In this installment, I continue with a series of interviews with industry leaders on what they see successful retailers doing to grow their sales, keep margins up and beat the boxes. In the last interview, I sat down with Bob Eady, President of T&L Distributing headquartered in Houston, TX, to get his perspective on what successful dealers are doing to stay on top.Bob Eady, President of T&L Distributing headquartered in Houston, TX, to get his perspective on what successful dealers are doing to stay on top.
This is an interview I conducted at Surfaces with Pat Theis, Vice President of Sales and Marketing for Herregan Distributors.
What do you see successful dealers doing to keep margins up, grow sales, and avoid competing on cheap price?
NOT focusing on entry-level pricing. Focus on one, two or three steps up from entry-level products. Instead of showing consumers low price, show them value. With the internet and other competition, they need to give the consumer a reason to come into their store. More successful dealers are keeping their products up to date.
Also, since the recession, successful dealers have realized they can’t count on walk-in traffic. They see that they must go out and get the business. They have to go out and network, whether at a networking group or attending Chamber of Commerce events, establishing relationships with property management companies, realtors, and things like that.
How can dealers increase their referrals?
It boils down to trust. Consumers want to find someone they can trust. Whatever flooring product the consumer is in the market for, they want to find someone in their sphere who can refer them, to help them establish trust with a dealer. Quality installation is a critical part of establishing trust.
What are your thoughts on developing repeat and referral business?
There’s a ton of opportunity out there in marketing for repeat and referral business, and staying in contact with your past customers. The dealers that make a phone call after the installation to make sure the customer is happy or if there is a problem to rectify it. Doing a post-installation follow up visit or phone call is vital, not only to get more business but for your own information that the job is getting done the way you want it done. Plus it opens up that opportunity to get that low hanging fruit, those referrals.
What are your thoughts on the importance of creating differentiation?
It’s what we have to do as distributors, as manufacturers, as retailers; it’s what we all have to do. If retailers don’t create that differentiation they just kind of blend into the background. Two of the most vital areas to create differentiation are with the salesperson and the installer. You have to create differentiation or you’re not giving consumers a reason to buy from you. You’re getting them to buy from you because you’re the lowest bidder, and that’s not sustainable.
How good is the average retailer at creating differentiation?
Fair. We all like to think we can differentiate. But it doesn’t matter what we think, it’s what the consumer thinks. And that’s why the post-installation follow up visit or call is so important. Because without that feedback you’re just kind of guessing.
How important is it to get away from selling on cheap price?
It’s vital. Selling on cheap-price is not sustainable. Most of the suppliers we deal with, their strength is not price, it’s style and design. The reason Home Depot is successful with the cheap-price model is because they are built that way. The vast majority of flooring retailers are not built that way. And you won’t be in business long if you do that. In my opinion, that’s the difference between being in business and not being in business 5-10 years from now.
In the next installment, interview Michael Raskin, President of Raskin Gorilla Floors on creating differentiation in your market.
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!