Cure For The Business Blues
Furniture World Magazine
By Larry Mullins
How some furniture entrepreneurs are turning the tide in a negative business climate.
Advertising Strategies by Larry Mullins
The best is yet to come? You are probably thinking, “You have got to be kidding. Don’t you watch TV? Don’t you read the papers?”
Yes, I do. And there is truth in the observation that public confidence has been seriously eroded by the media, which seems to put a maximum-negative spin on everything. Their underlying take home implication is that Washington must fix things, and do so soon. However, I can assure you that Washington never does fix all that much. Never has, never will.
The home furnishings industry will be fixed by the same breed of mavericks that have fixed it so many times before—the ones who innovate and dare in the face of challenge. They are not necessarily the big shots. These are not the guys with a cushion of millions of dollars who can afford to wait things out. These are individuals who do not have that luxury, who are striving to find ways to turn the tide now. They are more than survivors, the “spirit shines through” them.
Corny? Perhaps to some. But to repeat Mark Joyner’s comment from the May/June issue of FURNITURE WORLD Magazine: “Some people may read these words and want to vomit, and that’s OK. Cynical and sarcastic people may not like guys like me, and that’s cool. My [Brand] will sort right through them. I don’t want to be around them and they don’t want to be around me. No worries.”
More in a moment about some of the “ordinary” entrepreneurs and what they are doing in these tough times to “fix” our industry. First, let’s take an intermission from this “Lost Secrets” series to briefly revisit your personal brand (a subject featured in the last issue). Quite a few favorable comments were received from readers reacting to the importance of cultivating an extraordinary personal brand. But one furniture entrepreneur wrote me along these lines: “Larry, I like the idea that my store’s People Media™ begin with me. I like the idea of having a dynamic personal brand. But, how am I supposed to remember all of these branding qualities you and Mark Joyner list?”
Good question. Regarding your personal brand, your associates, customers, and vendors will not value so much how dynamic and charismatic you are. They may not remember much about how you look, what you say, how you say it or what you do. If all you are thinking about is you, you have it wrong. What customers, associates and vendors will never forget is how you make them feel. Your personal brand—and your store’s brand—are all wrapped up in how you make other people feel.
Furniture North's Big Promotion
Randy Terrio is accustomed to the rugged winters of northern Minnesota, but last winter was one for the record books. In January, the temperatures were staying well below zero degrees, and February, normally Randy’s slowest month, was off considerably from 2006. So he was very nervous as he anticipated February of 2008. He knew that he needed to do something different, and it had to be a winner.
Furniture North is an old-line store, in business since 1960. In normal business cycles Randy’s philosophy works well: Maintain good curb appeal, have attractive displays, and hire good, honest people. But the housing turndown and historic bad weather were taking their toll on sales. He had discussed the situation with his wife Kathy, and she encouraged him to fight, to dare to do something different. So he crafted a selling story and added a legitimate, irresistible offer to his marketing. The results were remarkable: Kathy and Randy doubled 2007 February sales, plus more than doubled 2007 March sales—even though his 5 week promotion ended March 17th.
“The home furnishings industry will be fixed by the same breed of mavericks that have fixed it so many times before-the ones who innovate and dare in the face of challenge. They are not necessarily the big shots. These are not the guys with a cushion of millions of dollars who can afford to wait things out. These are individuals who do not have that luxury, who are striving to find ways to turn the tide now. They are more than survivors, the ‘spirit shines through’ them ...”
We work in one of the most challenging, exciting and noble industries in the world. But it is also one of the most demanding. Why do we do it? Especially now, when things are so tough? Let’s take a step back and briefly review our industry and our motives.
Personally, I love the retail home furnishings industry because we have so many unparalleled opportunities to enrich people’s lives. You remember, don’t you? You have done it so often it is second nature to you now. Remember how hard you worked to make sure that a family’s dad got his recliner in time for Father’s Day? And how you invested so much time to make sure that a young couple was able to furnish their new home in an affordable way? If you are a rep, remember how you worked to help that dealer find a way out of his cash-flow problem? Or, as an entrepreneur, how you sat down with that sales person and restored her self-confidence?
This is a great industry going through rough times. This is not the first time. Some of us recall several other times when it seemed the customers were just not responding like they used to, and they would never come back. They always did. First of all, the reality is that people are still buying lots of furniture, mattresses and floor coverings. In fact, according to the Canwest news service, “Retail sales in the U.S. rose twice as much as forecast in May as Americans snapped up electronics, clothes and furniture. Purchases climbed one per cent, the most in six months, following a 0.4-per-cent April gain that was previously reported as a drop, the U.S. Commerce Department said. Sales excluding gasoline increased 0.8 per cent last month. The figures suggest consumers are helping stave off a deeper downturn.”
Without exception, the dealers I talk to agree that the mainstream media is hurting business. If my information came exclusively from the mainstream media I would be depressed too. My job as a consultant, however, is to probe deeper. For example, gas prices. Contrary to conventional wisdom, Kiplinger’s famous letter tells me there is another bubble about to burst, this time all for the better. About one quarter of the price of oil is on the future’s market, and cannot be sustained. The prediction: crude oil will average out to $96 a barrel this year. No recession, the economy will grow at a slow 1%. Trends magazine crunches the numbers and also predicts slow growth, but no recession, gas under $100 a barrel and a 15,000 Dow by the end of 2008.
