I got this email from my wife this afternoon. You want to know what’s new and exciting in my life? This is about as good as it gets:
I stumbled across the best fertilizer for the garden today! Lama poop! AND…we can get a bunch FREEEEEEEE!!!!! How’s that for great? You just have to haul some home in the trailer. Maybe Sunday afternoon? It’s just up at Loretta’s. And you don’t have to compost it before planting! And it keeps the deer and the rabbits away! It’s so perfect for us. I am excited!
ps. You are a great poop hauler!
Sometimes, having a blog seems like a lot of work. Sometimes it’s wicked fun. And every once in awhile something jumps up and bites you in the ass (er, I mean, surprises the heck out of you).
This was the case this fall when out of the blue, I got an email at my school address from Sara Shragal, Sr. Communications Coordinator for DirectBuy, Inc.
Almost a year ago I wrote a post about my experience at a Direct Buy showroom. Over time that post made its way to Google’s front page for the keywords “Direct Buy” as well as “Directbuy.” So now, depending on Direct Buy’s advertising schedule I consistently get between 150 and 200 visits a day to that post.
But that’s not to cool part. The cool part is that so far, 59 people have also shared their own Directbuy stories–both positive and negative–in the comments section. So I think, if you want a fairly even handed comprehensive report on the Direct Buy experience–from presentation, to sign up, to customer service–you can get a pretty good idea right at that post. One stop shopping.
And now–Direct Buy itself would like to weigh in.
Instead of telling you the whole story, I think I’ll just share with you the correspondence that Ms. Shragal initiated early this fall, which culminated in the interview at the bottom of this post.
Act 1: An Email From Direct Buy Corporate
I work at DirectBuy’s corporate headquarters in Merrillville, Indiana and wanted to introduce myself. Based on the discussion taking place on your website, I would love to schedule a time to talk so I can provide you with additional information about DirectBuy and answer any questions that you or your readers might have.
Given that you have already taken the time to visit one of our showrooms, I thought it might be useful to provide you with some additional information on our company, and allow you to ask questions of me. With some of the recent posts to your site, we also would like a chance to directly respond and provide clarification on our business and our policies.
In the meantime, I encourage you to visit www.directbuycares.com to see for yourself how some of our members have used DirectBuy to build, remodel or furnish their homes, and also how our franchise owners are giving back to the community.
Let me know what day/time works best for you. I look forward to speaking with you.
Sr. Communications Coordinator
act II: I reply. or–What the hell?
Your email intrigues me on a number of different levels.
So first I have to ask: How did you find my blog? I’m always interested to learn how people have come to find me. And since I don’t remember leaving this email address on my blog–how did you find that? And finally, why bother with little ol’ me and my blog? I mean, c’mon–it’s not like I’m Barbara Walters.
Mine is not a consumer awareness blog. I don’t really have a niche. So when I wrote that particular post, I never expected it to get the traffic and spark the discussion that it has. And I certainly never imagined it would catch the attention of DirectBuy corporate. Yet despite the traffic the post attracts, I really haven’t given DirectBuy much thought since writing it. I read the comments, but I don’t encourage (or discourage) the discussion. Heck I rarely even take part in it, other than to say something like, “Interesting. Thanks for stopping by.”
But, after getting your email last night, and thinking about it a little more today, a sort of follow up article might be interesting. From what I understand from your email, it sounds like you’d like to directly address some of the ideas, conceptions, or misconceptions about Directbuy that are floating around.
(I then basically brought up the idea of me interviewing her)
Act III: Direct Buy lets down its guard, takes a chance with an independent blogger, and agrees to an interview it has absolutely no control in publishing
Thanks for your note! I hope you weren’t too frightened when you got my initial email – we actually found your blog and your email address on Google. Here at DirectBuy’s headquarters, we are always on the lookout for outlets – online, media or otherwise – that are interested in our company. Since you have quite a bit of space devoted to DirectBuy, I thought I could offer some helpful insight into our business.
