Recently in my retail business, Gardner’s Mattress & More, we drew a line in the sand. After much thought, admittedly too much, we vacated selling certain price points in our main store location (Plaza Blvd.)
Our showroom floor previous to this line in the sand being drawn included more than 18 mattress models all under a $999 price point. The issue for us was that these models represented less than 8% of our business, yet covered 20% of our showroom floor.
My business partner and I resisted this change, in spite of the numbers, because of the following “what if’s".
- What if a customer came in looking for these products. Would we turn them away without a solution to offer?
- How would we feel about this?
- How would they feel about this?
What permitted us to pull the trigger and draw the line in the sand was the opening of our second location (Outlet) in an outlet center shopping area of town. This store, while offering goods at all price points is now used for clearance, discounted, discontinued, previous year’s floor models and scuffed items.
With the opening of this second location we now have two very clear and defined, or manipulated, messages to communicate.
For our Plaza Blvd. location the message is helping customers to wake up happy and pain free by investing in a premium sleep system and better sleep solution.
At our Outlet location the same can be accomplished but, there is a specific reason for the discount, and likely customers give up something in exchange for the discount.
We have never been the price oriented mattress store. It’s actually one of the many reasons for our success and why we attract a higher-class clientele. But still we struggled with actually drawing this line in the sand.
By having two different locations with two different messages we actually have two very defined messages, or two “line in the sand” stories to tell.
So why look to draw a line? First it makes life much easier to construct marketing messages when you don’t have to placate any one audience or group of people. Advertising for Plaza Blvd is laser focused now, even more so than before. And, for the Outlet location we can be specific there too, but in a different way.
Truthfully it is very “freeing” to have finally put this plan into action. We have had many a customer come to us simply because they see the word mattress in our advertising or outdoor signage. They think, and by no fault of their own, that all mattress stores are the same when in fact they aren’t, at least in our case.
These conversations when people find us by accident looking for inexpensive price driven solutions are how do I best say this? Awkward.
But now with an Outlet store that is focused on values and discounts along with a legitimate reason for the discount and not because of price games and deceptive practices, we can now direct them to our Outlet location for the savings and price points that they are looking for.
How To Draw Your Own Line In The Sand
So how do you draw your own line in the sand? How do you manipulate the marketing message to best benefit you and the customers you seek to serve?
First you need to be clear on what you want to do, what you want to offer and how these goals line up with your personal and business goals. As I highlighted above, we knew the products we wanted to offer, at which price point and at which location. We also developed a well defined marketing plan for each location.
Only you can answer these questions as the business owner. If you let your customers decide this for you, they will lead you around by the nose over the years.
There is nothing wrong with choosing how your business is run, how you promote it, and whom you choose to do business with. I am in no way saying you should discriminate or act unfairly, rather dedicate your efforts to the demographic with whom you want to do business 100% of the time.
In our example, the costs of fulfillment (short of actual inventory) are all the same. Whether I sell a $500 mattress set or a $5000 mattress set my costs to deliver it remain static. It’s the same operations person that orders it. The same warehouse crew that unloads it. The same rent per square foot to store it until delivery day. And finally, the same dollars per hour to deliver it.
Only the costs of inventory and post sale marketing change.
It’s up to you to decide where your line in the sand exists. I suggest finding it by the math. Emotions, desires, and wishes can be misleading in drawing your own line. First be clear on what you want and then look at the numbers.
Who in your existing client list is the 20% that gives you 80% of your revenue? Yes, the 80/20 rule exists here too. Focus on this most profitable group and work to bring more customers like them into your store. Fine tune your merchandising, display, sales presentation and follow up to meet their needs. Then apply the 20% rule again and again to find and cater to the real moneymakers; those customers who should dictate the focus of your business and where your line in the sand should be drawn.
This can be done through a number of different methods.
Reaching Your Most Profitable Customers
Facebook’s look alike audience generator: The least expensive way and immediately available for free at your fingertips is to upload your 20% best customer lists (names and email addresses) into Facebook's look alike audience generator and create a look alike audience that you can market to on Facebook.
Post Office EDDM:
You can also use the US Post Office's Every Door Direct Mail (EDDM) program. With EDDM you can focus direct mail into neighborhoods where customers who are most similar to those on your 20% customer list live. Using the EDDM program you can even mail to gated communities that would otherwise be expensive to reach. Find out more about EDDM by visiting http://www.USPS.com
. Keep in mind you can mail catalogs and mailings up to 3/4" in thickness providing the mail has no other dimension that measures larger than 12" x 15". (If you have questions refer to USPS.com or visit your local post office before you mail).
Use a demographic & psychographics company:
And lastly, use a demographic and psychographics company that completely replicates your 20% list. They can provide you with a ready to use list of customers in your marketing area that are just like your 20% list, but haven't bought from you yet. This new customer lead list will be comprised of those that have the similar home values, marital status, children, zip code and income characteristics. Even more important than this list is the psychographic information you will receive about your target customers including how your how they purchase (credit card or financing) so you can better prepare marketing messages. You will also find out what magazines they subscribe to, if they have pets and what kinds of cars they own. With this information you can better understand who your best customer leads are and how they prefer to purchase home furnishings.
Gardner’s Mattress & More uses measures on over 3,000 different psychographic touch points. There are 37 different measurements related just to how people use their credit cards!
This “drawing a line in the sand” process is not for everyone. It’s a sobering task and one that makes some uneasy. But, for those seeking a change and looking to take control of their business, it is a must do exercise.
About Jeff Giagnocavo: Jeff Giagnocavo is co-owner of the retailer Gardner’s Mattress & More and the co-creator of Mattress Retailer Weekly. Mattress Retailer Weekly is shared with you every week so you can get new customers, stay ahead of your competition and increase your sales tickets. Get your FREE subscription by visiting www.RenegadeMattressRetailer.com or text MRW to 484-303-4300.