Although I didn't realize it at the time, the trouble I started to describe in Monday's post began at the end of 2011. That's when we got a call from a client for a low-cost, modular, folding table. This is a particular configuration of conference table that we weren't making at that time, mostly because the best solution to the problem involves using metal components that we cannot fabricate in my factory (which concentrates on woodworking.) But we had been getting a steady stream of calls for this type of table, and I decided that we should put some effort into developing our own version.
We found a manufacturer of table components, based in Michigan, who had a particular leg design that we could use with our own top s and base parts. This leg had a very nice folding mechanism. I ordered one to see whether it was as good in person as it seemed online, and we built a prototype. It worked well. We were even able to engineer a way to include power and data capabilities - a tricky design problem, which is why most makers don't include them in folding tables. We showed the prototype to the client, closed the deal, and made the first batch.
The manufacturing times were acceptable, so I put the new product up on our Web site, with pricing per table of $1,594. When I first posted the table, we had the price prominently displayed at the top of the page. If you read the body text, it was clear that we were talking about each table in what would most likely be a multiple table order, but a quick glance at the whole page, with the picture showing four tables, left the impression that you could get a set of four for under $2,000.
Now, there are lots of cheap tables that are in that price range, but we don't really cater to people with that small a budget. Given the costs of our design and selling process, I consider $5,000 a reasonable minimum order. Our average order is closer to $15,000. In my mind, I was happy to add a new product to our line that hit a low but acceptable price point (in the quantity that most people would need, four or more) and that would serve as a starting point on further developments of that type of table.
We had been making modular tables previously, but most of them were large and complicated. While we had a page of our site devoted to them, I was not targeting them specifically with their own keywords or ad group. I decided that, with my new economy model, I would take a fresh look at this. Using the Google Keyword Tool, I found that “modular tables†was a very high-traffic search string. Great! So I generated a new group of keywords around that concept, set them up with their own ad group and started driving traffic to our Modular Tables page. Greeting visitors at the top left of the page was our Folding Modular Table, with its low, low price of $1,594 (per table) prominently displayed. I did all of this on Jan. 5.
A few weeks later, I went back to see how the group was doing. Basic ad group maintenance requires checking how many e-mail inquiries we get, whether the click-through rates are comparable to the overall campaign, which keywords generate the most traffic, and whether the ads are being triggered by searches that are relevant. For instance, we have an ad group called “Big Table†that was aimed at people looking for really large tables but was also triggered by people searching for information on a particular type of barbecue called the Big Green Egg.
Apparently, the Big Green Egg is an awkward shape, and lots of people want a custom table to hold it. There is a lot of search traffic around this concept, and a significant number of peo ple would click our ads. These clicks cost me money but do not result in any sales. Google's robots, however, see these clicks as perfectly successful, so they continued to serve our ads until I turned all Big Green Egg searches into negative keywords. Establishing effective negative keyword lists for each ad group can be done only after running them for a while and wasting a lot of money. Believe me, you can not predict the irrelevant search strings people will come up with.
After a month of running the Modular Table ad group, things were looking good. Not only were we seeing decent stats for the ads, we were also starting to get a significant number of calls about lower priced modular tables. Success! I had developed a new product, supported it with advertising, and now the calls were coming in. With a healthy inquiry pipeline, I turned my attention to our sales process.
Inquiries come to us in two forms: either via e-mail or as a phone call. In either case our response was the same. We have a list of 10 questions that allow us to make a recommendation for the client. The questions are designed to reveal the functional aspects of the problem - that is, they concentrate on things like the desired size, the desired number of users, the size of the room. Functional stuff.
When we feel we have enough information, we prepare a proposal, a pdf document that contains images of the options we recommend and information on wood choices, power/data options and pricing. The proposal, I believe, is an impressive piece of work. I had come up with the format over years of interacting with clients and designed it so that it explained itself. My theory is that the document needs to be something that can be sent from person to person in an organization and understood regardless of whether I am there to explain it. I did it this way because many of our transactions are done through relatively low-level people who pass the information on to the decision makers. My other theory about selling was that this document needed to be produced quickly. We could turn one of these around in less than two hours if the job were simple and within 24 hours even if the job were complicated.
This system - get a call, make a proposal, send it off and hope - actually worked pretty well for many years. I created the basic format in 2007 and didn't change it even through the downturn or the recovery that we experienced in 2010. In 2011 we broke all of our previous sales records and made money to boot. As spring of 2012 approached, it looked as though we would repeat that success. Incoming inquiries were strong, and my two sales engineers were churning out proposals in response. The numbers looked fine, and I was confident that success was assured. But I was about to find out that a high level of sales activity doesn't necessarily guarantee results.
Wednesday: The metrics I track and the stories I tell myself.
Paul Do wns founded Paul Downs Cabinetmakers in 1986. It is based outside Philadelphia.
