October 13/20, 2014; Volume 28/Number 9
By Jim Augustus Armstrong
Steve N., a dealer from California, added, “Foot traffic is bad. We just want at least seven customers a day. We get two to three customers and it becomes difficult to stay motivated.”
Both of these challenges were posed during a recent Marketing Mastery webinar—hosted by myself and FCNews associate publisher Dustin Aaronson—called “Your biggest marketing questions answered.” I was able to personally coach these gentlemen through their challenges on our live webinar. As it turns out, the solution for both was not only the same, but very simple: Implement the three tiers of marketing, which are as follows:
Tier 1: Warm market
- Referral marketing system
- Sales closer system
- Market to past customers (monthly direct-response newsletter)
Tier 2: Targeted marketing to cold prospects
- Website (including pay-per-click advertising and search engine optimization)
- Social media
- Display ads
- Direct mail to targeted list
- Home and garden shows
Tier 3: Broadcast advertising
You should implement all the Tier 1 strategies first. Once these strategies are up and running, begin implementing the Tier 2 strategies and then Tier 3 using luxury marketing dollars. Your biggest profits are in Tier 1 and then, in descending order, Tier 2 followed by Tier 3. The strategies in Tier 1 are dirt cheap to execute and it is relatively easy to measure their results, but Tiers 2 and 3 get progressively more expensive and challenging.
Tier 1 strategies also dramatically increase the profitability of Tiers 2 and 3. Let’s say you invest $5,000 in a direct mail campaign, which drives 10 prospects to your store. If you have a sales closer system in place, instead of converting four of the prospects, you convert six. If you have a referral marketing system in place, you can turn those six sales into eight. Finally, if you have a past customer marketing system in place, you can stay in front of those eight customers and farm them for repeat and referral business.
You should never move on to Tiers 2 or 3 until your Tier 1 is fully executed. Tier 1 is so effective that many of the dealers I coach build their businesses without ever needing Tiers 2 and 3.
Prior to the webinar, Matt and Steve were implementing both Tiers 2 and 3 but not Tier 1. I polled the rest of the attendees, and nearly 100% were doing the same. This is common throughout the flooring industry. Ninety-eight percent of dealers spend the lion’s share of their time, energy and money on Tiers 2 and 3 but totally ignore Tier 1. It’s time to stop the madness.
On a happy note, since the webinar both Matt and Steve have implemented the Tier 1 strategies. I know they will do well; dealers all across the U.S. and Canada have made this same switch, and I’ve seen many dramatic turnarounds.