Finding Success in the Dismal Economy
Michael Kite
I never imagined a day when my business would not be growing. For the past two years, it has been in significant decline. There are several reasons for this: the price of oil, gas, the housing market, discretionary spending, consumer utility costs ... I could go on and on, but the way I see it, my company,
Freeflow Spas, is a huge success!
I know it sounds ridiculous, but, even though things have been on the decline, we are gaining significant market share while our industry is shrinking at an alarming rate. The reason we are growing market share is simple: Our customers finally became aware of a need for our product only after the economy went south.
When the economy was in high gear, our customers, the specialty retail hot tub dealers, were selling so many hot tubs that the manufacturers were having a hard time keeping up. The years 2002 through 2005 saw the largest expansion in our industry's history. Dealers were making unprecedented profits and had little need to address the cost-conscious consumer at which our product is targeted. It simply didn’t pay to direct resources toward a lower-profit product when they needed to focus everything on selling the high-priced, high-profit items. In 2006, the hot tub market reversed itself and has now shriveled down to 50 percent of what it once was.
Although we continue to show sales figures that are off last years, we are adding new dealers at an unprecedented pace. We receive several inquiries a day from these independent hot tub retailers and close new accounts every week. We have even been invited to sell our products on the showroom floors of factory retailers owned by the manufacturers of high-end brands, to help cover overhead and bring in additional showroom traffic.
Our same store sales are down, but the addition of these new retailers is starting to make up the difference. We expect to turn the corner and return to a comfortable growth rate within six months, with or without an improvement in the economy.
So, as it turns out, the downturn in the economy is actually helping me achieve success by raising the awareness of my customers to a new product category that, in the past, was mostly ignored. My job now is to make sure that my newly enlightened customers find success in selling our products and don’t forget about us when the good times are rolling again.
