The majority of flooring dealers have a plan of action regarding the economy. Unfortunately, that plan tends to be ‘waiting and hoping‘ for the economy to ‘get back to normal.’ If I had a dollar for every time I heard a flooring retailer say, “Well hopefully the economy will turn around soon,” I could single-handedly fund the government’s stimulus package!
‘Waiting and hoping’ is not a plan. Taking concrete action to prosper and thrive in ANY economy IS a plan. Yes, when and economic downturn happens, I hope things get better quickly, but I’m not counting on it and neither should you.
Who is in the better position long-term? The dealer who has implemented systems and strategies so he/she can survive and thrive in any economy, or the dealer who is forced to ride the economic roller coaster? I’d rather be in the first group. And I want you to be in that first group as well, which is what this series of articles is about.
Creating joint venture relationships with businesses that will give you an ongoing stream of referrals is a critical strategy for recession-proofing your business. Here are some figures that illustrate my point:
- Let’s assume an average ticket of $3,000.
- If you have ten JV partners sending you a measly four referrals per year, that’s 40 extra sales per year.
- 40 x $3,000 = $120,000 EXTRA per year with, perhaps, $500 in marketing costs.
Do the math for twenty JV’s. Forty. Fifty! I set up referral relationships with over 60 Realtors in about six months with no cold calling. ‘No cold calling’ is important (I’ll explain why in a minute). Imagine having 60 of ANY business category sending you four referrals per year. This is so powerful that I teach my coaching clients to dedicate a salesperson full time to implementing joint ventures.
At another time, I used this process to create over a dozen JV’s in 90 days with no cold calling, which is important. Everyone hates cold calling. I never, ever do it, and I never teach it. It’s important that you use a marketing system for developing JV relationships that does not require your sales person to knock on doors, cold call, etc. Uhg! You might as well try to get them to submit to daily root canals.
At best, cold calling gives other business owners the impression that you need them. At worst, they see you as “begging” for business. This is very bad positioning, which ultimately means you are expected to compete on price.
Developing strong joint ventures can be done very effectively with no cold calling as long as you use a JV marketing system that does the following:
- Positions you as a trusted advisor rather than a sales person
- Utterly and completely differentiates you from every other dealer in your market
- Magnetically attracts potential JV partners (instead of chasing them)
By establishing joint venture relationships with this method, you’ll score some much larger jobs that you would not be able to attain through traditional advertising methods.
Case in point: one of my clients created a JV with an interior decorator (No, he did not chase her to establish this relationship.). He wound up doing a job for one of the decorator’s affluent, out-of-town clients who maintained a local residence. This single job was for more than $40,000. Because this person was affluent (thus tending to work by referral only) and from out of town, traditional advertising would have been useless for gaining him as a client.
I’ve seen this situation repeated time and time again. The smart and savvy dealer generates business through JV relationships (and other unconventional marketing methods), gets those ‘impossible-to-get’ jobs, while all the other dealers in his neighborhood stubbornly cling to traditional advertising methods, fight over the scraps, and whine about how no one buys flooring anymore.
Most dealers are transaction oriented: they chase ‘oil cans.’ Creating joint ventures is a process of digging ‘oil wells’ that continue to produce forever, but doing so requires a completely different mindset. Digging oil wells (instead of chasing ‘oil cans’) is a key strategy to recession-proofing your business.
Learn more in Part 2.
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!