Sept oct 2012 ofdealer

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Herman Miller Dealer TomKlobucher Publishes New Bookon Workplace TransformationHerman Miller dealer Tom Klobucher haspublished a new book, The Great Work-place Transformation, in which he de-scribes how to create great places towork and accommodate the growing re-ality of multiple generations workingside by side in the workplace.Klobucher, who is CEO of Thomas In-terior Systems in Bloomingdale, IL anda speaker at OFDA’s upcoming DealerStrategies Conference, says the bookis designed to “help fast-track your

organization into a truly great place to work… help you hireand retain the most, creative, loyal, and growth-driven employees… andtransform your workplace into a powerhouse that thrives during themost challenging and exciting multi-generational decade in history.”It is a sequel to his highly regarded The Great Workplace Revolution,which focused on showing leaders, front-line employees, and everyonein the between how to wage “a revolution where everybody wins.”For more information, email Klobucher at [email protected] orvisit www.thegreatworkplacerevolution.com.

Washington, DC-Based WorkSpaces LLC on Strong Growth CurveEven if business today is still plenty challenging, there are still expansionopportunities for growth-oriented dealers. Case in point: Washington,DC-based WorkSpaces LLC.WorkSpaces is a relative newcomer—the dealership was founded bypresident Tom McGuire in 2006—but it has been on an aggressivegrowth curve from day one.Its Washington, DC headquarters has seen two moves to larger facilitiesas business has grown. Expansion to Baltimore took place in 2010, fol-lowed by New York City and completion of a Baltimore showroom thefollowing year. With the dealership’s latest move, in August, Workspaceshas a nine-person staff and a 5-6,000 sq. ft. showroom, still being final-ized, in downtown Chicago.Not surprisingly, WorkSpaces was listed recently by the WashingtonBusiness Journal as one of its "2012 Fastest Growing Companies" and,reports COO Adrian Massiah, there’s still more to come.

SEPTEMBER/OCTOBER 2012 OFDEALER PAGE 3CONTINUED ON PAGE 4

news There’s Still Time toSign Up for OFDA’sDealer StrategiesConference

OFDA’s 2012 Dealer Strategies Conference is just aroundthe corner and if you haven’t yet signed up to attend, doit. Now!Putting it simply, you won’t find a better opportunity totake the pulse of our industry from an authentic dealerperspective and learn from office furniture experts, con-sultants, business partners and, most important of all,your fellow dealers.It’s never hard to find a reason not to attend … too manyindustry meetings, too much going on in the business, notenough money in the kitty for any more business travel,etc., etc.But none of those stand up against the single most impor-tant reason for attending: Our industry today is more com-petitive and more challenging than it’s ever been and nomatter how successful you might be today, you need allthe help you can get to make sure your dealership will bestronger and more profitable tomorrow.Looking for new ways to strengthen relationships with theA&D community and other key customer segments? Trying to figure out how to make the most of social mediamarketing opportunities?Want to make sure you’re taking advantage of every op-portunity to use technology to run faster, leaner and moreprofitably?Wondering what it will take to manage multiple gener-ations of employees and keep them productive andmotivated?You’ll find answers to all those questions and more at thisyear’s OFDA Conference. Plus, you’ll benefit from a unique opportunity to hearthought-provoking panel discussions featuring key man-ufacturers on the next ten years in the workplace and toptechnology providers on the implications for dealers ofBIM, IPD, Rivit and other powerful new tools.If you’re serious about your business and its future, youneed to be there. Call 703-549-9040 or visit www.of-danet.org/2012-Conference-Online-Registration and signup today. You owe it to yourself and your business not tomiss it!

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Future plans include expansion into at least one more new mar-ket—South Florida, with locations later this year in Miami and Or-lando—and a third move for headquarters scheduled for Q1 of2013 into some 21,000 sq. ft. of space just north of downtownDC.

In Grand Rapids, Custer Marks SteelcaseAnniversary at Special ArtPrize EventNow in its fourth year, Grand Rapids’ ArtPrize bills itself as theworld's largest art competition and with over 1,500 entries, 616

different venues and$560,000 in total prizes, theymay well have a point!This year’s event had anadded dimension as GrandRapids dealer Custer Inc.hosted a special celebrationon the opening night as partof a year-long recognition ofSteelcase’s 100th anniver-sary and its focus on the fu-ture of work.The Steelcase-Custer rela-tionship is one that goesback to the 1920s, when thegrandfather of Karen TerrellCuster, wife of current presi-dent Dave Custer started theTerrell Equipment Co. whichsupplied product to Steel-

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SEPTEMBER/OCTOBER 2012 OFDEALER PAGE 4

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Dealer News continued from page 3

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case, then known as the Metal Office Fur-niture Company. Since then, nine membersof the family have worked for Steelcase,many in executive level positions.Some 400 customers, prospects and busi-ness partners turned out for the event,which featured showings of Steelcase'sOne Day commemorative video and theopportunity to participate in its Share YourDreams project.“Our event this year was a great success,”reports Custer’s Tara Simmons. “We hadgreat food, live music, a raffle, photobooth and trolleys to take our guestsdowntown to various ArtPrize locationsand a good time was had by all!”

