Proven practices to maximize profit opportunities

HomeFeatured PostProven practices to maximize profit opportunities

As 2022 comes to a close, many specialty retailers are taking stock of the things they did well over the course of the year. At the same time, they may also be looking for ways to improve for 2023. One key area dealers will no doubt be focusing on is how to improve profit margins in an economy battered by rising inflation. FCNews rounded up several flooring retailers from across the country to share their proven practices for increasing profit and improving their business overall.

Following are some useful tips:

Keep customers happy

profit

While maintaining a satisfied customer base may seem like a standard practice, Typhannie Harker, CEO of Carpeting by Mike located in Somerset, Wis., made the point that it can make a huge difference in your sales and referrals when done consistently. The top three things Harker said keep her customers happy are setting an obtainable expectation, keeping up communication throughout the entirety of their journey and being consistent.

“When all three of those are met—we have outstanding results,” Harker said. “If just one is missing, things can get out of hand quickly.”

But how can this increase a store’s profits? Easy—satisfied customers refer at a higher rate, according to Harker.

Maximize margin opportunities

profit

When providing customers an estimate or quote for a total flooring purchase and installation, it’s tempting to present a lower price to match competing bids from other flooring retailers or big-box stores. Savvy specialty retailers avoid this at all costs, because once you present a low estimate to the consumer, there’s no turning back. In addition, selling solely on price restricts you to lower-end products that do not offer high profit margins.

“So many times, the salesperson starts off at one amount only to see the job end up at a lower mark,” said Sam Locher, vice president of business development and marketing, AJ Rose Carpets and Flooring with multiple locations across Massachusetts. “If you can find where that difference came from, you can find a solution to correct that.”

Some of the most common areas where RSAs sell themselves short include not charging enough for jobs that require additional labor, sub-floor preparation, installation of accessories, etc. Generally speaking, Locher said it’s always good practice to start out with your most expensive options, which gives you wiggle room to present a lower-price product if the customer balks at the more expensive option.

Always take the ‘team’ approach

Competition not only exists between flooring stores that service the same markets, but also between sales personnel within a single store. While competition is generally healthy, it’s important to not lose sight of the big picture—the best results often come from working as a team.

That’s a philosophy Ryan Commerce, president of Lancaster, Pa.-based Indoor City Flooring, embraces wholeheartedly. “The most tried-and-true practice that increases profits on projects is communication,” Commerce said. He shared that his most profitable jobs are when there is clear coordination between the design team, sales team, operations team, installers and the customer. When different departments function as one unit, there tends to be more emphasis on addressing the needs of the customer—which benefits everyone in the end.

Sell value, not price

Contrary to popular belief, most consumers don’t simply want the cheapest product available on the market when it comes to their flooring needs, according to Adam Joss, president of the Vertical Connection Carpet One Floor & Home in Columbia, Md. Instead, retailers should focus on building incredible value for what they do and charge accordingly for it.

Joss suggested sticking to your guns when quoting prices—especially in this day and age of price fluctuations—rather than re-calculating estimates based on dealer cost. Profit, he said, is not a dirty word. “That profit is the jet fuel for future growth,” he explained. “Offer a better experience than everyone else and the customers will pay for it!”

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Dec. 19/26, 2022

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