Careers are, ideally , about more than just making money. But for business owners, maintaining profitability is still the highest priority. For those selling portable spas, if they're any good at it, they're probably safely in the black these days, since people really are spending more time at home and investing in their nests. But if your goal is to be more than just good at selling hot tubs — if your goal is to be great — then the following profiles of a couple of very successful dealers may provide just the insight you're looking for.
The Customer Service Fanatic
When Jim Van Fleet, owner of Mainely Tubs in Portland, Maine, purchased a struggling hot tub dealership in 1994, he knew he had to make some changes. He looked just down the road for ideas. "L.L.Bean, with headquarters 10 miles from my house, is one of the premier retailers in Maine and also does an international mail-order catalog business," says Van Fleet. "They're known for their high standards and delivering superior customer service. So I thought, 'here's a pretty good model,' and set out to try and make us the L.L.Bean of hot tubs in Maine."
Founded in 1912 by Leon Leonwood Bean, L.L.Bean has grown from a one-man operation to a global organization with annual sales in excess of $1.4 billion. With only one part-time employee in 1994, Van Fleet was little more than a one-man operation when he started as well. So to meet his goal of providing excellent customer service and still have a life, he did something a bit unorthodox. "I'm one of the sole practitioners who actually puts his home phone number on the answering machine of his store when he's closed. I did that in 1994 for the first time because I felt it was a very quick and easy way for me to convince anybody I was very serious about taking care of them after the sale. This wasn't a sale-and-run proposition. Our prime mission was and is supporting customers.
"A lot of people in the early years called me crazy," adds Van Fleet. "Most of my friends who weren't associated with the business said I was insane." These days he only gets about one call a month, but in the early years he could get three or four calls a week.
The early years were different in other ways, too. "The company had fallen on very tough times, so the first year we sold only 30 hot tubs," says Van Fleet. "Revenues were low and losses were high so I wondered if I had done the right thing." Van Fleet even dug into his personal savings account to make things happen that first year.
But times have changed. "Our sales have gone from $255,000 in 1994 to $6.4 million in 2004," he says. To generate that $6.4 million, Mainely Tubs sold more than 900 HotSpring units in 2004. And all that came after what had been a record-setting 2003, when the dealer sold 650 hot tubs.
These kinds of numbers don't go unnoticed. In both 2003 and 2004, HotSpring honored Mainely Tubs with its worldwide dealer of the year award, the Locksin Thompson Award. "We were pretty excited," says Van Fleet about winning the award in 2003. "We felt as if we might have reached a pinnacle. We had really accomplished that which we set out to be — the L.L.Bean of hot tubs. I've even had employees of L.L.Bean tell me we are in fact the L.L.Bean of hot tubs in Maine."
Mainely Tubs sales numbers are even more impressive when you consider the size of its market, which is about 250,000 people. In fact, the pace at which the dealership has been selling portable spas prompted Van Fleet's banker to ask him if he had saturated the market yet. Van Fleet responded by telling his banker about a survey conducted by the American Society of Interior Designers, in which it asked homeowners age 35 and older what they want to do in their homes to improve them, and the most frequent response (15 percent) was to add a hot tub. "I think our industry feels we're in about 3 to 4 percent of American households today," says Van Fleet. "And so I think the upside is terrific and hence the response to 'Have we saturated the market.' is, 'No way.'"
Branding Mainely Tubs Van Fleet plans to get hot tubs into hundreds of more homes in southern Maine and eastern New Hampshire by providing exemplary customer service before, during and after the sale.
"In fact, we've put that in our job descriptions," says Van Fleet. "We eliminated all the little 'My job is to replace the O-ring' type stuff. Instead, it's: My job is to make a customers say, 'Wow, I've just experienced incredible customer service.'
