Danz Spas founder Daniel Thomas has turned a bedroom start-up he launched aged 17 into Britain’s leading online supplier of hot tubs. But how can he get the right sales strategy in place to take the business to the next level? He asks our panel of experts
Despite the Gulf Stream’s best efforts to cast permanent Tupperware skies over Britain, Daniel Thomas’s business is enjoying a vertiginous ascent: “In this industry, sunshine equates to success,” he tells Director. “This year we’ve had the best April on record, and that’s because it was sunny.”
The company in question is Danz Spas, a Nottingham-based supplier of Chinese-built outdoor hot tubs and spas. Today, Danz boasts seven staff, purpose-built offices, a nationwide network of engineers and a 2014 turnover of £1.1m, with plans to reach £2.5m within three years – but its beginnings were modest to say the least.
Thomas developed his love of sunshine – his staff like to tease him for insisting on lifting rather than opening blinds, to eke out maximum sunlight – in the childhood bedroom where, as a 17-year-old student, he later founded his enterprise.
“I’d been dibbling and dabbling with business ideas – I was always a bit of an entrepreneur,” he says, “and one day I was looking for a screen protector for a mobile phone, and somebody wanted £12 for one, and I wasn’t prepared to pay it. So I found a supplier in China who could do the same thing for 30p – that’s what got me into working with China, importing and so on.”
Initially, Thomas’s enterprise had a touch of the Trotters Independent Traders about it: “We started out selling a whole load of unrelated products,” he says. “Everything from golf trolleys to projector screens to TV brackets to stilts. It was working, money was coming in, but about two years in – I started out in 2007 – I knew I was going to have to pick one product and build
a business around it, rather than being a one-man market.”
At first, he ran the business on a hand-to-mouth basis. “It was a case of selling something and using the margin to fund the next [stock],” says Thomas. “I was only 17, and didn’t really have any idea what funding was or who to go to for it. Had I started this at the age of 25 instead of 17, we definitely would have sought funding in some shape or form and grown a lot faster.”
Danz’s unique selling point is that it makes a commodity widely perceived as high luxury available to people of more ordinary means: its most expensive hot tub costs £4,750, while the same product in the average showroom would fetch closer to £8,000. “It’s very much about the middle-class dream,” says Thomas. “When we talk to customers, as much as they say it’s about relaxation, it’s also about lifestyle, getting to that place in life when you can do certain things – that’s certainly a driving factor.”
Thomas says that another major factor behind Danz’s success comes from occupying a space which is devoid of household name brands – “No one would ever buy a Danz television,” he laughs – and knowing how to ‘work’ that space effectively. “The hot tub industry is very dated,” he says.
“It’s run by people who have been doing it for 60 years and they’ve never really believed the internet is a place you can convince someone to spend five or six thousand pounds without them ever meeting you. We know what motivates people online.”
He also cites the power of celebrity endorsements – crediting Sophie Ellis-Bextor’s avocation of the company’s products since the singer had one installed in the garden of her west London home as a post-pregnancy treat in summer 2013 – as a factor in Danz’s rocketing profile.
Next up for Danz is a two-pronged approach to growth: first, international expansion, starting with France, and second, improved distribution methods. “We sell about 300 spas a year, but we did a survey recently, and of all the traffic we bring to our website, 75 per cent of customers said they’d never buy a hot tub without actually seeing it,” he says. “So there’s a huge market we’re missing out on – people who want to see, touch and feel.”
How can this be rectified? “There’s a showroom in Essex we use that’s run by a garden awnings company which wants to expand – we want to look for more partners like that. That’s a huge growth opportunity.”
Key to this, says Thomas, is getting the right personnel to represent the company to potential retail outlets as well as customers. “We need a sales person who’s going to go out to them, talk to them, try to get them on board, and manage it,” he says.
“All the books about sales management talk about creating a competitive vibe in the office, but how can you do that when there’s only one salesperson? And, as we take on more salespeople, how do I keep them motivated, on track, on target?” So, can our panel of experts offer advice to keep Thomas’s venture bubbling along?
Thomas asks our board: How do we create a thriving sales environment in an atmosphere in which neither staff nor management have a selling background?
Tracey Bovingdon, managing director, Tea Monkey
It’s always interesting to hear when people say they’re not experienced in sales – everyone is a salesperson really, it’s just the word that scares them. Therefore it’s about creating an environment within your organisation that allows people to be totally enthused and passionate about your product and what you are trying to achieve.
This comes with having complete clarity about who you are and why you do what you do: why does your business do what it does? Who are you? Who is your customer? What are you trying to achieve? And by when? And, let’s face it… it should be great fun!
Once you have complete clarity and passion around that, then you can bring your whole team into that story and they will create and write the rest of the story for you. Once people know why they’re doing something and what part they have to play in it, they grab at it and become so enthusiastic that they naturally sell – and will also come up with other creative ideas to enhance your product and service.
These days, sales and marketing needs to be authentic, with personality. Ask your team what they think and genuinely listen – then create an amazing environment and culture for them to get excited about.
David Fitzpatrick, sales director, Ruskin Air Management
Creating a sales environment is not just about employing sales professionals. The first part is getting everybody in the business to understand how their actions affect the client. To do this everybody should understand the customer’s requirements and understand the value to the customer of what you offer compared to the competition.
Everybody tells me good sales is about saying ‘yes’ to the customer as they are always right. I believe it is to do with handling the customer’s expectations. This is done by setting out what they’re expecting from you and what you can then deliver. That’s the easy bit; the next is to deliver it.
My experience is that it never goes to plan. A good sales-based business embraces this by letting the customer know if something cannot be delivered as soon as possible and is proactive in coming back with what can be done. Good communication is very important and so is keeping your promises. If you say you will call back in an hour, call back, even if you have no news.
Business is no different to how we live our personal lives, so always think about how you would like to be treated if you were in the customer’s position.
Simon Orme, managing partner, Simon Orme and Associates
A hot tub is clearly both an aspirational and a lifestyle purchase. As a tangible product it does depend upon ‘proof of concept’ in order to complete the sale. The website is clearly working as a promotional and marketing channel but prospective purchasers will want to see, touch and possibly test the product before deciding to buy.
Indirect selling through relevant retail partners is an obvious route. Relevant partners will be involved in selling other lifestyle products such as garden furniture, swimming pools and high-end houses.
The sales function then has two objectives – to persuade retailers to stock the item and also to show them how to sell it. The sales performance so far demonstrates that the skills are already existent.
The website should aim to gather endorsements from satisfied users so that the buying decision is validated. Future sales expansion should come from appointing channel managers to develop specific geographical territories through capturing and developing new business partners. The ‘sales vibe’ is created by competition between channel managers to deliver superior sales figures.
Simon Orme is a member of the IoD Central London branch
Thanks! One thing that is crystal clear from all of these responses is that we must do an incredible job of conveying our passion, vision, and purpose to our sales team. Done well, this passion will naturally overflow into our conversations
with customers. We will give some serious thought to how we can incorporate these values into our training and induction for new starters. Simon’s advice on teaching our third-party dealers “how to sell” is something we had not considered and is valuable advice. It makes sense that we transfer our own expertise in addressing our customers’ pains
to our partners. Thanks again for the great advice.