(Last of five parts) Wise skydivers and business owners prepare for trouble long before they’re in danger. Knowing that tough economic times are a matter of “when” not “if,” let’s continue with more strategies to brace your flooring business against turbulence in the market.
Shift from hunting to ranching
Most dealers act like hunters. They’re always looking for that new customer. All of their marketing efforts are designed around hunting down strangers, bagging them and skinning them. Then they’re off hunting the next customer. Wash, rinse, repeat. Sometimes you bring home the game, sometimes you don’t. I train dealers to act like ranchers. Just like a rancher of cattle, as a rancher of clients you round up a herd, fence them in, nurture them, protect them, love them and profit from them, over and over again. You never have to “hunt” for your herd because it’s inside your corral. One of the proven “fencing and nurturing” strategies I’ve covered many times is communicating with your herd several times per month using the 90/10 formula.
When the market nosedives, the strangers you’ve been chasing are the first to disappear. You’ve probably noticed that your advertising becomes less effective during downturns. Well, it’s your herd of past clients and referral partners that’s going to keep you fed through those lean times—so take care of it.
Partner with other ranchers
In your market area are hundreds of businesses who have rounded up herds of clients who are ideal for you: homeowners. Realtors, designers, remodelers, carpet cleaners are just some of the businesses who work with homeowners every single day. Many of these folks have been in business for decades and have amassed thousands of past clients. They have good reputations. They get a ton of repeat and referral business. Why not partner with them so you can profit from their herds?
For the dealers I work with, some of these referral partnerships are worth, on average, about $35,000 per year in revenue. This doesn’t include the occasional superstar partner who sends six-figures in business.
Let’s do the math.
You spend 12 months developing three referral partnerships per month, for a total of 36 partnerships; 36 x $35,000 = $1.26 million in annual revenue. With zero marketing costs.
Benefits of referrals
Keep in mind that these are not cold leads generated by Google ads, social media ads, print, etc. These are referrals. Here are just some of the ways referrals are superior to cold leads:
- They already trust you
- Less price resistance
- Faster close
- Higher average ticket
- Much more pleasant selling experience. In fact, there’s really not much “selling” necessary. They see you as a trusted advisor. You’re simply there to provide guidance before they inevitably buy.
By following the strategies in this series you’ll ensure that your business not only survives but thrives during a downturn—and that you’ll blow the doors off during up markets.
Jim is the founder and president of Flooring Success Systems, a company that provides floor dealers with marketing services and coaching to help them attract quality customers, close more sales, get higher margins and work the hours they choose. For information, visit FlooringSuccessSystems.com.