"Now, we have a referral program, of course, so we say thank you to our customers in a tangible way, too," says Van Fleet. And the program works. Of the more than 900 units Mainely Tubs sold last year, over 500 came from referrals. And both the current and new customers benefit. The current customer gets a $100 gift certificate for chemicals or accessories, and the new customer gets $100 off a hot tub purchase.
Mainely Tubs also uses a variety of marketing and advertising, such as print, radio and network television ads and direct-mail pieces, to get customers through the door. "We do about a dozen big sales a year and have a lot of hype and promotion around them. Two times a year we do a big warehouse sale, and one happened to be last week. We sold 13 hot tubs — and that was on a Wednesday!
"We also go to home shows, we do fairs, we do boat shows, we do flower shows, we do clam festivals, we do lobster festivals. We create our own tent sale events in communities where there is no such event that draws a lot of people," says Van Fleet. "We take our products to the marketplace as many as 20 times a year."
The dealership also sponsors teams and youth sports activities. "Last year we did five or six charity golf tournaments where we took a hot tub as a hole-in-one prize," says Van Fleet. "It helps draw more players and creates more excitement for the charity event, so they raise more money. It's a nice way for us to give back to the community."
The Sales Side Yet another unorthodox practice at Mainely Tubs is how the sales staff is compensated. "I pay no commissions," says Van Fleet. "My staff is comfortably salaried, and we've been doing that for 11 years. It has to do with teamwork and my feeling that we need to have everybody working hand in hand as opposed to in competition with each other. I have seen lots of situations in which commissioned salespeople are so interested in their commissions that they fail to work well as a team."
Van Fleet says this doesn't hurt morale or motivation. "All the sales staff have numeric goals that are built upon their previous year's selling ability. And their personal goals become company goals."
Service techs help in the sales effort, as well. "We have cross-trained our service technicians in sales, so that when they're in the field doing service and support, they're aware of all our products and our selling techniques. Just yesterday, a guy was doing a service call on a hot tub and the customer wanted to know about new products. Well, the tech had brochures in his truck and was able to sell the customer a new hot tub. And for every service call, we ask ahead of time if they're in need of any chemicals or accessories from the store and if they are, we deliver them during that service call, so we're Johnny-onthe-spot there. We save them a trip to the store."
Mainely Tubs also helps customers save time by fully coordinating their installations. If electrical work needs to be done, they arrange for that. "If there are site-preparation issues in advance, we coordinate that for the customer," says Van Fleet. "So as a result, on the day of delivery, everything has been coordinated to allow for a fill-up and then we give the customer an operations lesson. I think that makes us somewhat different than many. Every customer also gets a phone call within 72 hours of their hot tub delivery."
And every time someone from Mainely Tubs visits a customer, whether it's for a delivery or a service call, they get a postage-paid response card. "If anybody gives us less than a five in any category, there is a subsequent follow-up call by an operations supervisor to find out what were the reasons for that so we can learn and improve," says Van Fleet. This comprehensive customer service really never ends — even when customers move. If they want their hot tub at their new home, Mainely Tubs will move it for free.
In The Future Van Fleet's goals for the future include bringing his company's hot tubs to more communities in its market more frequently. "I'm also purchasing a warehouse next week, which is absolutely essential when we get into these kinds of unit volumes." In the new warehouse facility Mainely Tubs will have a moreextensive refurbishing operation, although the company already takes trade-ins and sells refurbished spas, which, as Van Fleet says, "Has led us to being something for everybody."
Southwestern Charm
Southwest Spas in Mesa, Ariz., opened its doors 22 years ago as a Pinch-A-Penny franchise. The familyowned and -operated company start ed selling hot tubs and changed its name after the owner, Bernard "Yanni" Dvorak, developed back problems. "His wife kept saying, 'Why don't you get a spa and see if it helps you.' and so he got one for himself and he liked it," says Melinda Thomas, Dvorak's daughter and the sales manager at Southwest. "So he decided to try and sell some and basically it just took off."
