New Store, New Look... A New Beginning

Even the most well-run, perfectly positioned
companies can hit a wall sometime during their existence. That seemed to happen to MMI Power Equipment last year. While a complete overhaul wasn't necessary, owners Brett and Brian Santo decided their maturing business could use a bit of a makeover.

DEALERSHIP DATA

MMI Power Equipment
Milpitas and Sunnyvale, CA
mmipowerequipment.com

Founded: 1985
Owners: Brett and Brian Santo
Employees: 14 full time, 2 part time
Annual Sales: Over $3 million
Sales Mix: 60% wholegoods, 25% parts, 15% service
Customer Mix:
90% commercial in Milpitas,
70% commercial in Sunnyvale
Labor Rate: $85 per hour
Major Lines: Shindaiwa, Stihl, Husqvarna, Billy Goat, Cub Cadet, Echo, Gravely, Honda, Maruyama, Scag, Toro

The dealership had grown steadily over the course of its 20-year history. But the poor location of its second store and a variety of customer service issues were keeping it from clearing the next hurdle. The Santos decided they needed to address both of these issues—quickly—and let their customers know about it the second it happened.

Two stores, two strategies

Founded as Milpitas Mowers in 1985, the dealership purchased a second store 15 years later under the name Garden Equipment Clinic, and moved it to nearby Sunnyvale (only 10 miles away). Although close in proximity, the geographic and demographic idiosyncrasies of the bay area left the two stores seeming worlds apart.

"About 90 percent of our business at the Milpitas store is commercial," Brian points out. "In Sunnyvale, only 70 percent is commercial, and we think we can do even more residential business there."

Potential homeowner sales were a primary driving force behind the decision to open the Sunnyvale store in the first place. However, a less-than-ideal location in an industrial area kept the Santos from creating the shopping destination they hoped would pull consumer business into the store.

Their partner, someone Brian knew from past experience working at another dealership, would run the Sunnyvale store. Things got off to a decent start, but gradually headed in the other direction for a variety of reasons—namely personnel and customer service issues. For a good part of 2007, the Santos worked on buying this partner out, and embarked on a quest to reinvent the company—primarily the Sunnyvale store.

"We wanted to get back to what we really wanted when we first opened in Sunnyvale seven years ago," Brett relates. "We wanted to create a truly unique store; one where both landscapers and upscale consumers would feel comfortable. That's not always easy to do. Sometimes, like at our Milpitas store, consumers can feel overwhelmed by all the contractors. The layout of our Milpitas store doesn't help, either."

Roughly 2/3 of the 8,000-square-foot Milpitas store is designated for parts, service and warehouse operations. Plus, that section of the facility is right up front, adjacent to the showroom area. This layout, Brett says, works just fine for contractors—but not when it comes to affluent homeowners.

CREATING A DESTINATION LIKE NO OTHER

Conversely, the new 5,000-square-foot Sunnyvale store, which just opened five months ago, is almost entirely showroom. A customer service counter is stationed roughly 50 feet from the front entrance. The main parts counter is toward the back of the three-section showroom. Service is in the far back with a separate entranceway and ample parking lot space to maneuver a truck and trailer.

This new location, Brett and Brian concur, is almost too good to be true. Knowing they'd been wanting to move the Sunnyvale store, the Santos contacted their real estate agent to start the hunt. For several months nothing worthwhile presented itself. Out of the blue they got a call from him. A prime spot right down the road had become available, and would soon become the new home of Milpitas Mowers dba Garden Equipment Clinic.

Transforming the former office space into a modern-looking power equipment dealership was going to take some work. "This store is Brett's baby," Brian tells. "She had a clear vision for what she wanted this store to look like and worked tirelessly to make it happen."

According to Brett, her husband, every employee (especially Troy C. and Ramiro T. from the Milpitas store), local contractors Concrete Ideas and Valenti Construction, and all of the dealership's long-time distributors did an amazing job, as well. "Everyone was brave enough to say, 'Hey, why don't you try this?' They all had a lot of valuable input and guided us through the entire process."

Brett first conceptualized her dream store on a trip to Italy. "The stores there had this small-town, welcoming feel," she says. "And the people were so nice. They made you feel comfortable and glad to be there. Everything was laid out in a way that drew you in. That's the atmosphere I wanted our Sunnyvale store to have."

