Greetings Floor Dealers!

Welcome to Part Three of my Summer Series all about commanding higher retail margins!

“My margins are between 45-50%,” Jerome, a floor dealer from Texas, recently told me during an interview I was doing for a training video.  “And we’re booked solid for three months.”  What makes Jerome’s story even more amazing is that his residential margins used to be between 15-30%.   He made this massive increase in prices in a very short, 90-day period, and he’s busier than before he increased his margins.  This should be an inspiration to any dealer struggling to raise their prices.  You do not have to stay enslaved to razor-thin margins.

Jerome realized that his past customers already know him, like him and trust him.  He knew that when a past customer (or a referral) walked into his store they were pre-sold.  Unlike prospects generated by print ads, his website, radio, or TV; these tend to be skeptical, stand-offish and very price-sensitive.  So he shifted away from advertising to cold prospects, and implemented a herd-building strategy to build, nurture, and profit from his herd of past customers, and to protect them from poachers.  The strategy he uses is a monthly direct-response newsletter.

What he doesn’t use is a boring newsletter, like your insurance company sends you.  You know, it’s 100% about insurance.  Boring!  I call them “snooze-letters.”

Instead, he uses a monthly Direct Response Newsletter.  90% of the newsletter is dedicated to fun, informative, entertaining, valuable, welcome content.  Only 10% is about flooring.  It’s so much fun that his customers look forward to getting it, eagerly open it up the minute it arrives, and are thoroughly entertained  reading it.

Here are some tips if you decide to create  your own newsletter:

  • Use interesting, general-interest articles.  Think Reader’s Digest.
  • Include trivia contests that prompt customers to call your business or visit your website to enter.
  • Use customer recognition.  Include testimonials, and thank-you’s to customers who gave you repeat or referral business that month.
  • Send it monthly.  You must be consistent for it to work.

It doesn’t need to be a slick, glossy, 4-color production.  In fact, a four page letter printed on plain white or light-colored paper using black print works better than slickly produced letters because it looks more personal.  This is what Jerome does.

Here are some benefits of this strategy:

  • It positions your business as THE obvious choice.
  • Creates total differentiation from your competitors.  If you don’t create differentiation you will wind up competing on price.
  • It creates total top of mind awareness (TOMA) by keeping your business name in front of past customers frequently.  You don’t know when a customer will be ready to buy, so you must stay constantly in front of them with fun, informative, entertaining, valuable, welcome information that they will actually read (unlike most advertising which gets thrown in the trash unlooked at).  Then when the time comes you’re the ONLY dealer they even think about working with.
  • It gets your customers into your store before they go shopping online.  Your past customers should not have to search online to find you.  Lots of dealers think, “Well, my customers can Google flooring and find me.”  Bad idea!  Sending your past customers online to find you is like sending a sheep into a pack of wolves!  All your competitors are lurking there ready to gobble them up with “cheap price” offers!
  • Dramatically increases your referrals.
  • Positions you and your sales team as trusted advisors, rather than “used car salesmen.”
  • Creates a sense of community among your past customers.
  • Builds lasting, undying loyalty.

In the next installment, we’ll cover the second of three strategies you must have in place if you want to command margins of 40-50% or more.  Stay tuned!

 

To Tons Of Customers!
Jim Augustus Armstrong is The “Coach”

Jim Augustus Armstrong is the President of Flooring Success Systems, a program that equips dealers to double their profits, cut their work hours in half and beat the boxes! Many dealers have totally transformed their businesses and their lives for the better after joining Flooring Success Systems.
See what real, live dealers are saying!