May 23/30, 2016; Volume 30, Number 24
By Jim Augustus Armstrong
(Final of three parts)
With competition from box stores and online dealers, rising costs and pressure to cut margins, flooring retail is a tough business—especially if you don’t have the right sales and marketing systems in place. I recently spoke with Bob Eady, president of T&L Distributing, headquartered in Houston, to talk about what he sees successful retailers doing to grow sales, keep their margins up and beat the boxes.
What do you see successful flooring retailers doing to increase sales?
They know the customer base they are trying to target and they communicate with them directly. They are not trying to be all things to all people. Their showrooms are set up to merchandise to that particular group of consumers. Retailers need to stay focused on the segment with which they find the most success. Middle to upper-end retailers also keep their products and merchandising up to date. They don’t have as many suppliers represented on their floors. They stay focused. They do as much business with a particular supplier as possible and leverage that loyalty.
The vast majority of retailers have one to five stores. What are smaller retailers in particular doing to be successful?
The lifeblood of our business is dealers with one to three stores. The buying groups brought a new level of professionalism to dealers, especially in terms of merchandising. A lot of showrooms used to be kind of junky. Now you can go into a single-store business and it looks gorgeous.
How important are referrals in growing sales?
They are critical. Remember the old adage: “A happy customer will tell one person; an unhappy customer will tell seven.” The livelihood of a retailer is the installation; complete a job in a satisfactory manner so the customer is happy. We find really good dealers typically have the best mechanics. Too many retailers don’t focus on finding the best installers. If you are not able to keep those customers happy through your installations you lose the referral business. The most successful dealers focus on customer service, which is where the true value of quality flooring retailers lies. Their salespeople and installers have undergone superior training and they will invest in those aspects of their business. Training is difficult for a smaller dealer as it takes time—a precious commodity to an owner.
How important is marketing to past customers?
It’s vitally important. Implementation—actually following through with marketing—is key. Dealers need an easy way to accomplish that because the independent dealer is very busy and extra time is needed for a marketing program. Some dealers have a service that markets to their past customers for them. However, there are numerous examples of single-store owners who do very well on their own. They’re the ones who pay attention to and focus on repeat and referral.
Do you see the successful dealers competing on price or value?
You see a mix. There are some product categories that are more price driven. The successful dealer tries to start the consumer at a higher price point with a higher quality product. A lot of the price consumers—the Internet customers who buy on price and try to install the floor themselves—wind up dissatisfied. But they end up being good customers down the road because they didn’t like the finished product after installing it themselves.