(She then went on to accept my offer for an interview and explained a few of the things you’ll find below)
The final act: Chris Wondra goes head to head with Direct buy in a no holds barred knock down drag out interview that may, in the end, bring the corporate giant to its knees and award the first ever pulitzer to a blogger.
Not really, of course, but a guy can dream can’t he?
CW: Tell us a little bit about your position with Directbuy. What are your responsibilities and how long have you been with the company.
SS: As senior communications coordinator at DirectBuy, I spend a good portion of my time educating consumers about DirectBuy’s business model, because it’s different than what many people are accustomed to. As such, my focus is primarily public relations, branding, and internal communications. I started working with DirectBuy in May of 2001, and since that time, I’ve seen our company evolve and most importantly, grow! From the day that I’ve started, we’ve more than doubled the number of franchised locations we operate, and our members have increased their purchasing by over 500%!
CW:What are some things that you enjoy about your job?
SS: I’m naturally an outgoing person, so I love that I get to speak with so many people from so many different areas in a given day. Throughout the day, I’ll speak with many of our franchise owners, media representatives from newspapers, television, radio, and the Internet, and prospective and existing members from all over the U.S. and Canada. By far, the best part of my job is hearing from our members! Their experiences are so important to what we do. Just recently, I spoke with a family from Chattanooga that built a home, and purchased most everything they needed, from flooring, lighting, plumbing and cabinetry, to furnishings, appliances, and outdoor furniture, at DirectBuy. They were absolutely thrilled with their savings – in fact, they saved so much on their purchases that they were able to buy a brand new truck with the savings they incurred through DirectBuy!
CW:What are some of your biggest challenges?
SS: As a communications coordinator and spokesperson for DirectBuy, one of my biggest challenges is managing communications issues across our growing network. I’m finding myself traveling more and more to attend new showroom opening events, franchise owners meetings, video shoots. Just last week I was in Palm Springs for one event and then Columbus for another, to highlight some of our new showrooms. It has been difficult to keep up, but a lot of fun as well.
CW What would you say are some of the biggest misconceptions people have about Direct Buy?
SS: Some of the biggest misconceptions I’ve seen and heard about DirectBuy are that:
1.) DirectBuy’s sales process is high-pressure; and
2.) DirectBuy members don’t save on their purchases.
First, to address claims that our sales process is high pressure, it’s important to fully understand our business. Briefly, DirectBuy has a unique business model that requires prospective members to attend an open house and learn about the company, savings and product selection. The information shared during this session is confidential, and therefore we require consumers to make a decision to join during the open house. While this format is non-traditional (and somewhat “foreign” to most consumers), it is required to protect our manufacturer relations and ensure incredible savings.
Next, is the misconception that DirectBuy offers no savings on merchandise. Again, the answer to this question requires a little insight into our business model. DirectBuy requires a membership fee that is paid upon joining. In return, members are able to purchase merchandise at manufacturer’s prices. Since we derive no income from the sale of merchandise, this means that members will receive substantial savings on the majority of products offered through DirectBuy, including furniture, cabinetry, lighting, flooring, plumbing fixtures, etc. One point of clarification is that some products, such as appliances and electronics, tend to be very competitive amongst retailers. In such instances when we are advised by a manufacturer that their products may be similarly priced at retail stores, we notify our members via a label on that catalog that explains that the pricing on the products in the catalog, such as electronics and appliances, may offer only marginal savings.
Chris, I continually receive testimonials from our members all across North America, and I know we have tens of thousands of satisfied members who are saving significantly on a wide array of items for their homes. I’d like to find a way for your readers to understand that. I’d also like them to keep in mind that DirectBuy is not for a person who just wants a good price on a faucet or a television. We’re ideal for homeowners who are planning to make multiple home-related purchases in the near future.
CW: That’s interesting. It sounds like you’re saying that, in some cases, a DirectBuy membership may not be able to save you much if anything.
