable spends $8,500 per month to share an average of 465 commercials across multiple channels. This is not an immediate recommendation for The Countertop Shop in this first phase of advertising; however, it is something to be considered into the future (Pulizzi, 2014).
Pursue earned media opportunities
The Countertop Shop can increase its exposure through earned media, which is news articles that feature the company or a member of the team. News outlets such as The Blade, 13 ABC, WTOL 11 and NBC 24 could be interested in interviewing the owner as an expert about a home improvement trend. The Blade reports 279,486 Sunday readers and 247,264 daily readers. 13 ABC counts average viewers of up to 45,000 for its news programs, up to 20,000 for WTOL 11 and 4,000 for NBC 24 (Baird). While a news article may not be explicitly about the company, positioning it as a leader in the industry is a positive way to generate interest among those large audiences. In addition to the audiences that read or watch those news outlets, having The Countertop Shop’s name included in external news articles provides great content to share on its own website and social media channels to attract even more eyes to its brand (Arthur, 2018). The table below shows the number of audiences The Countertop Shop can realize from articles mentioning the firm in Toledo area news outlets.
Media
Potential Audiences
The Blade
247,264 daily, 279,486 Sunday
13 ABC
45,000
WTOL 11
20,000
NBC 24
4,000
There are additional opportunities to get The Countertop Shop in front of potential clients and earn some goodwill, such as volunteering as part of a Habitat for Humanity or similar project. The firm also should invest the energy to be involved in local events for the industry, such as the House and Home Show that took place in February at the SeaGate Center. The cost for a booth for the 2018 event was $910 for a nonmember and $625 for a member of the HBA of Greater Toledo.
Improve sales staff training
The sales staff at The Countertop Shop is friendly and helpful in assisting customers, however there are a few areas where improvements can be made. One of the things mentioned by Mike Langenderfer is that the staff is good at listening to the customers and helping them select the correct product based on their desires, but once the quotes has been generated, they don’t ask for the sale. While some customers like a no-pressure environment, it potentially gives up a number of “easy” sales. Closing a deal is an important aspect of any sales position.
It was difficult to find out how competitive The Countertop Shop’s prices were. Most customers have some price sensitivity and The Countertop Shop can meet or beat prices from the big box stores (Home Depot, Lowes, Menards, etc.). The firm also fabricates the countertops in its store rather than having them manufactured elsewhere and shipped in. This is a big advantage from a quality control perspective. Those two reasons should be influential to customers and need to be explained and reviewed with them as part of the value of doing business with The Countertop Shop over another option.
Another aspect of an improved sales training program would revolve around the customer relationship management system. This has the potential to reengage existing customers and provide value added services. One example the owner mentioned was the opportunity to re-seal a granite countertop after 10 years. Another example could be working with a customer who really wanted to renovate both her kitchen and bathrooms but could only afford the kitchen at the time. A program that could note a future interest in a new bathroom countertop with a scheduled reminder to check back could help maintain that relationship for a future sale. There also is a good opportunity to maintain relationships with customers by encouraging referrals. With a robust customer management system in place, you could add in a field or specific code that asks new clients if they were referred by someone. If that new client moves forward with doing business with The Countertop Shop, then there could be an automatic system that puts forward a reward or incentive to that previous customer as a thank you.
VI. Strategy Implementation
In order to implement the recommendations to improve the company’s website, social media activity and presence in the Toledo business environment through paid advertising, a strategic plan is needed to direct limited marketing resources to the efforts that will have the greatest impact. Our plan includes one-time costs to develop an improved website and the annual cost to maintain it, as well as a three-month media buy that would allow The Countertop Shop to enter the advertising space and also provide the opportunity to pivot if the marketing investment wasn’t having the desired impact instead of being locked into a long-term financial commitment.
Web Developing Strategy
Being a small family business, it’s reasonable for the company to not have a web design specialist on staff. Since a commercial website at this size is relatively low maintenance, employing a dedicated web designer to work on improving the website full-time would be inefficient. Instead, the company should consider hiring a web designer or using a DIY web builder. Each option’s cost can vary depending on the company’s needs and criteria.
A web designer working on a new website can offer a custom build from scratch and advanced features such as e-commerce. Hiring a web designer also takes away the need for technical and design skills required to use a DIY web builder. According to Website Builder Expert, their experiences and knowledge can help the client “avoid hidden technical and financial pitfalls and choose the right solution for [The Countertop Shop] budget level, technical level, and how much time [they] are prepared to commit.” The downside to this is a web designer will cost much more than simply using a template available from a web builder.
