Selling A Price Increase

Like many industries, the flooring manufacturers appear to currently be in a cycle of both catching up and keeping up with today’s costs. While none of us like to see increased pricing from manufacturers, rational dealers understand that they really do need to have financially solvent suppliers who can afford to both honor outstanding claims and continue to produce innovative products for the future. Simply put, a dead vendor does no one any good.

Similarly, effective retailers realize that they cannot afford to absorb these increases either. Margins are just too thin to be diluted further. Few dealers have either the financial or production capacity to do the additional volume required when absorbing profit-eroding increases. Hopefully we all understand this.

My experience is that the person who often doesn’t fully understand the importance of pricing adjustments, is likely the one who needs to the most – the salesperson. It seems that too often they tend to view increases negatively.

Most sales personnel are paid some form of commission; whether it be as a percent of the job’s profit, or as a percent of the total sale. Remind your staff that commissioned sales personnel have only two ways to make more money: either sell more of what you sell, or sell what you sell for more. It’s just that simple. Hopefully they will do both.

Remind them of the great value flooring is to the consumer. Remind them that when increases are industry wide, they are not put at a disadvantage with the competition. Remind them that the customer is judging this value, to a great extent, based upon the body language and enthusiasm the salesperson is conveying. But most of all, remind them that it’s not a price increase – it’s a raise! In today’s economy, I doubt that you’ll have many who would turn down more money at month’s end.

Tom Jennings

Monday, June 18, 2012