Greetings Floor Dealers!
“How Quickly Should I See A Return On My Investment?”
The title of this article is based on a question that comes up periodically, especially with new clients or dealers who are considering becoming a client. They want to know how quickly they will recoup the investment they made (or are going to make) when they become a Flooring Success System Member. This is an outstanding question, and it brings up a lot of very, very important issues. So I’m going to use this question as a launching point for a much broader discussion about achieving success in business and your life.
This is a question each one of you should be asking about ANYTHING you invest in, including your advertising (AND your entire business as a whole). In fact, if more dealers asked themselves this question, the titanic amount of money being wasted on traditional, “image” advertising could go back in the dealer’s pockets, or be put to work in more effective, direct response marketing, like I teach.
Case In Point:
I speak with dozens of flooring dealers from across North America every month who are interested in becoming clients. I always ask them these three questions:
Question # 1: What are you doing to market your business.
Answer I virtually always get: yellow pages, newspaper, radio, TV, direct mail, website, etc.
Question #2: What kind of results are you getting?
Answer I virtually always get: “Well, I don’t know. It’s hard to track.” (A close second is lousy, hit-and-miss, frustrating, inconsistent.)
RARELY do I get someone genuinely happy with the results, and they are NEVER happy with all the advertising categories in which they are investing. What I usually hear is something like, “Most of it’s disappointing, but radio seems to work pretty well.” When I ask them how they know radio is working, I usually get an answer like, “Well, we try to ask how people heard about us, and when we do, some of them mention radio.” TRANSLATION: They haven’t got a friggin’ clue whether radio is working.
Question #3: Do you have a system in place that communicates with your past clients on a monthly basis and farms them for repeat and referral business? (In other words, do you have any system in place to protect your relationships with the ONLY people on the planet who have proven they will give you money?)
Answer I categorically always get: “No.” (Or, at best they send a postcard or Christmas card once a year.)
I’ve surveyed approximately 200 dealers—and counting—across North America, and only ONE communicated with his past clients monthly. One!
Now Hear This, Flooring Success Systems Members!!
If you have any doubts whatsoever that the coaching, systems, and strategies you get as members are TOTALLY different than anything your competitors are doing, that last paragraph should dispel that myth forever.
You are truly part of an elite group. This is not hype. This is not smoke being blown up your skirt. It’s simply, categorically, undeniably a fact. And my ongoing surveys of flooring dealers continue to bear this out, week after week, after month after month.
I get the same answers from dealers who are spending $10,000, to those spending well into the six-figures each year. I’ve spoken with dealers who have marketing budgets of $140,000 per year, and when I ask them about the results they say, “not so good” or “I don’t know.” And here’s the real kicker: most of them are perfectly willing to continue the waste and simply “hope” that things get better! Hello! Anybody home????
And when these dealers go through the trouble to order my Free Report (dealers, mind you, that are spending 5-10 times the cost of my system on advertising that THEY admit they have no idea if it’s working), they want to see charts, statistics, assurances that my stuff will work; speak with current clients; etc.
I have no problem with that and I happily provide it.
But here’s the irony: why aren’t they applying this same kind of rigid testing and qualification for the yellow page, newspaper, radio and TV advertising they are blowing their kid’s college education on? Why aren’t they demanding that the ad reps selling them expensive media provide charts, graphs, testimonials, and allow them to speak with other dealers who have bought their stuff, etc.?
Answer: Because most people are “herd” thinkers. They look around at what everyone else is doing, and they copy them.
And because there is absolutely nothing easier than throwing away money on un-trackable “traditional” advertising.
And because it’s the path of least resistance. It’s what virtually all dealers (except my members) are doing.
And because it feels comfortable. It feels safe. (Amazing how “feeling” comfortable can mislead. Feelings can convince someone to continue shelling out $140k per year on advertising, and not even think to ask a basic question: How do I know it’s working?)
And because consciously or unconsciously, most dealers go through the following thought process: “Hey, if everyone else is doing traditional advertising, I must be on the right track. They can’t ALL be wrong. On the other hand, Jim Armstrong is saying something different. But almost no one else is saying what Jim is saying, including my co-op, my competitors, my business partner, my wife, my ad rep, my brother-in-law, the speakers at Surfaces, etc., etc., etc. Therefore, how can what he is teaching possibly be better than what I’m currently doing.”
Group think. Pure and simple.
And because following my system is harder than throwing money at a yellow page ad, or newspaper ad, and letting the newspaper’s ad department (shudder!) design the ad for you! An ad that fundamentally is going to resemble every other flooring ad that’s ever run in the history of that paper.
But in reality…is my system harder?
Not really.
