The Psychology of Customer Relations
By Bill Sendelback
PhotoS: ©2018 Brandon Barré Photography. www.brandonbarre.com.
Some might say you should have your head examined if you’re thinking about becoming a hearth product dealer. They might be right, but that didn’t slow down Alan Baroey, owner of Marsh’s Stoves & Fireplaces in Toronto, Ontario. In fact, he actually was a psychologist before becoming involved in the hearth products industry, and skill learned then may have helped him be successful in his second career. For the past nine years, Baroey has enjoyed annual sales increases of 15% to 20% (meaning Baroey has more than quadrupled his business in that time period).
Marsh’s is truly a hearth product dealer with 99% of its sales in hearth products, including wood and gas stoves, fireplaces and inserts, electric fireplaces, glass doors, and gas logs. The store doesn’t carry patio products and very few grills. About 85% of Baroey’s hearth product sales are gas burners, and almost 15% are wood-burner sales.
“I don’t have the showroom space to properly display patio and grills,” Baroey explains. “We do sell maybe a half dozen high-end grills a year, but most grill sales in our area go to the barbecue people whose main business is grills.
“My business philosophy is based on being honest and transparent,” Baroey says. “We’re dealing with explosive fire in someone’s home; we’re dealing with people’s lives, their investment, and their family. We need to be honest and transparent to earn people’s trust by moving them toward the products they need and want and then educating them on how to use that product safely.
“As a psychologist, I want every experience with us to be positive so that the customer will recommend us. They need to feel trust in us, a trust we must nurture. Many retailers don’t understand the importance of nurturing customer trust, the basis of my business since day one.”
Marsh’s was launched in 1948 by the Marsh family as a hardware store. In the mid-50s the store shifted from hardware to wood stoves, eventually selling across Canada, and warehousing as many as 600 wood stoves. In 1979, Baroey’s father-in-law, Richard Fitzsimons, and Baroey purchased Marsh’s as an investment and kept the Marsh’s name. “Neither of us had any experience at all in the hearth products industry,” he admits.
While co-owning Marsh’s, Baroey went to college and graduated in 1984 with a degree in psychology. “After graduation, I couldn’t find a job, so my father-in-law suggested I try working in the store. I told him I’d try it for a couple of months, and now it has been more than 30 years and I’m still here.” In 2009, Baroey purchased his father-in-law’s interest and is now sole owner.
|With about 30 hearth brands in the store, and only 3,500 sq. ft., Marsh's somehow allows inviting space for its customers.|
Baroey’s market area is the greater Toronto area, but 80% of his business comes from the more affluent downtown core. His customers tend to be well-paid, white-collar consumers. “For some reason our business has been recession proof,” he says. “No matter how badly the economy may do, people in our area still do renovations and still need fireplaces. Since we deal with higher-income consumers, they can still afford it.”
The economy in Baroey’s market is “moving along beautifully,” he says. “This market is still going up, and I don’t see any slow-down. The prices of real estate are rising annually at a rate of 15% to 20%, so the market here is incredibly high.
“We are not price beaters. People ask, ‘Are you price competitive,’ and I say, ‘No, we’re not. But we’re fair.’ I have a lot of competition, but I do my best and don’t worry about them. I sell based on confidence in our products and in my people. Once you sell based on price, you’re a loser. Once you educate the customer and have earned their trust, price is not a focus.”
Baroey works with custom homebuilders, but not tract builders. Using his showroom to sell builders, designers, architects, and their customers, each of his floor salespeople has his or her own clients. “When a builder, designer or architect comes in the door, he already knows whom to deal with.”
The entire staff at Marsh’s is on salary, none on commission. “Although a builder or customer may know whom to deal with, anyone can pick up a job or client to promptly get them an answer or take care of anything needed.
“Everything is transparent in our system and how we work,” he says. As a part of taking care of the customer, “I insist that when anybody walks in our door, one of our staff must, within a few seconds, greet and engage him or her.”
Baroey has a full-time staff of 20 with some, such as Austin Lounsbury, having been with Marsh’s for 44 years. “My people are my strength,” says Baroey. “They are the one thing I value more than anything else – people whom you can trust.” Like many business owners today, Baroey has trouble finding people who want to work. “We interview people, put them through rigorous testing to see how they will treat customers, and 90% of them are not worth hiring. So the people I have are as good as gold to me.”