The bad news for the furniture industry is that the housing market will continue to suffer into 2009. So, how do we survive until then? While it is true that people are still buying furniture, they are not responding to traditional media and the old appeals. So, what do we do? Rather than feed you advice from an ivory tower, let’s look at four stories of real furniture entrepreneurs in real time.
Careless ads equal reduced effectiveness.
This ad was well designed, has adequate copy, and yet its impact is hopelessly compromised. The headline states: “Pick a Room” and then promises that I can, “Create a room full of comfort for one low price.” So far so good, but the rest has nothing to do with a room group purchase. It is all price-item and credit offer, but nothing about this being a decorator-coordinated room, designed by an expert to be fashion-perfect and mistake-proof.
The “Pick a Room” theme suggests that I can select from several rooms. Although this retailer has many beautiful decorator rooms, no mention of this is made. The reverse side of the flyer features two other rooms but they are not priced as groups either! Modern customers will not take time to figure out what is meant by “one low price” nor to determine the advantages.
Fortunately, Randy and his wife refused to stay frozen in the headlights. And then, in the face of Minnesota weather that only got worse, they followed through with their decision to promote while other stores were pulling in their horns. The message to take home is that if you think hard enough, you will discover new possibilities and options to act upon, even in the toughest of times.
Hineline Home Furnishings is a traditional family-owned store that has operated in Harlan, Iowa since 1961. In a small city (population 5,500) and in the virtual shadow of Nebraska Furniture Mart, Gary Hineline has managed through some challenging times. The current downturn did not seem to faze him when he announced to his general manager, Linda Knoell, that he had purchased a large, vacant building and was going to open a new store in Storm Lake, Iowa. Linda was taken aback. Kyle Beggs, the general manager of Hineline’s other location in Maryville, Missouri was equally surprised.
As luck would have it, early spring storms resulted in construction delays at the Storm Lake facility. So, in the interim, he devised a way to make lemonade out of the lemon he was handed. The team planned an interim promotion based upon the Storm Lake delay for Gary’s other two stores. The weather story was credible and successful because it was true. In the meantime, Linda Knoell had the opportunity to tour the new Storm Lake facility and gain a better understanding of Gary’s plan. She said that the real turning point for her came in the Ashley Furniture showroom in Las Vegas. “Ashley’s merchandising and display inspired us to reach another level in our preparations,” Linda said, “and Gary was better able to communicate his vision to me.”
At this writing Storm Lake is preparing for its grand opening. “The huge building is gorgeous and the community is welcoming us with open arms,” Linda said. The Hineline team is geared up and the morale is high. The soft opening is going well and things look great. Gary Hineline can be proud that they dared to expand with a new location in such challenging market conditions.
Middle Tennessee Furniture & Appliance Outlet Innovates
Dwight Woods of Lawrenceburg, Tennessee never fails to be positive and full of ideas. While many furniture dealers are hunkering down and waiting for an upturn, Dwight decided to expand the Middle Tennessee Furniture & Appliance Outlet and rock his market. He planned to liquidate his entire television department and replace it with a more profitable floor covering program. He was going to do this by absorbing a successful local carpet store. Naturally, this called for a dynamic promotion.
One of the first lessons a copywriter must learn about selling is wrapped up in this principle: People do not like to read advertisements but they love to read stories. Here is how his story rolled out in his preferred customer preview letter.
“Back in 1984 when we started business Ronald Reagan was elected to his second term in office in a big landslide, the Discovery Space Shuttle flew for the first time, and a movie titled Terms of Endearment won the Academy Award. As a retired school teacher and principal, I didn’t know much about running a retail business. But I had some common-sense ideas that seemed to some people to be revolutionary.
“I decided I wanted a store that simply will not be undersold. There would be no frills, no fancy showrooms. I decided to sell directly to the public out of a huge warehouse. I made special deals with big manufacturers. I elected to buy furniture, mattress and appliance closeouts, scratch and dent items and sell them at close to—and sometimes below—dealer’s original wholesale cost. I wanted sales consultants who are salaried, and who are trained to focus on our customers’ needs and not worry about commissions. We offered famous brands and big-city selection, plus gracious and dedicated hometown service. My ‘formula’ worked beyond my wildest dreams, and people began to call me the ‘king of mini-pricing.’
“But times have changed. I feel challenged to take things to another level. After some long discussions with my wife Connie and our team, we generated a fabulous idea …”
No wild hard sell, no five-year free interest, no screaming. Just an authentic, captivating narrative that grabs the readers attention and reveals how she can benefit from this “happening.” Regardless of the event you plan, learn to tell the story behind it. Of course, in your private letter, you will also need to include all the stratagems of good selling direct mail copy. (See the FURNITURE WORLD article “Powerful, Productive Direct Mail” 06/2002 posted to the marketing article archives on www.furninfo.com.)
