Survey Says – Which Practices Really Affect Your Flooring Business?

Calling Your Customers Prior to Installation

I know some of you who read this title rolled your eyes and muttered the word “obviously”.  I also know many of you sat a bit lower in your chair, believe this practice is obvious, but still fail to do it on a consistent basis.  I also understand that there are not many things more frustrating than showing up to do a job and no one is there or surprised to see you even though a mutually agreed upon time was previously established.  In the flooring industry it is not only frustrating; it is very costly!  Trip charges, customer accommodations, delayed revenue, and medication to calm your nerves. 

Done right these pre-installation calls are more than just an appointment reminder, these calls are an opportunity to set expectations.  To nearly eliminate misunderstandings, reduce anxiety for the customer, and reiterate the terms of the contract.  Sales associates and installation managers are experts and understand all of the moving parts involved but expecting your customers to know the same is a disaster waiting to happen.  Even worse, you get frustrated that they didn’t have all of their furniture removed, ensure the sprinkler system was shut off, have the dogs secured so they don’t nip the ankles of the installers, and provide an access code to the gated community.   Why couldn’t they have just read over the document given to them explaining the installation process or remembered the verbal instructions the sales team went over three weeks ago when they were asked to swipe their credit card for $10,000 and they were a bit shell shocked that they just made the third single largest purchase of their lives?  Because they just can’t.   It is the job of the retailer to understand that and make the reminder call within two to five days prior to the scheduled installation date.

Many of our clients in the past, if they are too chicken to collect all of the payment upfront, will use this call to collect the remaining balance.  This will eliminate the need to turn their installers into money collectors, act as savings and loan institution, or employ a full-time accounts receivable clerk.  Some have also used this as an opportunity to add on take-up and disposal or furniture removal when the original work order stated the customer will perform the work. Many times just asking how it is going with the preparation will spark this question,  “Is it too late to have you guys do this for me and how much does it cost”?  Bam! More money for the company, more money for the installers, fewer headaches for the customer, and a guarantee the job will be ready for installation.  Sounds like a win/win/win/win!!!!

The best practices above seem logical and provide justification for the practice, but thankfully there is hard data that proves this event must not be overlooked.  According to a substantiated survey conducted by Benchmarkinc in which several hundred flooring owners participated over a three-year period ending 2013 independent flooring stores that call all customers prior to installation:

  • Generate $837,101 more in sales
  • Had a higher gross profit; 36% versus 34.4%
  • Receivable were 2.4 days less
  • Receivables over 90 days were nearly 28% less
  • Pretax net income was 50.5% greater

Just the fact that calls are made, reminding the customer of time of installation, doesn’t necessarily mean all above will happen.  If it were that easy many would just invest in the same software my doctor and dentist use when I answer my cell to the tune of a robotic voice spewing out the details of my appointment.  Achieving those results may require some strategic planning and training.  

How can one “obvious” process have such a great effect on a flooring company?  Easy.  If you could add on $75 per room for moving furniture and tack on take-up and disposal for 10% of your customers after the initial contract was signed, sales go up.   Unless you perform these services at cost, which would be borderline insane, gross profit goes up.   If customers are not irritated they had to leave work and come back home to spend the day with your entertaining installation crew, they won’t ask for an accommodation and profits go up.  If you collect the remaining balance during the pre-installation call your receivable days are less and the amount of receivables over 90 days is lower.  Boom!  More profits and less headaches.