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Seven Ways To Increase Market Share In Tough Times - Part 2

Furniture World Magazine
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Article Summary: Part 2 of this series examines and expands upon some of the ideas put forth in Britt Beemer’s book “It Takes A Prophet To Make A Profit”. The best retailers are sharpening their tools and checking for leaks, waste and junk. They are inspiring their troops with an upbeat, confident attitude. In addition, they are moving to increase market share.

View all articles by Larry Mullins


Trends that will shape your business.

We reviewed part of Beemer’s research in the last issue. The balance of his book holds further interesting "trends" and ideas. Let’s complete our examination of them.


In the April/May issue of FURNITURE WORLD, two books and two ways to approach the future were discussed. One was C. Britt Beemer’s: "It Takes a Prophet to Make a Profit." Beemer seeks to inform us about the "icebergs" and opportunities ahead. As a counterpoint, Gary Hammel’s book: "Leading the Revolution" puts forward a view that the bold and visionary among us can create our own future.

Read both books. Think about the "icebergs" ahead, and consider the opportunities. Be a visionary and dream boldly. Nevertheless, be a practical visionary: Hitch your wagon to a star and then get out and push. If you are like many furniture people, it’s been a slow spring. The staff is in the doldrums and the floor looks sterile.

FOR IMMEDIATE RELIEF PLAN A PROMOTION
That is what the leaders are doing. They are not waiting around for things to improve. Plan a daring clearance, a renovation event, or something with some excitement in it. Wake up the sleeping minds around you with some energetic planning, and do it right. Make it a real event, run it for three to five weeks. Allow a three-week planning period, and leave no stone unturned. Plan the mailing, the print advertising, the radio (and TV if you use it), the signs, the price tags, the staff training, the strategy, everything. Get things moving again! Be bold, dashing and masterful! Shock your competitors! You’ll not only wake everyone up, you’ll do business, increase market share, and have some fun! (For more information on everything from event planning through execution and follow-up see Larry Mullins’ series on event planning and execution starting with the 10/98 issue of FURNITURE WORLD and posted to the Marketing Management Index on www.furninfo.com).

BACK TO BEEMER’S "TRENDS"
We reviewed part of Beemer’s research in the last issue. The balance of his book holds further interesting "trends" and ideas. Let’s complete our examination of them.


You Have Her Attention, But Will She Believe You? When people say they don’t trust advertising, it really means they do not have enough information. If they don’t know you, then you must make an effort to validate your store and your offer. That is why the “confidence factors” are so important in advertising. Stating how long you have been in business in an ad means a lot if you have a track record. Stating a simple guarantee works wonders and makes ad space more effective. Yet dealer after dealer omits the several confidence building factors that cannot be omitted by a “new-style” marketer.


TREND: Community involvement enhances a company’s reputation.
Very important to your customer’s perception of you as a community minded store are programs such as giving to needy causes, sponsoring teams, giving to local charities, helping children at Christmas, assuming leadership in a local crisis, and having a college scholarship fund.
An important aspect of giving, which Beemer doesn’t mention, is that it is also important that you get credit for what you do. Tell people about your community involvement on your website. One great store gives away mattresses for the holidays. In addition, it may be good to have a summer community activity; it’s a long time between Christmases. And make sure the radio and TV stations and the newspaper are told about what you are doing.

TREND: There is a growing obsession with the internet. There is no doubt that we need to learn how to use the internet. Many furniture retailers brag about having a website. Unfortunately, they are more often than not completely out of date and poorly designed for ease of providing information. Some have maps of locations that are completely inaccurate, old information on vendors, etc. If you assign this job to some whiz kid, check up on him. Visit your own website often. A good, up to date website can be helpful.

TREND: American companies cannot count on employee loyalty - they must earn it. This is not news, of course. One of the strongest ideas Beemer uncovered is that people say, "the Company does not let me know what’s expected of me." Food for thought. Also, the "new" notion of loyalty is that "The company is responsible for providing an environment in which people can achieve their full potential, and employees are responsible for developing their skills."

A few additional "bytes" and ideas:

•"Everybody likes recognition" - Say "thank you."

•You can never thank good employees enough.

