May 14/21, 2018: Volume 33, Issue 24
By Jim Augustus Armstrong
“How many of you communicate with your past customers on a monthly basis?” I asked a group of dealers at the Digital Domination Boot Camp I was conducting during the Chicago Floor Covering Association’s annual Product Showcase. No one raised a hand, but this is not unusual. I poll most of my audiences with this question, and at most I’ll see three people out of 100 raise their hands.
“Most dealers are hunters,” I told the group. “They hunt down a customer, bag it, skin it and then they’re off hunting for the next one. But what if there was a better, easier way?”
There is, and that better way is to shift from being a hunter to a rancher. Hunters are transaction focused, while ranchers concentrate on the lifetime value of a customer (LVC). The LVC is all the business a customer will do with you over her lifetime, plus all the referrals she sends you over that period. Being a rancher means all your sales and marketing efforts—before, during and after someone buys from you—are focused on the LVC. Your job as a rancher is to round up a herd of customers, nurture your herd and protect your herd from rustlers, wolves and coyotes (box stores and other competitors). Your job is to fence in your herd, so it doesn’t wander off or get poached. By doing this, your herd will grow, and you’ll prosper.
If asked, most dealers will tell you they focus on LVC, but usually their marketing efforts don’t reflect this. The majority of dealers have some kind of advertising or marketing in place to attract new customers. But after all the time, energy and money spent getting a customer through their doors, they totally ignore them after the installation is complete and the customer never hears from them again. This makes about as much sense as a rancher spending time, energy and money acquiring a herd of cattle but having no fences, feed or watering troughs. His cattle are going to wander off, get poached or die.
The average consumer replaces her flooring about every five to seven years. What do you think happens to those customers during that time? They are bombarded with advertisements from Home Depot, Lowe’s, Menards, Lumber Liquidators, Empire and every other big company promising to sell them flooring at the lowest price. There’s also an excellent chance they’ll forget your store’s name, especially if they got quotes from multiple stores at the time.
But what if you had made the shift from hunter to rancher? What if, after acquiring that customer, you put her inside your fence with all your other customers so they wouldn’t wander off or get rustled?
In my sessions, I teach dealers how to make the shift from hunter to rancher by using a strategic, three-part process. Some of the benefits they enjoy include:
- It delivers an ongoing stream of new customers to add to their existing herd.
- Their repeat and referral business increases.
- It recession-proofs their business.
- It evens out the ups and downs in revenue.
- It keeps their herd fenced in, so they stop losing customers to competitors.
- They are able to increase their revenue while working a lot less.
Over the next several installments, I will lay out this three-step process to help you begin transforming from a hunter to a rancher.
Jim Armstrong specializes in providing turnkey marketing strategies for flooring retailers. For a free copy of his latest book, “How Floor Dealers Can Beat the Boxes Online,” visit BeatTheBoxesOnline.com.