In my books, articles, webinars and seminars I often feature case studies of dealers who have close ratios of 60%-80% (the national average is only 30%-35%), command margins of 50% or more, and stay booked out for weeks or months at a time year-round.  Occasionally someone will express disbelief that these kinds of results are possible.  I don’t blame dealers who feel this way because these kinds of results are way outside industry averages.   Let’s look at how floor dealers are achieving results which many think are impossible.

Tier 1 Marketing

To varying degrees, the dealers I feature have all implemented Tier 1 marketing.  This means marketing strategies directed towards to their past customers in order to generate repeat and referred business.  It also includes having a strong sales system in place which creates differentiation, enables the dealer to command higher-than-normal margins, and close more sales.  In other words, Tier 1 is all about going after their warm market, the low-hanging fruit.  (For more on Tier 1, Tier 2 and Tier 3 marketing, see post from earlier this year titled, How To Prioritize Your Marketing.)

In part one of this series I pointed out what I see as a gigantic problem in our industry: dealers will often spend thousands of dollars in advertising to attract cold prospects, yet not invest any effort to get the low-hanging fruit.  Does it make sense to invest a fortune chasing strangers, yet totally ignore your past customers, the only people on the planet who have proven they will buy flooring from you?  Of course not, yet it’s what the vast majority does.

When you put Tier 1 marketing in place, over time you will get a higher and higher percentage of your business through repeat and referred customers, which will automatically increase your close ratios.  Think about it this way:  on Monday you have ten walk-ins who are all repeat/referred customers.  On Tuesday you have ten walk-ins who are strangers who simply found you online.  Which day are you going to close more sales, get full margin, and not get jerked around as much on price?  Monday, of course.   

The Marketing Multiplier Effect

Tier 1 also produces the Marketing Multiplier Effect, meaning it will multiply the ROI of any other advertising you’re doing.  For example, let’s say you’re investing $3,000 per month on your website, SEO and Google ads.   And let’s say that this generates 10 walk-ins per month, and you close three of them on average.  This will produce $9,000 in revenue.  By having a strong sales system in place (Tier 1), you can do better than industry averages and close four or even five out of ten.  By having a referral system in place (Tier 1) you should be able to generate at least one referral from your closed sales.  If you market to all ten walk-ins with a monthly newsletter (Tier 1), you can easily generate another one or two sales over the next year.  In this example, Tier 1 has more than doubled the ROI from the original $3,000 advertising investment without spending much more money.  Tier 1 will create this Marketing Multiplier Effect for any other advertising you’re doing.


To recap, Tier 1 will increase your percentage of repeat/referred business.  That, combined with a strong sales system, will automatically increase your closed sale batting average, and help you command higher margins, and help even out the seasonal ups and downs.  It will also increase the ROI from all the other advertising you’re doing.  Tier 1 is also simple and inexpensive compared to many other types of advertising.

Hopefully you are beginning to see how the multi-faceted effects of Tier 1 can produce results which are better than average, sometimes a lot better.  And hopefully I’ve inspired you to implement Tier 1.


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.
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