What we can learn from Progressive’s ‘Flo’

Home Column What we can learn from Progressive's 'Flo'

Lisbeth Calandrino—By now I’m sure everyone has seen “Flo,” the fictional, insurance-obsessed salesperson from the Progressive Insurance commercials. For Flo, who clearly loves her job, it’s all about saving her customers money. (She’s also charming and filled with enthusiasm—the perfect combination for a great salesperson.) The latest Progressive Insurance campaign features real-life actor Jon Hamm, who is clearly infatuated with Flo. Despite his numerous attempts to wine and dine Flo, she remains hell bent on promoting the benefits of bundling to Mr. Hamm all while seeming oblivious to his advances.

This is all very amusing but there’s much to be learned from Flo as it pertains to sales and price bundling and how it can help us build our flooring business. The concept of bundling products and pricing isn’t new. It’s a practice employed by businesses such as McDonalds (care for some kid-sized fries, apple slices and a drink with that hamburger Happy Meal?) and new car dealers. Even cable TV companies are becoming more adept at bundling services. A typical Cable TV provider might offer three packages for a “good price.” They have one or two channels that I want and one I don’t want, but I buy it anyway because there’s value in the bundle. With bundling, you might not be getting a lot, but there’s a little of everything; bundling makes it easy to choose.

Why is bundling a good idea? It makes it easier for the salesperson and the customer. It’s also a way for the store to dump certain products.

Let’s look how bundling might work for your business.

  • The box stores offer “free installation” with their flooring, which infuriates the specialty flooring retailer. The knee-jerk response might be to tell the customer, “Nothing is free” and “You get what you pay for.” I don’t think this is a good tactic because, in my mind, there’s plenty of free stuff out there. Stores like Marshalls and Home Goods have taught me that if I’m a good shopper, I’ll get more than that for which I pay.
  • I would phrase it this way: “I know it sounds great, but let’s review the products and pricing to see if it’s comparable to what I’m selling.”
  • Let’s say the customer combines two or more products and wants to purchase them at a lower price than if they were sold individually. In a pure bundle, the customer can’t make changes for the same price. (This is like your cable TV when you can change products and are called pure bundling; it’s just how it is.)
  • The other type is a “mixed bundle,” where you give the customer the option to purchase each feature together or individually for a higher price. The bundle is better done with discontinued or one-of-a-kind items.
  • What can you bundle? I was in the liquidation business, and we looked for items that were cheap for us to buy and bundled them with more expensive products. For example, we bought discontinued area rugs and sold them with hard surface flooring. This way, the customer couldn’t match our hard surface prices with other stores because they were getting an area rug for a discounted price. Work with your suppliers in identifying discontinued items that you can bundle and yet still give you good margins.

Lisbeth Calandrino has been promoting retail strategies for the last 20 years. To have her speak at your business or to schedule a consultation, contact her at lcalandrino@nycap.rr.com.

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Sept. 12/19, 2022

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