When the market cools, will you be ready?

market downturnBy Jim Augustus Armstrong— “Jim, I really hope we don’t go into a recession, but it might happen. What can I do to prepare my business for this?” Too many dealers are simply riding the current remodeling boom and doing nothing to prepare for the inevitable market downturn.

Let’s look at the plan I covered with *Anna, a floor dealer from Utah, when she asked this question. (*Name changed to protect privacy.)

First, I reminded her that when a recession or market downturn hits, the “pie” of prospective flooring customers shrinks. This means you need effective methods to cut yourself a larger slice of the pie.

Second, I told her to continue marketing to her past clients. She’s one of my Flooring Success Systems members, so we are sending her client list a monthly printed newsletter and a weekly email newsletter. Your past client list—and their referrals—are a critical source of revenue during downturns. Stay in front of them with fun, informative, welcome, entertaining, relationship-building content.

Third, develop referral relationships with realtors, designers, remodelers, cleaners, insurance companies and other businesses who can send you referrals. They’ve already invested the time, energy and money baking their customer pie, and these relationships get you a slice of theirs at little cost. Anna’s business already has 20 of these relationships, which are generating $300,000 or more annually, so we set a goal to double the number by the end of the year.

Fourth, Anna had already hired an outside salesperson to go after Main Street commercial and negotiated commercial. I encouraged her to keep this up. This represents a stream of revenue that’s largely disconnected from the residential remodel market. If we get a downturn in residential remodel, often the commercial side will not experience the same dip.

Fifth, too many salespeople are simply “order takers.” That won’t cut it when the market slows down. You need to have an on-purpose, teachable selling system in place to: 1) maximize your team’s close ratio; 2) increase their average ticket size; and 3) keep their margins high. (Anna has already has this in place.) When walk-ins slow down, it becomes all the more critical to make every at-bat count. A selling system and weekly sales training will make this happen.

Sixth, make sure your Google review game is on point. Anna is already doing this and has over 70 reviews with a 4.8 rating, the second highest number of reviews in her market. Everyone looks at reviews when they go shopping online, and Google reviews are the first thing they see. Plus, it helps with your search rankings.

Lastly, make the shopping experience extraordinary so people can’t help but talk about you and refer you. Greet prospects immediately with a script to get them to sit down for a consultation; offer them snacks and drinks; have testimonials posted throughout your showroom; and make sure your showroom is clean, clutter-free and curated.

Some of the dealers I worked with had record-breaking years during the last recession by implementing these strategies and scooping up market share left behind by failed competitors. Anna has given herself the same advantage. You can, too, if you take action.

Jim is the founder and president of Flooring Success Systems, a company that provides floor dealers with marketing services and coaching to help them attract quality customers, close more sales, get higher margins and work the hours they choose. For information visit FlooringSuccessSystems.com.

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