January 19/26, 2015; Volume 28/Number 15
By Jim Augustus Armstrong
(Second of two parts)
It’s no secret that box stores, online dealers and other discounters are trying to steal your customers. Most dealers would like to put Home Depot in its crosshairs for a change. But to do that you need to implement strategies that create differentiation, positioning yourself and your sales team as trusted advisors and creating a zero-resistance selling environment. There are practical strategies you can implement right away to turn the tables on the big orange giant.
Eliminate any price shopper magnets. This means getting rid of anything with cheap price language like “Our prices won’t be beat,” “Highest quality at the lowest prices,” etc.
I spoke with a dealer recently who was adamant about wanting to command premium prices. I pulled up his website, which said, “Free installations.” I told him he couldn’t use price shopper magnets and simultaneously expect to charge margins of 45% to 50% or more. I recommended he review his outdoor and indoor signage, brochures, website, display ads and any other method he used to promote his business and get rid of anything that even smelled like a cheap price offer.
Bake cookies or bread daily in your store. Get a small oven and buy pre-made dough. Whoever opens the store bakes the first batch. This makes your store smell like home, relaxes prospects, creates differentiation and makes them feel welcome. Set the goodies out on a table and offer them to walk-ins.
Use a hand-written welcome sign. One dealer I’ve worked with keeps a whiteboard on an easel near his store’s front door. When he knows a specific customer is coming in, he writes “Welcome [insert name here]!” on the sign. This is a huge wow factor. When was the last time a business did this for you?
When a prospect leaves without making a buying decision, send her a “shock-and-awe” mailer inviting her to come back. Another dealer I’ve helped sends prospects a sample packet of aspirin in a padded envelope. Inside is a letter with a headline that says, “How to End the Headache of Shopping for New Floors.” It reminds the prospect of all the benefits of buying from him, including his guarantees and warranties, and includes a special offer if she returns by a specific deadline.
Market to your past customers every month. Repeat and referral customers already know you, like you and trust you, so they have much lower price resistance than customers brought in through cold advertising. It’s much easier to charge full margins when you’re dealing with past customers and the people they refer to you. These are the only people who have proven they will buy from you, so stop ignoring them.
The best way to reach repeat and referral customers is with a monthly newsletter. It should be 80% fun, informative, entertaining, with only 10% to 20% about flooring. I know one dealer who went from nearly closing his doors to being booked out for weeks in only six months by using a monthly newsletter as his main marketing strategy.
Train your salespeople to ask for referrals. If you average 50 installations per month, you can easily expand that to 60 with no marketing costs by training your staff to effectively ask for referrals. Another dealer from Texas made over $90,000 in extra revenue in one month by doing this.