March 2/9, 2015; Volume 28/Number 18
By David Romano
In 2013, a study reviewed a week in the life of Baltimore Ravens head coach, John Harbaugh. Harbaugh completed a daily log from Monday to Sunday dissecting the time spent preparing for Sunday’s showdown. The amount of time spent analyzing the opponent was 29.5 hours. When subtracting the minimum amount of time for sleeping, eating and socializing from the 168 available hours per week, studying the opponent accounted for 32% of time spent preparing for the game.
If a successful NFL coach needs to spend that much time studying the competition, why don’t flooring retailers do the same? Doesn’t it make sense that in order to counter the moves of your competitors you need to first understand how they operate and the strategies they employ? It seems floor covering store owners have coached a team that is too reactive to what is thrown at them instead of providing a playbook to prepare for all the trick plays run by customers.
For dealers, that means shopping the competition from greeting to installation. Just sending a member of your sales team to look at pricing and product is not enough. You need to find out how they sell it, how it is priced, the services they provide, the steps taken and the quality of the workmanship.
According to a survey conducted by Benchmarkinc, in which several hundred flooring owners participated over a three-year period, flooring owners who had their competition shopped monthly realized the following:
Total net sales volume:
- $1,492,479 greater than the average
- $1,879,418 greater than those who did not shop the competition
Change in volume (total change in net sales):
- 3.6% growth for those who shopped the competition, 0.9% for the average and -0.2% for those who did not shop the competition
- 40% better than those who did not create a plan
Average transaction (average volume per order):
- $48 better than the average
- $187 higher than those who did not shop the competition
Sales productivity (dollars generated by each full-time equivalent that sells):
- $71,137 more per full-time sales equivalent than the average
- $96,313 more per full-time sales equivalent than those who did not shop the competition
Let’s apply some logic to those numbers. Knowing the tactics of your competitors will help in the following ways:
Your staff will be more equipped to handle price objections, creating an increase in sales volume because they better understand the competitive landscape.
Margins will increase because sales associates are going to be less likely to drop the price when customers falsely claim they found the same product at the same price for the same level of service at your competitor.
If your team feels confident that you provide a superior product and have superior service, they will sell as many products as possible, which increases your average ticket. They will upgrade cushion and grout, sell heating elements, add on cleaning supplies and more.
Allocating 32% of your time to analyzing your competition is both unrealistic and unproductive. The best practice is to have each competitor shopped at least once every quarter and relay those results to your sales team.