Major Showroom Renovation for LothIn Cincinnati, Rick Naber and his team atLoth, Inc. have been enjoying the benefitsof a brand new showroom after complet-ing a major renovation.The new space combines interior architec-ture, furniture and technology to create anenvironment designed to reflect the latestin workplace research and provide a stateof the art working showroom for some 35-40 Loth team members.The showroom consists of some 25,000sq. ft. of space, plus a mezzanine area forthe dealership’s healthcare market offer-ings and is positioned not only as a show-case for the latest office furnishings butalso as a research and education resourcefor clients.

Kentucky Dealers OfficeResources and Cardinal OfficeSystems CombineKentucky Steelcase dealer Office Re-sources, Inc. (ORI), headquartered inLouisville, has purchased substantially allof the assets of Cardinal Office Systems,also a Steelcase dealership, with offices inLexington/Nicholasville, Frankfort andBowling Green. The new organization es-sentially provides statewide coverage.“This is truly meaningful for our customers,who depend on us to help them create in-novative and harder working spaces thatinspire, foster collaboration, optimize theirreal estate footprint and promote wellbe-ing,” said George R. Bell III, president &CEO of ORI.Jim Gray, president of Cardinal Office Sys-tems, said, “I am confident that our clientswill benefit from this strategic change aswe intensify and expand the products andservices offered and modernize our ordermanagement process and infrastructure.”Gray plans to continue with ORI, as doother members of the Cardinal leadershipteam. He will be a member of the ORI lead-ership team and will lead sales and market-ing efforts at the Bowling Green location.

Maryland Office Interiors Hosts‘Industry Day’ Educational Eventfor Sales and Support TeamBaltimore-based Maryland Office Interiorsrecently came up with an innovative way

to provide their sales team and others inthe dealership with some valuable industryeducation by hosting a special “IndustryDay” at its Washington, DC showroom.The event brought in some of MOI’s keymanufacturing partners in a tabletop formatto showcase new products and trends. Featured vendors included Janus et Cie,Peter Pepper Products, Potomac Lighting,Highmark Seating, McLain Group, Schnei-der League Associates and BBA Contract.“At MOI, we pride ourselves on having aneducated salesforce and while we all geta lot of exposure to our primary lines,there are several hundred other manufac-turers we draw on and this was an out-standing opportunity for some of them topresent their solutions,” commentedMOI’s Joanna Hoffschneider, VP of busi-ness development and marketing.Some 40 MOI sales and support teammembers participated and the event wasso successful, plans are already underwayfor a follow-up session at MOI’s Baltimoreheadquarters.

Corporate Interiors Helps Out onTechnology Upgrade for LocalSchool DistrictStudents in Pennsylvania’s SpringfieldSchool District got a technology makeoverrecently, thanks to a generous assist fromCorporate Interiors, a Steelcase dealerwith locations in New Castle, DE, andConshohocken and East Norriton, PA.



Loth, Inc., Cincinnati, OH

CONTINUED ON PAGE 6

The makeover came in the form of 220liquid crystal display (LCD) flat-screenmonitors which were donated to four dif-ferent schools by Children’s Hospital ofPhiladelphia.The monitors became available due to thehospital’s own technology upgrade andgifting them to the schools fit right in withits “good corporate citizen” philosophy.Fortunately, they were able to draw on thesupport of another good corporate citizenin Corporate Interiors, who packed andshipped all 200-plus monitors to the dis-trict free of charge. “We are fortunate to be able to assist Chil-dren’s Hospital of Philadelphia in distribut-ing such a beneficial gift as these computermonitors, enabling students to learn anddevelop for years to come,” commentedCorporate Interiors principal Janice Leone.“Supporting this charity initiative by Chil-dren’s Hospital of Philadelphia is what Cor-porate Interiors is all about.”

The school district is not the only benefici-ary of the dealership’s community involve-ment. Corporate Interiors is also agenerous supporter of Children’s Hospitalof Philadelphia, Habitat for Humanity, theAmerican Cancer Society and many otherworthy causes.

Seattle’s Apex Facility ResourcesAdds New VP of Sales andMarketing

Seattle-based ApexFacility Resourcesrecently announcedthe addition to thecompany of PaulSobczak as VP ofsales and marketing. Sobczak’s previousexperience includes

building and leading sales teams as a re-gional sales director for Herman Miller, as

well as leading product launch strategiesand steering corporate learning programsfor sales personnel as the company’s sen-ior field marketing manager.He also served as principal of Knoll deal-ership Bauhaus Interiors Group, where hehelped drive business revenue from $3 mil-lion to $18 million over the course of threeyears.Sobczak also founded Triad Leadership,Inc., an entrepreneurial startup designed tocoach and develop high-performancework teams and sales leaders.“Paul has more than 25 years of hands-onexperience in nearly every level of this in-dustry,” said Apex president Marlaine Mc-Cauley, “He brings rare insight to the needsof sales reps and customers alike, whichenables him to empower his teams toserve as consultative partners, provide ourclient partners with guaranteed addedvalue and bring them peace of mind astheir businesses grow and prosper.”

