A friend of mine needed flooring for his home, but he didn’t know any flooring dealers.  So, he went online and Googled flooring stores in his area.  He looked at the websites and read the reviews of the dealers appearing in the top three search results.  All the websites and reviews looked pretty similar, so his plan was to get quotes from all three, then buy from whomever had the lowest price.  Then he found out that his brother had just had flooring installed and was happy with the results.  So, he got a referral to the dealer his brother used, and is not planning to get quotes from anyone else.   

Let’s analyze what just happened.

My friend lives in a major metro area, so there’s a lot of competition to get those top spots on Google.  Those top three dealers are spending thousands of dollars per month for pay-per-click and/or SEO in order to maintain those top positions.  But a zero-cost referral outperformed all of it.

Further, my friend’s original plan was to get quotes from the top three dealers and buy from whomever was cheapest, meaning that these dealers spent thousands of dollars to attract someone who was, at best, a price-shopper.  Now my friend planning to buy from the referred dealer and not get any other quotes.  So, the referral had the added benefit of transforming my friend from a price-shopper to a ready-to-buy customer.

word-of-mouth is the most effective form of advertising

But this is no surprise.  Everyone knows that word-of-mouth is the most effective form of advertising.  Every dealer knows that when someone walks in because they are a past customer or a referral it’s a very different experience compared with when a stranger who walks in because they found them online.  The repeat/referred customer trusts you, they are pre-sold, it’s easier to get full margin, the sales cycle is shorter, and they most likely aren’t going to shop around.  The stranger is more skeptical, distrusting, and more likely to price shop you and waste your time.  We all know this.

I’m not saying you should necessarily stop doing those other forms of advertising.  My point is that dealers are spending tens-of-thousands of dollars a year in online advertising, radio, billboards, etc., to attract strangers, but the vast majority of those dealers don’t market to their past customers, or have a referral marketing system, or a marketing plan to generate referrals from Realtors, remodeling contractors, interior designers, carpet cleaning companies and other businesses.   This is very short-sighted thinking.

“Omni-channel marketing” is a buzzword right now.  This means being visible in many different locations, both online (your website, multiple social media platforms, review sites, etc.) and offline (your physical store, offline advertising).  It means making it possible for your prospect to communicate with you via multiple online and offline channels, and having systems in place to monitor and respond quickly to communication from any of these channels.  It means having a sales process in place which creates a seamless shopping experience between multiple devices and platforms, and between online and offline.

Am I ignoring the low-hanging fruit?

Will putting all of this in place generate sales?  Yes.  If you throw enough money at any kind of advertising it will produce some sales.  Here’s a better question: Am I ignoring the low-hanging fruit?  Should I be spending tens-of-thousands of dollars per year to set up and maintain a system like this in order to attract strangers, while failing to put systems in place to market to my past customers to generate repeat and referral business?

In the next installment I’ll explore this question in depth, and give you guidelines for simplifying your marketing and grabbing the low-hanging fruit, while at the same time maximizing the ROI from all your other advertising.


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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