Business Insight 111 – Shutting Down Your Showroom Network? (blog & vlog)

 

We raised another £500,000 from the sale of the properties, including the freeholds; we were now trading solidly off of our own cash and had no need of any bank facility at all. We had not been under any pressure for months, but it was still a delicious moment when I told them (the bank) that I wasn’t sending financial information to them anymore, and that we didn’t need any overdraft facility.

It’s early December and we have a sales meeting to admit that we are selling the showrooms; rumours had been flying around anyway, mostly triggered by the flow of people wanting to view them and other obvious giveaways.

The salesforce are still very shocked and a big debate ensues. I make my point about the Hastings debacle; Mark Barrett is embarrassed but confirms, yes, we did get more sales when the showroom was a building site, without (even) a sign over it.

“What would they prefer, a full page advert in their local paper every week or a showroom?”

This was the plan in the changeover period: people who wanted to deal with us would still ring us up, all existing lines were to be diverted to HQ, our profile if anything would be even bigger, and whatever leads came in would be given to the local manager to distribute in the normal way. In truth, nothing much was going to change – it was just that we didn’t have showrooms anymore, for salesmen to doss in.

Obviously, the showroom reception staff would be made redundant and paid whatever they were due.

As in previous other crucial times we had come up with a great sales incentive to see us over the ‘hump’ – it was our best ever . On the 80/20 principle, we were obviously very keen for our best and highest producers to return in the new year and give this massive change the best chance of success – we just needed the best 10 of them to still be on side.

Frank Bruno was fighting Mike Tyson for the World Heavyweight Championship on the 25th February 1989. Tyson was at his absolute peak of form, and Frank was a national treasure. We had bought 10 ringside tickets for the event and booked the Tropicana hotel for 3 nights – it was going to be epic. The top 10 salesmen would be going to Las Vegas. I had been there previously with my wife and my brother with his wife also. We could confirm that it was an amazing place for fit young men!! Those who were likely to win should make sure they have passports and the necessary visa for entry to the USofA.

Our Christmas dos were the usual celebration – if nothing else we still knew how to throw a fantastic party.

In 1988, our Turnover was £6,746,146, with a £418,414 Profit and an almost bullshit-free £600,000 Net Worth. Profits from the sale of the showrooms were not represented yet.

 

1989

We reconvened in The Halland Forge Hotel the day after New Year’s Day, and we wondered how many people would turn up. At the time of announcing the shutting of the shops, we had a sales force of 40+, with a hardcore of 20+ longer term and established salesmen. That was the number we catered for and indeed the number that turned up, including all of our ‘serious closers’ and the more ambitious and hungry recent recruits that saw this new model as an opportunity.

We, of course, had booked a campaign in all of our ex-showroom towns (3 years interest-free credit), and indeed we started to get more than enough leads to keep our reduced sales force very happy.

At this first meeting, we discussed how to explain the closing of our showroom network to our potential customers, and taking the bull by the horns (re explaining the positive benefits, such as lower overheads allowing us to be more competitive) – for to be sure our competitors would say that we were going bust.

One of our long-term salesmen, Gary Tate, phones me the following day to let me know that the ‘sit’ (salesman speak for presentation) he was on the previous evening had lived in Eastbourne all of their lives.

He launched into the ‘why we closed the shops’ speech but was stopped by the customer, who didn’t know that we had had one. Even though the shop had been there since 1976 they had never noticed it; they had, however, seen our TV ads and other publicity and were in the market for the first time, and wanted a quote.

All salesmen were now told to only mention the shutdown of the showrooms if previously mentioned by the customer.

INSIGHT 111:- What you think is visible, noticeable and important might differ significantly to what your customers see and think. Other than the existing customers who knew of our showrooms and/or passed them in their daily routines, new customers generally phoned us up for a quote and didn’t care about the shops at that stage (or any other stage) – they just wanted a quote. 

 

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