Best Practices - April 2010

By Sonya Jennings

Floor Craft owner Mark Strauch is always looking for new systems to tackle old challenges. One of Strauch’s favorite quotes is, “During the bad times, you should be preparing for the good. During the good, prepare for the bad.” With the downturn in the economy, Strauch has focused on fine-tuning and perfecting business processes. From warehouse inventory control to tracking customers, Floor Craft is a well oiled machine where things happen on purpose.

Tracking Floor Craft customers is a simple, yet routine process that informs the company of where and how it is attracting customers. The salesperson asks each customer how they learned of Floor Craft and, once the customer leaves, writes the information on a tally sheet, which includes the categories of TV commercial, referral, billboard, direct mail, drive-by, website and repeat customer.

Referrals and repeats make up approximately 70% of the store’s business, 20% is drive-by, and the rest comes through media. Floor Craft invests 5% of revenue into advertising including TV commercials, billboard, Internet ads and direct mail sent from its advertising agency. The lion’s share of the budget, about 80%, is spent on TV advertising.

Floor Craft’s goal is to promote name recognition and reach customers through various media categories. When Floor Craft moved to its new location seven years ago, a phone poll was conducted to find out if people in the local area knew the name of the store. Although the store had been in the area for decades, the results indicated that this new part of town wasn’t very familiar with the store name. The goal of the store’s TV advertising then became to promote name recognition. Floor Craft commercials center on promoting the store itself rather than only highlighting the current sale. Like most American businesses, Floor Craft’s numbers are off from their peak in 2006. However, the company still invests the same percentage in advertising as it does when business is booming.

Service after the sale is also handled in a structured way. Each month, a list is printed of every sale that occurred in the same month of the previous year. A staff member takes the list, calls every customer on it and asks, “How is your floor looking today? Is there anything we need to address or are you still completely satisfied?” One to two requests per month (out of approximately 150 calls) are made for minor repairs based solely on the check up phone calls. The service manager goes to the home, and he usually fixes the problem while he’s there. If he can’t remedy the problem immediately, he arranges to have it fixed. Although this creates more work for the store, it ensures a happy customer—the source of referrals and repeat business. In addition, the customer will sometimes discuss a future project she was considering, and a trip to the store is encouraged.

The warehouse inventory control system at Floor Craft is systematic and consistent. All inventory in and out of the warehouse goes through one person—the store’s operations manager. Floor Craft’s most recent year-end inventory of $255,000 worth of product showed that the company was off by only $326.00.

Having a highly organized operations manager has allowed the company to keep a clear and accurate snapshot of exactly what is in the warehouse at all times. Every Friday the store takes inventory, and every product in the warehouse is inventoried at least once a month. If products leave the warehouse, the operations manager documents this in the RFMS software system. If products enter the warehouse, the same thing happens.

Where many inventory controls fail is when an add-on occurs. A customer might decide to add more work to a job or a product may need to be replaced. When this happens, the add-on is entered into RFMS immediately. There’s never anyone just randomly grabbing things that they need without informing the operations manager. The company also has centralized purchasing. One employee does all product ordering, and when product arrives, it goes through the operations manager to be entered into the system before it is stocked in the warehouse. According to Strauch, “Sometimes in a store, systems may be in place to track and keep records of inventory, but then, in the heat of the moment when someone needs more of this or that, it is just taken out of the warehouse. We have managed to put a system in place that everyone knows we always adhere to no matter the circumstance.”

Another systematic process the store has is keeping the showroom looking its best. Typically, a cleaning crew comes in when a store is finally dusty and dirty enough that it needs a complete cleaning. Floor Craft has a structured way to make sure that the showroom is presentable at all times, not just after a cleaning crew leaves. On Mondays, the staff dusts; Tuesdays, they vacuum; and Wednesdays, they mop. Every day a different area is addressed, and then it starts over again the following week. Using this process, no area of the store ever has the chance to begin to look dull and lifeless.

Floor Craft has been in the Strauch family for 68 years. The company offers carpet, tile, hardwood, sheet vinyl, luxury vinyl tile, granite, cork, and laminate. The store’s business is split evenly between retail and commercial.

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