SS: Our business model enables us to offer savings in every product category we sell. The key is that savings on certain types of merchandise is more significant than others, because retailers tend to mark up certain products more than others. That said, our members still find savings on products with smaller margins because they buy them at manufacturers’ prices. In some cases, savings on merchandise with smaller margins is not as much as the savings they would find on other products. I mentioned how we communicate this to our members by labeling our catalogs. When prospective members visit DirectBuy at an Open House, we also make sure to tell them where they will find the most significant savings.
CW: What sort of person would get the most benefit from a DirectBuy membership? In other words, what sort of items would a person want to buy through DirectBuy to save the most money?
SS: Well, any homeowner planning to make major purchases for his or her home over the next ten years would benefit from a membership. However, the families who benefit the most and in the shortest time frame are homeowners who are redoing a room, building a home, or moving into a new home. For example, members often save tens of thousands of dollars on remodeling their kitchens by purchasing items through DirectBuy. The savings on kitchen cabinets alone is typically thousands of dollars. We do not pretend that we are for every consumer, and our marketing efforts are designed to reach out to people who will benefit from our savings.
CW:Let’s talk a little about that so-called “high pressure” sales tactic of requiring a member to sign up on the spot or be banned from the showroom for 4 years. In my original post, I made a pretty big deal about being able to get and print out an invitation for another showroom appointment even after I’d visited once. What would happen if I had actually shown up for the appointment?
SS: That’s a good question. When you sign up for an Open House appointment online, your information is added to a database and then sent to the appropriate showroom so that they may follow up with you to confirm your appointment. If you had signed up and attended an Open House previously, the database would recognize the duplication, and you would be contacted by a representative from the showroom.
CW: You say,
“The information shared during this session is confidential, and therefore we require consumers to make a decision to join during the open house. While this format is non-traditional (and somewhat “foreign” to most consumers), it is required to protect our manufacturer relations and ensure incredible savings. “
Explain how this arrangement “protects” your relationship with manufacturers.
SS: The relationships we have developed with top manufacturers is one of the elements that provides our members with outstanding value and makes DirectBuy a success. Out of respect for the retail community and our manufacturers, the information shared during the Open House session is confidential to prevent individuals from using our prices as leverage at traditional retail outlets. Without this policy, our pricing could adversely impact our manufacturers’ relationships with their other retailers. For example, if a store has a price match policy, and consumers continually visit the store with lower DirectBuy prices that the store is obligated to match, it would hurt their business. That store could and probably would complain to the manufacturer about DirectBuy advertising and delivering on much lower prices, and that could ultimately hurt our relationship with our manufacturers.
CW: You also say,
“ . . .we derive no income from the sale of merchandise.”
Yet I’ve also read (in comments on my post and elsewhere) that in addition to the manufacture’s cost, you charge an 8% “service fee” above and beyond shipping and sales tax. Can you explain this?
SS: To ensure that our members receive the items they requested in ideal condition, our product service staff receives and inspects each piece of merchandise ordered through DirectBuy. Some items include a 6-8% charge to cover this. As I mentioned, this is not an aspect of our business that we profit from, but a service that we provide for our members.
CW: What would you say to those who call Direct Buy a scam?
SS:We have a 35-year track record of serving tens of thousands of satisfied members, and we are continuing to grow across North America with new showrooms opening each month. DirectBuy continues to have success because we offer our members a unique opportunity to save money on items for their home. With any company, there are going to be isolated incidents where customers or members have issues or difficulties. That said many of the individuals who criticize us are not members and some have not even taken the time to visit a showroom. At the end of the day, I am proud to work for a company that helps so many families enjoy and improve their homes.
I don’t know how many times I’d seen it. That chipper blond, the irritatingly giddy couples explaining how much money they’ve saved, the irrefutable logic of being able to purchase things directly from manufacturers, avoiding all those costly markups.
If you’ve seen the infomercial, you know what I’m talking about. If you haven’t, here are just a few of the claims Direct Buy makes:
Retailers are making a killing—even on sale or closeout items. Direct Buy cites statistics from the U.S. Census Bureau to support the following average retail sales markups: home furnishings-43.3%, appliances and electronics-26.2%, sporting goods-37.7%, clothing-41.6%, general merchandise-25.2% and internet & mail order-37.7%.
