When the majority of project sales involved systems furniture with workstations as far as the eye could see, accessories and ancillary products were well defined. At the most basic level every employee needed a chair mat, monitor arms, task lighting, a waste basket, wire management and sometimes a keyboard tray.
Things have changed just a little bit since then. In today’s business environment, projects frequently go beyond a systems approach and sometimes avoid it entirely. New products have popped up to join the list of potential ancillary products. “Sit-to-stand options have become a daily part of our business,” says Tommy Sansom, managing partner, Officewise Furniture and Supply, Amarillo, Texas. “Benching and sit-to-stand have replaced much of what used to be casegood sales,” he adds.
“When you have a good year with project sales, you don’t always do as good a job selling accessories,” says Sansom. “High priority is selling the installation service,” he adds. The installation is presented as a separate offering from the furniture sale and is detailed out so customers know what to expect. “We break out that cost on large projects,” he adds.
Project sales are changing
At Citron Workspaces, Denver, the majority of project sales involve a height-adjustable desk surface, some kind of storage and a task chair. “Many times we’re not even selling the power and data delivery system which used to be a panel system,” says Steve Manhart, vice president. “Today it’s often a power strip they buy from Office Depot or maybe a beam system.”
In the mid-market space, where Citron does the majority of its business, the buying process has remained relatively stable, says Manhart. The lead buyer ranges from an office manager to the business owner and all decisions are arrived at with little or no input from outside consultants such as architects or designers. “Customers are looking for something simple, quick and very affordable,” says Manhart.
In addition to monitor arms and chair mats, Citron offers coat racks, meeting room reservation systems and sound mitigation, as well as built-in cabinetry and millwork for copy centers and storage rooms. Partners such as Great American Art, Canton, Massachusetts, make it easy to sell artwork. Movable walls are also available and are a big part of the offering. Walls range from low-end product without many options to more expensive systems from Teknion and Trendway, which make up the majority of what’s sold. “The money that used to go into workstations and private offices is now going into collaborative areas with coffee bars and soft seating,” says Manhart. “It’s the Starbuck’s feel where you go in and don’t sit at a desk.”
At Tallgrass Business Resources, Coralville, Iowa, the project sales process has evolved and now includes what the dealership refers to as “discovery exercises”. “We perform them at every level—at the leadership level, at the management level and the user level,” says Tom Vander Vaart, director of furniture sales. At each level customers are questioned about what they like and don’t like about their current space.
The goal is to engage the customer in the process and develop a new space that eliminates any pain points. “We let customers know upfront everything we do—from furniture and to supplies to promotional items and branded environments—so we get a feel if that’s something they want us to present,” Vander Vaart explains. “The ancillary items we address most on project sales are monitor arms, task lighting, wire management and plug-and-play capability,” he adds. “It’s the little items that people don’t always think about.”
Sound masking is another popular offering. “We have a couple of different sources; one of them is through our primary manufacturer—Steelcase,” says Vander Vaart. As workstations get smaller and more open areas are created, more people congregate in them so sound masking is desired. This approach integrates sound masking within the building as units typically installed in ceilings. “You don’t even notice that it’s there,” says Vander Vaart. “If you turn it off you definitely notice the ability to hear other conversations.”
Tallgrass partners with signage and graphics companies to create unique spaces that tell a company’s story with the branded graphics it offers. Graphics are frequently installed in reception areas but could be found anywhere within an organization—the cafeteria, open meeting areas, conference rooms or other spaces. This offering has been implemented on a handful of projects over the last several years. “In a few instances it’s the reason we won the project because we differentiated ourselves,” says Vander Vaart.
Customers don’t know what they need
Environments Denver, the furniture division of EON Office, Denver, is part of another full-line dealership which offers both office furniture and office supplies. Customers don’t always recognize the need for ancillary products at the time a furniture order is placed. “You can increase the value of a sale 30 percent just by offering something that the customer doesn’t know they need at that time,” says Van Young, vice president of furniture at EON.
Corporate moves and reconfigurations are a major offering at Environments Denver. What drives move services is the fact that when customers need to move they deal with furniture people. “Most moving companies don’t employ office furniture specialists who know how to take systems apart and especially how to put them back together,” says Young.
Officewise is selective on which moving jobs it takes. Scheduling is a big determinant of which moving jobs can be accepted. Sansom suggests it would be beneficial to have a separate staff for moves and intermarket work. “That would really be a good growth area for us,” he says.
At Apex Facility Resources, as the size of workstations has been reduced, there has been concomitant changes in moves, says Matt Watson, co-owner and vice president of business development. In his view corporate moves have become far more technical than physical. ”We’re not moving as much but what we move needs to be disconnected and reconnected with accuracy and integrity,” he says.
Monitors and docking stations need to be set up correctly to avoid extended employee downtime. In large office environments the loss of productive time due to inexperienced movers could be considerable. “Time is their number one commodity and we can save them time and money with our services,” says Watson.
Apex takes time upfront to meet with potential customers and educate them on the extent of products and services that are available. “We offer clients a completely integrated solution,” says Watson. Most mid-market customers don’t have project delivery teams, which feeds into Apex’s integrated approach. “We sell deeper on every commercial deal that we do,” he adds. “We focus on services because that’s where we see growth and the sustainability of our organization.
The service mindset
“Most dealers are there to sell product,” he continues. “It’s very much a product delivery mindset while at Apex we have more of a services solutions mindset.” Offerings include data cabling, relocations, reconfigurations, lease surrender services and workspace refresh services. Right now the dealership targets small remodel projects for tenants with 10,000 to 50,000 square feet. Watson doesn’t see the business as either furniture or services. “It’s an integrated solutions partnering,” he says, “We listen for the need and tailor a solution to answer it.”
