How to prevent a "down year" in 2007

[Steve]

Yea!   What's the typical Markup on hot tubs?  What's the biggest cash cow? N2 is all profit, that's why is pushed .  isn't it? (Come on, you can tell me, I won't tell anyone....).   That water testing thingy you guys have in the backroom, that's all just a bunch of lights and stuff and all the machine really does is see what  you have in your chemical inventory that isn't moving and print's it out suggesting the customer buy it.   I'm right, aren't I?


I knew it.  

I thought you were just kidding around but I'll do my best.

Typical markup depends on a number of factors but good retailers will achieve a 35% profit margin or more. It's not huge (or as much as some may think) once the factors of overhead are calculated. As I've said before, dealers really aren't making money until they're selling more than 75-100 units annually.

Biggest cash cow IMO is ozone (and watercare products in general).

Water testing equipment is only as good as the operator...

[drewstar]

Thanks Steve.

I was just thinking about this and was wondering if 03 was a good cash cow. After all, once it's sold and installed the 03 unit is pretty much self sufficent, as opposed to N2 and other chemicals which  keeps customers comming back and is a good revenue stream.

Yup, I figured the mark up would be that much to cover Overhead and operating costs

[caribbeansun]

Okay, I went by the Hot Springs dealer and all I can say is that's 20 minutes of my life I'll never get back.

What an utter waste of time, didn't provide ANY information at all other than to say repeatedly "you have to try them to see the difference" - no kidding.  He asked me a question and then as I was anwering him he saw a Porsche through the window and walked away from me with some comment about how I'd like to have that (reminded me of Homer Simpson - "ohhhhh shinnyyyy").  My answer was that I really don't care about what people drive.  I asked what the key differences were in the lines he carried - answer "the jets" and that was it.  I mean come on people!  It appeared that I was more of an inconvience than anything else.  He didn't even want to talk about the HS models, he wanted to talk about Caldera instead.  I pointed out the different seat back of the HS - he made some non-committal remark about yeah the jets are different.  I asked about warranty - he handed me a brochure on the Caldera - gee, thanks for that. He then said that I should come back with my wife - why, so he could waster her time as well?

Without a doubt this was even worse than being ignored, I actually left this place feeling pissed off - I made the effort to find this place, drive there and go in.  It's hard to believe these guys have been in business for 40 years.

This person didn't do one single thing right on any level.

[East_TX_Spa]

I'm really sorry.

I'd never seen a Porsche before.

Please give me one more chance!

Terminator

[drewstar]

Okay, I went by the Hot Springs dealer and all I can say is that's 20 minutes of my life I'll never get back.

What an utter waste of time, didn't provide ANY information at all other than to say repeatedly "you have to try them to see the difference" - no kidding.  He asked me a question and then as I was anwering him he saw a Porsche through the window and walked away from me with some comment about how I'd like to have that (reminded me of Homer Simpson - "ohhhhh shinnyyyy").  My answer was that I really don't care about what people drive.   and that was it.  I mean come on people!  It appeared that I was more of an inconvience than anything else.  He didn't even want to talk about the HS models, he wanted to talk about Caldera instead.  I pointed out the different seat back of the HS - he made some non-committal remark about yeah the jets are different.  I asked about warranty - he handed me a brochure on the Caldera - gee, thanks for that. He then said that I should come back with my wife - why, so he could waster her time as well?

Without a doubt this was even worse than being ignored, I actually left this place feeling pissed off - I made the effort to find this place, drive there and go in.  It's hard to believe these guys have been in business for 40 years.

This person didn't do one single thing right on any level.

Wow.

Did he at least have his pants on?

"I asked what the key differences were in the lines he carried - answer "the jets""

That's not a good answer?

But what if it's accurate?

[East_TX_Spa]

All kidding aside, it sounds like you are having to deal with a dearth of ineptitude!  Some folks should just not be in the spa business as they give the entire industry a bad name.

I wish you luck in your search.  It's a crying shame you don't live in East Texas or you would probably have a spa by now.

Term

[Steve]

Okay, I went by the Hot Springs dealer and all I can say is that's 20 minutes of my life I'll never get back.

What an utter waste of time, didn't provide ANY information at all other than to say repeatedly "you have to try them to see the difference" - no kidding.  He asked me a question and then as I was anwering him he saw a Porsche through the window and walked away from me with some comment about how I'd like to have that (reminded me of Homer Simpson - "ohhhhh shinnyyyy").  My answer was that I really don't care about what people drive.  I asked what the key differences were in the lines he carried - answer "the jets" and that was it.  I mean come on people!  It appeared that I was more of an inconvience than anything else.  He didn't even want to talk about the HS models, he wanted to talk about Caldera instead.  I pointed out the different seat back of the HS - he made some non-committal remark about yeah the jets are different.  I asked about warranty - he handed me a brochure on the Caldera - gee, thanks for that. He then said that I should come back with my wife - why, so he could waster her time as well?

Without a doubt this was even worse than being ignored, I actually left this place feeling pissed off - I made the effort to find this place, drive there and go in.  It's hard to believe these guys have been in business for 40 years.

