Apr 26, 2007

Who's Afraid of the Big Box Stores?

We often hear from dealers that they are having trouble competing with big box stores; however, we feel there is nothing to fear if they do a good job presenting value. If you worry about big box stores, read on and see if you can take steps to restore some of your confidence.

Provide Help in Any Department

You offer services that the big box stores do not and cannot. Try this test. Go to a big box store near you and go to the softener aisle. Many stores display a sign that says, “This softener designed for ferrous iron and this softener designed for ferric iron.” Ask the helpful staff to explain the difference. We have been told by one employee that ferrous is just the Spanish version. This test should give you confidence that the big box stores will never replace the services you provide your customers—even when they have the exact product you carry!

Target the Right Market

Remember that only a small portion of the market would ever consider going to a big box store and installing equipment themselves. Think about the problems. First, they have to diagnose the problem—the old ferric/ferrous problem. Then they need a truck to pick it up. Then they need to have the time, tools and expertise to install it. Who has all this? Do attorneys and dentists in your town enjoy crawling under cupboards on the weekend sweating pipe? Do they look forward to dropping hot flux on their skin so they can show their wounds on Monday at the office?

If you sell to call-ins from ads or if you sell to do-it-yourselfers, you are asking for competition from everyone, including the big box stores. If customers call after seeing your Yellow Pages ad, they probably called four or five dealers and visited a big box store. There is no money to be made there; however, if you prospect—particularly in a municipal upscale area—you will find very few who change their own oil, cut their own hair or install their own water equipment.

Sell the Entire Package

Most do-it-yourselfers will only buy one piece of equipment at the big box store, but they need far more. Offer them a custom package that solves all their water challenges, including a mixed-media conditioner, an RO, ultraviolet light, ozone or whole-house carbon. If you can show them a complete package that suits their needs, very few will attempt to install it all. If you miss the softener sale, maybe you can sell the rest of the package. Just talking about these advanced solutions will help them realize how little they know about solving their entire problem.

People who buy from the big box stores are missing a great demonstration. If you do a great demonstration, your total package will have far more than what they can get at the big box store. Also, be sure to talk in dollars per month, as this makes a difference to do-it-yourself customers.

Highlight Your Skills

Sometimes we forget all the skills and assets we have that “civilians” just don’t have. Take a simple example: Does Mr. Homeowner have a tool to cut copper pipe? If he does, how old is the blade? If he hasn’t used the blade in three years, will it make a nice clean cut? If he needs a blade, that’s another trip to the store and more time. While he is there, he buys the pipe. Should he get the exact amount or 12 ft too much in case he is short? When he is done installing the RO, can he test the TDS? No, he has no meter. