A friend of mine owns a one-location mattress retail store and provides outstanding customer service and inspires customer loyalty. She’s one of those “always positive” types. Well, I was on the phone with her the other and asked how business was going.
“We’re down 8 percent year-to-year,” she said. I knew she really knows her sales numbers so I knew she wasn’t exaggerating. But what she said next stopped me cold. “Hey, what do you expect? The economy’s slow. Everybody’s struggling.”
The reason it stopped me cold is that she’s really a good business person and has built a tremendously successful business over the years. And because of what I’d heard in my last phone call. Another friend of mine runs a furniture store, which specializes in mattresses.
“We’re having a great month,” he said. “We’re selling more mattresses than we’ve ever sold before.”
The first business assumed it was the economy driving her sales – or lack thereof – and wasn’t taking the time to diagnose the problem and what what was driving the change.
Tough times make it easy to do nothing. It’s a ready-made excuse to justify both poor performance and inaction. Yes, sometimes it is the marketplace. Sometimes, it’s you.
So I called back the guy that was having a great month and asked him why they were doing so well when others weren’t. He told me he owes it all to couple that kept coming back to his store, but wouldn’t buy.Here’s what he told me:
“Most times when people buy a mattress, they may shop one or two places. We generally know that if someone’s been in once, they leave and then come back again, they’ve shopped around and they’re here to buy,” he said. “So when we had this one couple that had been in the store four times looking at the same mattress and they hadn’t bought, we asked them why. They said they wanted to buy this particular mattress even though it was a little more expensive than the one at a competitive store. They liked it better.”
Why didn’t they buy it? It turns out they were willing to pay the slightly higher price, but couldn’t justify spending $40 to have it delivered. “That’s what we normally charged – at least we used to,” said my friend. “I needed the sale, so I told him I’d waive the delivery fee and he bought on the spot.”
They had always pushed value and quality in their advertising. But after this experience, they made two decisions. One, to get rid of delivery fees. And two, to change their marketing. In their new ads, the still stressed quality and value, but they also stressed free, same day delivery.
Not only did their sales increase, but the average price increased. It turns out people were willing to buy more expensive mattresses as long as they didn’t have to pay for delivery.
By waiving a $40 delivery fee, they increased their average sale by $92.
In down economies, people want to feel good about buying goods and services – more than ever. But they still want quality. And they don’t want to pay extra for the little things.
Recognizing a change in your customer’s perceptions and attitudes during tough times can be a catalyst to grow your business dramatically… at the expense of other businesses that continue to do business-as-usual… and blame it on the economy.