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INDEAL Adds to Full-Time StaffThe INDEAL dealer grouphas announced the addi-tion of Michael Cuviello toits full-time staff. Cuviello,had been with INDEALpart-time for the past twoyears as director of dealerprogram implementationand also as an on-linetrainer.


CONTINUED ON PAGE 9

The Business and Institutional Furni-ture Manufacturers Association(BIFMA) recently released its marketstatistics for July and the numbersshowed a disappointing loss of mo-mentum.

BIFMA estimates July orders de-creased 4% year-over-year, while ship-ments were off 5% from the samemonth last year.

“The July data were a clear disappoint-ment relative to our pre-report expec-tations,” commented analyst BuddBugatch of the Raymond James in-vestment firm.

“Given the easier prior-year compar-isons, we were anticipating significantyear-over-year order growth, even ac-counting for the normal seasonal Juneto July decline. Instead, July orders de-clined year-over-year and worsenedversus June on a two-year stackbasis,” he commented.

Bugatch noted, however, that July typ-ically tends to be a bit soft ahead of thenormal seasonal pick-up going into thefall and suggested the mid-week July4 holiday this year may have caused

some of the negative numbers.

“While the July stats were certainly a‘shot across the bow’ for our favorableindustry thesis, we continue to expectthe industry to reaccelerate in the sec-ond half of 2012 due to easier compar-isons and healthy order activity fromcommercial customers,” he said.

BIFMA also recently updated its indus-try forecast for this year and next.BIFMA now expects 2012 orders andshipments to increase 1.1%, reviseddownward from its prior estimates of4.2% order and 3.4% shipmentgrowth.

BIFMA also lowered its 2013 outlook.The association expects 2013 ordersto increase 3.3% (previously +6.8%)and 2013 shipments to increase 2.9%(previously +6.7%).

Global Insight, the research firm whichdevelops the forecasts for BIFMA,cited a more muted GDP forecast, re-cent weakening in employment/manu-facturing orders, and uncertaintyregarding the Eurozone crisis and thelooming fiscal cliff as factors contribut-ing to the downward revision.

BIFMAReleases

July MarketStatistics,

UpdatesIndustryForecast

Haworth has acquired a strategic interestin office furniture and seating manufacturerAIS. Haworth vice president of global salesTodd James said of the deal, “This new as-sociation will help Haworth’s network ofdealers broaden their offering to small-and medium-sized businesses. We cur-rently focus on that market directly,through our ‘Start-It-Up’ program, and in-

directly through our alliances with GroupeLacasse, United Chair, and now AIS.”“We are excited for the mutual opportunityto add AIS products to Haworth’s distribu-tion network,” said AIS executive vicepresident Rob Lazarus. “This associationwith Haworth, and our continued relation-ships with AIS dealers and sales represen-tatives, will help us to continue our journeyof growth and success.”

Haworth Acquires Strategic Interest in AIS

In addition to his current duties, Cuviello willassist dealers with special product-focusedprograms and share his previous knowledgeand success with the INDEAL programs aswell as his implementation strategies.

Teknion Opens Newly DesignedShowroom in MontrealTeknion Corporation recently announcedthe official opening of its redesigned Mon-treal showroom. The 7,000 sq. ft. show-room has been registered with theCanadian Green Building Council with thecertification goal of LEED-CI Platinum.The redesigned showroom reflects theFrench culture of Montreal by taking a tra-ditional French brocade pattern and ma-nipulating it into a high-tech modern dotpattern for use in the feature screen walls.To further enhance the reflection of naturallight, walls were removed to open up thespace and a white, light material paletteemployed. Environmentally sensitive materials wereused throughout, as well as sustainablewood and wall finishes. Teknion’s showroom is located at 1010


Industry News continued from page 8

Sainte-Catherine Street West in The Dominion Square Building, a land-mark structure situated in downtown Montreal.

Inscape Appoints Vice President of Sales for CanadaInscape has announced the appointment of Edward Collins as vicepresident of sales, Canada. Collins will be responsible for all salesfunctions for Canada, including development of distribution channels,building strategic business relationships and providing vision for allsales strategies and execution.Collins most recently served as vice president of sales in Canada forNeopost, a supplier of mailing systems and solutions. He started hiscareer at Xerox, where he held progressive sales and marketing posi-tions during his 13 years with them.

Global Introduces Proietto, New Seating LineGlobal - The Total Office has introduced Proietto, a new seating seriesthat features both high and medium back task chairs as well as a com-plementing side chair. The Proietto series includes a Synchro-Tilter and Multi-Tilter equippedwith a ratchet style back height adjustment. Chairs are fully uphol-stered with distinctive top-stitching, available in fabric, vinyl andleather.

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OFDA) has announced the winners of its2012 Dealers Choice Survey. Formerlyknown as the Dealer ManufacturerSatisfaction Index Survey (DMSI), thenewly revamped survey is morecomprehensive and aimed at providingproduct-category-level feedback fromdealers of all sizes on the full range ofsupport they receive from their primarynon-aligned suppliers, including morespecialized furniture manufacturers.


CONTINUED ON PAGE 12

announces first

DealersChoiceSurveyAwardsW I N N E R S

Dealers were asked to rate their top-vol-ume non-aligned suppliers in each of sixproduct categories recognized by theBusiness and Institutional Furniture Manu-facturers Association (BIFMA).

