August 31/September 7; Volume 30/Number 6
By Jim Augustus Armstrong
(First of two parts)
During my educational sessions I often ask attendees to think back to the last 10 residential remodel sales they made that were over $20,000. Then I ask, “How many of them came from repeat or referral customers vs. advertising?” For virtually everyone in the group, the answer is 80% to 100% came either from a previous customer or a referral.
This isn’t too surprising if you put yourself in the shoes of a consumer getting ready to plunk down $20,000, $30,000 or even $50,000 on flooring for her home. Anyone getting ready to spend that kind of money is not going to select a flooring dealer by browsing the Internet, perusing display ads in the local paper, or calling the phone number seen on a billboard or heard on the radio. These consumers are going to either go to a flooring dealer they already know, like and trust because they bought from him before, or they are going to get a referral. You and I would do the same thing if we found ourselves getting ready to spend tens of thousands of dollars on cabinets, a deck or any other major design project.
One retailer I know from North Carolina regularly books sales in the $15,000 to $40,000 range and they all come from repeat and referral customers. His margins are at 45% or above. And one from Montana landed a $100,000 commercial job with 55% margins from a referral. Dealers’ best-paying Main Street commercial jobs almost always come from a referral or repeat customer.
With that in mind, let’s look at some strategies and principles for attracting high-end, high-margin customers.
Be referable
If you want referrals, you have to provide the kind of service that thrills your customers such that they are eager (not just willing) to refer other high-end customers to you. This starts with the basics: Do what you say you are going to do, when you say you are going to do it. If you promise to be at a customer’s house at 3 p.m. on Wednesday, be there at 3 p.m. on Wednesday, not 3:15 p.m. If you are unavoidably detained, call her and let her know. Then give her a $10 gift card to Starbucks as an apology when you arrive. Apply this mentality to all interactions with your customers.
Wow your customers
Satisfied customers don’t give referrals—thrilled customers do. Walt Disney said, “Whatever you do, do it so well and so uniquely that others can’t help but talk about you.” When someone walks into your store, hand her a beverage menu and ask her what she’d like to drink. Have a testimonial brag wall prominently featured so that the customer sees it the minute she walks in. When visiting a customer’s home to give her a quote, wear medical shoe covers. Inspect her vacuum to make sure it’s functioning properly and removing damaging soil from her carpet. Give her a free bottle of residue-free spotter and offer free lifetime refills. Write down recommendations for how to get the longest life out of her flooring, even the areas she’s not replacing. After the installation, surprise her with a gift basket.
In part two of this series I’ll cover more strategies for magnetically attracting big, profitable sales. For in-depth training on the strategies covered here, register for the “Retail Profit Explosion Boot Camp” taking place Nov. 5 at The International Surface Event East in Orlando. Visit tiseeast.com for more information.