Services currently account for 40 percent of revenues at Apex, and an effort is underway to raise that to 50 percent. “Selling services really comes down to selling trust and confidence,” says Watson. “Really what we have to do is build levels of trust and deliver on confidence. Our services have carried us through every downturn we’ve gone through,” he adds. “So it is a defensive position as well as a core cultural aspect of who we are.”
Three designers on staff at Environments Denver, along with Young, take the lead on selling services. “Reps don’t have to know how to quote moves, they just need to know to ask the question,” says Young. When a need for moving services is uncovered, Young or a designer will accompany the sales rep to cover service options.
Malone Office Environments, Columbus, Georgia, would rather dedicate its moving and installation personnel to product sales as those activities are far more profitable. “We do a fair amount of services because people ask us to but I don’t target that,” says Sam Buracker, owner and president at Malone. “The same men that do that labor can make the company more money on furniture installations.”
A separate division sells floor coverings at Malone Office Environments and has operated since 2003. Like other furniture dealers Malone operates with discretion when it comes to floor covering sales, or any ancillary products that might fall under the design umbrella. “Architects typically have a design team so if we discuss design options we might cut into their ability to charge for design,” adds Buraker.
When it makes sense Malone Contract Floor Covering will do measuring and pricing, and then a floor-covering line item is wrapped into the total furniture charge. “We are really trying to ramp up that division in the next couple of years because we think there are more opportunities out there,” he says.
All on one P.O.
Environments Denver has sold floor coverings for the past ten years, but rather than offer products itself it works with outside sources. “One of the details that helps us close deals
is we keep everything on one purchase order,” says Young. Environments Denver gets an invoice from floor covering suppliers and then invoices the customers for everything. “We don’t want the customer to leave our office and go to the carpet guy’s place to get their carpet done,” he adds.
When ancillary products including floor coverings get wrapped into one invoice it makes financing easier, says Young. “We offer leases on every project we sell because it make it easier to sell ancillary products if you can wrap them into the lease.” Design and installation charges can also be rolled into a lease.
A variety of ancillary design-type products are available from Environments Denver. “We do wall coverings, accent wall paintings, flooring and a lot of rugs,” says Young. One recent ancillary product that’s just starting to take hold are decorative pillows to go with seating throughout corporate offices in reception areas, collaborative meeting areas and executives offices. A lot of manufacturers have started to offer pillows. “Global has started to sell pillows,” he says. “Accent pillows are available in any of the upholstery fabrics Global offers.”
Furniture dealers that are not backed up by a supplies division may find themselves at a disadvantage if they don’t have access to that one-stop wholesale shop. “The wholesale level really helps us provide products on a timely basis without having to set up multiple vendors,” Young says. “We place one order with the wholesaler and we deliver it on the furniture trucks with everything else.”
“You can’t go into business anymore and just sell furniture,” says Watson. “It’s commoditized.” He says that a growing number of his dealership’s tech customers have started to buy furniture and accessories online. “I walk into my customers’ offices all the time and they just bought three more sit-to-stand tables without even talking to me,” he adds. Increased commoditization makes the brand experience less relevant; hence Apex remains unaffiliated because Watson contends that stance provides greater flexibility to provide furniture solutions for customers.
Competition is formidable
When it comes to selling the most basic ancillary products, online competition can be formidable. Online suppliers have picked up a good deal of ancillary product sales. On a recent sale of 150 workstations at Apex, the client decided to purchase monitor arms from Amazon. “They didn’t see a large difference between the products we offered and what they ended up buying,” says Watson. “We had coached them to test the product on the mock up we had done for them, but they didn’t do that.” The arms purchased online worked but only after trial-and-error efforts enabled the customer to discover how to jury-rig the attachments.
Another new market that full-line dealers can readily pursue is servicing restrooms in new office construction. Often when architects specify restroom products they do so without a specific idea as to where those products can be obtained. “They don’t usually have relationships with Jan/San distributors like they do with furniture dealers,” says Sansom. “We have discussions with them upfront to have them specify our dispensers.”
As workstations shrink in size and customers seek furniture with smaller footprints, one solution that comes up more frequently is quick-ship furniture solutions typically found on the internet. “Everybody is in a hurry, so traditional long lead times from furniture manufacturers don’t work well with a lot of clients,” says Sansom. His primary furniture suppliers Herman Miller, National and HON all have quick-ship options.
Customers who don’t buy furniture that often can have some misconceptions. “They think because they can see furniture online, we should be able to get it delivered to them in a day or so,” says Sansom. He believes this quick-ship market will continue to grow. “The biggest challenge to growing sales of ancillary products and services is retraining existing sales reps,” he adds.
Citron has a sales staff split between older and younger salespeople. Some of the old-school folks have a harder time selling accessories, especially any that are more tech-oriented. One up-and-coming ancillary product is the M/Connect docking station from Humanscale, which provides a USB port to connect laptops to monitor arms. The system combines technology with ergonomics and eliminates cable clutter. “The younger reps love it,” says Manhart. Instead of attempting to sell the docking station they present it as a cool alternative to connect monitor arms and it practically sells itself, he reports.
At Apex Facility Resources, Watson goes outside the industry to hire salespeople as he contends that the typical furniture salesperson doesn’t get services. “They don’t feel comfortable or confident having that conversation,” says Watson. “Dealers who aren’t replacing those salespeople with young, smart people and training them to handle the modern customer will get left behind.”
Michael Chazin is a freelance writer specializing in business topics, who has written about the office supply business for more than 15 years. He can be reached at firstname.lastname@example.org.