by Ed Korczak
The past five years have been a challenging roller coaster ride, climbing to the highest point only to come rumbling back down. But that ride is nearly over. The light we saw at the end of the tunnel was an oncoming train. But now it has passed, and just like recovering from the devastation of a perfect storm, we need to reassess where we are, where we want to go and how to rebuild to get there.
To complicate the recovery even more, while the economic storm was raging, it changed everything. While we were hunkered down, devastating economic winds changed the world in which we do business. Some competitors are gone, some restructured, all cut prices. Our suppliers are forced to change our partnering arrangements, tightening credit. Home construction is nearly gone, refocusing us on remodeling.
Consumer attitude is improving. Many have pent-up demand and are eager to buy. New home construction is down, so most consumers are buying and remodeling existing homes or their current home. They’ve been through some tough times and are cautious about every dollar, looking for the best product at the best price. They are more product savvy, having access to a wealth of information via the Internet.
The statement often repeated is “business as usual is never coming back.” While that may be true, the business basics are still the same, and how we approach them will create a new normal business model. The basic elements are still the same: advertising to get the buyers’ attention; sales to get the order; installation to deliver the product/service and; after sales/service, to get referrals and repeat business. To succeed in the reviving economy, you must restructure how you do business with a “get back to basics” philosophy focusing on the buyer.
While the basics haven’t changed, how you need to address each facet has changed. Advertising is no longer a simple ad or living off referrals. Our new consumer is hooked up to the world electronically. They shop on the Internet, they get recommendations from Angie’s List, they learn from YouTube, Facebook and Twitter. To reach the new consumer, you need an engaging website, satisfied customers praising you online, and a strong following on Facebook and Twitter. You have to be the recognized expert.
Job cost is everything. It’s been a tough time on everyone’s budget, so once you get their attention, you need to sharpen your pencil and cost every item and hour of every job/bid to determine if you break even. Build your profit on that so you know how low you can go before the job is not worth chasing.
Deliver with extreme customer service. Your customer needs to be well informed about what you are going to do before you do it. The installation/delivery process has to be as promised and painless. Fix issues before they become complaints. Perform a walk-through inspection with the customer, satisfying all her concerns before you leave the job.
Keep your customer satisfied before, during and after the sale. In the old days, a satisfied customer would tell five people. An unhappy customer would tell 25 people. Today with the Internet, satisfaction or dissatisfaction can go viral.
We came out of the Great Depression. We’ll come out of this Great Recession. Study your marketplace to better under- stand your potential customer. Learn what it takes to get her attention, to get her business and to get her loyalty. Get back to basics and reshape them to address your customers’ needs and wants. Get your share of the reviving economy.
Ed Korczak is executive director and CEO of the National Wood Flooring Association.