September 17/24, 2018: Volume 34, Issue 7
By Jim Augustus Armstrong
Many dealers are running on a hamster wheel trying to build their businesses. One month you have plenty of customers coming in and enough money to cover costs; some months you have more work than you can handle. But then a month or two later, your work slows down and you’re stressed about where all the flooring jobs have gone. As a result, you run even harder, putting in 50-plus hours per week until you’re overworked. This is what it looks like to run on the hamster wheel.
My goal is for you to step off the hamster wheel and onto solid ground to create consistent cash flow. Here are three mistakes I see dealers do all the time that make it impossible to do this.
Mistake #1: Not using “Before,” “During” and “After” together in a system.
Most dealers are weak in at least two of these steps. For example, many dealers spend tens of thousands of dollars on their “Before” strategies—advertising to get prospects to visit their store. Some dealers do a fairly good job with this, and they generate a decent number of walk-ins, but most don’t buy. In fact, studies show the average dealer only closes about three out of 10 walk-ins. They’re spending a fortune in advertising, but 70% of that money is going to waste. This is because they are weak in the “During” part of the system. They don’t have a strong system for converting a customer visit into a job, so they lose most of them.
To make matters worse, customers who do buy almost never receive ongoing communication from the dealer “After” the sale. These customers get stolen by competitors. The dealer loses that repeat business and their referrals because they have no “After” system in place.
If you’re weak in any of the three areas— “Before,” “During” or “After”—you have holes in your fence, and your customers are being poached by your competition.
Mistake #2: Failure to develop a great online reputation using reviews.
Getting reviews is a “Before” strategy because it’s something you do to attract new customers before they purchase from you. Reviews are critical in today’s business world. More than 90% of consumers read reviews before visiting a business, and 88% trust reviews as much as a referral.
Unfortunately, I’ve discovered that many dealers who have a great offline reputation have a lousy online reputation. For example, Kevin is a dealer from Colorado, and he’s upset because he’s getting up every day trying to build his business and is getting his head handed to him on a stick by the big boxes. He can’t figure out why he’s losing sales. He doesn’t realize it’s because he hardly has any reviews and half of them are bad. When Mrs. Prospect decides she wants flooring, she goes online and within three clicks finds his store, sees his 2.6-star rating and, just like that, he’s off the list.
Mistake #3: The majority of dealers ignore past customers.
Flooring is a relationship business. If you want to maximize your success, you have to build deep, long-lasting relationships with your past customers. Regular communication with your customers is what you do “After” the sale to generate repeat and referral business. The “After” step is critical because box stores are lurking in every city and online, spending millions of dollars in advertising to poach your customers from you.
Correcting these mistakes will help you step off the hamster wheel and generate consistent, growing cash flow.
Jim Armstrong specializes in providing turnkey marketing strategies for flooring retailers. For a free copy of his latest book, “How Floor Dealers Can Beat the Boxes Online,” visit BeatTheBoxesOnline.com.