Q: We sell great products at competitive prices. our challenge is, lacking the massive ad budgets of our national competitors, how do we get customers in the door?
Signed, Ad Budget-less
Dear AD BUDGET-LESS,
The simple answer to this question is found in two key rules from Track and Field:
- Don’t look back.
- Run your race.
Like you, I too found my company faced with the daunting task of competing with a number of national LBM dealers and retailers. It bugged us to no end how they could sell Schlage locks and treated 2x4s below our cost. To make things worse, we’d follow one wasteful exercise with another by later that day calling and screaming at our Schlage rep and treated supplier, accusing them of supporting unfair pricing practices. The real truth? We couldn’t have been more wrong, and our behavior was exactly what the nationals wanted.
Remember: Don’t look back, and run your race. Instead of focusing on what we did well, we were watching them. Furthermore, like lemmings, our marketing reflected this misguided obsession. We would pick items and feature them at or below cost. Take that! What did we ultimately learn? You can’t out-Home Depot Home Depot.
But competing with nationals need not be bad news. My opinion is it was the best thing that could have happened to us. It forced us to step back, figure out what we did best, and start marketing our strengths versus focusing on theirs. Although the big boys have been predicting the demise of independents for decades, it ain’t gonna happen. Independent dealers simply have too many strengths. Here are a few of my favorites:
- You are an active part of the community. Probably born and raised there, kids in schools, an established member of the church, etc. Are they?
- You know the names of every key account, and their children. Do they?
- Assuming you belong to a co-op or buying group, you buy right and can be very competitive…with everyone.
- Your profits remain in the community, and get recycled eight to 10 times over. Theirs go out-of-state to corporate and are rarely seen locally again. What a positive impact!
- Your service levels are likely superior to theirs. You will open the store/yard for a customer on a closed Saturday. Will they?
- You’re the decision-maker. You will make key decisions benefitting your client on the spot. Nationals react slowly, with every key issue going up-the-ladder to corporate.
Bottom line: Focus on what you do well and tell your story. It’s powerful. Market every single strength of yours (one-on-one and face-to-face) with every single key client. When you stop looking back and start running your race, you’ll no doubt have clients at your door and be on track to successfully growing your business.