Best Practices - March 2006
By Lisbeth Calandrino
The Scottsdale newspaper called it “Dine and Design” at J.R. McDade Design Center. I’ve talked so many times about retailers hosting seminars for prospective customers, I thought attending myself would be an interesting opportunity to experience how one retailer was doing it.
No such luck. Much to my surprise, there was no room left. Pleading how important it was and why they should let me in (since I’m from the industry press, of course), they offered to at least take me into the training room for a preview. What I saw were 100 chairs, each with a manila envelope, one for each guest.
What was it about this retailer that would warrant such a turnout? Here’s what we discovered about this $50 million-plus retailer’s secrets to success.
The firm was founded in 1958, and evolved out of a labor only business. Today, the J. R. McDade Design Center is enormous—some 32,000 square feet at its Scottsdale facility and another 100,000 square feet of commercial, marble and granite, multi-housing and warehouse space in Phoenix. Plus, the city of Tucson is home to the company's 15,000 square foot, appointment-only design center.
J. R. McDade is not open to the public: builders, designers and consumers have to make an appointment. The reason? The firm doesn’t want to appear at all like a big box store; rather they want to project an air of exclusivity.
The company has been in the McDade family for more than 45 years. The current owner, John Roger McDade II (better known as Jack), recently purchased the business from his father with the intent of carrying on a successful tradition.
As the McDade story goes, customers in the constantly growing Phoenix-Scottsdale-Tucson area were always asking for more products, and services such as flooring design work. From this, the store brand expanded into other flooring areas and other surfaces—cabinets, backsplashes, granite fabrication—as well as installation for both new construction and remodeling.
Today, the company positions itself as a one-stop, full service design company. With 180 employees, flooring is handled by builder reps who service builder accounts and interior designers who work in the remodeling division. Flooring installation is subcontracted out to over 50 crews.
Vice president Jason Monczka says McDade’s serves “a niche that we've been able to carve out by building long term relationships with customers on all levels.”
One of the firm’s unique approaches is offering 11 consumer seminars (open to the public) every year, like the one we saw advertised in the local newspapers. At these events, McDade features industry experts and celebrity guests.
Why do they do it? Jason says that experience has taught the McDade team that consumers are basically uninformed about home products and seldom know what questions to ask. By holding seminars, he says, McDade positions itself as the local industry expert. Customers are surveyed after each seminar to make sure the firm is providing the information they want.
“This is a way for us to meet new customers,” Jason said, adding that typically 10% to 15% of their attendees make appointments with McDade interior designers at the time of the event.
Topics for their seminars include flooring, design and color trends, kitchen design, appliances, architecture and outdoor living, landscaping and replacement windows.
“This is one way to give our customer a positive experience even before we do any work,” Jason says.
When asked where the company sees growth, the answer is twofold: the expanding Phoenix Metro Market builder business and the explosive high end remodeling market.
What advice would they give to other retailers to help them grow and thrive?
1. “Specialize in core competencies,” Jason says. “And look for business opportunities which complement your existing base, such as shop-at-home, stone countertops, carpet cleaning, even remodeling. The key is to give your customer as much as you can so you don’t lose them to your competitors. Start with a small core team you have confidence in so that the new enterprise already has procedures in place. You can’t count on a new business to be run like your core business.”
2. “Partner as much as you can, including with local design magazines.” J.R. McDade partners with Food and Life Arizona, which has helped with guest chefs and other speakers. They also worked out an agreement, including a referral fee, with a local furniture store and that store’s design staff, who will bring up remodeling and flooring to their customers, sending them, of course, to J.R. McDade. Says Jason, “Try it with someone for about a year, and see how it works. Focus on the relationship, see how many ways you can help each other and wait to see how it will pay off. For any great relationship, it will take time to develop and for the payoff to be realized. Bob Dole once said, ‘I only know the hard way, as nothing has come to me except through the hard way’.”
3. “It's important to pay attention to your numbers,” Jason says. “McDade prices its labor and materials together and then adds on a profit margin.” If you’re going to supply the material, you need to make money on it, too.
4. “Whenever possible, give the customer a better warranty than your competitor. Arizona requires that we give at least a two year warranty on flooring. For remodeling clients, we give a 10 year warranty on installation.” Jason reminds us that McDade has been in the business of building customers for 45 years. “If the customer received a two year warranty and calls after two years, J.R. McDade is still going to take care of that customer. We want to capture positive PR from this attitude.”
5. “Learn from people who do what you want to do.” Jason explored big flooring and remodeling businesses across the country and asked if he could visit. He learned new processes and profitability techniques and gained great new friends across the country, friends he can call up for advice.
6. “Help others grow.” Jason speaks regularly at the local community college design classes and at interior design and architecture programs at Arizona State University.
7. “Good partnerships will build your reputation and bring in new customers.” Real estate agents make great partners, he says, because they have access to customers, and most houses that are purchased usually need new flooring or remodeling. J.R. McDade hosts regular real estate meetings at their showroom and often provides design programs for them.
8. “Commit to an advertising schedule and develop relationships around it.” Jason suggests looking at industries that help you advance your products, pointing again to the culinary industry, which is connected directly to their kitchens. Or find a magazine you can write for, reinforcing your company image as the expert. Jason regularly contributes to Food and Life Magazine. He’s also a weekly columnist in the Tribune Newspaper, as well as other local and national magazines.
Copyright 2006 Floor Focus Inc