Ask Steve

Ask Steve: Is it Better to Sell Carpet/Flooring or Form a Referral Partnership?

toburen_FTHi Steve,

For several years I've neglected my carpet cleaning company trying to hit “home runs” selling carpet and hard floors. The distraction has been very costly with lethargic and, in some areas, diminishing market growth. The bottom line is that I wasn’t making nearly the profit I should in either my flooring sales or my cleaning division!

So just recently I stopped selling and installing flooring. Instead, I spoon-feed a highly respected retail flooring distributor every one of my carpet or floor leads and he writes me a check for 10% upon the client’s formal order. Now I can focus on the one that “brought me to the dance.”

My new “focus” also gives me the time to trot down to the bank every week to deposit the $800 to $1,500 bucks that my referrals are bringing in. Not bad for a simple “I highly recommend this company. In fact, just give them my business card here and they will give you my special ‘trade discount’” statement to my customers!

So Steve, do you recommend developing a relationship like this in SFS? Or should I still be trying to milk my retail sales’ cow dry?

-Referring in Richmond, VA


I agree with you 100%, Referring! When I had my carpet cleaning and restoration services operation we just never could make sense out of doing our own retail carpet sales. Why not? Let me count the ways:

1. There is brutal price competition on these big ticket commodity installations. Can you say, “Home Depot?”

2. Even worse, most of the retailers we would have been competing against at least occasionally referred our services. Obviously those referrals would have been a thing of the past with us going head-to-head against our “referring retailers!”

3. Low margins: Sure, I know you think you make a bunch of money with a $10K carpet installation. But factor in the sales expenses and all the marketing on the ones you didn't get and I agree - stick to your bread and butter.

4. And the biggest problem I found was a complete lack of quality installers out there that not only knew what they were doing technically but also could get through even one day without totally alienating my loyal customers, who logically expected the same great value-added service from our installers that our cleaning techs always delivered.

So eventually we wound up just where you are, Referring. We developed reliable (and very appreciative) “Strategic Partnerships” in many different industries and it worked fine for us.

NOTE: For a complete Special Report on how I “partnered” with my flooring retailers, just write me at stevet@jondon.comOr just download it for free HERE.

Now let me mention something before I get lots of e-mails arguing about the above points. I realize there are some very successful mixed operations out there that do both retail sales and then service their installations afterward. And if you have been successful in flooring sales, more power to you! This “synergistic approach” is very appealing in theory! However, I still strongly feel that for the vast majority of cleaning and restoration contractors it is much better to partner up with good retailers!

 Steve and ICS want to consult for you! For a personal reply write Steve HERE with your questions, problems, struggles and challenges! Your help is on the way! A new “Ask Steve” will appear in the eNews every Thursday. Register to receive it by clicking here

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