What’s hard is spinning your wheels and getting nowhere. Pressing your nose against the grindstone until it turns bloody. Working your butt off year, after year, after year, unable to escape the rut. Unable to take your business to the next level. Remaining at the mercy of outside forces for your success. Unable to achieve the Ideal Business and Ideal Lifestyle that inspired you to open your own store in the first place. Sacrificing your time, energy, money and your family and your dreams to a business that’s still at the same level it was 5 years ago.
Yeah, setting up the systems and strategies you learn as a coaching client is hard. But it’s a heck of a lot LESS hard than the scenario I just described.
And yeah, joining my system is expensive. (If you call investing one-tenth of your six-figure ad budget expensive.) But, okay…it’s expensive. But it’s a heck of a lot LESS expensive than being a slave to your store forever. A heck of a lot less expensive than being trapped in the scenario I described above. A scenario, by the way, that I hear over, and over, and over again from dealers all over the United States.
By the way…if I was trapped in the business hell that I hear from so many flooring dealers, I’d mortgage my house, max out my credit cards, take a second job…whatever it took to get a hold of Jim Augustus Armstrong’s system and escape!
And this is exactly what happened to me. There was a time when I WAS trapped in the hell I just described. And you know what? I was smart enough not to sit in the pile of excrement I had created, doing nothing but whining, moaning and carping, and hoping things would get better. (Yes, I created the pile of excrement…the first step in achieving success is to admit that YOU are responsible for where you are at.)
Here’s what happened: over a decade ago, my business was struggling, I was a slave to it and I was going broke, when an opportunity for escape presented itself. I was given the opportunity to invest in a marketing system that would (supposedly) solve my revenue problems. I took the plunge. I invested in my first marketing coaching system when I COULD NOT AFFORD IT! I put it on a friggin’ credit card! My life and my business were literally changed forever, and the rest is history…
Anyway…back to the topic of how long should it take to get a return on investment with my system.
3 Considerations When
Calculating R.O.I.
Consideration #1: What are my goals?
Remember that my coaching focuses on two areas: time and money. (The two things everyone wants from their business.)
Money—these are the outside-the-box marketing systems and strategies you are given and taught that generate revenue from multiple sources; strategies that NO ONE ELSE in the flooring industry has access to.
Time—these are the business systems you are being given and taught that enable you to transform your business so that it’s SYSTEM rather than OWNER dependent. Like a McDonald’s. Thus giving you freedom, walk-away power, and the time to enjoy the money.
What if when you become a Flooring Success Systems Member your income is doing okay (for now), but your major challenge is you’re a slave to your store. In other words, your number-one goal is gaining freedom? Well, the return on your investment (at least in the short term) is gaining freedom. If you spend the first 6 months as a member implementing systems to give you walk-away power, you may not make one extra dime during that time because you are not focused implementing marketing.
I have several members who are in this exact situation. The return on their investment is freedom. (At least in the short term. Later on, they’ll tackle increasing their revenue. It’s just not critical right now.)
“School Is Never Out
For The Professional.”
Most business people stop learning when they finish high school or college. This is a huge mistake. The vast majority of relevant knowledge you’ll gain about life and business happen after you finish your formal education. Put another way, high school or college merely provide the foundation so you can begin your real education.
“Poor People Have Big T.V.’s.
Rich People Have Big Libraries.”
Therefore, if you hope to achieve your Ideal Business and Ideal Lifestyle, you need brain food! It’s critical to YOUR success that you feed your mind with an ongoing stream of relevant information. And that’s exactly what you get as a coaching member.
Frankly, most of the business information (especially marketing info) you find out there is either of little relevance to your business, or—even worse—bad information. As a coaching member, you not only get relevant, ready-to-use strategies, systems and information, but you get recommendations for other relevant “brain food” resources. (Check out the Million Dollar Resource Directory and recommended reading list you got when you joined.)
You also need to consider the benefits of having a coach. Tiger Woods—one of the best golfers on the planet—pays hundreds of thousands per year for coaching. This seems counterintuitive. Why should a world-class golfer “waste” his money on coaching? Because Tiger understands the concept of the competitive edge. Oftentimes the difference between winning and losing boils down to a single stroke. This is exactly the same for your business as well if you hope to achieve maximum success.
Tiger also understands that it’s virtually impossible to analyze his own swing. He needs that second set of eyes that a knowledgeable coach provides to point out exactly where he needs improvement. This is also exactly the same with your business.
“A Painful Irony”
Dan Kennedy tells the story of working a booth at a tradeshow in his early years of selling. At the booth were displayed a variety of business and marketing success materials. A man walked up, looked over the items on display, and proceeded to buy one of each product—no arguments, no dickering, and no whining about the price. It turns out the man was a very successful business person, and didn’t “need” any help to be successful. This fellow understood the concepts of “brain food” and the competitive edge.
