Outpacing the Competition: Strategies for Increasing Sales in the Decorative Hardware Industry

The decorative hardware industry has become increasingly competitive, with national companies increasing their reach, manufacturers circumventing dealers, the rise of e-commerce platforms like Amazon, Wayfair, and Build.com, and dealers vying for the attention of the remaining but fragmented customer base. To stand out and drive sales, it’s critical to understand your current market position, identify underserved market segments, and implement targeted strategies. This article will guide you through analyzing your business, understanding your key markets, and increasing your sales effectively.

Step 1: Analyze Your Current Market Position

The first step in increasing sales is to determine where your company is excelling and where it may be falling short. Start by examining your sales data and customer demographics to answer the following questions:

• Which customer groups make up the bulk of your sales?
• Which customer groups require the most time?

To answer these questions, take all your sales from the last month and group them by customers. Next, go through and combine customers with shared characteristics. As you do, four market segments should arise: Interior Designers, Contractors, Millwork, and Homeowners. You may find that these market segments can be further divided into smaller categories. If you have enough data, you should separate your sales into those subsegments.

After you have grouped your sales by markets with shared characteristics, add the sales together for each group. Next, determine the time required to serve each group. You may find that 70% of your revenue comes from selling to Millwork and they take only 30% of your time. Or you may find that Homeowners account for 15% of your revenue but take 40% of your time. Whatever you find, do not jump to the conclusion that you would be better off not targeting a poor performing market. That poor performing market may be an opportunity in disguise.

Step 2: Identify Underserved Markets

Once you understand your current strengths, the next step is to determine which markets your company is not serving effectively. For example, when you identified your current market position you may have determined that homeowners take too much time for the revenue they generate. One conclusion could be to stop serving homeowners. Another conclusion could be that all your competitors are having the same struggles with homeowners and do not want to invest in targeting that market. This presents an opportunity for you. If you understand the underperforming market better, you can invest in that market to streamline their purchasing process, increase customers from that market and grow revenue.

From our experience, the decorative hardware industry caters to four primary customer groups:

1. Interior Designers

Interior designers prioritize aesthetics and quality. They seek a wide range of finishes, styles, and unique pieces to match various client preferences. They also need a streamlined way to get their clients’ feedback on the products they have selected for a proposal. Adding a way to reduce an interior designer’s workload will streamline the sales process and increase that customer’s purchasing with you.

2. Contractors

Contractors may not be the person that you are talking to throughout a project, but they are the person who determines where the project sources their hardware. Many of the interior designers we have talked to said that the contractor paid for the materials the interior designer selected. Making it easier for the contractor to do their job would make them more likely to pressure their interior designers or homeowners to shop from you.

3. Millwork

Millwork is the golden goose in decorative hardware. They have a constant stream of work and have enough industry knowledge to reduce the amount of work your company has too do to make the sales. This market is also more likely than others to have designated employees to handle purchasing. If you have an e-commerce store that is properly maintained, this market segment will take full advantage of it.

The downside of this market is that they have a large enough volume to circumvent dealers and purchase directly from the manufacturer. Thus, winning their business on price is not a winning long-term strategy. Instead, offering services that make their lives easier will be more likely to increase their purchasing.

4. Homeowners

Homeowners are one of the most difficult segments to target because of their high demands and low spending. Homeowners have grown accustomed to an amazon like experience and are more likely to purchase based on price instead of service. The biggest hurdle to this market is awareness. Most homeowners are not aware of your company when they are purchasing hardware. They may first go to a large E-Commerce platform or to Home Depot. Increasing awareness of your company with an online presence is the first step to effectively targeting this market.

Step 3: Evaluate Your Current Market Focus

After identifying where your sales are coming from and the characteristics of markets you are selling well or need improvement in, choose a market to invest in. By analyzing your current position and expanding into underserved markets, you can increase sales and build a stronger competitive advantage. Whether you are catering to interior designers, contractors, millwork professionals, or homeowners, understanding their unique needs and tailoring your approach is key. The decorative hardware industry is evolving—stay ahead of the curve by evolving with it.