To Lend or Not to Lend?

There are two kinds of store owners in the flooring business. Those who lend samples, and those who don’t. While it may seem like a pretty innocuous topic, it’s actually one that’s created more than its fair share of heated debates. I’d like to throw in my two cents on the subject and share with you some data that clearly shows that NOT lending samples is the way to go.

Those who lend samples argue that if they don’t, then customers may get upset and take their business elsewhere. On the other hand, it is argued that lending samples leads to customers shopping the competition to get a lower price. Both arguments are definitely valid, which has led to some flooring companies adopting a very effective compromise. Rather than lending out samples, sales associates take them to the home and then bring them back to the store after measurements are complete. This allows customers to see the flooring in their environments, without risking the samples being used to find better deals elsewhere. Sometimes customers will request samples so they can match paint or other parts of their décor. In this case, many manufacturers will ship samples directly to the customer, saving the store the need to cover these costs or re-order samples when they are not returned.

Using these two strategies enables you to provide superior customer service without incurring any of the risk or financial losses that occur with lending samples. Still need convincing? A survey conducted over three years revealed the following:

  • Total net sales was nearly $1.1 million greater than those who DO lend samples
  • Total net sales was nearly $1 million greater than average for those who DO NOT lend samples
  • Gross profit was 38.4% for those who DO NOT lend samples vs. 35.4% for those who do
  • Sales productivity was $16,000 less per FTE for those who DO NOT lend samples vs. those who do
  • Close rates were 3.9 points less for those who DO NOT lend samples vs. those who do
  • Owners who DO NOT lend samples earned nearly $32,000 more than those who do
  • Stores that DO NOT lend samples spent about $11,334 on samples and displays (representing 0.26% of sales)
  • Stores that DO lend samples spent about $12,858 on samples and displays (representing 0.39% of sales)

At first glance, it may seem that the results of the survey were inconclusive, with some numbers in favor of lending samples and others in favor of not lending. Sure, the close rates and sales productivity numbers are lower for those who do not lend samples. However, when you look at the higher gross profits, lower costs of samples, and higher sales volumes it becomes clear that the practice of not lending samples is the clear winner.

Let’s look at this in the terms of real dollars and cents. If an owner generates an additional $1.1 million in volume at a 38.4% gross profit by not lending samples, this translates to a gain in gross profit of $422,400. That’s definitely nothing to sneeze at!

If you are currently lending samples and are interested in changing your strategy, it is important that it not be done too hastily. Be sure to train your RSAs thoroughly so they can confidently handle any objections or challenges they may face when dealing with customers. The bottom line is, you can still offer excellent service without lending samples. It just takes a little extra effort, but as you can see it is well worth it.

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