Greetings Floor Dealers!

This series is about the mindset and strategies used by dealers who build $5 Million businesses with gross margins of 45% or more.

To successfully command premium prices (gross margins of 45-50% or more) in today’s environment, and build a $5 Million business, two critical components must be in place. The first is having a premium price mindset. The second is having sales and marketing strategies to magnetically attract customers willing to pay more and to overcome the low-price brainwashing many consumers have undergone. Mindset is critical. A “low price” mindset will sabotage even the most effective sales and marketing strategies; I’ve seen it happen. So I’ll spend the remainder of this installment talking about mindset, then cover sales and marketing strategies in part 2.

The first step in changing your mindset from “cheap price” selling to “premium price” selling is to realize that, in spite of what you hear in the media, from your distributor’s sales rep, from other dealers, even some industry “experts,” it’s very possible to command high margins. Some examples from dealers I know personally: Jerome N. from Texas went from charging 20% – 30% gross residential margins to 45% – 50% over a 90-day period. Craig B. from Florida is commanding 45% margins. Garry C. from Illinois raised his margins to 50% over a 90-day period. Dan G. from Montana commands 45% margins. Jeff R. from Texas averages 55%. And there are many more dealers, both inside and outside the group I coach, from every conceivable market, who successfully charge a premium. If they can do it, you can too.

Next, you’ve got to believe you’re worth it. What a dealer charges is often tied up with their self-worth. They don’t feel like they deserve to make a lot of money and their prices reflect this. Negative self-talk like, “Who am I to ask for 50% margins,” or “No one will pay me premium prices,” reflect an attitude about pricing that has more to do with the dealer’s self-worth than outside market forces or their customers’ willingness to pay more.

It’s also important to be aware of negative cultural programming that produces guilt in business owners about succeeding. “Profit” is considered a dirty word in some large, influential circles, including our national news media. Add to that the endless government regulations that punish success, the infinite parade of pandering politicians decrying corporate “greed” and profits, and is it any wonder that many entrepreneurs struggle with guilt about money? You must purge every vestige of negative social programming surrounding success, wealth, and profits that is currently in fashion. By failing to do so you risk failure at worst or endlessly wallowing in mediocrity at best.

Finally, don’t fall for this industry myth: “If you have great products, or great warranties, or great service, people will beat a path to your door.”

Yeah, right.

I call this the build-a-better-mousetrap myth and it’s one of the biggest misconceptions amongst dealers. In today’s incredibly competitive, hectic world, nobody’s beating a path to anyone’s door. Legions of dealers have learned this lesson the hard way since 2007; many are no longer in business.

Even the best flooring dealer will struggle and suffer, even go broke without a system that attracts a steady flow of new, good customers (especially in today’s market). You see, while being honest, ethical, and knowledgeable and carrying top products is a prerequisite to success, by themselves they are not enough.   The thousands of knowledgeable, ethical, honest dealers with great products who were forced to shut their doors over the past seven years could attest to this. You must combine these prerequisites with sales and marketing strategies that attract the best customers, create differentiation, position you as a trusted advisor, and empower you to charge high prices.

Stay tuned because that’s the topic of the next installment.

 

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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