“Nearly 2,000 votes were cast in the Work-station/Systems, Seating, Casegoods, Fil-ing, Tables and Storage categories,” saidChris Bates, OFDA\president.

“We were very pleased with the numberand range of responses for this first yearand believe that the survey data will be in-valuable both to dealers, who will be ableto see where suppliers rank, and to thosemanufacturers mentioned, who will benefitfrom the feedback on their companies’product offerings and support services,”he added.

“OFDA and office furniture dealersthroughout the country are honored tohave these winning manufacturers asstrong supporters of our industry,” statedSandi Jacobs, OFDA chair and president/COO of Sidemark of Santa Clara, CA.

2012 DealersChoice Survey

Award WinnersW O R K S TAT I O N S / S Y S T E M S

AIS, Inc.S E AT I N G

Global-The Total OfficeC A S E G O O D S

National Office FurnitureTA B L E S

Global-The Total OfficeF I L I N G

Great OpeningsS TO R A G E

The HON Company

“These manufactures have earned specialrecognition through their support anddedication to the dealer community andare models by which to gauge best prac-tices that contribute most to future indus-try success.”

The award is based on a carefully structured, anonymous dealer poll thatmeasures the six functional areas of man-ufacturer performance considered to beof greatest importance to a diverse cross-section of dealers throughout NorthAmerica.

The award program recognizes those man-ufacturers that deliver the most consistentand effective overall support to dealers inall of those areas in each of the six productcategories.

Awards will be presented to manufacturerson the closing morning of this year’s OFDADealer Strategies Conference, October 28-30 at the Cosmopolitan Hotel in Las Vegas.


Awards continued from page 11

I was born in Oakland, CA, and havebeen a lifelong baseball fan. I followedthe San Francisco Giants because theymoved to the Bay Area first but I alsobecame a fan of the Oakland Athleticswhen they left Kansas City and movedto Oakland in the late 1960s. And yes,I still follow both teams.

For those of you who haven’t readMoneyball: The Art of Winning an Un-fair Game by Michael Lewis or seenthe film version starring Brad Pitt, itfollows the Oakland A’s 2002 season,when the A’s set a team record of 20wins in a row.

As recounted in both the book and themovie, the key to that new record wasgeneral manager Billy Beane and as-sistant GM Peter Brand and their highlyanalytical, evidence-based, sabermet-ric approach to assembling a compet-itive baseball team despite Oakland'smuch lower payroll and overall budget.

At that time, most teams selected play-ers using much different methods andcriteria. Although both methods de-pended on past performance, saber-metrics was less interested intraditional statistics like batting aver-ages and RBI’s (Runs Batted In).

Instead, “sabermetricians” looked atdifferent ways to identify and defineleading indicators of success forballplayers.

They would say that runs win ball-

games and that a good measure of aplayer's worth is the ability to help theirteam score more runs than the oppos-ing team.

Players who got on base with walks,therefore, were as valuable as thosewith hits. Those players who could geton and steal extra bases also had ahigh value, even though it didn’t alwaysshow up in the more traditionally val-ued statistics.

If you’re still with me, you might startto see that sabermetrics is about out-comes and creating the opportunitiesthat lead to them.

Sales are very similar in that regard.The first step is to make sure you’veidentified the right outcomes for yourcompany and your staff.

It took some clever computations toconclude that games weren’t won bybatting averages, but by OBP (On BasePercentage) and slugging percentagebecause these were a more usefulmeasure of a player's overall offensiveproduction.

In the past, the traditional sales win-ners were those salespeople whobrought in and closed large sales.

Today we have come to learn that thelargest sales often have the lowestmargins and can be a drain on thecompany’s resources, manpower andcash flow.

Can

SabermetricsHelp Create an Action Plan

for Salespeople?By Jim Heilborn





COVER continued from page 13

A better measurement is not the size of thesale but the gross profit generated fromthat sale.

Salespeople who hit “homeruns” in thepast may not be as valuable as thosesalespeople who have a better record ofselling at higher gross profit.

The right gross profit is the outcome com-panies need today, as it is what wins in thesales game. It is important, therefore, toevaluate your sales plan and your peoplebased on their ability to generate thesekinds of sales.

Once you have created a sales plan basedon the right outcomes, the next step is tobreak it down into action steps for eachsalesperson.

Just as baseball players must constantlypractice the skills needed to play their po-sitions, salespeople need to keep theirsales skills sharp. Ongoing sales training isimportant if the staff is to continue to per-form at a high level.

Just as important as OBP is to a baseballplayer, NQA (new qualified appointments)are important to salespeople. This is theplayer’s “turn at bat.”

Will they get to first base with the clientand get a sales opportunity or just strikeout? If the salespeople aren’t able to createenough appointments they may need to besent down to the minors (too many base-ball references yet?).

Let’s look at some other possible “saber-metrics” for salespeople…activities thatwill lead to desired outcomes.

The sales process starts by obtaining ap-pointments…enough appointments to cre-ate sales. These can be achieved by coldcalling, networking, referrals, leads groupsor call-ins.

Nothing else happens till the salespersonhas met with a potential buyer and startedthe discovery process.

