Selling hot tubs is hard work. Just ask Craig Ecelbarger, owner of the Recreational Warehouse in Ft. Myers and Naples, Fla. “The spa business is the biggest thing we do, and it’s the hardest thing we do,” he says.
Yet he’s found a way prosper in the face of that challenge. Ecelbarger was presented with the Productivity for Multiple Stores award at Hot Spring’s 2013 dealer awards, an honor that goes to the multi-store dealer with the highest sales volume.
Here, Ecelbarger shares his philosophy regarding sales, promotions, training and more.
According to Hot Spring, price optimization was a big reason for your success. Can you tell us about your philosophy?
Whatever price level spas can be sold profitably, we want to be there. If a customer is going to buy a spa for $12,000, we certainly want him. If he’s going to buy a spa for $9,000, we want him, too. If he wants to buy one for $6,000, we want him. We set up our program so that within those levels, profitability-wise, they’re mostly equal. Obviously the gross dollars change. But we are just as happy to be putting a name on the board for a spa that’s $4,500 or $9,500. For us, it’s about maximizing the number of units, and we do that by promoting price points very carefully.
So how do you manage promotion? Hot Spring also discussed your promotional strategy as a winning point during the awards ceremony.
We’re not a typical Hot Spring dealer from that standpoint. We really view our world as a volume world — certainly a sales volume with profitability world. With us, we’re promoting every day.
We have television commercials running every day, we do a direct mail program, we still do some print advertising. We want to be the dominant player in our market for the products we sell. The Ft. Myers/Naples market isn’t a huge market; it’s big enough where we want to be there, it’s not big enough that everybody wants to be there, and we view that as a good thing. But it’s also small enough where we as two stores can dominate it by promoting heavily. Our promotions are not highly creative because I’m not creative. They’re price point driven, and we present finance options a lot. Our ads would look like a high-volume furniture store.
It’s interesting you emphasize price points and financing, since a lot of dealers shy away from price and focus on the relaxation message.
Whatever works. Whenever we run a television commercial, even though we’re talking about price points and financing, we use the luxurious Hot Spring footage of people enjoying the spa and the “oohs” and the “ahhs.” We don’t want to lose that message, but the reality is, with only 30 seconds of time in a TV commercial, we’re not looking to build demand. We’re trying to take demand that already exists in some form and activate it. We’re just trying to get people that are at least predisposed to come and kick some tires to get up off their chairs, grab their car keys and come see us. It wouldn’t work for everybody, but that’s what we do.
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You opened your second store in 2012. What was the thinking behind a second location?
People open a second store for a lot of reasons; I frankly never wanted to. I was involved in a chain with multiple stores before and it really didn’t match my personality. But I was faced with a tough decision: After that tough period of 2007 to 2011, my choice was either going to be to dial everything back a lot, which meant I’d have to lose a lot of good people who had been with us for a long time, or we were going to have to get more sales. And the way we decided to get more sales was to open a second location. We drew up a plan on paper for how it would work, and it doesn’t always work that way, but it went exactly as we planned. Whether it was luck or skill or whatever combination of the two, we’ll take it. For us, it was really a matter of survival.
What kind of plan did you have in mind?
We managed to open a second store and not add any people. We wanted 50 percent more sales and only 30 percent more expenses. And we managed to do that. We have a little more than 50 percent more sales and a little bit less than 30 percent more expenses, so it was a big win. The only reason we could do it was our people were that good, and they were that not busy. We decided we have really good people, they need to be busier, and they can handle it.
What kinds of growing pains did you experience when launching the second store?
Some things were much easier than I thought they would be. And there are some things, of course, that were harder. I can tell you that the hardest part was being used to living in a world where everything is within four walls and you can see everything all the time if you want to — suddenly, it’s eight walls and the two sets of four walls are forty miles apart. You don’t see everything, and you don’t know everything that’s happening.
The part we found was difficult and really made us change the way we work was preparation. It had to be taken to a new level. No longer could we work by being reactionary, which is what I wanted to do: see something, identify it and fix it. Well, with two stores and two groups, we suddenly find ourselves preparing promotions and doing it in advance. More time preparing purchases, monitoring incoming shipments, all those things.
The other thing is it’s a whole new level of communication. The only way to know what’s happening 40 miles away, whether it’s electronically or by telephone or by visits, is to communicate better. Frankly, it’s made us better at the things we do.
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What’s your sales training like? Any final thoughts?
I think selling spas is hard every single day — even when times were great — because it’s a big-ticket item that for the most part people don’t really need. They have to want it. It’s the kind of thing people would be prone to putting off. For us, our world is based on ‘please buy one, and please buy it today if you possibly can, and gee, can we deliver it tomorrow?’
Even if times are getting better, and it seems like they are, if you’re going to take a passive approach to any business — but especially the spa business — I don’t think there’s a pot of gold at the end of that rainbow. I think we have to be out there, promoting, changing our displays, training — we happen to be big believers in sales training.
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We have a very aggressive sales training approach. Every single sales employee we have has to attend two one-hour training sessions every week. Plus they attend one group meeting between the two stores once per month. So every sales department employee through the course of a year has 116 sales meetings they have to attend. It’s a condition of employment, and frankly, it’s how we got to be able to do what we do.
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