In his story, Dan went on to talk about how a number of other business people came to his booth and ,after looking the materials over, remarked how great the information would be in helping them be more successful. But they wouldn’t buy anything. Their reason? “Too expensive.”
And that’s the great irony. The people who need help the most are the ones least likely to get it. That’s why successful people tend to get more successful, and why failures stay stuck in a rut. Failures have 101 excuses lined up and ready to go in order to justify why they can’t afford the time/money to invest in the coaching and educational materials that would propel them to success.
“If only I had the money.”
“If only I had the time.”
“If only my wife/business partner/sales manager would let me invest in coaching.”
“If only my business was successful, then I could invest in the success of my business.”
“If only” is part of a failure’s daily lexicon. And it’s why most failures stay failures.
This is very, very harsh, I know. But what’s harsher? Daring to say what I just said? Or a flooring dealer who goes through life—working their tail off like a whipped dog—but NOT achieving their Ideal Business and Ideal Lifestyle because they have swallowed the giant lie that they CAN’T afford the time/money?
What’s harsher? What I just said? Or the picture of a business person lying on their deathbed with their dreams UN-fulfilled—wishing they would have done something different?
Because when you strip everything away—your store, the showroom, your employees, and all the other “business” stuff—that’s what we’re really talking about: your life. And how to live your life to the fullest. And frankly—based on my conversations with hundreds of flooring dealers—most of them are so swallowed up by their business, that everything that has meaning, purpose and value outside of business is sacrificed on the alter of “keeping their nose to the grindstone.”
And that is truly sad.
“Better a slap from a friend than a kiss from an enemy.”
Consideration #2: How quickly can I recoup my monetary investment?
As an Ambassador member, the TOTAL cost of my system for the first 12 months is $11,973*. (After that it drops to $2964 per year, which equals $247/mo x 12 months. There are NO renewal fees of any kind.)
(*Price based on the fees for the first 25 Pioneer members. The price will be going up significantly after the first 25 members are in place.)
Let’s estimate really low and say that your average ticket right now is $1,700, and your average margin is 30%.
$1,700 ticket x 30% margin = $510 profit.
Using this example, you would only need 2 EXTRA jobs per month above and beyond what you already have to TOTALLY pay for my system for the first year. (After the first year, you’ll only need one extra job every other month to totally pay for my system.)
Now let’s look at three LOW COST strategies (out of the dozens) from my system, any one of which will easily bring in 2 extra jobs per month.
Low Cost Strategy #1: Joint Venture Module
This strategy costs only $11-$14 for each joint venture you set up. Using this system I created twelve joint ventures in 90 days…with ZERO cold-calling! In the Joint Venture module, you’ll learn my step-by-step system for setting up extremely profitable joint ventures using NON-invasive, NON-cold-calling, welcome, entertaining communication. (In fact, when a potential joint venture partner opens the first communication you send them, it will UTTERLY and INSTANTLY set you apart from every other flooring dealer in your area and make them want to do business with you.) This is a ridiculously cheap strategy to set up and maintain. Imagine having 10, 20, or 30 businesses each sending you referrals every month for FREE!
It would be difficult NOT to get at least 2 extra jobs per month with this one strategy! (And 2 extra sales using the Joint Ventures strategy is ridiculously conservative. I’m merely pointing out how easy it will be for you to recoup your investment.)
Low cost strategy #2: Referral Program
This program costs about $2.40 per job to implement, so it’s dirt cheap.
Let’s say your store is doing 10 jobs per month. My referral program uses NON-invasive, NON-cold-calling, welcome, entertaining communication to generate on average 7 referrals for each job. But let’s call it 5 referrals just to be conservative.
10 jobs per month x 5 referrals = 50 referrals per month
My system identifies the 2-4 people out of the 50 who need flooring RIGHT NOW. (The other 46 who don’t need flooring right then get plugged into my “Herd Building” system where they’ll automatically be farmed over the next 6-12 months for even MORE business.)
Anyway, if you can’t close at LEAST 2 extra sales using my referral system, we need to hold a mirror in front of your mouth to see if you’re still breathing!
Low cost strategy #3: Design Audit System
The Design Audit is a sales tool that costs only 24-cents per client. It automatically does 5 things:
1. Positions you and your salespeople as trusted advisors
2. Completely sets you and your team apart from every other dealer
3. Eliminates price resistance
4. Has built-in upsell opportunities for instantly higher profits (These don’t FEEL like upsells to the client. They feel like professional recommendations from a trusted advisor.)
