Marketing mastery: Eliminate the ‘feast or famine’ cycle

Home Columns Marketing mastery: Eliminate the ‘feast or famine’ cycle

October 26/November 2; Volume 30/Number 10

By Jim Augustus Armstrong

(Second of three parts)

Most dealers don’t have an ongoing, dependable marketing system in place to bring in a predictable stream of customers and balance the seasonal ups and downs. The radio advertising rep will call and say, “We’re having a special this month on ad space.” The dealer figures it’s too good to pass up and buys a slot. He takes a similar approach with newspaper and TV ads, pay-per-click, etc. There is no rhyme or reason, just reactionary advertising.

By contrast, dealers need a bulletproof strategy against market fluctuations. Here’s my definition of a marketing system: a set of interconnected sales and marketing strategies working together to create the marketing multiplier effect, provide differentiation, reduce price resistance and generate sales. Each strategy in a marketing system compounds the effectiveness of every other strategy. Following are some effective basic strategies:

Monthly customer newsletter

Follow the 90/10 rule with your newsletter. In other words, include 90% fun, informative, entertaining and general interest articles with only 10% of articles about flooring. Remember: All flooring is all boring.

Implement a closer system

This leads prospects through a logical step-by-step process from shopper to buyer. I recommend using a questionnaire with a list of standard questions prospects should be asked such as level of traffic within the room, number of pets, color preferences, etc. But you should also ask more probing questions such as, “What’s important about new floors to you? What do you like and dislike about your current floors? What can we do to exceed your expectations?”

Referral Program

Train your sales team to ask each customer for referrals. One effective way to do this is to ask, “Who do you know who needs flooring right now?” Don’t say, “Do you know someone who needs flooring?” This gives her the option of replying with a no, ending the conversation. The first question is much more open-ended. When someone sends you a referral, send her a gift certificate for dinner.

The marketing multiplier effect  

These three strategies are marketing multipliers. Let’s say you spend $5,000 on a direct mail campaign that generates 10 walk-ins. The industry average for closed sales is about 32%, which translates to three closed sales. If your average ticket is $3,000, this means $9,000 in gross revenue. However, if you have a strong sales system in place, you can increase this to four or five closed sales.

Plus, a referral program can produce at least one or two referrals from this group. And, if you market to your past customers, you can get an additional sale from this group over the next 12 months. You’ve now turned three sales (worth $9,000) into six or seven sales (worth $18,000 to $21,000).

In the next installment I will cover how to leverage the surge in sales generated by the marketing multiplier effect into a permanent higher level of revenue for your business while cutting your work hours.

For in-depth training on using marketing multipliers to eliminate the “feast or famine” cycle, be sure to attend the Retail Profit Explosion Boot Camp on Nov. 5 at The International Surface Event (TISE) East in Orlando. For a sneak peak video, visit JimInFlorida.com.

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