Through Direct Buy, you can buy items at the same prices the retail stores pay—and sometimes even cheaper.
Direct Buy gives you access to the complete lines of over 700 different manufacturers—in a sense, unlimited options. For example, while a store may carry a sofa in a choice of 3 different fabrics, the manufacturer may actually offer 50 different fabrics. You, of course now get to choose from 50, all from one location. No shopping from store to store.
You will belong to an organization that operates more like a private club than a store, with access to confidential manufacturer prices.
Everything you buy comes with a complete manufacturer’s warranty.
With a Direct Buy membership, you can now buy like the stores do. All you ever pay is cost and shipping.
If you’d like to see more of Direct Buy’s claims (ahem) directly, just visit them here. If you’re here for serious research, I strongly encourage you to check it out. Be sure to click on the testimonial tab in the lower right hand corner of the screen labeled, “What Members Are Saying.” .
Now just to be fair, let’s balance it out a bit with couple more testimonials. I found the following on this site.
3/10/2007 – Casey of Michigan, USA writes:
We were skeptical of this outfit and went prepared to say no. We are building a home and were “promised” by the owner savings of 20-30%, approximately $45,000-70,000. We have tried to take advantage of these “savings”. However, we have done better on purchases at box stores & local distributors.
We purchased four stainless steel Kitchenaid appliances and saved $311 through a big box. We found our front door for $600 less than Direct Buy’s “insider” price. Other examples: Our plumbing, lighting, hardwood, and tile have all been cheaper through the installers. Our lumber, doors, siding, roofing, and window price was $52,408 through Direct Buy, but another lumber company in town is offering the same thing (apples to apples) for $49,817. We are refusing to chase our losses and have unfortunately not been able to save a penny by purchasing through Direct Buy.
If we can’t save at least $4500 to recoup our initiation fee then you won’t be able to.
I do not recommend this company to anyone. It is a scam. My husband and I joined in 2003 (I think it was $3600 to join and haven’t bought a stick of furniture from Direct Buy yet. If you really want a laugh try getting prices of an item off their web-site, it is so confusing just to navigate their site that I just gave up. Going to the actual site isn’t any better. The reps aren’t really helpful almost to the point you feel as if you’re bothering them. I have found many pieces of furniture and other items a lot cheaper “outside”. I will probably just take this as a lesson learned, and not try to purchase anything from them, after also hearing the horror stories about the extra shipping & handling charges and other excess fees, plus the long waiting time just to get your items. If anyone wants to start a lawsuit, I’m in, because we’d like to get our hard earned money back. I will keep coming back to this web-site to get contact info from anyone of you out there who is brave enough and angry enough to carry this out.
Direct Buy: Our invitation to the showroom
So anyway, like I said, God knows how many times I’d seen that infomercial. And of course, as a homeowner with a history of gutting rooms until nothing’s left but dust, studs and wires, it always looked like a pretty good deal to me.
But I just could never find the time to make that phone call. Always something more important to do—like chew meat snacks and watch infomercials. So, as chance would have it, last October Direct Buy made the first move and called us.
Not only did they extend a warm invitation, but they also promised us one of three fabulous door prizes—a new car, a cruise or a $30 gift certificate at a popular chain restaurant—just for showing up.
How could we lose? Worst-case scenario: we satisfy our curiosity and get a free meal. Can’t beat that.
The Rubber Meets the Road (and I slip into a coma)
If you visit the sites I linked to, you’ll get a pretty good idea about what to expect during your visit. The presentation was slick. A nice little movie much like the infomercial you see on T.V., a little talk by the owner showing us some newspaper ads, some sale prices, and then comparing those to Direct Buy’s prices.
The deal we got was $4,300 for the first three years and then something like $95 a year after that.
But we had to decide right then and there. It was a go or no-go situation. If we decided that it just wouldn’t work for us right now, or that we needed to sleep on it, we couldn’t come back for at least 4 years. And of course, who knows how expensive the initiation fee will be by then.
