Stories like this are far too commonplace these days for a business like ours that considers the K-12 education market core business. The prolonged weakness in new school construction means a significant reduction in demand for our core products, MAXAM gym bleachers and Quattro auditorium chairs. Not to mention our newly acquired line of Clarin by Hussey Seating fixed lecture room seating.
Faced with a steady decline in demand from a core market (and no dramatic resurgence in sight), some businesses choose to do nothing and try to ride out the storm, waiting for the customers to return. Others take action and respond to the shifting economic landscape, determined to thrive in the short term and reap the benefits of a resurgence in demand when (and if) that day comes. For Hussey Seating Company, which has persevered through 176+ years of good times and bad, the choice was simple. Experience has taught us that when the market serves up lemons, you better get busy making lemonade.
Strategy 1: If they can't afford what they want, make sure you can sell them what they need
Put another way, meet the demand that is there. In the education market, communities that can't afford to build new facilities must immediately turn their attention to maintaining, and if possible, upgrading their existing buildings and equipment. Our nationwide network of Hussey Regional Service Centers has long been in the business of servicing and supporting the products we sell; as new construction demand has fallen, these local experts have seen a big upsurge in demand. In addition to the routine work of inspecting and maintaining telescopic and fixed seating systems, many schools are investing in upgrades or replacement of their existing seating systems to bring them up to current safety codes, achieve desired comfort and aesthetic standards for their patrons, and ultimately to extend the useful life of their investment.
By leveraging the expertise of their local dealer and the OEM support of Hussey Seating, these schools are able to stretch their budget dollars. At the same time, Hussey and its dealers are able to continue to rely on steady demand from this core market sector. If your core market demand has declined, chances are they haven't stopped spending – they've simply reduced spending with you. Find a way to meet the needs on which they are spending.
Strategy 2: Offer the best value to win more market share
With a smaller pie of consumer demand, it's imperative that you grab a bigger piece of that pie if you want to continue to thrive. Two ways to accomplish that are by cutting your price (and your profits), or by delivering more value for the customer's dollar.
In a climate of tight budgets, it may seem that the former is the quickest means of gaining market share, given that customers have less to spend. But if all you've done is gain work that's unprofitable to perform, what's the point? Tight budgets also mean customers are looking to stretch their dollars, and get as much buying power out of each investment as possible. So delivering a superior value at a competitive price can be a means of gaining market share while preserving margin.
Fortunately for Hussey Seating, that approach is nothing new. We've always competed in a very price-sensitive, publicly funded K-12 education market space, against competitors that have by and large opted for a lower-cost, "just as good as Hussey" sales pitch. Since Hussey Seating is committed to offering the best-engineered, safest and most reliable gym bleachers and auditorium seating possible, we're almost never the low cost option. Which means we have to deliver a superior value at a still very competitive price.
We do that by a continuous investment in product development and innovation, always looking for ways to improve the customer's experience while controlling and streamlining production costs.
Our unique, patent-pending wireless bleacher controller dramatically improves customer convenience and ease of use at a very affordable price
Committing scarce resources to product development can certainly be challenging; other means of increasing customer value can include bundling other products and services together to improve the overall value to the customer, or offering a stronger warranty or support package. The important concept is to find ways offer more customer benefits per dollar than your competitors as a means of gaining market share without simply slashing price and profit.
Strategy 3: Leave your comfort zone and compete in new markets
Easy to say, and for many businesses very hard to do. It's human nature to want to stick with what we know, with what's been proven to work in the past.
For Hussey Seating and our exclusive dealers, all of whom have been very successful in our shared focus on new school construction over the years, that challenge is one we've embraced and one that has already begun to bear fruit. While we continue to gain market share in the telescopic gym bleacher market and compete successfully in the school auditorium and theater seating business, our product development and acquisition strategy for the past couple of years has been aimed at complementing and expanding our product offerings so that we can better serve adjacent markets as well.
A good example is our new MXP™ Telescopic Platform. Despite our recent focus on the education market, our long history of success in the Arena & Stadium seating markets meant that we have a very loyal following of former customers who are eager for us to compete for their business again. With a declining school construction market on the horizon, we shifted our product development priorities to developing a premiere telescopic platform solution that would compete successfully in a healthier Arena and community event center market. And happily, we'll be installing the first jobs this year.
With up to 36” row spacing with either fold-down or nose mount Quattro upholstered seats, MXP™ sets a new standard in premium telescopic seating.
We didn't stop there – we acquired another company, Clarin Seating, whose products are an excellent fit for our markets, our distribution and our manufacturing capabilities. Moreover, by combining and packaging our expanded product offerings – such as our MXP Telescopic Platform with our new Premium Portable Seating lines – we offer even better value to customers in these adjacent markets. And product lines such as our new Multi-Purpose seating and Fixed Lecture Room seating open doors into health care, hospitality and corporate customers for whom our existing telescopic and fixed seating products can offer creative new audience seating solutions.
Like everyone, we would have been very happy to continue with our very successful business model had outside circumstances not fundamentally altered our competitive landscape. That said, while these times are challenging, there is opportunity out there for businesses that are willing to be proactive in confronting and responding to the new set of rules we're all playing by. These are three of the ways that Hussey Seating has dealt with the seismic changes in our core K-12 Education market – we'd love to hear your ideas as well. Feel free to share your comments below.