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 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.
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: firstname.lastname@example.org or call (888) 333-8981.