5. Increases your team’s closed-sale batting average and gets EXTRA sales every month.
Let’s say you only have one salesperson. By following my step-by-step process in the Design Audit, if you or your salesperson CAN’T close at least 2 extra sales per month, then we need to check your pulse to see if you’re still alive! Seriously, you’d have to work really, really hard to not to get at least two extra sales per month per sales person using this single strategy.
Between these three dirt-cheap strategies, you can easily generate dozens of EXTRA jobs per month (and that’s VERY conservative). In fact, these three strategies alone have the power to turn around a failing business. So…getting 2 extra jobs is an utter slam dunk. (Plug your own numbers into these examples and you’ll find that it will be hard NOT to recoup your investment quickly.)
But recouping your investment is just NOT the point. The point is, we’re talking about transforming your business into an Ideal business, and thus giving you the power to live your Ideal Lifestyle. You simply can’t put a price tag on that.
Consideration #3: R.O.I. on specific ads.
This is something that you should absolutely be tracking. And here’s the question you should ask: “When I spend $100 on an ad, do I make at least $100 back and gain a client?” If the answer is yes, then the ad is successful. Keep running it. If no, then ditch the ad, or tweak it.
This is the minimum performance you should expect from an ad. Break-even + new client.
Now you might be saying, “Jim, why would I bother running an ad that I just break even on.”
Here’s why:
Multi-million-dollar direct mail companies make millions of dollars from clients acquired at break-even. (Some even acquire clients at a loss.) In other words, they barely make enough on the initial sale to cover their advertising cost, and some even go in the hole.
You know those late night commercials advertising a set of steak knives for $19.95? And if you act RIGHT NOW they’ll throw in a combination potato peeler/nose picker, a designer meat cleaver, a set of indestructible bar-b-que utensils, a stainless steel ear-hair-trimmer, and an inside-the-egg-shell-egg-scrambler.
Do you actually think they’re making money on that sale after paying the ad cost? No way!
Why in the name of all that’s sane and rational would they do this?
Reason: They know something that most small businesses don’t: the real wealth in any business is in the relationship with the client AFTER you have acquired them. They are building a list of clients so they can market to them later and sell MORE stuff at a profit.
This is the exact opposite of what 99% of flooring dealers are doing. Remember what I said earlier in this article: I’ve surveyed (to date) over 200 flooring dealers across North America. Only ONE had a system to market to his previous clients on a monthly basis.
Therefore, if you get an ad that breaks even AND brings you a new client, it’s working. Keep doing it.
Of course as an Inner Circle member you are given marketing strategies that enable you to do much better than break even. And of course, tweak your ads for better response, always be on the lookout for marketing strategies that do better than break even, etc. But break-even + new client is a-okay!
(Plus, by using my referral system, you can take a break-even ad and MAKE it super-profitable.)
Dealers have tracked their advertising costs for a typical weekend sale. They divide the total cost of promoting the sale with the number of walk-ins. It’s common for the cost to be $100 to $600 for EACH PERSON who walks through the door. And that’s not even to buy something. Just walk-ins. And the irony is, those same dealers have no system in place to farm those clients for referrals or for future business. Insanity!
“How To Track Your Marketing”
There are lots of ways to track your marketing, but here’s an easy way to get started: on every closed invoice, write across the top where that client came from, including if they were a repeat or referred client. At the end of the month, add them all up. You’ll know which ads are working and which aren’t. You’ll also get a very clear picture over time where your business is coming from. You’ll probably be very surprised. Heck, you might even cancel your yellow page ad! (Or drastically reduce it’s size.)
Don’t Fall For This
Deadly Advertising Myth…
Ad reps constantly talk about “response rates” to ads. What they are talking about is when an ad produces 20 phone calls or 20 walk-ins. They’ll say, “20 people responded to your ad. See, it’s working!”
News Flash! You can’t put response rates in the bank. The only thing you can put in the bank is money that you make from sales. This is the only criteria by which you should judge the success of an ad. “Did the ad bring in enough sales to at least pay for the ad and bring me one client.” Who cares if it brought in 20 calls if none of them bought anything.
This also means that you can get a “low response” ad that’s still successful. What if an ad costs you $350 and only generates 2 calls, but one of those calls turns into a $3,500 sale? That’s a 10-1 return on your investment. I’d call that successful even though the response rate was low. Wouldn’t you?
Conclusion…
I began this article with the question, “How quickly should I see a return on my investment.” Good question. It leads to many other truly important, core questions about your success in business, and—more importantly—your success in life. Hopefully my answers to this question have opened your mind to the reality that there is more than one kind of return on your investment.
And that you should be applying this question to many areas in your life…not just my coaching system, and not just to returns involving money.
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!