The first step is to identify how many ap-

pointments the salesperson needs tomake, as only a percentage of them willturn into a sales opportunity…a desiredoutcome.

Only a percentage of the opportunities willlead to a proposal and only a percentageof those into a sale…another desired out-come.

The better the salesperson gets at eachskill, the greater their chance of success inthe next activities.

Unfortunately, if the salesperson isn’t hav-ing success in the first steps, they won’tget close to making a sale. Train or tradethe “player” not scoring well in this firstmetric.

So what should companies be measuring,especially for new or under-performingsales reps.? In basic terms, what are thedesired outcomes? What are the leadingindicators of success and profitability?

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COVER continued from page 14

Here are some suggestions:

If we now agree that sabermetrics is aboutthe leading indicators of performance andthe need to reach certain outcomes, thenthe next items for consideration have to bethe skills and tendencies of the individualplayers/salespeople.

Oakland A’s general manager Billie Beanehad to find players who he felt could attainthe outcomes on a very low budget…adaunting task at best.

This meant he had to be willing to passover some bigger name players and findrole players who could best perform theneeded activities—getting on base as op-posed to just trying to hit home runs; get-ting pitchers who could strike out one ortwo batters, as opposed to throwing theoccasional no-hitter. These types of play-ers led to wins.

He evaluated players based on their abil-ity to fulfill these roles as opposed tobeing superstars. As the 2002 seasonproved, teams with superstars didn’t al-ways win big.

Dealer owners and managers need to de-fine the roles they need from their sales-people and realize that they need a varietyof sales types to be profitable.

The new business developers might findgreat new major projects, but they may notbe as profitable as the mid-size projects.

Both types of sales have a place in reach-ing the desired goal, but they need to beweighted based on the true objective,which is not sales volume but net profit.

It has become increasingly important toidentify the types of salesperson neededby the dealership and their ability to help itreach its goals.

If the business is based primarily on large,existing companies, then salespeople aremore likely to be account managers…goodat maintaining relationships.

A new business developer may not be asinterested or detailed in the longer, slowerprocess required by these accounts. Theaccount manager may not have the per-

sistence or personality needed for devel-oping new business opportunities.

The challenge is to manage a blend ofsalespeople…role players who can helpreach the desired outcomes.

Billie Beane was looking for players whowould fit in with his team, his “company.”He wanted players with the ability to makethe contributions that would help themreach their goals.

Sabermetrics gave him a new way to iden-tify those players. Sales organizations canlearn from this model by establishing theirown metrics and training and coachingtheir players to reach their desired out-comes…then everybody wins.

Jim Heilborn is an independent businessconsultant, trainer, speaker and writer whospecializes in the office furniture industry.Jim will be a featured speaker at the OFDAconference in Las Vegas on October 28,2012. For more information please visit hiswebsite www.jheilbornassociates.com orview his LinkedIn page. He can be reacheddirectly at 916.434.9811 [email protected].

Measureable Activitiy Desired Outcome

Number of appointment-setting calls/contacts per day..........................................................One appointment

Number of appointments conducted per day....................................................Identify a proposal opportunity

Number of orders placed per day..............................................................................Reach daily GP dollar goal

Ratio of appointments to proposals.......................................................................Increased opportunity to bid

Ratio of proposals to orders ......................................................................................Reach daily GP dollar goal

Average dollars per sale .............................................................................................Reach sales volume goals

Average GP dollars per sale....................................................................................Reach company profit goals

Average daily sales ...........................................................................................Identify goal attainment position

Average monthly gross sales .....................................................................................Identify cash flow position

Average monthly GP dollars earned .............................................................................Identify cash flow trends

What other metrics should a sales manager be looking at in order to reach the right outcomes?

Sales Mix

Number of new accounts opened in next 30 – 60 - 90days

Number of orders/dollars/GP generated from new accounts per month

Number of orders/dollars/GP generated from established, ongoing accounts

Product Mix—Low GP vs. High GP products

Low volume vs. High volume products

Product-only sales vs. Product and Service sales

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This year, OFDA asked me to write an arti-cle on the Dealer Financial Comparisonand Benchmarking Guide (DFC).

While I do not bring to the table the inti-mate knowledge that comes from being adealer within the industry, I am able tobring the unique perspective of someonewho has been involved with the execution,compilation and analysis of the Dealer Fi-nancial Comparison and BenchmarkingGuide since 2005.

Having conducted over a hundred bench-marking studies for industries that rangefrom office furniture dealers to healthcarepractitioners and concrete manufacturers,I have unique insights into numerous in-dustry segments and business types.

This year, I wanted to take a somewhat dif-ferent approach to the analysis from previ-ous years. With over 10 years of datacollected for the DFC, I thought this was agood opportunity to take a look back andsee how the industry has changed over thelast decade.

So much has happened in the industryover the past ten years and to some extentthe office furniture dealer business bearslittle resemblance to that of the early2000s. Consolidations have occurred,products have changed, and the overallapproach to business operations hastransformed.

Also, over the past decade, we have beenon an economic roller coaster ride that hasseen incredible highs and devastatinglows.