Copy starved furniture ad, but complete Information on the grill.
Furniture retailers can speak eloquently about their merchandise, but in print, they are too often tongue-tied. The half page furniture ad at left gives a group price, but only the purchased separately price of the “walnut” sofa. Not much information for the home maker who wants to know more about the value-added benefits this great company offers.
Compare that with 1/16th page Home Depot ad for an outdoor grill. In a small fraction of the space we are told this about the “Charmglow” grill: “$599 ... as low as $19 per month ... RED 3-ZONE GAS GRILL ... The 100% infrared heat locks in flavor and keeps foods moist and juicy, not dried out. Features 34,500 BTUs for a wide cooking range from an intense searing at the cooking surface down to slow-and-low barbecuing and rotisserie cooking. 750 sq. in. cooking surface with three stainless-steel burners and porcelain- coated cast iron grates.”
There were a total of 15 complete grill presentations on the same page, leaving no doubt who has the best selection and who knows the most about their products! Someone worked very hard on the Home Depot flyer... it takes time and extra effort to put together effective copy
presentations such as this. The take-home lesson: A smart furniture independent can learn—or assign someone to learn—to use selling copy and white space with many times the effectiveness of the lackluster efforts of many of the big boxes. This can go a long way toward leveling the advertising playing field.
Dwight Woods has learned to connect with the Lawrenceburg community, population approximately 14,000. His theme “Good folks, great brands, low prices” may sound saccharine to a cynical ad man, but it resonates with a very neighborly community where citizens and officials work together for continuous growth and prosperity.
Classic Interiors Brand Preservation
I saved Pat for last because his story is both heart-rending and inspiring. It’s tough for a smaller store to do business in a big city when several big boxes dominate the media. This wasn’t so much the situation in Reno when Pat opened Classic Interiors several years ago. But since then Reno has become a bloody ocean of big box competition. To add to the difficulties of a smaller store, as the economy turns down there always seems to be an interminable GOB going on somewhere in Reno.
Pat came to Reno with a partner, but he bailed out when the competition intensified. In spite of a less than ideal location and limited showroom, Pat gradually created a niche and built a following. He developed a relationship with India’s largest manufacturer and distributor of solid wood furniture made from Sheesham—an exotic two-tone hardwood. Pat was inspired to develop a company and create a distributorship for this product in America, Monsoon Pacific. This idea worked out well for him.
But as the retail situation in Reno foundered, a serious illness in the family drained away much of his resources and energy. Then came the catastrophic Angora fire that completely destroyed his home and possessions. By then Pat knew that circumstances demanded that he close his retail store. However, Pat had developed precious relationships with his customers and he did not want to jeopardize his credibility with a down and dirty store-closing promotion. So his story unfolded something like this:
“…My wife and I have made many friends in the Reno area, and we have developed some wonderful business relationships. Our dream of creating a different kind of furniture store seemed to have come true. However, a series of events has made it impossible for us to continue, and the time has come to say goodbye. Fortunately, for a limited time we can offer our friends and neighbors the latest in world-class furniture fashions at unheard of prices. Some customers have dropped by just to say goodbye, and we have appreciated that... Indeed, I truly want to continue to serve Reno, even after family illness, economic conditions, and even after the loss of our home and all our possessions by the Angora fire. (That was especially ironic, since I was one of the volunteer fire-fighters battling that historic blaze!) But, realities must be faced. On the positive side, if you are able to buy now, you can make a wonderful furniture purchase. And, it’s win-win, because in doing so you will be helping us meet our financial challenges and begin again ...”
The operative words are: “begin again.” Customers read this story and they responded. Not just to buy furniture. Many truly came by just to wish him and his wife well. His successful store-closing event has left him in a much more advantageous position. The sincere disclosure to the public preserved his integrity and left the door open for Pat to set into motion the second part of his strategy: Pat will revive his retail operation and sell to the public out of his Monsoon Pacific warehouse four days a week.
Few other furniture retailers have been hit harder than Pat Hennessy. But through it all he has always been a gentleman, always courteous and cheerful. These attributes are a large part of Pat’s brand. Even as one venture folds for Pat, since he took steps to preserve his brand, his new venture has a much greater chance of success.
We read enough of the tough times in furniture retailing. More needs to be said about the “ordinary” men and women who are out there making it work in spite of economic conditions, weather, and negative mainstream media. I hope these stories and exhibits inspire you to come up with solutions of your own. America’s recovery will spring from where it has always originated — in the inexhaustible energy of its grass roots.
Next issue, we will pick up on the Seven Lost Secrets series.
Contributing Editor Larry Mullins has 30+ years experience in the front lines of furniture marketing. Over the past ten years he has developed a Visionary Management program that can impact the culture of an entire organization and bring it to life. He also produces state-of- the-art promotional advertising packages for everything from quick cash flow to complete exit strategies and store closings. Larry is the President of UltraSales, Inc.. Questions about this article can be sent to Larry care of FURNITURE WORLD to firstname.lastname@example.org. See more articles by Larry in the marketing management archives on 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.
Read other articles by Larry Mullins