Greetings Floor Dealers!
Not long ago I was on a coaching call with Mark, a floor dealer from the Chicago area.
“We love having Home Depot for neighbors,” he said. “We take a lot of business from them.”
I spewed iced tea as I burst out laughing. “Details! Details! Give me details!” I said after I picked myself up off the floor. (I just love a good Home Depot story.)
Mark told me that Home Depot attracts a lot of floor shoppers to his area, and as a result a large percentage of them visit his store while they are in the neighborhood. Once inside, however, he almost always swipes these customers away from the clutches of the Big Orange Behemoth. Here’s the best part: he never tries to beat Home Depot’s price; his prices and margins are among the highest in his area. (Besides, he knows he’d be in hot water with me if I found out he was competing on cheap price.) And Mark is just one among a number of dealers I’ve worked with who also take business from their friendly neighborhood box store.
So how do Mark and other dealers swipe customers from the box stores even though their prices are higher—sometimes a lot higher—a feat that many dealers would claim is impossible?
That’s the subject of this series of articles.
Train Your Brain
It’s useless for me to give you premium pricing strategies if you have a mindset that says, “The only thing my customers care about is a cheap price.” So let’s begin by serving up some delicious, multi-grain, zero-calorie, organic brain food.
First, train your brain that you are worth it. I coach dealers on how to command premium prices, and this usually involves working on their self-image. If your self-image says you don’t deserve to get high prices, you’ll self-sabotage.
Unconsciously, many entrepreneurs feel guilty about charging high prices, or they feel that they don’t deserve it. Don’t be too quick to dismiss this as psychobabble. If you find yourself constantly getting beat up on price, there is an excellent chance you are unconsciously creating this situation. No amount of training in the techniques of sales and marketing will solve this problem until the underlying mindset is changed. An excellent book on this subject is Psycho-Cybernetics by Dr. Maxwell Maltz. It was written in the 1960’s, and the principles it teaches are the foundation of most current-day self-improvement training.
Next, train your brain that Home Depot’s customer service is generally stinky, they have absolutely no unique product offerings, and their flooring “expert” one week may have been their plumbing “expert” the week before. (Or that morning, depending on who called in sick.) Therefore their only competitive advantage is to create the illusion of being the lowest priced. (Notice I said illusion.)
Finally, train your brain that if the only thing people cared about was a cheap price everyone would eat at McDonald’s and drive a Kia. In fact, you can divide the entire population into roughly three groups: 80/10/10. The bottom 10% are your die-hard price shoppers, hard-wired to always buy the lowest priced product. They also tend to be the biggest complainers, impossible to please. You do not want these people as customers. Send them to your competitors. (Gift-wrapped, with a nice bow.)
The top 10% are hard-wired for highest quality. They want the best and they are willing to pay for it.
The middle 80% also want quality, and they are generally willing to pay for it provided you educate them on how they will benefit by paying for higher priced goods.
Now that we’ve covered the necessary mindset, in the next installment I’ll cover specific strategies for “beating the boxes.”
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!