MANAGING FOR
MONEY
Appointments
Cost More than Ever!
Here's why - and what you can do about it.
by Steven C. Bursten
If you are
like many business owners who advertise for appointments, you probably
had worse results in 2005 than anytime in recent memory. If appointments
are steady, chances are they are not from media advertising like
newspaper, yellow pages, radio or television. What’s behind
it? What can we expect for the future? Most of all, what can we
do about it now?
Possibly you are one of the fortunate few who do not have a problem
getting appointments. Or possibly your appointments are down, but
your sales are ahead of last year. Either way, count your blessings!
WHAT’S HAPPENING?
What is going on to cause this experience? Is it temporary, or the
beginning of a trend? Here is what we know. And, here are a couple
of pretty good guesses.
• Newspapers are losing readers—It is part of a continuing
trend that finds young people getting their news from the Internet,
cell phones and other options more than newspapers. Those who read
are usually older, sometimes with higher income, which is good,
but the older segment is not buying enough to offset losses from
non-readers.
• Television is fragmented—Today, you have more TV options
than ever. More channels, more ways to view: cable, satellite, even
DSL phone lines are delivering video in some areas. More options
mean fewer viewers for each program.
• Radio has always been a hard sell—And it’s true
now more than ever. The medium requires time and investment. Many
window coverings business owners just do not have the time to wait.
If it works for you, use it. But if you are thinking about it, be
cautious.
HOUSING AND THE ECONOMY
Along with media trends, housing and economic trends are shifting.
Young people have always stretched to get a down payment for their
first home. Now, it is more so than ever. They want to buy the most
expensive home they can afford, confident that prices will continue
to escalate and drive up their net worth. It’s an easy calculation.
If home values grow 30 percent in five years, how much better to
have 30 percent of a $500,000 home rather than 30 percent of a $250,000
home? The challenge is having no money left for window coverings
after scraping together the down payment.
Another piece of the puzzle is the vast number of $1 million homes
being sold—about twice as many as traditional trends. The
Neiman Markus effect I wrote about recently is alive and well (see
D&WC, July 2005, page 52). Increasing numbers of homeowners
have the income to buy luxury, and guess what? These buyers make
decisions less on advertising and more on referrals from friends
they trust.
About six times a year our company, custEmers.com, conducts a Professional
Window Coverings Sales Class. We assign homework to complete a competitive
analysis. We now see a pattern: Competition is not about losing
sales to customers who get six estimates and sell you out for 10
percent less. It is more about competitors who take customers off
the market before they have a chance to answer your ad!
FRANCHISING – GROWING IMPACT
One big reason you have fewer leads than before: Franchising! Yes,
franchising is making your life difficult because they are good
at what they do: teaching new business owners to get appointments
without spending a lot on advertising. How do they do it? New homeowner
marketing and intense awareness in target neighborhoods are keys
to their success. Franchisors train new people to canvass homeowners
in the right areas, knock on doors, pass out flyers and build personal
relationships at a customer’s early stage of search, even
before they start reading ads.
With national leader, Budget Blinds, reportedly awarding some 250
franchises last year, and some half dozen competitors equaling that
level of success, you can expect to see about 500 new franchised
businesses had started up in 2005, and no less in 2006. But that
is only part of the story. Their success is spawning independents
who use the same techniques of building neighborhood awareness.
With at least 2,000 independents starting up this year, you can
see why appointments are tougher to get than ever.
WHAT CAN YOU DO?
First, build on your strength. You’ve been in business for
years. You have a good customer list. Chances are you aren’t
developing it as you should. Prioritize in thirds. The top third
are your favorite customers you love to do business with. Your next
third are good customers you like, but not quite so well as the
first group. The last group includes customers who wanted to buy
cheap and get multiple estimates, or just bought small jobs and
you don’t care if they call you again. For sure, you do not
want them to refer other friends like themselves. Throw those names
out if you have over 1,000 customers. Keep them if you only have
a small list, under 500 names.
Start mailing and phoning the top customers. They believe in you
and trust you. They have already given you a vote of confidence
by writing a check. This group is the easiest to persuade to buy
again and to refer you to their friends.
Next, analyze the best neighborhoods where you get business today,
but you would like to have more. Saturate those neighborhoods with
flyers and door hangers. You know that the area has the right income
and homeowners have the right attitude about making their homes
beautiful with exciting window treatments.
WOMM
The next thing to do is to start boosting word of mouth with demonstrations
in your store. If you do not have a store, use a library or community
room . . . or your customer’s home. Begin promoting yourself
in ways that create buzz and positive awareness.
Neil Gordon, a Hunter Douglas Gallery Dealer and an Exciting Windows!
member, has developed a strategy he calls WOMM: Word Of Mouth Marketing.
He has one of the highest volume stores in the country and one of
the lowest advertising budgets. Follow his lead. Begin using alternative
media like post cards to past customers, e-mail newsletters, special
presentations and phone calling to stay in touch.
If you want to beat the high cost of media advertising, take a page
from your competitor’s handbook . . . then add your advantages!
You have years of experience. Your competitor does not. You may
have an attractive showroom. Your competitor does not. You have
a solid customer following built up over many years. Your competitor
does not. You have lots of ways to bring in more customers at lower
cost. Why not start today?
This article is based on Steven C. Bursten’s actual experience
with sales and financial information working with hundreds of window
coverings businesses.
Whether you are a sole manager who aspires to higher sales, or you manage 50
window fashion decorators in a multi-million dollar business, this series will
help you manage sales better and increase your profitability. Bursten is the
retired founder of Decorating Den Interiors and author of a how-to book on new
business start up, “Bootstrap Entrepreneur,” and is a leading expert
in window coverings marketing, sales systems and sales management through his
company, custEmers.com. Questions and comments welcome: steveb@custemers.com or call (888) 333-8981. |
