Learning lessons from 2009 help spa retailers perform better in 2010

Ddd 1010 AqIf you're a hot tub retailer reading this article, you're one of the survivors who have made changes in your business that have enabled you to weather what seems to be the worst of this persistent recession.

For some, the battle is being won by maintaining a positive attitude and staying confident in products and prices under pressure to give in and cut margins. For others, changes in marketing have helped, and still others have been carried along by simple, old-fashioned customer service.

AQUA spoke with a few retailers that have adjusted to today's economic climate and made it into the downturn's third year with some ideas that keep spirits up, costs down and targeted, and most of all, customers happy.

Advertising Sells

"Last year, probably like most people did in cutting their expenses, we cut our advertising back a little bit," says Jon Chapman, marketing manager for Rich's For The Home, a retailer with five locations throughout Washington state. "We think that was detrimental to our sales. And it was a mistake."

Chapman says the company entered 2010 with a new outlook, and a bigger budget for advertising, and has found that the gamble is paying off.

"We put a lot more money into advertising. We felt better about doing it because last year was terrible. It wasn't a great year for anybody. So we figured [this year] we needed to go for broke and just make it happen. It's working well for us."

Chapman has steered clear of his Yellow Pages contracts, opting now to invest money into TV and the Internet. While he views the Internet as more of an "untapped area" for the company, Chapman says he's trying to find out more about how and where it fits into advertising.

"We don't sell on the Internet, but we consider it a sixth showroom. It seems to complement our other advertising," he says.

Ed Allen, owner of Allen Pools and Spas in Williston, Vt., says he also cut the company's traditional advertising methods - newspaper and radio - and invested more money in the Internet. He has given his company a better online presence and continues to update his Website, a job he says is necessary to stay current with people's shopping habits.

But more important than his decision to advertise on the Internet is his dedication to his customers. Allen offers personal in-home visits, and believes it is crucial to his business.

"We try to do an in-home visit with every customer," says Allen. "And that seems to make a pretty big difference to people. I sold one a while ago where the customer was very surprised that we would do that, but that just seems to be what's working for us."

Allen visits the home whether the potential client buys or not, a tactic that he says achieves at least an 80 percent closing ratio.

"If you can get into a person's house, meet them on their own property and tell them one or two things that they didn't know, you've gained their confidence. So you help design where they're going to put the hot tub. If you tell them something they didn't think of, you're going to turn it into a sale.

"Things have changed. Customers aren't coming to the showrooms, so you have to go to their houses as much as you can."

The Evolving Customer

Both Chapman and Allen agree that today's customer is better informed. The 2010 buyer knows what to look for and how to get it.

"People are looking for a deal," says Chapman, "or a perceived deal, anyway. I mean I'm looking for a deal when I look for things I want."

Allen is quick to point out that price isn't everything, though. Sure, he gets the occasional shopper looking at price and price alone, but it's the whole package that he's selling: service, value and price point.

And the only way to successfully promote all three is to have confidence in the product.

"People can see it in your eyes when they don't think you're confident about the price you are selling at," says Allen. "We're not selling really cheap, but I think they just like to see the confidence in the product and our body language.

"If you listen to the news and everything that gives you the rundown of the stock market, it can really make you go out there and present yourself differently. You sort of have to turn some of that stuff off and go out there with enthusiasm and passion for your product, and sell them that.

"You can't be thinking of price as a priority when you go out there. You have to be thinking of the quality of what you have for a hot tub and be confident with it. You are going to have to go against the grain, in a sense, because you think everybody is sensitive to price, but that's not always true."

One of the main points Allen stresses is that customers want to know that the retailer is going to be around and that they are buying from a company that has a good, solid reputation.

Plus, adds Chapman, people are ready to spend again.

"I think people held onto their money last year, and it has gotten to the point where people are saying, 'Hey, the world didn't end, and I'm going to enjoy life and spend some money. I didn't spend last year, so I'm going to spend this year.'"

Comments or thoughts on this article? Please e-mail [email protected].

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