On the other hand, a web builder template can cost as low as $60 per website and offer great look and features. A DIY approach does require a dedicated staff member with sufficient design skills to work on the website. In the case of The Countertop Shop, this can chip away at somebody’s time that could be used for other business functions. Below is a cost break down for each alternative according to Website Builder Expert:
* Source: www.websitebuilderexpert.com
For The Countertop Shop, we recommend it make the investment in a web designer rather than trying to do the website in house. As we explore later in this strategy implementation, there are full-service firms that can assist with both the website and paid advertising plans if the firm would choose to make such an investment. A one-time cost of approximately $6,000 to build a strong website that is the base of all additional marketing outreach is a smart investment.
Social Media Improvement Plan
To successfully utilize social media to improve customer service and communication with a specific target market, one person from the company must be responsible for maintaining social media accounts, periodically create new content, and respond to messages. This could be someone from the sale staffs or front desk staff. The cost for maintaining social media is negligible for the first year as traffic on the company pages is slow. If the company wants to be aggressive on social media, a possible approach in the future is to hire a part-time digital marketing intern who can be responsible for maintaining traffic on both the website and social media pages. An intern who makes $10/hour and works three days a week for a total of 20 hours would cost $200 a week or approximately $10,000 for a year (50 weeks accounting for time off). The Countertop Shop should budget for this now, even if it doesn’t implement immediately. The firm also should reserve $1,000 to spend to promote posts on Facebook and Twitter to reach a broader audience.
Yearly Sales Staff Training Retreat
One of the strengths identified in the SWOT analysis was the knowledge and expertise of the sales staff. Holding a yearly sales staff retreat is a great way to invest in the employees and improve specific skills in targeted areas. A sales staff could close a portion of the business for the retreat as to not intrude on the employee’s weekends or evenings. The Edward H. Schmidt School of Professional Sales (ESSPS) at The University of Toledo offers customizable packages that can meet the specific needs in areas such as social styles, handling objections, and closing (getting commitment). Part of the training package from the ESSPS program includes a detailed discussion about the specific business needs and help them identify the best ways of addressing them.
The training retreat also serves the important function of team building. It removes the staff from their daily routines and allows them to spend time bonding, thinking about issues they may not have time to consider, and refocusing their collective efforts. A well-done training session could have lasting impact for many years. A full day training session at Stranahan Hall costs $5,000.
Media Buy
If the firm is serious about an investment to redesign its website and make a push into advertising, it can partner with a local agency to develop a strategic outreach plan as well as provide creative and placement services. Hart, Thread and Communica are among the reputable full-service agencies in the Toledo market. While an agency would add to the cost, it would be the most strategic solution to address the company’s goals. The Countertop Shop also can engage a freelance designer to do the creative and it can make its own placements to get the ball rolling. This plan will explore that option.
The first step in the outreach plan should be the development of a display ad that can be used across platforms to introduce the company to consumers in the Toledo market for its first round of paid advertising. A simple display ad with a beauty shot of an updated kitchen and a large logo with the address and website is all you need for a billboard display ad. A newspaper ad could have the same look and feel, with the addition of its tagline “Everything from laminate to granite” and additional information if space allows. The same display ad creative should be posted on the company’s website and social media platforms for maximum exposure. A review of the salary rates for current open graphic design positions shows an hourly rate of approximately $30. The Countertop Shop could hire a freelance designer at that rate for a 40-hour project to develop one base ad that can be scaled across various platforms, for a cost of $1,200.
Billboards
Digital posters would be a good first entry into large display advertising on billboards in the Toledo market. Posters are less expensive, smaller and closer to the road than traditional billboards. Lamar in the Toledo market charges $700-800 for a four-week period to reach a population of more than 467,000 people who are 18 or older. In comparison, Lamar charges $1,500-$4,100 for large permanent bulletins and $2,500-$3,800 for digital bulletins. There are several posters available on Airport Highway between The Countertop Shop and I-475 that could garner up to 101,716 impressions per week depending on the location. A package that includes 6 posters in the Toledo market, with at least one on Airport Highway and others strategically located near competitors and big box stores would cost up to $4,800 with multiple touch points compared to spending nearly that amount for one large permanent board off the highway.
