July 4/11, 2016; Volume 30, Number 27
By Jim Augustus Armstrong
I was helping a flooring dealer prioritize her marketing program when she said, “I think I could be doing more with my Facebook page to generate sales; what do you suggest?” I am asked this in one form or another quite often, and the answer lies in how each individual dealer prioritizes his or her marketing.
My Flooring Warranty is a service that conducts ongoing polls of consumers who recently purchased flooring. One question on the survey is, “What prompted you to buy this time?” The top five answers are:
1.“A referral from one of your past customers.” (50.6%)
2.“I drove by your store.” (8.9%)
3.TV or radio ad (3.1%)
4.Social media (2.2%)
5.Internet search (2.1%)
A few people pointed out that some sales happen because consumers post on Facebook asking for referrals to good, trusted flooring dealers. You may assume these referrals count in the social media category but they do not. They should still be considered referrals from past customers because they would have happened even if the dealer had zero social media presence. Similarly, if someone emailed her personal contacts asking for a referral to a flooring dealer you wouldn’t attribute any resulting sales to email marketing.
If you dedicated time, energy and money to social media marketing and tripled the national average, you’d go from 2.2% of your sales coming from social media to 6.6%. Not bad, but hardly a game changer. However, if you dedicated time, energy and money to a referral marketing program and tripled the national average of 50.6%, you would transform your business.
Does this mean I’m against social media marketing? Heck no. I use it in my business, and my team and I teach dealers how to use it in their own organizations. The difference lies in how you prioritize social media; that’s where the three tiers of marketing come in. Let’s review:
Tier 1: Warm market
- Referral marketing system
- Sales closer system
- Market to past customers (monthly direct-response newsletter)
Tier 2: Marketing to cold prospects
- Social media
- Google Ad Words
- Search engine optimization (SEO)
- Display ads
- Direct mail to targeted list
- Val Pak coupons
Tier 3: Broadcast advertising
You should first implement all tier 1 strategies. Once these are fully up and running, then implement tier 2. Once tiers 1 and 2 are in full effect, then you may choose to implement tier 3. Use discretionary marketing dollars for tier 3. Comparatively, tier 1 is inexpensive to implement and get big results from, but tiers 2 and 3 become progressively more expensive and difficult to make profitable.
Most dealers spend the lion’s share of their time, energy and money in tiers 2 and 3; tier 1 is virtually ignored. If this describes you, you’re sitting atop an untapped goldmine of hidden profits.
I’ve seen dealers transform their businesses and, by extension, their lives for the better by making this shift to tier 1. I recommend you do the same so you can transform your business, too.