Home Depot spent 1.06 billion U.S. dollars on advertising in the United States in 2018.  They were the third largest radio advertiser in the U.S. in 2017, and made it to the list of top 5 retailers in North America in 2017 based on sales.  (Source: Statista.com)  As of this writing, they have 4,939,108 followers on Facebook, 283,000 subscribers on YouTube, and 940,000 followers on Instagram.

Home Depot is outspending you thousands of times over.  You will never beat Home Depot, Lowes, or any other giant, multi-national, multi-billion-dollar corporation by going head-to-head with them in the advertising game.  Yet that is what many dealers try to do with their advertising, usually without realizing it.  The vast majority of dealers engage in “institutional” or “brand building” advertising.  This basically means that you put your business name out there over and over again—both in digital and offline advertising—in an attempt to build up “name recognition.”  The hope is that if enough people see your name enough times that when consumers in your market decide to buy flooring, they’ll think of you and buy from you instead of your competitor.  It’s the basis for the old advertising “wisdom” that says people need to see your name at least seven times in order to think of you and buy from you.  It’s the idea behind the phrase, “You need to get your name out there.”

There is some truth to this strategy.  You can build up name recognition this way, but there are three serious problems for independent dealers who attempt it.

Problem #1:  It’s extremely expensive. 

In order to build up name recognition to the point where a meaningful percentage of consumers in your market automatically think of you when they need flooring will cost hundreds-of-thousands (if not millions) of dollars spent on advertising over a number of years.   

Problem #2: It takes a long time to work. 

Assuming you have the kind of budget to attempt this strategy, it can take years to build up this kind of name recognition.  Floor dealers need their marketing efforts to generate sales now, not three years down the road.

Problem #3: You’ll attract a lot of price shoppers. 

Think about the difference between a walk-in who is a repeat/referred customer versus a cold prospect who came in because they saw an ad or discovered you online.  The cold prospect is much less trusting, more price-sensitive, and they are much more likely to “shop around.”

A powerful, effective, proven alternative to brand-building for floor dealers is ranching.

Most dealers are hunters.  They hunt down a customer, bag it, skin it, then they’re off hunting down the next one.  Smart dealers are ranchers.  They round up a herd of customers, then invest time, energy and money into nurturing their herd, building a relationship with their herd, and protecting it from poachers.  A relatively small herd allows these dealers to have growing, thriving businesses, and to live in style.

There are many advantage to this approach over brand-building:

  • It’s far less expensive
  • It works faster
  • It weeds out the bottom-feeders and brings you the best customers
  • It creates total differentiation from competitors
  • It recession-proofs your business.  When the market tanks the first thing to stop working is cold advertising.  (Many of you have discovered this the hard way.)

Finally, it fully utilizes the strengths and advantages you have as a small, agile, independent business owner, and exploits the weaknesses inherent in gigantic organizations like box stores.  Over the next several installments I’m going to cover specific strategies which leverage your strengths, and outline how these strategies fit within the “ranching” framework.   


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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