Marsh’s does its own service work and installations with in-house employees. “I don’t sub anything out. We do everything in house,” Baroey emphasizes. “And everything we do makes us profit.” But “profit” to Baroey does not always mean money. “It’s a profit for us when my service guy promptly visits a customer and takes care of a problem. The idea of monetary profit comes secondary to being able to deliver products to the customer as promised, and to take care of any service. I can’t always put a dollar sign on that. I want our customers to feel that they have been served appropriately, trusted and looked after.”
Most of Baroey’s purchases are dealer-direct and that includes a long list of hearth product manufacturers coming from not only Canada and the U.S., but from all over the world. “The exchange rate and the tariffs are huge hits for us, but I’m not moving toward Canadian manufacturers. I will sell what the client wants, and the dollar sign doesn’t mean anything.”
Baroey does have some consumers asking about Canadian products. “I don’t make any bones about where our products come from,” he says. “It really is the product design, what the customer wants, and what is suitable for him that counts.”
|Electric fireplaces are well displayed at Marsh's.|
Based in the original 1948 location of Marsh’s, today Baroey has two adjacent showrooms totaling 3,500 square feet. His original 1,500-square foot main showroom features wood stoves, electric fireplaces and glass doors. After purchasing Marsh’s, Baroey turned his then warehouse into an additional 2,000 square foot showroom now featuring wood and gas fireplaces and gas stoves, both showrooms with multiple burning models.
“We built our showrooms ourselves,” Baroey says, “and they are like revolving doors. We change all our displayed products every five or six years because new products are introduced and our customers’ tastes change. We don’t have a fancy showroom, but we really do well on our displays, and we don’t want our showrooms to look stale.”
He offers a display and product suggestion to other dealers. “If you are displaying or warehousing products that you have not moved in two years, it is time for you to put a ‘sale’ sign on them, get rid of them, and display something new.”
Baroey’s advertising is a little unconventional for hearth dealers. He spends 2.5% of his gross sales on advertising. Gone are traditional radio and television spots, newspaper ads, and all but a few Yellow Page listings with no display ads. Most of Baroey’s money, 80%, is spent on Google Internet ads and Marsh’s website. The remainder is spent on ads in small, designer books in the “really” affluent areas of Toronto, Baroey says.
“People go online and then come in to shop and say, ‘We saw you online and read your reviews.’ Our customers also go online, sometime to talk about us, and we hope happy with our service. But no advertising can pay me back as much as a satisfied customer. We want our customers to say to their friends, ‘Marsh’s is where you need to go.’”
With sales continuing to increase, Baroey is planning to expand his operation. “We’ve been looking for the last five years for a larger facility so we will have enough room to add and display outdoor living products such as grills.” He adds that downtown Toronto is a “miserable place to find property. It could be worth as much as $15 million to $20 million dollars!
“If you are going to get into this business,” Baroey advises, “you must know how to install, be a gas fitter, and be certified for wood-burners. You will not be selling just an appliance. You will be selling something that brings fire into a customer’s home, so you have to know how to install it safely.”
Putting on his psychologist’s hat, Baroey says, “You have to be a people person and be able to sit down and face problems. You have to be able to listen to homeowners, builders, and designers, and be able to satisfy everyone without insulting anyone.”
Sounds like advice most of today’s politicians should heed.
Store Name: Marsh's Stoves & Fireplaces
Address: 3322 Dundas Street, West, Toronto, ON M6P 2A4
Number of Stores: One
Owner: Alan Baroey
Key People: All 20 employees including Robert Sherk, office manager, and John Morton, operations manager
Year Established: 1948
Web Site: www.marshsfireplace.com
E-mail: firstname.lastname@example.org or email@example.com
Phones: (416) 762-4582 and (800) 906-5557
Fax: (416) 762-0345
Number of Employees:
% Gross Sales by Product Category:
Sq. Ft. of Building Space:
% of Annual Gross Sales for Advertising: 2.5%, Internet and social media, 99%