CLARIFICATION: The Salesmanship column that appeared in the April 30/May 7 issue of FCNews misstated comments made by an Armstrong representative during a presentation in 2011 titled “How to Compete Against Large Discount Retailers.” When referring to inferior products or materials that are not usable, the speaker was not targeting the Bellawood line from Lumber Liquidators. Rather, he was talking about some promotional items sold by large retailers as traffic drivers that can be made of B grade or off-good materials which could lead to higher-than-average defects in a box.
by Warren Tyler
Just as consumers are desperate to save money, retailers are desperate to sell.
The big boxes—Costco, Empire Today and Lumber liquidators—have a leg up as they already have a reputation as fearsome price cutters. One look at these stores or Empire’s TV ads only enhances the feeling these giants can undersell the floor covering specialty stores by up to 70%.
You have to be able to overcome this perception. You need to become a fighter.
First, you have to know how these retailers promote their products. Know they have to make at least as much as you do on each sale, so they can’t possibly undersell all the time. It is critical to educate yourself on how they handle their outrageous advertising claims. For instance, when they advertise “free padding,” enough customers believe them to take thousands of sales from specialty stores in each market.
You have to know “free install” is only available on certain items and to qualify, customers have to buy a pad for $.80 a square foot that normally sells for $.40. That makes up for the cost, but they don’t stop there. They charge for everything related to the install most dealers normally include. They actually make more money on the “free install,” which reminds me of the old salesmen’s joke about the week’s sale: “Does the carpet go back down to the regular price after the sale?”
Armstrong surveyed Lumber Liquidators’ signature Bella-wood line and found up to 50% of every box was unusable. So $3.99 a square foot is really $8.
These and a thousand other issues come up and you have to know about it. You can’t just sit back and let them eat your lunch. You deserve the job more than they do. Most of you have the skills to complete any job in a much more professional manner and it’s a shame you let them steal your customers, especially since they frequently order wrong, lay out the job wrong and because they buy their labor on price only, the customer you should have served is the victim of shoddy installation, or the wrong surface for the space to be covered.
You may ask: “How can I counter these things when my traffic count is so low?” I have covered this many times by advocating the use of electronic media, networking and keeping in touch with your thousands of previous customers.
The economic conditions are not going to get better any time soon. Whatever happens, even if unemployment is 20%, which means 80% of Americans are still working—now is the time to fight for your customers.
Don’t sell the big guys short—they are smart. The charge for measuring is not as much to pay for the time and mileage as it is because they know once money has passed hands, no matter how little, 90% of customers will stop shopping.
During the last recession, we issued a guarantee that read: “If after you make your purchase from (store name) and you find the same material on display elsewhere for less, we will pay you double the difference upon presentation of the other store’s estimate.” I had six stores and never had to pony up, which I was willing to do because I took the order, and I still made some money. Once they saw their beautiful new floor, they were more than satisfied and, of course, we private labeled. Failure to private label is akin to suicide.
Be creative, innovative, acquire a killer instinct and have the courage to take a chance. I gave this wildly successful idea to many retailers, but they were afraid to use it. If you have fear, get out of the business.