Part 1 of this three part series looks at alternatives retailers have to just cutting back expenses in these tough times. Instead, Larry Mullins suggests ways to become a Market Leader and leave sleeping competitors behind.
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Get way out front now, while your competitor’s are sleeping - Part 1.
Marketing Techniques by Larry Mullins
The furniture industry has forgotten a timeless maxim: “Nothing happens until something is sold.”
As I write this, I am looking at a recent article in the Wall Street Journal, titled: “Furniture Retailers Look to Trim Costs.” The focus of this article is a catastrophic drop in sales by leading furniture manufacturers and retailers. The facts supporting this gloom and doom theme seem indisputable. After drastic cost cutting, La-Z-Boy eked out a profit of two million on an 18% drop in sales. La-Z-Boy is relocating its cutting and sewing operations from five U.S. plants to one facility in Mexico, hoping to “save more than $20 million a year.”
Ethan Allen reported a 41% drop in sales in its fiscal fourth quarter which ended in June. The company hopes to save its way into a profit with a new system that will increase consumer delivery time from 3-4 weeks to 5-6 weeks. Furniture Brands (Broyhill, Lane, Drexel, Thomasville, etc.) faced a 36% drop in sales for its second quarter ending in June.
And the big guys are not alone. Many mid to large sized chains and independent retailers find themselves in an uncomfortable position as well. I wonder if many of our furniture leaders are
failing to read the facts of this downturn correctly. Or, maybe they are reading the facts ok, but are not asking the right questions.
Instead of asking how they can save their way into a profit during the recession, perhaps they should ask: “Why am I losing market share that is far out of proportion to the downturn?” The Wall Street Journal article did not address this issue.
Financial information published in the “Wall Street Journal” is geared to an investor audience that cheers cost cutting and often rewards steep cuts with enhanced stock prices. I, therefore, understand that the WSJ article doesn’t cover the entire breadth of responses initiated by the mentioned companies in response to sales declines. I would still like to know, for example, how a company should respond to an 18% drop in company sales for July when the drop in total industry sales for the same period was 12.9%? Isn’t it apparent that it is not only losing sales but also market share? And when another company’s sales tumble 41%, over four times the drop in overall furniture sales for that quarter, will delaying furniture deliveries address this loss of market share?
Cutting expenses and Losing Market Share
As a marketing man, I’ve seen several recessions, but have never witnessed a furniture store cut expenses, lose market share, and save its way back to profitability. Stores can reduce loses this way, but all retailers know that the main driver of profitability is increased sales. If you are losing sales way out of proportion to the industry as a whole, you need to look very closely at your marketing. If you are cutting back out of fear, you may be leaving a whole lot on the table for more aggressive marketers. It is these aggressive retailers, the ones that are innovating now, that will take market share from otherwise good stores that are sleeping through the recession. And the stores that will come out on top are not doing more of the same-old, same-old marketing ploys such as phony discounts and deceptive ads.
Before I tell you some of the things they are doing, let’s quickly review what’s happening with advertising media. We all know that the cost of newspapers, TV, radio and other traditional media continue to go up while the audience continues to shrink. Most furniture advertising today is prepared at great speed by technicians who have never studied the power of persuasive print. So the market is flooded with beautiful, four color flyers that are information-starved. As far as print goes, every inch of space is precious and should be used with great care by an expert who knows whereof he or she speaks. For more information on this topic, see “Evidence-Based Advertising” in the August/September 2009 issue of FURNITURE WORLD Magazine (posted to the Marketing Management article archives on the www.furninfo.com website.)
The purpose of this article is to explain how you can begin building what Chet Holmes calls the ultimate sales machine. A retail home furnishings store is nothing less than a machine for selling furniture, mattresses, and accessories at a profit.
Furniture entrepreneurs often complain that: “Nothing is working anymore.” In fact, what is not working anymore is the same-old same-old.
What is working is creative innovation that is predicated upon evidence-based advertising, plus a serious assessment of several new media opportunities that are lying around in plain sight.
Market Leaders are seizing them to create new home furnishings selling machines. And, as Seth Godin has pointed out: “If you’re not a Market Leader, your business and lovely income that you’ve grown quite fond of will have a very limited life span.”
“Market Leader” Concept
While doing research for this article I read two important best-selling books, “The Ultimate Sales Machine… Turbocharge Your Business with Relentless Focus on Twelve key Strategies” by Chet Holmes, and Seth Godin’s book “Tribes… We Need You to Lead Us.” Both of these books, warn companies to mend their ways and become Market Leaders. This information was supplemented with several articles from the “Wall Street Journal”, and a great deal of material from Internet market leaders.
In a strange way, a single remarkable concept emerged from all these sources. It’s almost enough to make one believe in the 100th Monkey Theory. Here is a capsule version of what Market Leaders like Holmes and Godin are saying. These are the winners. If you embrace their philosophies, you can replace the negative drumbeat of recessionary worries, and join the Market Leaders.
The concept of Market Leaders is becoming a Tsunami: you too must become a Market Leader to thrive. Seth Godin is a bit far out at times, but his book “Tribes” nails the concept that you only need a few passionate followers to become a Market Leader. Look around at the people who work with you, and for you. What do their eyes say? What does their body language say? I’m willing to bet that you will see fear and the plea, “We need you to lead us. We don’t know what to do.” Begin with them. That’s a start.