We have recently seen unemploymentrates nearing record figures, a collapse of

the construction industry and housing mar-ket and small and large businesses beingforced to close their doors.

Simultaneously, recent years have seen ahigh degree of uncertainty due to impend-ing tax increases and costs associatedwith financing national debts, the effect ofgovernment regulations on businesses andthe new national healthcare legislation.

Throw into the mix an election year and theimpact of struggling foreign economiesand it all can begin to seem just a littleoverwhelming.

That said, the good news is that throughthe highs and lows, office furniture deal-ers—or at least the survivors—have re-mained focused and determined, and havefound ways to evolve and not just survivebut successfully compete.

Moreover, through the DFC, we have over10 years of data to view and assess the in-dustry’s past and present from a financialperspective.

With so much movement and change en-capsulated in the DFC data over the past10 years, what better time to reflect backon the journey the industry has endured?

What Has Changed and WhatRemains the SameTo provide a little background information,the majority of respondents to the DFC op-erate in the United States. Data is also col-lected from companies in Canada andother countries, but the largest participa-tion comes from those based in the U.S.

Due to the large sample size of U.S. firms,we will focus on these dealers as we com-pare figures over the past decade. Bydoing so, we will eliminate data skews thatmay occur by looking at a smaller subsetand it will remove any currency conversionbias that may affect the data.

To give an overview of how the industryhas fared over the past 10 years, Exhibit 1


benchmarkingA Look Back at Ten Years of Performance Trends

for Office Furniture DealersBy Michael Becher

Comparative

EXHIBIT 1SEPTEMBER/OCTOBER 2012 OFDEALER PAGE 17

illustrates the year-over-year sales growthof those U.S. dealers who participated inthe DFC and Exhibit 2 shows the net profitbefore taxes for the past decade.

Sales growth has had large swings fromyear-to-year which includes three years oflosses; the largest coming in 2009 with a

revenue loss of over 21% as compared to2008. The industry can also claim threeyears of double-digit growth with thelargest increase being in 2011 - a 16.6%increase as compared to 2010.

Impressively, despite the large variance insales growth, the industry has maintained

consistent profitability numbers.

Net profit before taxes has ranged from es-sentially flat to just under three percent.Even in 2009, when the industry saw salesplummet, companies were able to remainprofitable by adapting on the fly.

Many companies are still fighting to gettheir sales figures back to the levels theysaw in 2007 or 2008, but the rebound overthe past two years is certainly encouragingand a welcome breath of fresh air foreveryone.

To further dissect how the industry haschanged over the past decade, Exhibit 3shows the summary income statement anda select few key performance measures forfiscal years 2002 and 2011 and the direc-tional change of each.

A number of very important changes—andin some cases non-changes—in industryperformance are readily identifiable.



Benchmarking continued from page 17

EXHIBIT 2

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benchmarkingFY2002 FY2011 Direction of

Change

DETAILED INCOME STATEMENT-% OF TOTAL REVENUE (US DEALERS)Total Product Sales.....................................................................................................88.1% 85.0% q

Total Services Revenues ............................................................................................11.9% 15.0% p

TOTAL REVENUES ..................................................................................................100.0% 100.0% tu

TOTAL COST OF SALES ............................................................................................69.2% 69.3% tu

TOTAL GROSS PROFIT PRODUCT & SERVICES.....................................................30.8% 30.7% tu

TOTAL INSTALLED GROSS PROFIT ..........................................................................20.9% 20.0% q

TOTAL OPERATING EXPENSES ................................................................................21.1% 18.2% q

OPERATING PROFIT...................................................................................................-0.2% 1.9% p

Total Other Income (Expenses).....................................................................................0.5% 0.4% tu

NET PROFIT BEFORE TAXES ......................................................................................0.3% 2.3% p

EMPLOYEE PERFORMANCE MEASURES (US DEALERS)Employee Compensation Expense ............................................................................16.0% 14.5% q

Total Revenue per Employee .................................................................................$296,635 $482,021 p



n Service revenues in 2011, as a percentof total revenues, have increased bymore than three hundred basis pointsas compared to 2002, as dealers havesought to diversify their revenue streamand offset margin pressures on productsales.

n Cost of sales has remained almostidentical which leads to nearly identicalgross profit figures.

n Overall operating expenses. All of theoperating expenses components as apercentage of total revenue were downor flat in 2011 as compared to ten yearsprior. Selling expenses, office expensesand administrative expenses were alllower in 2011 and occupancy expense

remained flat as compared to 2002. Inevery industry, the best way to be prof-itable is to control costs. The two maincomponents that negatively affect prof-itability are the cost of sales and oper-ating expenses. With cost of salesremaining flat over the past 10 years,the ability of dealers to lower operatingexpenses by three percent lead us to…

n Higher net profit. Better control of ex-penses in 2011 translated into an im-provement of two hundred basis pointsin profitability as compared to 2002.

n Employee productivity. Employees areoften considered the most importantasset for any business and that makesan extremely important driver to prof-

itability the productivity you are able toget out of your employees relative totheir cost. Looking at how employeecompensation expense and total rev-enues per employee have changed inthe past decade is very telling. In 2002,each employee was generating sales of$296,635 at a total employee cost of16% of total revenues. In 2011, officefurniture dealers were generating$482,021 of sales per employee at atotal cost of 14.5% of total revenues.This indicates that over the pastdecade, not only is each employee pro-ducing 62.5% more revenue than 2002,but they are doing so at a proportion-ately lower cost to the company.

