Asking a prospective promoter the right questions can ward off potential conflicts and dissatisfaction.
Is your business trend flat or downward? Are you being pressured by your competitors? Is there a major event occurring, or about to occur, in your business or personal life? Do you want to increase your volume and market share? Is your inventory out of control? Do you need to reduce excess inventory so that you can re-merchandise?
If the answer is yes to any of the above then you should consider a major Business Stimulation Event. Successful stimulation events have a unique character and use a psychological approach that is different from regular retail furniture store events. In order to stimulate traffic and sales, it is important that the event create urgency in a believable, logical and credible manner. The normal retail approach will not create the excitement required for a successful event.
Now you may be thinking to yourself, “I’ve heard “horror stories” about this type of event, where the promoter makes money and the dealer is left holding the bag.” It is sadly true that there have been plenty of these cases, created mostly by unprofessional, greedy individuals and companies. This is why if you decide to hire a professional sales promoter for your event, you should interview more than one company and investigate them thoroughly.
How does one go about finding a reputable company? There are a number of ways to get names of good companies.
1. Read trade publications. Be aware that companies who purchase the largest ads and make the most impressive claims may or may not be a good “fit” for your business. Trade ads are a good start, but some good companies do not advertise extensively.
2. Speak to other dealers you know who have had a company conduct an event for them. Most home furnishings retailers are wonderful people, but take care. It is a common practice for event promoters to pay an incentive to past customers to get them additional business through referrals.
3. Ask manufacturer’s representatives. Again be sure the Rep is a friend and not just looking to get a finders fee. Some companies offer Reps large commissions for getting them “in the door”. Some even offer a percentage of the total volume for the event.
4. Consult manufacturers or credit managers. If you are doing business with them, they are not likely to give you jaded information and they usually know good promotion people from past experience.
5. Save your direct mail. If you are considering conducting a special event in the near future, save interesting direct mail pieces for reference.
6. Surf the internet. There is an amazing amount of information on the internet. Type in a search for the company name, principal’s name, business type, or event name. You may be surprised by the information that will come up.
Once you have compiled the names of several candidates, discuss your goals for the event with each. If you feel comfortable with their responses, invite select companies to visit you for a first-hand evaluation. Before going any further, thoroughly check references and ask industry acquaintances to offer opinions.
Prepare for face-to-face meetings by writing down your questions and concerns. The following list should give you some insight into how to approach the interview. You will probably have many other questions as well.
Questions To Ask
•Is your private information held in the strictest confidence?
•What is their overall philosophy of doing business and interacting with customers and clients?
•What theme would they recommend to accomplish your goals?
•Will company principals be available during the event?
•Will they analyze your inventory and make recommendations?
•Will they suggest ways to fine tune store displays?
•Do they provide financing assistance if needed? Would merchandise be purchased from your present sources, from their sources or be supplied from other sales they’ve conducted? How would it be billed to you; consignment or terms?
•What kind of advertising support do they provide for all types of media?
•Do they provide weekly reporting and how extensive is it?
•How will they handle cancellations during the event?
•Who will control the event? Will you be able to exercise a veto if you are uncomfortable with some aspect of the event?
•What guarantees do they give? For example, a margin guarantee. Some companies will talk in terms of margin but insert markup in their guarantee. Margin is expressed as a percentage of selling price whereas markup is a percentage of cost. This makes a huge difference in the bottom line.
•Will their approach consider your reputation and image?
•What is the background of the principles of the company? Have they had experience in retail beyond the promotion business?
•How many of their employees do they want to use during the event and how will they interact with your present staff. What impact will these additional people have on your operation before, during and after the event?
Be prepared to share information about your business situation. If you expect them to give you an intelligent and honest proposal, you need to be completely candid as well.
•Print out your most recent Profit & Loss statement as well as a current Balance sheet.
•Be prepared to discuss your accounts payable situation, as well as information on any secured debt.
•Inform them of any pending liens and or law suits.
•Discuss your pricing policy and present margins.
•Prepare a list of problem areas. For example, customer sold orders, difficulties with sources of supply, merchandising, etc.
A good promotion company will be your partner for the event, so you must be open and honest with them. No one likes surprises! There is nothing more disruptive to a successful event than to be blindsided. This applies to both parties.
When the chemistry between the parties is right, a “Business Stimulation Event” can be very successful and profitable. It can be the best vehicle to help you decrease inventory, increase traffic, sales and profits.
David Geddeis, Sr. and his son David Geddeis, Jr. own DG Associates LLC, a sales promotion and consulting firm specializing in the Retail Furniture Industry. Questions can be addressed to him care of FURNITURE WORLD Magazine at davidgeddeis@furninfo.com.