Anyway, after the pitch, we were invited to look around the showroom, which in our case really wasn’t much more than some furniture and a bunch of shelves packed with catalogues.
The thing to understand here is that we really wanted this to work. I’m an investment kind of guy. If I can make sense of it and think I can make my money back in a reasonable amount of time, usually I’m in. My experience with geo thermal heat pumps and CFLs are just two examples of how I’ll put my money where my mouth is.
So all I had to see was how I could recoup my investment in the next three to four years. The problem was that we weren’t planning any major building projects or renovations.
But maybe an even more compelling reason to decline was that we simply couldn’t find anything. We didn’t come prepared. So we made a hasty list of things we thought we might buy.
Gas grills? Um, couldn’t find ‘em.
How about toilets? Umm . . .hang on, let me see.
Maybe clothing? How about athletic apparel or shoes—ehh, not so much.
Bed sheets? Nope.
Direct Buy: The Deal Breaker
They don’t carry basic building materials like Sheetrock or lumber. We’ve already replaced all the windows and doors on our house. So we thought maybe siding. We’ve actually already started doing this ourselves (slowly), as time and money permits, using a brand of fiber cement siding we get at Menards. But we still have a large majority of the house left. We figured if Direct Buy carried the siding, we might be able to recoup much of the $4,300 membership fee.
Like I said, I really wanted it to work.
Bottom line: it didn’t.
After a completely mind-numbing search (first with a sales rep, then another sales rep, then the owner) of the catalogues, we finally came to the conclusion that they couldn’t get it. However, one of the advantages of being a Direct Buy member is that you also get discounts from “partner” retailers and installers and whatnot. So the owner pulls out his cell phone but, alas, it was now nearing six o’clock on a Saturday evening. Nobody who knew anything could be found.
By now I was completely comatose.
We’d spent nearly 3 hours in that place, and I’d had it. It just wasn’t working. And seriously, the hardest part about the whole process was the endless searching. The manufacturer’s catalogues are confusing as hell. Item numbers, limited descriptions, maybe a pencil sketch or a picture here or there but that’s about it.
We had heard during the pitch that everything was also online and shopping was a breeze from home—but we never got close to a computer when we were there. Indeed, I think we only saw one on the floor–and it didn’t look friendly, but that might have just been my blood sugar.
I imagined countless hours over the next 4 years vanishing in the pages of dusty catalogues, as we searched relentlessly for ways to recoup our start up fee. No thanks.
We can’t set foot within 100 feet of the building for the next 4 years? Bummer. Please tell me we won the restaurant gift card. I’m starving.
Direct Buy and Persuasive Sales: A Case Study
Persuasive Sales 101
Ok. First the crash course. If you’ve been to enough sales presentations, you’ve probably noticed a pattern. This pattern is not an accident. It’s replicated because it just plain works.
Different industries, presentation methods, and individuals all tweak the pattern to suit their particular product/media/style, but the persuasive pattern is still the same. Understand, of course, that there’s a whole lot more to this. Libraries have been written about sales persuasion. But here are the basics:
1) The Big Promise
2) The Proof
3) Stories (often in testimonial form)
4) The Guarantee (you’ve got nothing to lose, yet lots to gain)
5) The close (with a tag of urgency)
If you think about it, you’ll find all the basics in Direct Buy’s approach, but what I want to examine in particular is number 5.
You see urgency in sales and marketing all the time. “Act Now. For a Limited Time.” Sales always have an ending date. Every window and siding salesman who ever came to give us a “Free Estimate” always told us that we had to buy that night in order to get that particular deal. Same with time-share presentations.
Direct Buy’s Sales Machine
But Direct Buy puts this whole urgency thing on steroids. If you ask me, the decide-tonight-or-you-can-never-come-back is pure genius.
Why? Direct Buy knows that 95% of people who walk out won’t come back anyway. People have a strong aversion to missing out. Psychologists have proven that fear of loss is a much greater motivator than potential joy from gain.