CONTINUED ON PAGE 21EXHIBIT 3

The Criteria for High ProfitabilityHave Not ChangedWhile some of the basic economics of run-ning an office furniture dealership mayhave changed, the fact is, for the past 10years, the components for success in theindustry remain largely unchanged. Eachyear’s DFC includes a special analysis thatcompares the performance of the mostprofitable firms (defined as the upper 25%best performing companies based on themeasure Operating Profit as a % of TotalRevenues), versus other companies in theindustry. Year in and year out, the samecomponents for success almost alwaysshow up, as listed below:

• Sound expense management • Disciplined control of cost of sales• Solid sales growth• Effective personnel management • Strong accounts receivables

management

Summary and ConclusionsIn summary, while there have been somedramatic changes in the industry and in theeconomy at large, the bottom line is thatsuccess and profitability is created bythose companies that follow the basics ofbusiness.

They focus on four or five of the areasidentified above that result in the most sig-nificant profitability impact.

Moreover, those companies that are themost profitable are not necessarily signifi-cantly superior in each of these areas.

Rather, their success is the cumulative re-sult of being even somewhat better in all ofthese areas to generate substantiallyhigher profit margins.

Remember, those who do not learn fromhistory are condemned to repeat it. Fortu-nately, we have more than a 10-year his-tory of the DFC to learn what leads tosuccess in the industry.

Michael Becher, CPA, is senior projectdirector at Industry Insights, Inc. Becher haspersonally worked on the OFDA DealerFinancial Comparison and BenchmarkingGuide since 2005 and has managed overone hundred benchmarking studies, acrossmany different industries. His work has alsobeen cited in The Wall Street Journal, USAToday and many other publications.



www.rscllcorp.com

It's this motto that defines the Joe DiMag-gio Children’s Hospital in Hollywood, FLand is the foundation for the recently com-pleted 180,000 sq.ft., four-floor LEED-goldcertified expansion designed to not onlyallow hospital staff to perform at their best,but also keep things as normal as possiblefor young patients.

Through an existing relationship with thehospital, Office Elements, a PompanoBeach, FL-based Knoll, Kimball and Na-tional dealer, was recruited to bid on theproject which consisted of waiting/recep-tion areas and several patient roompieces.

“We needed furniture that would be ap-pealing, practical, safe for children andfeature very vibrant colors,” said ChantalLeconte, associate administrator for thehospital who was responsible for workingwith the dealer, architect and facilitiesmanager to bring to life the needs of the



profile

Joe DiMaggioChildren’s Hospital

“We treat your children like our own.”

administrators, staff and patients.

“Each of the four floors was to have itsown color scheme but a cohesive feel,”

said Office Elements’ account managerJohn Goldberg. “Using renderings andsample boards, we were able to showcase

a clean, modern, fun look while maintain-ing a consistent and efficient feel. We usedWieland recliners and gliders with a cus-

“ F I N E A R C H I T E C T U R A L H A R D W A R E F O R Y O U R F I N E F U R N I T U R E ” ®

w w w . m o c k e t t . c o m 8 0 0 - 5 2 3 - 12 6 9

Out of black trash management liners, out of rectangular computer printer slot liners come new and colorful recycle bin drop liners – green for compostables, blue for recyclables, red for confidential, and black for traditional all-around use – making it easy to identify designated waste bins!

Our TM Series of Trash Management liners and our three sizes of CP Series printer slot liners are now available in the usual Black, as well as brand new (and made of regrind) Green, Blue and Red.

Make an eco-friendly statement!

You Can Teach An Old Dog New Tricks!Vibrant Colors & New Tasks for Old Parts

CP1-62 - BlueTM1-66 - Red

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project profile continued from page 22

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tomized Spec side chair for patient roomsand really wowed the client with National’sEloquence, Reno and Swift for resourcecenters, reception areas, lounges and thespaces outside the procedure and treat-ment rooms. Plus all the National productsin the expansion are level 2 and SCS In-door Advantage Gold certified which con-tributes to healthier indoor air and wouldhelp in the hospital’s pursuit of LEED Goldcertification.”

With a team of 8-10 in-house installers, Of-fice Elements went floor by floor for fivedays to complete the project.

“We had to work around a few contractorsand move a few pieces so painters coulddo touchups but all in all, the installationwent very smoothly,” said Goldberg. “Thefurnishings blend perfectly with the décorand really create a place that’s warm andinviting…not so scary both for the childrenbeing treated and their families.”

From the colorful wayfinding elements to

the vibrant graphics of the themed floorsof sports, arts, games and dreams, thePower of Play is at the heart of the facility’sdesign and provides patients and visitorswith a positive distraction from the medicalequipment and procedures.

“The furniture is very versatile and free

flowing. We have already rearranged thefurniture to match the function of the roomand are very pleased with the durability,”said Leconte. “The furniture creates achild-friendly environment and we feelgreat about the design and selections wemade.”

