January 22/29, 2018: Volume 33, Issue 16
By Tom Jennings
No flooring store seems to be making easy money today. Competition is fierce and margins are squeezed. As with every budget in the business world, the need to watch expenses is very real. I get it. It’s just that there are some areas of your business which may be poor places to attempt to save money. In fact, in order to actually grow your clientele you may want to consider just the opposite.
What I don’t get is why most flooring retailers I encounter seem to think sales and installation training can often be identified as an area of cost containment or reduction, when service is the only element of a sale that really differentiates us from our competition.
To illustrate, allow me to make a comparison to the restaurant business, as I feel the flooring business has much in common with full-service dining. In the food trade, every morning a food supplier makes the rounds to the various restaurants in a trade area. Whether it’s a carton of eggs or a sack of flour, essentially the same ingredients are available to all establishments.
What we all realize is while the deliveries into the kitchen are very similar, the deliveries from the kitchen to the customer’s table vary greatly. The ultimate success of the restaurant relies heavily on both the chef’s abilities and the recipes used. A great chef using inspired recipes will create a wait for a table at which to be seated. However, a mediocre cook using bland recipes will eventually create a “for rent” sign in the front window. Similar ingredients can produce very different results.
For example, let’s say an entrée cost $15. Ask yourself, if a restaurant added $1 to the price of every item on its menu, then consistently delivered a great meal using more skilled cooks, what do you think the net results in their amount of business would be?
Now, ask the same question, but reduce the prices by $1 and use a less skilled kitchen staff. Do you really think they would prosper by being a little cheaper at the expense of delivering a better meal? I sure don’t. Isn’t this scenario in many ways very similar to our own? Our trucks carry names such as Shaw and Mohawk on their sides. They essentially deliver the same ingredients to the dock of all flooring stores. It is only the efforts of those who can craft a beautiful bathroom from boxes of tile, for example, that differentiate a great place from which to buy flooring from a mediocre one, thereby reducing the emphasis on price alone.
At the restaurant, you judge the meal presented on the plate, not the ingredients themselves. Just as not everyone wishes to eat from the dollar menu; neither do all flooring customers want an installation bargain. The $1 illustration above represents a 6% price difference. Have you ever gladly paid 6% more for something that you really wanted? We all have. What would a 6% change in revenue do for your business?
My experience tells me customers will gladly pay a bit more to have a superior experience. This is nothing new. Nearly a century ago, Will Rogers said, “It’s not what you pay a man, but what he costs you that counts.” It’s still great wisdom today. Don’t let lower initial costs for more questionable workmanship mislead you. Their real cost may prove to be quite high.
Tom Jennings is vice president of professional development for the World Floor Covering Association (WFCA). Jennings, a retail sales training guru, has served in various capacities within the WFCA.