Strategic Exchange - December 2012

By Kemp Harr

 

It’s a relief to have the elections behind us and an even bigger relief that there’s no dispute over the results. So now that the two leading political parties have collectively spent $6 billion promoting their candidates—or more candidly trashing the other guys—we look back and see that not much has really changed. And now both sides have to pick up that proverbial can they’ve been kicking down the street and find some rational compromise on the proper balance of government funding and spending.

I’m reminded of Albert Einstein’s definition of insanity as it relates to doing the same thing and expecting different results, but I also know a comment like that isn’t constructive.

Some would argue that no decision must be made, since up to this point, indecision has had little, if any, negative consequences to the members of the executive and legislative branches of our federal government and almost everyone in Washington has gotten to keep their cushy jobs. You know, the jobs with the lifelong pension plans and free healthcare, not to mention the big marble buildings with the fancy offices and huge support staff. 

For those of you who get worked into a lather about the frustrations in Washington, it’s important to realize that partisan bickering has been going on since the days of Jefferson and Hamilton. Back then, it was the Federalists versus the Republicans but the passion and unwillingness to compromise was just as strong. 

So now we face the “fiscal cliff” that was created from previous political stalemates, and it’s highly likely that the same cast of characters will kick the can again. Hopefully, Americans, who seem to suffer from a chronic case of amnesia, haven’t forgotten that a large component of this cliff was the poison pill that was written into the Budget Control Act of 2011 as a penalty for indecisiveness or lack of compromise. This legislation was driven by the public’s outrage at the rapid escalation of the nation’s debt, which has increased 46% in the last four years from $10.6 trillion to $15.5 trillion. And shan’t we forget that this legislation—even with its poison pill—resulted in the nation’s first credit rating downgrade. 

Every time we delay, we add to the national debt. It’s worth noting that in 2012, American taxpayers will spend $220 billion on interest expenses for that debt. Heaven forbid that inflation should kick in and interest rates should start to tick up or that the credit rating of the country is further downgraded, which could also increase interest rates. When will we stand up and reason through a solution with the same passion and forethought that we’ve used to solve other issues that we’ve faced as a nation? 

Back in the 1790s, while we bickered among ourselves across party lines, we stood united as a young nation with a common goal of building a strong republic. Above, I jested of the marble buildings in Washington, but those iconic buildings and memorials stand to remind those in power that we are a united nation with a common pledge of justice for all. We must have faith and be optimistic that our leaders can separate their own personal interests for the benefit of the collective citizenry—and move forward with a compromise that benefits us all.

FINDING BALANCE WITH TECHNOLOGY AT RETAIL
There’s no disputing that the pace of change has accelerated thanks to smartphones and tablet computers. In the past two months, I’ve attended three different meetings where this topic was on the agenda. The goal with these human interface gadgets is to make access to information easy to find, easy to share and, most importantly, portable. Now, thanks to cellular networks, Wi-Fi and advanced battery technology, we can access almost any data instantaneously and remotely. But it’s important to remember that the smartphone and mobile tablet are just portable communications devices; they help with business, but they’re no substitute for business itself. And without a battery charge and a radio signal, they’re just pretty pieces of glass and plastic.

Can these tools bring more efficiency to your sales and service? Most definitely, but they can also be a distraction and counterproductive if they cause you to lose sight of what customers are looking for and why they buy from you. It’s more important to build a relationship with your customer through human interaction and empathy, and modern technology can isolate you from your customer if not used correctly.

And let’s not forget that while these devices, in many cases, give you greater access to your customer, they also give your customer greater access to other suppliers, some of whom may be thousands of miles away but competing with you nonetheless. As a retailer, you used to just worry about the guy down the street, but now you have to compete with Amazon, eBay and the other powerhouse e-tailers. Some customers are bold enough to come into your store with their smartphone and cross-check the pricing on a specific product with an online retailer. 

Recent research indicates that 80% to 90% of all consumers who are searching for flooring go the Internet in the early stages of their search process. But it also shows that for most flooring purchases, the consumer likes to touch and feel the product before he or she buys it. The challenge is to make sure you’re on their list when they get to that phase of the shopping process. And while research shows that consumers browse on the Internet, it doesn’t quantify how many people physically visit a retail flooring showroom after finding it using an Internet search engine. 

It’s important to remember that people buy from people. A customer might look you up on the Internet because they saw your catchy billboard or heard about you from a friend at church or at work. But while it’s important to have a good website that presents you in a positive light, you don’t need to focus too much effort on where you appear when someone types in “flooring in Albuquerque” if your promotional and networking mix includes other touch points. However, if your business model is to compete on price and most of your sales are closed online, then search engine optimization and pay-per-click might be a valid area of focus. You have to figure out what balance is right for you and your business.

With limited resources, many retailers struggle with the challenge of knowing where to focus their time and energy to compete in this modern world. Retailers often ask themselves which Internet marketing activity pays the biggest dividends when, in fact, too much focus on the Internet might be part of the problem. Smartphones and tablets, for all the ways they are supposed to make life and business more efficient, sometimes seem to consume more time than they save.

REFLECTING OVER THE HOLIDAYS
As the end of the year approaches, it is time to reflect, relax, spend time with family and be thankful. Economic prosperity runs in cycles and we’ve just pulled free from one of the deepest troughs in modern history. Newspapers and 24 hour news channels would not exist without an audience. They attempt to lure us in by sensationalizing the threats that stand before us. Today the Twinkie dies and General Petraeus resigns in disgrace. There are lessons in these stories for all of us to learn from. Take time over the holidays to soak in a dose of culture, listen to music, reach out to a distant friend and recognize that culture and civility matters. 

We are in the business of enhancing the homes, dwellings and structures of our customers with the only plane in the cube that they touch as they live and work. Our products need to tickle the senses aesthetically but also provide a lasting foundation of service. Take time over the holidays to step out of the forest far enough to see the trees and then makes plans to pursue your business with passion for next year. 

If you have any comments about this month’s column, you can email me at kemp@floorfocus.com.

Copyright 2012 Floor Focus



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