Greetings Floor Dealers!

John Mapes is the President and founder of My Flooring Warranty and in part one I shared statistics that his company gathered by polling 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. Every consumer was asked, “What prompted you to buy this time?” Here’s a recap of the top five answers:

  1. 50.6% A referral from one of your past customers
  2. 8.9% I drove by your store
  3. 3.1% TV or Radio Ad
  4. 2.2% Social Media
  5. 2.1% Internet search

The vast majority of dealers are spending the lion’s share of their time, energy, and money on strategies that only produce 2% – 3% of their business, but have no marketing plan to capitalize on revenue sources generating 50% or more of their revenue: repeat and referral customers. This mistake costs dealers millions of dollars over their careers. I blame this mistake in part on the flooring industry at large, which tends to emphasize strategies that produce a tiny fraction of dealer’s revenue.

That’s where the Three Tiers of Marketing is useful in helping dealers prioritize their efforts. The tiers are as follows:

Tier 1: Warm Market

  • Referral marketing system (a system to farm your currently scheduled installations for immediate referral business)
  • Sales closer system (a sales system that brings consistency to your sales process, and leads customers on a logical step-by-step path from “shopper” to “buyer.”)
  • Market to past customers (monthly direct response newsletter, weekly e-letter)
  • Referral relationships with other businesses (realtors, contractors, carpet cleaners, etc.)

Tier 2: Targeted Marketing to Cold Prospects

  • Website (including pay-per-click advertising and search engine optimization)
  • Social media
  • Newspaper
  • Display ads
  • Direct mail (to targeted list of cold prospects)
  • Home and garden shows

Tier 3: Broadcast Advertising

  • Billboards
  • Radio
  • Television

The correct way to prioritize is to implement all of the Tier 1 strategies first. Once these are fully up and running, then begin implementing the Tier 2 strategies. Once Tiers 1 and 2 are up and running, implement Tier 3 using luxury marketing dollars.

Let’s take a look at the revenue potential from just two of the strategies from Tier 1.

Referral Marketing System. By having a system in place that farms all your installations for immediate referral business, closing two extra sales per week per sales person is realistic. Assuming an average ticket of $3,000, two extra sales per week equals $312,000 in extra revenue annually with miniscule marketing costs. If you have two sales people, this doubles to $624,000.

Referral Relationships With Other Businesses. Let’s also say you develop relationships with 35 businesses, and each sends you a measly four referrals per year. This equals 140 extra sales annually. A $3,000 average ticket translates to $420,000 in extra revenue with virtually zero marketing costs.

These two strategies alone can generate over $1 Million annually. If this seems like a crazy, unrealistic, pie-in-the-sky number, then cut it in half. You’re still at over $500,000 in extra revenue with miniscule marketing costs. And we haven’t even figured in the remaining strategies from Tier 1, which can conservatively add another $500,000 or more annually.

Tier 1 strategies have the power to transform a failing store or take an already-successful store to all new revenue levels, multiple locations, etc. I’ve seen it happen first-hand over and over again with dealers I work with. I defy anyone to show me an example of a dealer who has generated these kinds of transformative results with Tiers 2 and 3 for costs comparable to Tier 1.

This doesn’t mean I’m against Tier 2 and 3. I teach dealers how to effectively use these strategies, but I make sure they prioritize. This means that I have them fully implement Tier 1 before investing time and money on Tiers 2 and 3. You can see why.

 

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!