Unlike Seth Godin, Chet Holmes is more of an action guy than a philosopher. You already know how to do what he suggests. You just don’t do it. This idea is best articulated in the preface to his book: “I have been speaking in front of audiences for about 18 years now. I often begin my talk by asking: ‘How many people here would truly like to learn a handful of things that will absolutely, positively double your sales? Everyone will raise their hands. Then I say, ‘That’s great. Because that is absolutely my promise to you. You’re going to hear what I say. You’re going to understand it intellectually, you’re going to know the concepts will work, and then you will—still not do it.’”
This gets a laugh, of course. But Holmes is not kidding. He suggests twelve bedrock principles that can be applied to your business and your career by committing just a few hours a week.
Some of these principles are more related to the problems of furniture entrepreneurs than others. Most significant for the overburdened 60-hour a week retailer is TIME MANAGEMENT. Holmes teaches a system very close to one I developed and teach to managers. It is so important that I will explain it fully in the next article, but I will give you one short anecdote. In his book, Holmes tells how he was working 7 days a week 12 hours a day for a billionaire boss. Then he would go home and work three more hours. He worked on holidays and vacations. Holmes was a “got-a-minute” manager. His door was always open. Yet, he noticed when he had a meeting with his boss he had to set an appointment, have a tight agenda, know what he was going to say, and be “Mr. on-the-spot” ready for anything.
Then he had a revelatory moment. He instituted a new company wide discipline:
“Don’t come to my door anymore and ask me if I’ve got a minute. The answer will be no. There are nine primary impact areas reporting to me, so we are going to have nine impact meetings per week with each of these impact areas. Hold all ideas, unless urgent, until your weekly meeting.”
The next day after the memo no one came to his door. He literally did not know what to do with his time. Of course, within a week or so people began appearing at his door again. He says: “It took pigheaded discipline and determination on my part to train the entire organization to respect not just my time, but theirs as well.” Believe me, understanding time management fully will completely revolutionize your business life.
The second most important essential for furniture retailers is LEARNING TO BECOME A MASTER STRATEGIST. Holmes suggests: “Very few executives are master strategists. And a strategist will slaughter a tactician every day.” I agree. I teach managers the simple truth that every battle is won or lost before it is fought. This is true of wars, football games, and sales events. Space demands that I hold the full implications of this idea until next time. Ditto with some of Chet’s other points. With the remaining space I have in this article, let’s discuss the elephant in the room.
The Elephant in the Room… The Internet
We all know that TV, Newspaper and Radio cost more and deliver less. Direct mail seems to be holding its own, but fewer and fewer people know how to write the compelling copy it needs.
Meanwhile, there is a huge new player in marketing that grows more powerful by the day: The Internet.
I recently took a 30-day intensive course in Internet marketing called the “30 Day Challenge.” I admit, as an aging marketing man it was a bit difficult to watch very young geniuses in painfully casual garb gently bragging about how they became Internet millionaires virtually overnight. And, hey, they still rock in this tough economy. Before I took this course I bought into the idea that when experienced furniture people like me talk with Internet technicians, we necessarily find ourselves in a foreign country where nobody speaks our language.
The truth is that we don’t need to learn an entire language. By learning the meaning of just 20 or 30 words, we can become completely fluent.
And, if you follow Chet Holme’s advice and become a strategist, you will find that you have an advantage, because most internet techs are tacticians, not strategists.
The Internet is a key ingredient toward becoming a Market Leader and developing your home furnishings selling machine. The most important lessons the Internet geniuses learned are as old as retailing. They develop relationships. They add value. They understand that people search the Internet for information. People want to know where to buy home furnishings and why they should buy from you.
A pilot does not need to know how to build a DC10 to fly it. The technicians and geeks do that. The pilot does not need to master all the jargon of the techs. The pilot needs discipline and training, of course. He or she needs to know which buttons to push and levers to throw. As a Market Leader you can learn those simple techniques. In our final installment I will cover the secrets of making the Internet your strategic friend, your free medium. No fluff, just simple ideas that will drive you past your competition.
Tony Robbins has successfully marketed his motivational messages by traditional marketing methods for many years. Recently he discovered the Internet, and is being heralded by the top Internet Market Leaders and learning to market for free. Scoff if you want, but Tony’s analysis and advice are compelling:
“We’re in a society now where we’ve been involved for so long with instantaneous gratification, where we’ve been in a 20-year cycle of such unbelievable abundance that people forgot that life has several seasons. And so, now we’re in winter… We’ve had 20 years of economic fall, the greatest 20 years of economic history. And now, the 80-year cycle that happens every 80 years is happening where all of a sudden, credit is tightened a bit, people’s choices have shifted … It’s going to change because as we go through tougher times… the strong will get stronger and the weak will get weaker.”
The next installment will help you become one of the market leaders who are getting stronger.
Time management used to be a stultifying, totally boring concept, but it can save you untold hours, not to mention relieving a great deal of stress.Our next installment will discuss a simple method of time management you will enjoy. We will also look into how you can become a master strategist and move to another, higher level of effectiveness. Finally, we will cover briefly some of the other points made in Chet Holmes’ book, and how they can be applied to build your home furnishings selling machine and build market share while your competitors are sleeping. I look forward to our next visit.
Larry Mullins is a contributing editor for Furniture World and has 30+ years 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 turnkey 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 his 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 email him at email@example.com. See many more articles by Larry Mullins on the www.furninfo.com website.
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