This person didn't do one single thing right on any level.

Case in point Drewstar and the timing of this post was impecable! I'm sorry to hear that this happened but no one product is exempt from sales idiots. I do agree though that the major manufacturers do tend to have wonderful training though it's certainly not HS exclusive!

[Steve]

Thanks Steve.

I was just thinking about this and was wondering if 03 was a good cash cow. After all, once it's sold and installed the 03 unit is pretty much self sufficent, as opposed to N2 and other chemicals which  keeps customers comming back and is a good revenue stream.

Yup, I figured the mark up would be that much to cover Overhead and operating costs

Actually, O3 requires a chip or bulb every couple years which can half the cost of the ozone unit itself. Makes ya wonder just how much you're saving in watercare product eh? I do understand that some units have a longer life span but there's usually more of upfront cost associated with those as well.

[hottubdan]

Actually, O3 requires a chip or bulb every couple years which can half the cost of the ozone unit itself. Makes ya wonder just how much you're saving in watercare product eh? I do understand that some units have a longer life span but there's usually more of upfront cost associated with those as well.

In my experience, most people do not change chips or bulbs.  Makes you wonder how much ozone is really being pumped into those hot tubs.

[Steve]

In my experience, most people do not change chips or bulbs.  Makes you wonder how much ozone is really being pumped into those hot tubs.

I've had people tell me how great ozone is and that they have had it in their spa for 5 or 6 years and LOVE IT! Needless to say, it stopped working a number of years ago but hey, they love it right?!

[caribbeansun]

I'm in Canada so no Texas sales folk and yes he had pants on which was just as well given his reaction to the Porsche  

Well, stuff happens so no worries, there just won't be a sale for those guys.  I also won't be sending them any business and as with all interactions of this type people remember pain and discomfort so I'll likely end up telling more people about it but you never know.

What my trips to these various dealers proves is that it really doesn't take a whole heck of a lot to differentiate yourself in the market if you are willing to invest in some training and be an active dealer checking on what your sales force is doing - secret shoppers while sounding silly are really worth it - how many of you do this?

Yes you have to differentiate your product but you absolutely MUST differentiate yourself first - the product stuff just blends into mush over time but what leaves a lasting impression is the person you dealt with - get that right and carry a decent product line and you should do very well.

The one thing none of these places did was figure out (at least I'm pretty sure they didn't) what market I was shopping - asking me what my budget is won't get you that information.  It amazes me that so few sales people can ask simple, non-threating questions to qualify their leads.  If they had asked about my neighbourhood, asked why I wanted the hot tub is it because I work in a high stress job which should lead to a question(s) about what kind of work my wife and I do, how would it integrate into my landscape, observed my wife's jewellery, my watch and ring, the car I drove, asked a non-confrontational question around the financing offered.  The clues are all there and you can weave these into the sales patter without coming off as 20 question intimidating.  Of course most people look at the clothes and make a judgement based on that - really silly because I don't wear an Italian suit to shop for a hot tub, who does?

Sorry for the rant, my line of work is in buiness advisory so I'm forever amazed at how few companies actually attend to delivering the minimum level of service let alone exceeding expectations.  Every one of the companies I work with (across a wide spectrum of industries by the way) say they want to exceed customer expectations and at the beginning every one struggles just to meet the basic required level of service.  The competition is no better than they are and if all they do is meet the required basic level and then add on say 3 things to that they will stand out from everyone else around them, get those right and add 3 more, and so on - in a couple years you've got the best damn operation in the region and your sales and bottom line are proof.  It all has to start with the owner though and too often they just aren't willing to invest the effort, time, pain and yes, cost to get things right.  The funny thing is that this is all self-funding but most people never want to change anything they do.  They continue to do the same thing every day and expect a different outcome - good luck with that!

Case in point Drewstar and the timing of this post was impecable! I'm sorry to hear that this happened but no one product is exempt from sales idiots. I do agree though that the major manufacturers do tend to have wonderful training though it's certainly not HS exclusive!

[Steve]

Well said. DAMN, us Canadians are sharp!  

I agree that it all starts with the business owners and if they're not willing to properly invest in good staff by training, monitoring and paying them well, the result will be parallel.

That said, the largest challenge in retail is finding quality people…

Steve

[East_TX_Spa]

NOW it becomes clear...you're dealing with Canadian salespeople.  Bless their hearts!

Terminator

[Zep]

re: "...the largest challenge in retail is finding quality people…"

And in the service industry!

We are constantly looking for "super stars" and I suppose for
every "super star" there are at least a dozen "flakes....lazy.....
baggage....I don't wanna be at work" types that you have to filter out.

When you find those "diamonds in the rough"....super stars.....pay them
well......pamper them....they are indeed....very rare....kind of like #23!
 

[Steve]

NOW it becomes clear...you're dealing with Canadian salespeople.  Bless their hearts!

Terminator

It IS a little harder to close someone without the added benefit of a weapon to their head here but we manage...