Best Practices - November 2012

By Brian Hamilton

When shoppers visit the showrooms of Chesterfield, Missouri-based Ambassador Floor Co., they’re in for a completely different experience from what they’ll get at almost any other retailer. While everyone from Home Depot to most independents trumpet their prices, nothing in the Ambassador showrooms has a price on it. It’s a practice the company has maintained since it opened in 1985, but at that time it focused solely on the builder market. As it transitioned into retail work, it maintained the practice and discovered that it also works well in that arena. The showrooms serve both retail and builder customers.

“It’s completely foreign to most other retailers,” says owner Kelly Taylor, whose business is now a member of the National Floorcovering Alliance. “But their way is different for us.”
The reason for this tactic, Taylor says, is that it forces customers to have a conversation with someone on the sales staff. And that’s the beginning of forming a relationship.

“The customer can’t sneak in and not be helped,” Taylor says. “They need someone to walk around the shop with them, and with the right sales person, that’s where the trust is built.” It also tends to result in better salespeople.

When an Ambassador salesperson quotes a price, it’s for an entire job, not the floorcovering alone. That also keeps customers from going to competitors to shop on product price alone and clues them in on other questions they may need answered by competitors. It also teaches them to be wary of free pad offers and other promotions that make pricing more difficult to understand elsewhere.

Another part of this inclusive pricing strategy is that Ambassador installs about 90% of the products it sells. All Ambassador installers are fully certified staff members and are not the typical subcontractors that most retailers use. They’re all trained in a four-year program by the Installation Standards Training Alliance (INSTALL), the floorcovering arm of the United Brotherhood of Carpenters. Using higher-paid union labor hasn’t hurt his business at all, and, in fact, Taylor touts the INSTALL label as a way to give customers peace of mind that their projects will be installed quickly and professionally.

“All of our guys are subject to prehire drug screenings and random screenings afterward,” Taylor says, noting that these screenings, along with the extensive training, gives him better, more professional crews than other companies have. “I’m not afraid to send a crew into your grandmother’s house.”

The upshot, Taylor says, is that by pricing full jobs, he can compete with any of the non-union shops like Lowe’s and Home Depot that sell primarily by price and don’t necessarily fill in all the details or provide the same guarantees. Also, the bulk of his installers have been with him for at least ten years, and many have been with him for more than 20, which has given him a highly reliable workforce as well as a measure of confidence.

The focus on high-quality installation also matches the better quality products Ambassador sells. Ambassador, for example, is a Stainmaster Center and most of the carpet it sells carries that label. (In fact, more than half the carpet it sells into the builder market is Stainmaster.) As an NFA member, Ambassador is also a Mohawk SmartSolutions Flooring Center.

EMPHASIS ON KNOWLEDGE
Taylor has focused on making sure his employees are highly trained. All of his installers have OSHA safety training, which he says takes a certain level of commitment, and they work differently from other installers to avoid accidents. For example, he says, they tend to stay clean and tidy when they work. “Our guys are trained to be conscientious, because some things can be dangerous,” Taylor says. Also, a number of his workers are certified in EPA lead testing, because so many older homes used lead paint that can be disturbed during an installation.

He also has a National Wood Flooring Association certified wood inspector, who provides a lot of general expertise to help avoid problems and can be valuable if a problem turns up later with an installation. Another ten people are certified on Schluter-Systems products, the installation system for tile and stone.

“We spend a lot of money sending people to these courses,” Taylor says. “We claim to be professionals, so we want to back that up with education.”

In addition, every Wednesday the sales staff attends a product knowledge training meeting, generally performed by a vendor. New salespeople spend their first two weeks learning about the products and familiarizing themselves with the computer system. “It’s a unique environment when you don’t have prices on the products,” Taylor says. “You’ve got to sell a whole lot more than price, and that’s where we’ve got Lowe’s and Home Depot beat.”

PROMOTING THE BUSINESS
Taylor has refined his advertising approach for Ambassador in recent years. “For years we were just throwing advertising dollars out there, but two years ago we started focusing on our target audience, and shouting our message to them.”

Taylor made the decision to spend nearly his entire ad budget on television. For one week each month he has a special promotion. He has ads, which feature his employees, on all the major networks and many cable channels, saturating the airwaves. The ads are 30 seconds long, which he describes as “goofy things” that are designed to grab attention and be memorable.

Ambassador, in addition to its website, also has a social media presence on Facebook, Twitter and YouTube. However, Taylor says he’s not been able to track or pinpoint what he gets from any of it. He says his best business from the web comes through Armstrong’s Elite program, which puts his business at the top of the list of referred retailers on the Armstrong website.

RESPONDING TO THE BUILDING BUST

Kelly Taylor's father, Bob, started Ambassador in 1985, serving the builder trade with carpet, hardwood and sheet vinyl. That turned into a highly profitable business as it rode the unprecedented home building boom. At the height of the boom, 90% of the firm's business was to that segment, even though it had begun serving remoderlers, commercial contractors and developers. At its peak, the firm had 200 employees and sales hit more than $30 million as it worked on 14,000 new homes. That business started to tank in 2007, and many of Ambassador's competitors went out of business.

Fortunately, the firm had begun to diversify as it became clear home building was going to stall, and Taylor put more emphasis on straight retail and commercial work. In 2004 Taylor also added TTI Sports, installing artificial turf, and today that's a $2 million business, separate from Ambassador. "Turf helped cushion us through the recession," he says. Last year Taylor bought Paul Abt, a 65-year-old commercial contractor that does most of its work in education and healthcare and over half of sales are hard surface products. Almost all business comes via word of mouth. Today, the builder market accounts for 50% of Taylor's business, 25% is traditional retail, and 25% is commercial. The 50,000 square foot O'Fallon location (6,000 feet of showroom) is about 20 miles east, so it can serve the entire St. Louis area. Today about 45% of sales are carpet, with the bulk of that Stainmaster. Taylor joined NFA in 2011, and he says the networking with other successful retailers "is worth the price of admission" by itself.

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