I read a great quote in Entrepreneur Magazine recently that I’d like to share with you. Jim Koch, the founder of the Boston Beer Company, stated that “you have a viable business only if your product is either better or cheaper than the alternatives.” Wow! That pretty well sums up the flooring business just as it does the beer business.
What we must remember is that in our field, installation and service are products, just the same as a box of tile or a roll of carpet. It is an integral part of what the customer is purchasing from us.
Ask yourself the question, can you sustainably compete on price alone? Sure, anyone can sell for less for a while, but can you do it profitably over the long haul? Some dealers can, but it takes tremendous resources to commit to the inventory, marketing and operating costs that doing so requires. It is one of the reasons that big box stores have to be big!
If you can’t be the biggest, nothing is stopping you from being the best. Contrary to what many think, not everyone is looking for a mediocre product at a cheap price. Customers spend premium money every day with smaller scale suppliers that consistently get it right the first time. Not only will they willingly spend more, they will often brag about doing so. For most dealers, it’s the only logical way to thrive in a crowded market. Don’t believe me? Ask someone who’s drinking one of Jim Koch’s Samuel Adams beers!