Greetings Floor Dealers!
My friend John Mapes is the founder and President of My Flooring Warranty. During a recent conversation he told me that his company has conducted polls of 65,000 consumers across the U.S. and Canada who bought flooring from one of the 1,300 dealers in the My Flooring Warranty program. This is an extremely wide sampling of dealers and consumers.
“One of the questions in the poll is something I think you’ll find very interesting,” John said.
“What’s the question?” I replied.
“Every consumer was asked, ‘what prompted you to buy this time?’”
Being a sales and marketing guy, this pegged my curiosity meter. “Well don’t keep me in suspense, man!” I practically shouted into the phone. “What were the results?”
“Here are the top five responses,” he laughed. “I think these will grab you.”
Boy, was he right. Here they are:
- 50.6% A referral from one of your past customers
- 8.9% I drove by your store
- 3.1% TV or Radio Ad
- 2.2% Social Media
- 2.1% Internet search
The fact that “referral” ranked at 50% was not at all surprising to me. My own polls of dealers since 2007 have revealed that for most, repeat and referral business totals 50% to 80% of their overall revenue. But even I was stunned at the utterly dismal results from internet searches and social media.
Two percent??
I knew the percentage of revenue generated from these strategies is low, but this is shockingly bad. Especially when you consider how much time and energy is devoted to these strategies by the flooring industry at large. But it gets worse. As a result of our industry emphasizing online and social media advertising—often to the exclusion of marketing methods proven to be more effective—dealers wind up spending a disproportionate amount of time and money on advertising methods that produce only a tiny fraction of their revenue. Case in point: the vast majority of dealers have an online presence, but no marketing system in place to capitalize on their biggest source of revenue: past customers and referrals. Madness! Our industry has got to do a better job educating retailers on strategies proven to be effective rather than strategies that happen to be in vogue. If door hangers only produced 2% of revenue for dealers, would we devote multiple workshops, seminars, trainings, and other resources on how to do “door hangar” marketing? Of course not. So why do online strategies receive emphasis that’s out of proportion with their effectiveness for dealers?
In a world where everyone is tethered to the internet through the umbilical cord of their smart phones, and where social media has taken over as a dominate mode of social interaction, some may see this article as sacrilegious.
I don’t care.
When it comes to marketing, the only thing I care about is helping dealers put more money in the bank. Period. And if you’re a dealer, it should be the only thing you care about when choosing where to spend your marketing dollars. You should be ruthless about this. If online advertising accounts for only a small piece of the revenue pie, why are you investing a disproportionate amount of time and money there? Because everyone else is doing it? Doing things because “everyone else is doing it” is a lousy way to run your business that virtually guarantees you’ll wallow in mediocrity.
Lest anyone misunderstand, I am a big believer in online marketing. I do a ton of it, and I train dealers on effective online strategies. Online is an important part of your overall marketing mix. Problems occur when dealers over-prioritize it within that mix, while totally ignoring strategies that capitalize on much bigger sources of revenue, like past customers and their referrals, and affiliate relationships with other businesses. This is something that’s widely misunderstood and it’s the subject 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.
See what real, live dealers are saying!