How to grow a furniture business in the new normal

TIME OF CHANGE

The global crisis has been disruptive for the furniture industry. Some businesses have had to scale up fast, driven by large spikes in demand – IKEA are running at maximum capacity and still can’t keep up. But more are struggling, with demand slumps and negative consequences on teams, such as furloughing or, sadly, having to let go of staff.

What’s happened with the pandemic is a disruptive, shock event, and though this can hurt businesses in their existing format, it also presents opportunities for growth. The companies we work with have been getting leadership teams together to ask themselves: ‘Where is the land grab?’ i.e. where do the changes in customer behaviour provide us with new opportunities?

Success in this environment requires a 2-pronged approach, balancing 2 different but necessary approaches.:

• Survival and success in this market at this time depends upon your ability to align the team behind new strategies and initiatives. This means creating teams and making investments to pursue new ideas, based on changes in customer behaviour. This is inherently risky, uncertain, and opportunistic.
• Protect the core. Whilst some parts of the business chase new opportunity, the existing business cannot afford missed opportunities, so a rigorous focus on sales and sales best practice, as well as protection of cash flow, are key to survive and thrive. This is inherently disciplined, conservative, and pragmatic.

Here we share anonymised stories of some of the top companies in the industry that we have worked with, and the steps that they’ve been taking to outsmart the crisis and how they’ve balanced these 2 approaches.

PIVOT

One of the biggest disruptions as a result of COVID-19 is the large-scale transition to home working. If you sell office furniture, this is an enormous threat, and an opportunity. One of our clients, one of the largest furniture distributors in the UK, has successfully launched two new business units to capitalise on this opportunity. Combined, the two new business ventures provide over half of the groups new business growth and generate ideas and new services that are benefitting the legacy business.

For traditional, large-scale furniture companies, initiatives like this can be challenging to pull off, as you’re working against institutional inertia. However, the below tools and techniques have been critical to making the transition successfully:

Skunk works.

A pivot strategy by definition requires experimentation. In an existing business this can be hard, because everyone is busy running legacy units. It’s practically difficult for teams that are operationally engaged in the day-to-day to launch new products and services or experiment with new ideas, as they struggle to find the time and headspace.

The solution is to take capable managers from existing teams and set them up into new units to take on specific challenges. Of course, these teams need to be connected to the legacy business, those connections are often key to the success of the new venture, but also independent enough of it to be able to focus on the new project without distraction.

Scrum Development.

Once you have teams in place to work on pivot ventures, then they need to move fast. The temptation at this stage is to design and work on complex solutions. For example, if you want to build a new platform for remote working, there is a wide range of functions you can include. Different parts of the business will suggest and expect different features. This then leads to complex feature maps, long Gantt charts, and inevitably to missed deadlines and over-run budgets.

Silicon Valley has many best practices we can learn from here, such as Scrum. The key principles being:

• Start with only the absolute minimum necessary functionality. Be rigorous in distinguishing ‘must have’ from ‘nice to have’.
• Get to first prototype quickly (minimum viable product).
• Work in short bursts (called sprints) as you then iterate updates, based on customer feedback.

For example, if you want to launch a new platform to allow people to purchase virtually, first collect the basic minimum requirements and build a working prototype. Get it to market, then start iterating.

Own a category / key term

When markets shift, new niches open up. Each is an opportunity to own the key words associated with that category. You can either own the name of that category (e.g. www.conversion-rate-experts.com own the category ‘website conversion’), the brand associated with that category (which company comes to mind when I say ‘internet search’), or the key attribute of that category (which brand ‘kills 99.9% of germs’?).

There are categories opening up in the furniture industry right now that are available. Take ownership. Whichever business is associated first with the key words of a new category gets to keep a huge advantage within it.

Key reading:
– Scrum, by Jeff Sutherland
– The 22 immutable laws of marketing, by Al Ries and Jack Trout

PROTECT THE CORE

The furniture brands that we work with have had to take a thorough look at their sales functions and worked to strictly implement best practices. In today’s times, every opportunity is valuable, and there is simply no room for error within the sales team.

Routine sets you free. Much of the sales process comes down to organisation, process and persistence. Sales teams have to collaborate in order to close accounts, so good coordination and communication is critical, especially when teams are remote and dispersed. The solution to this is as old as it is simple, and yet so many sales teams do not implement this key discipline: the weekly sales meeting.

The features of a good sales meeting include:

• Same time every week (to get even better results add a 15-minute huddle at the beginning of each day).
• A review of the pipeline (if you don’t have a CRM, a whiteboard will do)
• Identify actions for each team member, so you’re taking proactive steps with prospects
• Constantly re-training the Calls to Action at each stage of the funnel, so teams are focused on what action they need next from prospects
• Some time spent on motivating and training the team

That’s it. It really is that simple. Email is no way to run a sales team, it leads to miscommunication and confusion. This solution makes a huge impact, never assume that sales people are doing it of their own volition.

The A-team. Within a sales team there are always those who perform better than others. In normal times we would spend more time on those that are still developing their sales skills, giving them opportunities in front of prospects. These are not those times. Be ruthless – pick your best sales people, and focus on them.

Key reading:

• The Sales Bible, by Jeffrey Gitomer
• The Sales Playbook, by Jack Daly
• Scaling Up, by Verne Harnish.