•Two of the top reasons for loyalty: "good working environment and "the supervisor listens to me." This passage on page 103 of Beemer’s book is very important: "65 % [of associates] appreciate their company having a mission statement. Doing the right thing is good for business. Employees admire companies that communicate where they stand. Many companies claim to prize trust, life balance, employee development and other lofty goals, and they enumerate them in policies and value statements. But a company must walk the talk. When its stated values clash with its actions, employees will be cynical and disillusioned. Morale will suffer. If you are going to announce your company’s values to your employees, and the world, be sure you mean what you say. Be committed, and show it. Values, or deeply held principles and beliefs, can be powerful motivators that, when shared, form a foundation for corporate culture." I can not agree more with Beemer on this one.

TREND: Customers are reluctant to pay full retail price. Certainly not news. However, Beemer points out that customers want low price and value. Remember that "value" means much more than the value of merchandise. Most important to customers are added value factors, according to Beemer’s research:

•"Does the store have the selection I want every time?

•Does it consistently fulfill my needs?

•Is my shopping time well invested?

•Is the store or its brand indispensable to me? Do I get what I pay for? "How a retailer answers these questions determines the level of customer loyalty. Another important idea: a salesperson affects 80% of furniture purchases and 60% of mattress purchases. Relationship selling is increasingly important. Beemer notes: "Our research shows that when a business owner is directly involved with a customer, there is an 83% chance of repeat business. This compares to a mere 16% to 38% in a mass marketer’s store. Surveys have shown that customers feel that in a shopping experience there is no greater honor than to be waited on by the owner."


Like A Master Chess Player, Today’s Independent Furniture Retailers Must Think Ahead. They must be aware of the trends and be ahead of the curve. But successful retailers must also have a personal vision, an idea of what the future should be. They must: “Hitch their wagon to a star... and then get out and push.” It takes both vision and hard work to make that future what you want it to be.


TREND: Frequent buyer programs have come to govern consumer-spending habits. 63% of all American households now participate in a frequent-buyer program. Beemer notes that many companies have aggressive marketing programs that focus mainly on getting new business and pay relatively little attention to maintaining existing customers. This is an important point because it costs six times more to get a new customer than a previous customer to respond. Yet, many small and medium size retailers have yet to develop a preferred customer program to ensure customer retention. Frequent buyer programs that are executed on a mass scale are attempts by the big guys to achieve the personal follow-up possible for smaller stores. There can be no question that loyal customers generate repeat business, which in time builds a customer base.

Beemer’s research indicated that to actually enhance loyalty, a program should incorporate six specific objectives:

•Perceived value.

•Choice of rewards.

•Aspirational value - Something the customer is excited to receive.

•Relevance - Can they reasonably win the awards?

•Convenience -It must be easy to redeem rewards or it will be counter-productive.

•Communication - You must keep targeted customers informed.

TREND: Today’s consumers want brand-name products. Beemer says there are five key reasons people buy brand names.

•They believe they get better quality.

•They feel they can trust the company.

•They think they know what they are getting.

•They think it will be worth more to them.

Beemer is on target here. Consumers know very few furniture brands. La-Z-Boy, Natuzzi, and a few others. The important idea is to name brands all the time, even when they are not well known. It adds to the credibility of the selling proposition. This is true of ads as well as sales talks. Beemer comments: "In the eyes of shoppers, a $299 La-Z-Boy brand recliner is more attractive than a $279 Berkline recliner. Even selling at $20 lower Berkline loses, because La-Z-Boy would have to be priced over $100 more in order for Berkline to be able to create the same traffic with an advertisement."

TREND: Gaming casinos and lotteries have joined America’s mainstream. People gamble more, according to Beemer, because they seek escape from the pressures of life. There is probably room for some exciting furniture and home-oriented contests in the promotional mix. Awards, recognition, and respect all appeal to the desire to win and be recognized.

TREND: People today complain of feeling invisible. Beemer says that in a 1999 survey, 72% of Americans said they felt that people are ruder today than in the past. When asked why, they gave these reasons:

•More stress, 35%.

•Families don’t stay together, 25%.

•People care only about themselves, 24%.

