August 19/26, 2019: Volume 35, Issue 5
By Jim Augustus Armstrong
(Editor’s note: This is the first of two parts.)
A friend of mine needed flooring for his home, but he didn’t know any flooring dealers. So, he went online and Googled flooring stores in his area. He looked at the web- sites and read the reviews of the dealers appearing in the top three search results. All the websites and reviews looked similar, so his plan was to get quotes from all three, then buy from whomever had the lowest price. Then, he found out his brother just had flooring installed and was happy with the results. He got a referral to the dealer his brother used and is not planning to get quotes from anyone else.
Let’s look at what just happened.
My friend lives in a major metro area, so there’s a lot of competition to get those top spots on Google. Those top three dealers are spending thousands of dollars per month for pay-per-click and/or SEO in order to maintain those top positions. But a zero-cost referral outperformed all of it.
Further, my friend’s original plan was to get quotes from the top three dealers and buy from whomever was cheapest—meaning that these dealers spent thousands of dollars to attract someone who was, at best, a price- shopper. Now, my friend is planning to just buy from the referred dealer. So, the referral had the added benefit of transforming my friend from a price-shopper to a ready-to-buy customer.
This is no surprise. Everyone knows word-of-mouth is the most effective form of advertising. Every dealer knows when a past customer or a referral walks in it’s a very different experience compared to when a stranger walks in because she found them online. The repeat/referred customer trusts you; it’s easier to get full margin; the sales cycle is shorter and she most likely isn’t going to shop around. The stranger is more skeptical and more likely to price shop and waste your time.
I’m not saying you should stop doing those other forms of advertising. My point is dealers are spending tens of thousands of dollars a year in online advertising, radio, billboards, etc., to attract strangers. However, the vast majority of dealers don’t market to their past customers, nor do they have a structured referral marketing plan or system for realtors, remodeling contractors, interior designers, carpet cleaning companies and other businesses.
“Omni-channel marketing” is a buzzword right now. This means being visible in many different locations, both online and offline. It means making it possible for your prospect to communicate with you via multiple online and offline channels and having systems in place to monitor and respond quickly to communication from any of these channels. It means having a sales process in place that creates a seamless shopping experience between multiple devices and platforms and between online and offline.
Will putting all of this in place generate sales? Yes. If you throw enough money at any kind of advertising it will likely produce some sales. Here’s a better question: Should you spend thousands of dollars to maintain a system like this in order to attract strangers while failing to put systems in place to generate repeat and referral business?
In my next column I’ll explore this question in depth and give guidelines for simplifying your marketing while maximizing the ROI from all your other advertising.
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.