Direct Buy knows this.
Simply put—if you can resist their tactic, they know you weren’t going to buy anyway. And in probably 99% of the cases, they’re right.
But here’s what I was wondering: Are they really telling the truth?
I mean c’mon. First of all, do you think they really keep track of every person that walks in and out of their doors without signing on the dotted line?
And even if they did, what if (say, six months later), some couple’s situation changes and now they really do want to take advantage of all Direct Buy has to offer. Are they really going to turn away another $4,300 in cold hard cash?
Testing Direct Buy’s Urgent Call To Action
I decided to find out.
Remember, our visit was in October. But last Friday I decided to experiment by clicking on that little “Direct Buy Visitor’s Pass” ticket thingy in the upper right hand corner of their website.
This is what happened next:
First I get a choice of days and times,
Then I get some preliminary instructions about who must and must not attend with me before I’m asked, “Will Saturday, 3/24/2007 at 3:30 PM definitely be good for both you and Lisa?”
Followed closely by a reminder that there are absolutely no children allowed (in case you didn’t catch that the first time), and finally my confirmed Visitors Pass. Yea! I can go!
I even got a pdf version that I prints out neatly and I’m encouraged to bring along to the appointment.
So there you have it. Banned from the building for 4 years? Hah! Just try to keep me out.
Direct Buy and the The Bottom Line for the Consumer
I don’t think Direct Buy is owned and operated by the devil. I don’t think it’s an evil company. And at least from the perspective of an outsider looking in, I would hesitate before I called it a scam.
I honestly think Direct Buy is trying to do what it says–save the consumer money. It’s a good business model, and I truly think it’s legit. But Direct Buy has some serious issues to resolve to get to the next level. The first being the daunting challenge of streamlining and simplifying the flow of information to the customer.
Searching through 8-foot high shelves filled with 5 pound catalogues? Fuggetaboutit. Direct Buy is set up more like an old fashioned library crammed with technical specs than a fun, creative, imaginative showroom.
So who is it right for?
Probably people looking forward to some major furniture purchases,
people who have the time and patience to do their own research,
and people who aren’t afraid to wait 6 weeks without word on their order.
Oh, and it probably helps to have some experience (or at least no fear of) dealing directly with manufacturers–which is a whole different beast when it comes to customer service.
A few final tips to prepare for your Direct Buy showroom visit
So, if you’re going in for a visit, here are a few final tips:
Keep an open mind.
Remember the initiation fee will be anywhere between $4,000 and $6,000.
Be prepared. Bring a list of items you’re thinking of buying in near future. Don’t forget to include specific manufacturer item numbers, specs, and retail prices.
Don’t be pressured. Take your time. See if you can find the things you want quickly and efficiently without a sales person helping you. Who knows how helpful they’ll actually be after they get your money.
When they remind you it’s now or never, just smile and not your head. Now you know better–but it’s still probably best to let that be our little secret. You’d hate to upset them. They might actually remember you six months or a year from now.
I’m wondering if anyone else out there has noticed anything suspicious about the bugs around their house lately. The word “bug” is a scientific term biologists use to combine two species:
The Family of Animals That You Can Kill With A Rolled Up Magazine, and The Family Of Animals That Are Too Quick For That.
I ask because the bugs I’ve seen have definitely become more aggressive in their pursuit to GET INTO MY HOUSE. This makes me nervous. Having just thrown away a Kleenex full of squished box elder bugs, my wife laments because, somehow, she’s missed one.
Then another one.
Then another one.
They just keep appearing.
Sometimes my children react strongly when a box elder bug flies near or lands on them.
Being the man of the house, I feel somewhat responsible to do what I can to help—especially after learning that pointing and saying, “Oh, there’s another one,” or, “Maybe a vacuum would work better,” wasn’t an effective approach.
I’m not a high stakes gambler. I’ve never made or lost millions in business. Never fought in a foreign war (hell, never even been in a fist fight). I’m not a superstar anything. Don’t drive fast cars, drink, mess around with either women or drugs.