•People have less time to be nice, 9%.

•People travel more and are more transient.

•32% said the rudest people they encountered were in stores (clerks, etc.). 39% of Americans, two out of every five people, think employees in retail stores are ruder today than in the past . . . 41% said rudeness caused them to postpone a purchase or not to make it at all. 38% said they felt invisible or ignored in a department store. 66% of Americans won’t tolerate such mistreatment.

A major source of grief is voice mail and electronic operators. All of these factors should mean one thing to an independent furniture retailer: There is a huge opportunity to stand out from the retail crowd by training the staff to be nice to customers, each other, and to vendors.

TREND: Today’s marketing efforts are not keeping pace with changing customer demands. Beemer summarizes his "changing consumer" with this trend. The customer expectations are indeed higher than ever. Customers expect:

•To be able to return purchases easily - 68%.

•To find easily what has been advertised - 55%.

•Employees to be able to answer questions - 54%.

•Thirty-day unconditional satisfaction guarantees - 53%.

•Lowest price, period!- 50%.

•Signage that clearly directs them to what they are seeking to purchase - 49%.

•Store employees who are visible at all times - 48%.

•To be able to get what they want and leave - 47%.

•To have new introductions clearly marked - 41%.

•To be in a store that not only talks about customer service but also delivers it - 41%.

Furniture stores have been dropping the ball in providing information to customers about their products. 73% of today’s consumers said manufacturers are outperforming retailers in advertising and product education. Beemer has quite a bit to say about customer confidence in advertising. But he sometimes asks ambiguous questions. For example, the real shocker was the response to this question: "Are you as motivated today as you used to be to shop a store based upon its advertising?" Of the respondents, 48.5% said yes, 48.6% said no, and the rest didn’t know. When half the population doesn’t trust advertising, that’s bad. In the same survey, 58% said they felt that "companies routinely offer more in their advertising than they deliver." Of course, the numbers do not indicate that "half the population doesn’t trust advertising." The question was whether people were as motivated to shop a store based upon its advertising. And "trusting advertising" is a subjective question, which depends upon the specific store, the merchandise, the advertisement itself, and so on.

Beemer noted that 62% of customers said they have stopped shopping where the quality of sales assistance has deteriorated. To what do they attribute the decline? 60% said management was at fault due to inferior training. The other 40% believed retail stores are hiring inferior people.

So, what should you do about all of this? In broad terms, here is what I suggest: start thinking of becoming a new-style marketer of furniture. Think about creating value in the minds of customers. Build your company "brand" by developing common ground between you and your customers. Struggle to build good customer relationships. Remember that it is more efficient to sell additional merchandise to your existing customers - - than to reach out to find new customers. Define customer expectations and then over-deliver on them. People are not going to settle for anything less. If you don’t become a new-style marketer of furniture, and you don’t start moving ahead with new energy, you may be left behind.


Larry Mullins, President of UltraSales, Inc., has 30+ years experience in the front lines of retail furniture marketing. Larry's mainstream executive experience, his creative work for "promoter-specialists," and study of advertising principles has enabled him to continually develop new High-Impact strategies for independent furniture retailers that are sound, complete, and innovative. Inquiries can be sent to Larry care of FURNITURE WORLD at editor@furninfo.com.

 


Larry Mullins is a contributing editor for Furniture World and has 30+ years of experience on the front lines of furniture marketing. Larry’s mainstream executive experience, his creative work with promotion specialists, and mastery of advertising principles have established him as one of the foremost experts in furniture marketing. His affordable High-Impact programs produce legendary results for everything from cash raising events to profitable exit strategies. His newest books, THE METAVALUES BREAKTHROUGH and IMMATURE PEOPLE WITH POWER… How to Handle Them have recently been released by Morgan James Publishing. Joe Girard, “The World’s Greatest Salesman” said of this book: “If I had read Larry Mullins’ book when I started out, I would have reached the top much sooner than I did.” Larry is founder and CEO of UltraSales, Inc. and can be reached directly at 904.794.9212 or at Larrym@furninfo.com. See more articles by Larry at www.furninfo.com or www.ultrasales.com.

View all articles by Larry Mullins

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