April 13/20, 2015; Volume 29/Number 1
By Jim Augustus Armstrong
(First of two parts)
“I have to keep my margins down because of my competitors.”
“I live in an area where people expect a big discount.”
I’ve heard these comments dozens of times from dealers in every market: big cities, small towns, urban, suburban, farm communities, high-tech communities, out in the boondocks and everywhere in between. The common theme is usually, “Yeah, maybe dealers in other areas can charge high prices, but my situation is different.”
I could be wrong. You might truly live in an area where it’s impossible to command anything higher than slave wages, where market conditions beyond your control have condemned you to live out your career broke, struggling and frustrated. If that describes you, I have a question: Are there roads leading out of your town? If so, you should leave. If you actually live in an honest-to-gosh “cheap price vortex,” it will be worth whatever expense, hassle and sacrifice you have to make in order to escape to an area where you won’t have to spend the rest of your life running on your hamster wheel of doom.
But a word of warning: Be careful that the same thing doesn’t happen no matter where you move. Your low-price problems probably have nothing to do with your market and everything to do with you.
Although you may be angry, this is actually good news; it means that you have the power over your fate. It means that if you make the decision to learn new strategies, you can create tremendous profits in any conceivable market.
Always remember that it’s systems of sales and marketing strategies all working together to create a zero-resistance selling environment that will enable you to command premium prices—not a single strategy.
Eliminate all cheap-price language. If you have store signage, ads, brochures or web pages saying things such as, “Our prices won’t be beat” or “Free installations,” then commanding premium prices will be difficult. A cheap-price message and a premium-quality message are contradictory. Pick one and stick with it.
Use testimonials everywhere. What others say about you is 100 times more powerful than what you say about yourself, even if you’re 100 times more eloquent. I suggest using testimonials on your website, on a “brag wall” in your showroom, in a booklet for walk-ins, on display ads and on CDs or DVDs for prospects.
Create differentiation when prospects walk in. Hand your customer a beverage menu and say, “What can I get you to drink?” Bake cookies or bread in your store; the aroma will put prospects at ease. Offer the goodies to walk-ins. Instead of saying, “How may I help you?” say, “Welcome to Jimbo’s Floors! Are you a new or returning customer? A new customer? Great! We have a special program for new customers; can I take a minute to tell you about it?” Then lead her into your sales process. Do the same if she is a returning customer.
Use Facebook to position yourself as a premium quality dealer. Post photos of happy customers on their new floors and include a caption that will engage followers: “Like this post to congratulate John and Suzie Pendergastman on their new floors.” Tag them in the photo and your post will appear on their timelines where all their friends will see it.