Best Practices - March 2011
By Brian Hamilton
If you think times are tough where you are, you should try selling floorcovering in the Detroit area. While the entire country has suffered through the Great Recession, few areas can compare to Detroit, which is still dealing with the drastic downsizing and relocation of the auto industry, both in terms of numbers of employees as well as decreased pay, on top of all the other economic factors that have affected the rest of the country. Unemployment in the Detroit area was 12% in November, and the problems in the auto industry have been going on a lot longer than the recession.
Nevertheless, Independent Carpet One Floor & Home, a one-store, family-owned business in the Detroit suburb of Westland, has managed to keep afloat while watching much of its competition sink over the last several years, leaving the home centers, big boxes, and other large operations as its primary competitors. Sales manager Bob Francavilla has seen store revenues fall from $10 million in 2000 to $5 million last year (which is up about 10% over 2009), while his staff has been cut by a similar percentage.
At the same time, he has pushed the business more toward mainstreet commercial work (a segment the company first entered in the early 1990s), and today it makes up about 30% of sales, which has been a blessing since the builder business these days is nearly non-existent, Francavilla says. Independent advertised on Christian radio for years, and built a brisk church business, where Francavilla sells a lot of cut pile commercial carpet. This is one sector where word-of-mouth referrals are a significant factor. Even though Independent quit advertising on Christian radio several years ago due to expense, people still claim they first heard about the store through that medium. Independent also specializes in retirement homes, golf course club houses, bowling alleys, and medical offices. Bob’s brother, Carl, handles business development and is frequently on the road seeking out many of these customers.
Residential work still makes up the bulk of sales. While the big boxes largely focus on price—and Francavilla admits that price is a huge factor for his business as well—Independent has put most of its efforts into customer service and on the satisfaction warranty that the Carpet One Co-op calls the “beautiful guarantee,” Francavilla, who admits to being something of a corn ball, goes by the motto “If you stand on it, we stand behind it.”
“That sets the tone,” Francavilla says. “It is what we are. It’s quirky, but it works. I think the key in this business is to be honest and sincere and do what you say you’re going to do,”
Francavilla adds that the “beautiful guarantee,” which assures 100% satisfaction (Gold rated items or higher) or the floor will be replaced free, including installation, has been a big hit. Independent is also Michigan’s top dealer of Everguard, Carpet One’s stain protection warranty program. The warranty, serviced by 3M, adds an additional five years to the carpet’s original five-year stain warranty.
“We’ve been number one the last seven or eight years,” Francavilla says. “That really helps.”
A significant portion of Independent’s customers—about 78% of business is repeat—is age 45 to 80, and many of them just won’t go to a big box store, no matter how low the prices are. Many of them, in fact, won’t even go to Francavilla’s store and prefer to take advantage of his shop at home service.
“A lot of elderly people want you to come to their homes,” Francavilla says. “We try to get them to come into the store because of the selection and the fact that a lot of people want to make their rooms more of a statement, with perhaps a design in the cut pile, like a wall-to-wall area rug. But we’ll take out different things to them, and we’ll go back if we need to. Overall, it’s an easy way to do business. We can get a feel for what the customer is like and what their décor is like. And we can answer questions for them.” Bob’s sister, Catherine, is also an interior designer.
Francavilla says his sales closing rate is pretty good, about 85%, and a large part is due to the approach he and his staff take toward customers. Their focus is to let customers educate the sales staff about what they want, then help the customer make the most appropriate decision. They don’t try to oversell a customer into something she doesn’t really need because that can diminish the store’s reputation and ruin repeat business. “I’m selling longevity,” he says. However, he believes there’s always an appropriate product. “I work the sale until it’s dead. I don’t let anyone walk. I also don’t give away the product and take the margin out. I’ll show them another product.”
Because of the severely depressed nature of the real estate market in Detroit, many of his customers are buying flooring so they can flip a home or rent it out. “They don’t want high end, they just want something neutral that doesn’t cost too much,” Francavilla says. But they also want good service.
Independent uses contract installers but Francavilla sends them all for training through the Certified Floorcovering Installers program, which helps produce a more professional installation and minimize problems. He’s also an advocate of Carpet One’s Healthier Living carpet installation system, which includes certain practices, such as vacuuming old carpet before it’s ripped out and adding an antimicrobial to the new product.
The follow-up after an installation is also extremely important to Francavilla. The day after a job is completed, the customer gets a call from Independent to see if there have been any problems so they can be addressed immediately.
“Sometimes they won’t call if they’re embarrassed or angry, so we call every day after every install to address any problems right now,” Francavilla says. “That way we don’t get bad calls.”
Beyond that, Independent keeps track of customer birthdays and other information and sends out thank-you cards and birthday greetings. The store also occasionally holds a private sale for previous customers.
This has all helped Independent maintain a 5-Diamond rating in Carpet One’s Installation Excellence Program, which measures customer satisfaction through surveys and other tools and is also designed to improve communication between the sales staff and installers.
Independent, a 22,000 square foot facility on a main boulevard, is also set up a little different from other retail operations. For one, 12,000 feet are used for an attached warehouse, where customers can view products. The space is naturally lit by skylights and all racks are on a 45 degree angle so all product can be seen clearly. Because Independent has so much product on the premises, it can offer next-day installation in almost every case, as a way to compete with companies like Empire.
The 10,000 foot showroom is kept in immaculate condition. Sales desks are positioned out of the way, so there’s no clutter in the main part of the showroom. There’s even a refrigerator for customers, stocked with water labeled “Clear Choice” and featuring the Independent logo. “I’m into showing people the business and walking them through the store,” Francavilla says. “We want to create a real warm, comfortable environment.”
Independent spends about $8,000 per month on advertising. It uses the local newspaper, sharing the cost with another nearby but non-competing Carpet One store. Newsprint helps reach the store’s older customer base, which isn’t as likely to use the Internet. The store also advertises on specialty cable channels aimed at women, such as the Lifetime and Hallmark networks, and is planning its first direct mail campaign in three years this spring in a Tigressa promotion. The store is also active on Facebook. But increasingly leads are coming through the Internet and Carpet One’s lead generation system and other programs.
“Carpet One just acquired the Fannie Mae account, and we’ve just gotten our first Fannie Mae jobs,” Francavilla says. “There’s also a national insurance account through Carpet One, and that has really helped business a lot.”
Independent Carpet One Floor & Home has been in business for 42 years and has never had more than one location. The late Carl Francavilla started the business and today his wife, Frances, is the sole proprietor, and his children, Bob, Carl Jr. and Catherine, all work in the business. Bob is the sales and purchasing manager, Carl Jr. is an outside sales consultant, and Catherine Buchanan is the showroom manager. Carpet accounts for 70% of sales, and Independent is Michigan's largest dealer of Shaw's Tigressa carpet. Vinyl makes up about 20% of sales. The business has been affiliated with the Carpet One organization since 1998, and Catherine, who has served on the organization's advisory board, is an outspoken proponent of the organization. Independent takes advantage of nearly every program Carpet One has to offer, from marketing and business education and tools, to product selection, advertising and networking. "It gives us programs that separate us from the little guy down the street," Buchanan says. "We would not be who we are without them."
Copyright 2011 Floor Focus