So the Santos borrowed some money, purchased the building and started remodeling. Some highlights of the remodel include:
• Showroom is sectioned into three areas separated by archways
• A glass storefront and abundant windows in the first section of the showroom allow natural light to create a sense of warmth as customers first enter the store
• Product is merchandised by brand, which appeals to the dealership's often brand loyal customers
• Decorative concrete and stone-patterned floors add to the upscale feel already created by the sleek walls, classy lighting and unique displays
• Men's and women's restrooms, conveniently off to the side of the showroom, rival any swank boutique in terms of cleanliness
• Fastest-moving parts are showcased on a wall display as customers enter the second tier of the showroom

JUST LIKE 'BRAND' NEW

Along with the welcoming, small-town feel she experienced in Italy, Brett wanted the Sunnyvale store to convey one other thing. Customers had long known the business as Milpitas Mowers and Garden Equipment Clinic, which created some confusion. Brett wanted to create a single name that strengthened the dealership's brand and could be marketed more effectively. She and Brian settled on MMI Power Equipment.

They hired a professional to create a new logo, which is incorporated on business cards and other stationary, on the floor and walls of the store, and, of course, signage. Also, while vendor-supplied posters and wall displays are part of the overall merchandising scheme, others with the name MMI Power Equipment are also utilized.

"Suppliers like to give you advice on what works when it comes to merchandising," Brett says. "Sometimes, it's really what will work best for them to help their product sell. We need something that will work for us, though. That's what we think this store creates. Fortunately, our suppliers have been very supportive; the long-lasting relationships made us feel very secure to move on."

SYSTEMS FOR BETTER SERVICE

Marketing and merchandising are only half of the re-branding effort Brett and Brian Santo have undertaken. They're also trying to reaffirm their commitment to service, making some personnel changes and implementing procedural systems in the process.

As a result of the buyout of their former partner, the Santos needed to bring someone on who could run the Sunnyvale store the way it needed to be run. Enter Jeremy Cook, a long-standing employee who recently returned to the dealership after trying his hand at real estate.

The Santos also enlisted the help of consultant Bob Clements to, among other things, put an employee handbook together with individual compensation plans for each employee. Every employee needs to understand that, for the Sunnyvale store to succeed, superior customer service must be at the heart of everything.

"Brian is very meticulous and regimented," Brett says. "Since he's such a self-starter, he kind of expects others to do the same. But that's not always the case. Sometimes you have to address issues before they get out of hand. The employee handbook will help a lot because it's all there in writing; this is your job description, this is acceptable behavior and this isn't, and so on."

Along with improving customer service, the handbook should help empower employees to make good decisions and work more independently. This will free up Brett and Brian to, as they say, work more "on" the business and not so much "in" it. That's a delicate balance.

"Working 'in' the business is what we love to do, especially Brian," Brett says. "Plus, I don't think it's all that practical, at least from our perspective, to say we aren't going to work in the business. What we want to do is empower our employees as much as we can, and spend less of our time doing things that aren't helping improve service and grow our business. That's what this reinvention is all about."

The Ice Cream Man is Coming!

Brett and Brian Santo have invested a lot of time, emotion and money in their new Sunnyvale store. By creating a unique shopping destination, the husband and wife duo are hopeful that more high-end consumers will come check them out.
In the meantime, they aren't forgetting the customer segment that's helped them build up their multi-million-dollar dealership: landscape contractors. Many landscapers were MMI Power Equipment customers years ago when they were just small operators. Now their businesses have grown—and changed. Thus, the Santos have had to adapt their approach accordingly.
"Once these guys start approaching a million a year in revenue, they start doing most of their own maintenance in-house," Brett points out. "We keep an eye on that, and work closely with them so they understand we can continue to be their parts supplier, and, of course, equipment retailer."
Where a lot of MMI's commercial customers now have mature businesses, more small operators continue to hit the scene. A couple days a week, Brett drives around the area looking for crews. She'll pull over, and take a bottle of water or popsicle to a laborer. She hands him her business card, and maybe drops a folder with brochures in their truck. Brett says it's amazing how often this results in a visit to their store.
She's also looking at having an ice machine installed at the dealership, so landscapers can fill up their coolers when they stop by the dealership. It's just another way MMI Power Equipment can say thank you.

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