Hardwood Flooring February March 2018

BUSINESS BEST PRACTICES BUSINESS BASICS

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Three Key Sales Roadblocks for Flooring Companies – and How to Overcome Them

The global flooring market is large – according to Global Market Insights, it was worth more than $270 billion in 2016, and its value is only set to increase further. Opportunities for market share are abundant, but competition is fierce. Opportunities to acquire new customers are disproportionately swept up by larger flooring companies. These companies are more easily able to undercut smaller competitors on price, and they have the resources to experiment with thousands of new product lines and solutions. This increases commoditization at the expense of differentiation. Larger companies also have larger budgets, and can, therefore, make more substantial improvements to operational efficiency – giving them the time and resources they need to target larger audiences. Accordingly, smaller flooring organizations often find it difficult to achieve market share. So, what can their sales and marketing teams do to gain ground on larger competitors? If you’re working for a flooring company, here are three key roadblocks to sales that are most likely holding you back – and some advice on how you can remove them.

1. Unclear pricing rules Let’s say you need to make your product or service more appealing to customers, and quickly. How would you go about that? If you answered ‘lowering prices,’ you’d be wrong. Lowering prices does nothing to improve your offering – it simply indicates what you think it’s worth. By undercutting your competitors, you further encourage commoditization, receiving a short-term sales spike at the cost of long-term profitability, brand integrity, and customer relationships. Besides which, larger companies can always undercut you right back. If you get into an escalating game of pricing chicken, you will eventually lose. To tackle this challenge, you need to set clearly defined pricing rules. The first of these rules should be that no single person – whether they’re CEO, head of finance, or head of sales – has unilateral authority over the cost of your product. They will all have the best intentions for the business, but they may have different ideas of what is and is not a reasonable price. Another key rule is simply that prices should always be customer-centric, and accurately reflect the value

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