Newspaper Ad
The Blade has a combined readership of 372,612 when you combine daily and Sunday newspaper readers and the website, toledoblade.com has 1,212,731 unique visitors and 3,657,322 page views on average each month, according to the newspaper’s media kit. The newspaper reader profile has a median age of 46 and an average household income of $44,135. Readers are evenly split by gender with 51% female and 49% male.
The Blade HOMES section published every Friday is a targeted tabloid for those looking for real estate as well as home services. The demographic of the readers of that section include 81% of adults who plan to remodel a home within the next 12 months. The rates are as follows:
SIZE
BLACK & WHITE
COLOR
Back Page
$1,106
Full Page
$615
$725
Sr. Half Page
$516
$580
Half Page, Horizontal
$420
$475
Jr. Half Page
$344
$387
Sr. Quarter Page
$252
$285
Jr. Quarter Page
$168
$189
Sr. Eighth Page
$120
$135
Jr. Eight Page
$80
$90
Front Page Strip
$1,250
We recommend a senior quarter page ad to run for one month as a combined multimedia approach with the four-week display advertising. A color ad is $285 per week, for a total cost of $1,140.
The current rates for in-newspaper advertising are not as easily accessible with firms encouraged to contact the advertising representatives directly to put together a package of ads. The “Second News” section that highlights local news features 84% of readers who are homeowners, so that would be an ideal placement. The “Main News” section with national and state news and the “Business” section would be other recommended sections of the printed paper to explore ad placement. Retail advertising rates are based on column inches. Numerous discounts apply depending on the size of the ads and the frequency. For example, you can achieve a 30% discount for committing to 104 ads per year. The Sr. Quarter Page size ad that we recommend in the Homes section measures 5.4417 by 5.25 inches. According to the most recent publicly available rate card for 2012, an open column inch in the daily paper is $77.47 and $98.82 for Sunday for black and white. A three-color ad that is less than 63 inches would be $1,650 for a daily paper and $1,750 for Sunday. We recommend a print ad spend of $5,000 per month negotiating the best package that the Blade marketing department would provide, which includes the $1,140 for the HOMES section.
The combined media buy of $5,000 for The Blade and $4,800 for display advertising would equal a $9,800 commitment for one month. Since one month is not a long enough period of time to make an impact, we recommend The Countertop Shop commits to a three-month campaign for an investment of $29,400. The results of that ad buy would help inform additional advertising for the coming year. A longer commitment would not provide the opportunity to pivot if the ad spend does not have the desired effect for the investment.
Summary
In conclusion, an investment in a new website and the creation and execution of paid advertising for a three-month period would be a smart initial plan for The Countertop Shop to make a direct push for new customers to contact the firm independent of builders or other referral systems. This initial strategy implementation has a cost of $52,600, as compiled below:
STRATEGTY
COST
Web Design
$6,000
Freelance Graphic Designer
$1,200
Display Advertising (Billboards)
$14,400 ($4,800 for 4 weeks x 3 months)
Print Advertising (Newspaper)
$15,000 ($5,000 per month x 3 months)
Social Media Promotion
$1,000
Sales Staff Training
$5,000
Digital Media Intern
$10,000 (1 year)
Total
$52,600
The net result from the strategies laid out is threefold. First, The Countertop Shop will increase brand awareness through a new website and advertising campaign (web design, billboards and newspaper ads, social media promotion). Second, they will invest in their staff by holding a yearly sales staff training retreat and expanding their team with a digital media intern. Finally, because of these changes, The Countertop Shop can expect to see increased revenue from new customer purchases and a higher percentage of closes from the training. These benefits could be immediately realized in as little as a few months, but residual benefits will continue through the three-year plan.
This estimate is strategically less than the budget of $70,000, using a 10% of sales model, to allow flexibility of the firm to explore the possibility of engaging with a full-service marketing and advertising agency that would allow The Countertop Shop to more strategically explore all of these recommendations in a comprehensive outreach plan and take advantage of cross promotional discounts.
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Works Cited
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The University of Toledo Edward H. Schmidt School of Professional Sales. Professional Sales Training Program. http://www.utoledo.edu/business/ESSPS/ESSPSBusinessOutreach.html
Website Builder Expert. https://www.websitebuilderexpert.com/how-much-should-a-website-cost/
Yelp. The Countertop Shop. https://www.yelp.com/biz/the-countertop-shop-monclova-2