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project profile continued from page 23

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Just Google It.

Go Organic With Your Search ResultsBy Jennifer Schulman

Believe it or not, most of the websites thatshow up on page one of your search re-sults worked hard to get there.

Whether it be from running strategic paidads, also called Pay-Per-Click (PPC) orsponsored ads, or by showing up in natu-ral or organic search results, these web-sites know the importance of being foundonline.

So how do you go about increasing yourown chances of showing up on that all-im-portant first page of a search? Let’s startby tackling how to appear in organic ornatural search results by deploying SearchEngine Optimization (SEO) to your site.

Keyword ResearchIt all starts with a good keyword list. Youhave to identify what you would like to befound for, what your competitors are beingfound for and of those terms, which searchesmay be the most popular. Here’s a three-step plan to build a great keyword list:

1. You know best. You and your col-leagues are the people who knowthe services you provide, the mar-kets you provide them to and yourcustomers the best. What do youthink they would search for? Whatwords are currently used on yourwebsite now?

2. What keywords are being usedon your competitors’ sites andwhich keywords are your competi-

tors ranking on page one for?

3. Run your keyword list throughGoogle. Start with the keywordtool, which will give you more key-word ideas as well as global andlocal traffic for those terms. Thetool will give you keyword ideas byentering the URL of any website orjust one primary keyword. Accessit here: http://tinyurl.com/27uvznm

Go Local For those of you that do business in a ge-ographically targeted area, take your key-word list and append the terms with yourprimary geographic locations.

Keep in mind that most users will appenda search with a city or town name, notnecessarily a county, but you should ac-count for both in most cases.

Engines also personalize search results,one way by showing results close to thesearcher’s location. That said, your site willalso start to rank for broad terms like “Of-fice Furniture Installation” if your businessand the searcher’s locations are in closeproximity to one another.

We also highly recommend creating localbusiness listings: Google + Local (formerlyGoogle Places), Yahoo Local and BingLocal Listing (via the Bing Business Por-tal). They are FREE and can really helpboost organic search presence for yourbusiness.

On-Site OptimizationAs the name explains, these are SEO tac-tics you deploy to your website. The topon-site techniques are:

• Focusing on 3-4 keywords perpage. Anything more can bedeemed “Keyword Stuffing” and is considered spam by search engines.

• Creating custom title tags and metadata for each page. Title tagsshould be no more than 70 charac-ters, while meta descriptions shouldremain at 160 characters or less.

• Internal linking. This is the practiceof linking keywords in your bodycopy to other areas of the site. Forexample, if you mention “cubicle in-stallation” in your body copy, youneed to link those words to thatpage on your site.

• Keeping your HTML and XML sitemaps up to date.

Content CreationContent is King. You probably have heardthis before, but it is very true when itcomes to SEO. Here’s why.

• Engines know how often you up-date your site. They are in the busi-ness of providing the most relevantresults to end users so if your site isproviding “old” info, they will notshow it.

You hear those words, and probably use

them yourself, every day. Think about how

many times you Google or search for

something each day from your PC,

laptop or mobile device—whether you are

looking for the address of that new restaurant

you’ve wanted to check out or trying to track

down a new supplier for your business.


http://tinyurl.com/27uvznm

• Each new page you create can becentered around keywords you needto improve or obtain new rank for.

• Good content will be picked up andshared by other sites, thus leadingto more inbound links, which are in-tegral to a good SEO strategy.

• Your audience loves good informa-tion. Give it to them.

Inbound LinksSimply put, the more qualified, authorita-tive and relevant websites that link to yoursite, the better search result rank you willhave. Link building is critical to SEO. Thereare two types of links:

• Reciprocal links: A link to your sitegoes on another website and youreturn the favor.

• One-way links: These are weightedheavier than reciprocal links. Theycan include business directories,

online directories, blog posts/com-ments and even link sharing on so-cial channels.

You want to follow the 80/20 rule: 80% ofthe links you acquire should be one-waylinks and point to interior pages of yourwebsite, while the remaining 20% shouldbe reciprocal links.

A word of caution: DO NOT BUY LINKS!This is considered spam by search en-gines. The latest algorithm changes arelooking for this and will penalize your site.

Seeing ResultsThere really is a science to deploying SEOand it starts with the steps above. But rec-ognize that SEO does not happenovernight.

Search engines have to re-crawl your site,pick up on the keywords you are trying tobe found for, index your site and decidewhere they are going to initially rank you.

Always allow at least 90 days to start see-ing page one rank and increases in organictraffic, although if done right, you shouldstart seeing results faster.

Another must for tracking your efforts is toinstall Google Analytics (also free) whichwill allow you to easily identify traffic, leadsand/or sales coming from organic resultson search engines.

Whether you have in-house resources orare hiring an outside agency, make sureyou start with the right keywords, deploythe right techniques and, most importantly,track your efforts.

Jennifer Schulman is president of FortuneWeb Marketing, a full service Internetmarketing agency offering consulting andmanaged services for search enginemarketing, social media, e-mail marketing,analytics, local online marketing and otherInternet marketing initiatives. Visitwww.FortuneWebMarketing.com for moreinformation.


Go Organic... continued from page 26

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