Checking in: Battling it out in Buffalo

Home Editorials Checking in: Battling it out in Buffalo

by Steve Feldman

I always say attend a National Floorcovering Alliance meeting, keep your ears open and your mouth shut and you head home a smarter individual. That’s because these retailers are the best of the best.

One of the reasons these retailers continue to get better is because at each meeting two or three members share their best practices with the group. Aside from admiring how each is successful in their own right, you gain an appreciation for what they do.

Take Jay McDonnell, president of eight-location Custom Carpet Centers in Buffalo, N.Y. Think you have it tough? Buffalo was this country’s eighth-largest city in 1900. By 1960 it was No. 20. Today it is ranked 51st and the third poorest. While major cities’ populations have grown 200% to 300%, Buffalo has lost more than half its people. While you’ve been in a recession for four years, Buffalo has been in one for the last 40. So when McDonnell talks about the rules of survival in a down economy, do what everyone used to do when E.F. Hutton talked: listen.

While the NFA traditionally prefers to keep its best practices within the group, McDonnell was kind enough to allow me to share his with all of you.

1. Be distinctive in brand identity. Rather than advertising room scenes like every other flooring retailer in western New York, Custom Carpet Centers created a cartoon caricature named Callahan, which appears in all advertising, marketing, in-store POP, etc. Ads tout him as “The only man in town who knows what your wife really wants.” Or “Saving Western New York one floor at a time.” The cartoon logo has become synonymous with the company.

2. Do more with your existing customer base. Every customer who purchases from Custom Carpet Centers receives a post card before she leaves the store offering 10% off her next purchase if made within 90 days. Custom Carpet Centers also is not shy about asking for referrals. At the point of sale, the consumer is provided with a referral bucks coupon, aptly called Callahan Referral Bucks. A referral can be worth up to $100.

3. Expand the business into other categories. It could be shop-at-home, it could be con- tract, it could be cleaning, it could be wood refinishing. Diversify.

4. Maintain your gross profit margin. This is the downfall of so many retailers. Profit pays the bills, not volume. McDonnell put it in perspective: If you do $10 million at 35% margin, that’s $3.5 million. If you want to do an extra million but drop your margin three points to do so ($11 million at 32%), you only make $20,000 more profit. On the other hand, if you raise your margin three points (38%) but do $500,000 less business, you have increased your profit by $161,000.

5. Manage your reputation.

McDonnell suggests Googling the name of your company followed by the word “complaints.” See what negative comments are out there on the Internet. Fix them. Then go to the Better Business Bureau site and see how you come up. You get a letter grade as to how you handle complaints.

Just remember: It could always be worse. Your recession could have lasted 10 times as long.

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