In that first year of selling hot tubs, Thomas says they only sold 25 units, but more recently they had a year in which they sold 425. "Most of our growth and business is because of good customer service, referrals and happy customers," says Thomas. "We take pride in really catering to our customers' needs. If they want something different and they're not happy, we make them happy. That's really the bottom line.
"So many places just want to make a quick sale, but we look to the future for repeat business. We have so many repeat customers, it's unbelievable. People move and leave the existing one with the house, and they can't live without it, so they come back in for another one."
Thomas also credits the company's big selection of tubs on display. "We've got 20 Dimension One models to choose from."
And since Southwest stocks hot tubs, the units are usually delivered within 24 to 48 hours of purchase, which helps to accommodate the company's impulse buyers, says Thomas.
For example, Baltimore Ravens linebacker Terrell Suggs recently stopped in to purchase a hot tub. "He was having a party and he wanted a spa now ," says Thomas. "One of the biggest selling features to him was I could have the whole tub installed — electrical, stereo and everything — within 24 hours. He wasn't in the mood to wait and order. So being able to get product now makes a difference.
"Another good customer of mine," says Thomas, "is Joe Proski, the retired sports trainer for the Phoenix Suns. He's referred people to us, too.
Getting in with people like that and getting your name out there is good, it's good recognition."
The Extra Miles Southwest also garners exposure through direct-mail, home shows, and radio and print advertising, but Thomas says the best marketing is referrals from happy customers.
In addition, Southwest has an incentive program so that referrals are rewarded, but the company's efforts to provide superior service don't end there. "We offer custom installs because often people don't want to see just a box in their backyard," says Thomas. "And we coordinate all sorts of deliveries: ones with cranes, helicopters, boats, whatever it takes. We'll go the extra mile to make sure they get their product. I had one client who wanted a Serena Bay so badly, he spent $2,200 to get it helicoptered on to the side of a mountain.
"We also do a lot of follow-up. We send thank-you cards and birthday cards for people's spas. So a year after they buy their spa, they get a birthday card for it. And you can send them reminders of other products they might want at that time, too."
But before a sale is finalized, Southwest will even go to a client's home, take measurements and make a recommendation. "Most places will not do that, not on a spa purchase. But once you're in their backyard, it's pretty easy to make a sale," Thomas says.
But sometimes a sale for Southwest requires much less groundwork. "I sell spas over the phone all the time," says Thomas, "because some people don't have the time to come in. But they see our product on the D1 Web site and actually make a buying decision over the phone, which is kind of cool. Our sales have increased because of the D1 Web site." But these are not cut-rate Internet sales — they're full-price transactions, says Thomas. "If they come in to the showroom, they usually end up getting a better deal because you can get one-on-one and negotiate in person. But we're more hesitant to negotiate over the phone because we don't know who it is for sure."
When selling on the showroom floor, Thomas feels honesty is critical. "Many companies mislead customers or badmouth the competition," says Thomas. "But I encourage customers to go to my competitors because competition to me is healthy. I'll even give them the address because I'm that confident they'll be back if I did my job. And when I refer customers to my competitors, I think that builds a lot of trust, too, because then they think, 'Wow, she's telling us who the good dealers are and actually making our shopping easier.' Then they realize, 'Maybe I don't even need to go to the other dealer.'"
Instead of criticizing competitors, Thomas explains the benefits of the hot tubs she offers. "Knowing our products well helps us maintain an edge over the competition." She also listens carefully to what customers ask for so she can recommend the spa that suits them best, even if it's not the one with the biggest profit margin.
Looking forward, Thomas says Southwest plans to expand to two or maybe three locations, so it's more convenient for customers to drive to the dealer.
"Right now some people drive quite a distance. We get some customers from so far away, I'm surprised they drive to us," she says. "They come from Pace and Prescott — I have people come from all over the valley. I even had a man who just came in from Paige, which is about six hours away. It's by the border — that's far."
