USING YOUR NOGGIN' TO
GET NEW CUSTOMER LEADS
By Lissa Wyman
There are several ways to get leads on new customers. For most of my business career, vendors seem to have preferred using the ol' spaghetti on the wall technique. You get a bunch of go-getter reps (hungry commission-only types preferred) and tell them to get in their cars and start ringing retailer doorbells. Then you sit back and wait for the orders to pour in.
After all, back in the good ol' days, the country was filled with thousands and thousands of independent floor covering stores, rug stores and furniture stores. (At one time, it was estimated that there were over 50,000 independent floor covering stores).
Back in those halcyon days, sending a salesman out on the road and hoping for the best was a pretty good sales management technique. Sales agents who were eager, young, ambitious and energetic could make a very good living.
But that tried-and-true way of opening new business doesn't work anymore. First of all, the numbers of independent stores are dwindling rapidly.
Consumers no longer buy their flooring and furniture at a trusted neighborhood store. More frequently, they go to stores that are part of big buying syndicates, mass merchants, or large regional furniture chains.
Hoover's, a research division of Dun & Bradstreet, reports that the US home furnishings store industry includes about 20,000 stores with combined annual revenues of about $25 billion. The 50 largest companies (i.e., national chains) account for about 70% of the revenues.
It was more difficult to find anything that looked like valid research on the floor covering store sector. I finally found a company that wanted to sell me a mailing list of 28,000 carpet and rug stores.
The independent rep has a dwindling number of potential independent store customers. Existing customers are putting the price squeeze on all their vendors to get the low-low price in order to compete with the big chains. Independent stores are not too interested in adding new vendors, they'd rather be important to a few vendors. The price squeeze is also putting a profit squeeze on vendors and a commission squeeze on the independent sales rep.
The current situation is the classic dilemma of being between a rock and a hard place, for sure.
But there is still business to be done.
I think it's extremely important to develop new sales techniques in a changing market. I think both sales managers and field sales reps must learn to be more systematic and scientific. You can't just jump in your car and drive around looking for likely stores anymore. (Especially with the price of gas today!)
Vendors and field salesmen have to hone their research tools to pinpoint new customers and understand their needs.
One of the best research tools the industry has is within easy reach of everyone. It's the list of top stores compiled by the large business publications such as Furniture Today and Floor Covering Weekly.
Furniture Today published its Top 100 list of Furniture Stores on May 23, 2011. I wasn't able to access the list on the internet, but it's definitely worth the price of a subscription to get the list, which has a great deal of information on each company. The top ranked store, Ashley Furniture Home Stores, had 2010 sales of $2.4 billion, the 100th ranked store, Gardiners Furniture, had 2010 sales of $38.4 million. In a few week, FT will follow up with a list of "beyond the Top 100" stores which didn't make the cut this year. Furniture Today has a large research staff and they manage to cram in a huge amount of information in a single paragraph on each store.
Floor Covering Weekly has a list of the top 50 Floor Covering retailers right on their website. (Access the list by clicking here). You don't event have to have a subscription. Floor Covering Weekly's list is topped by Lumber Liquidators, Toano, VA at $620.3 million with Costen Floors of Richmond, VA in 50th place with $13.5 million. The FCW compilation does not have the rich detail of the Furniture Today list, but it does provide a valuable jumping off place for people who want to research the individual companies.
I don't normally like to send my readers into the arms of other publications, but we have a close working relationship with both Furniture Today and Floor Covering Weekly. (I write a monthly column for Furniture Today and I am a sometime contributor to FCW)
One of our readers recently told me about how he even uses Rugnews.com to research the market. "I study the market people pictures and then I Google every store that's mentioned that we don't sell," he said. "I already know that the buyers want rugs because they are visiting a rug showroom at a major market event."
I was very pleased to hear that Rugnews.com can help sell more rugs. I would like to hear more from you about how both vendors and field sales people are developing skills that will help them get new business.
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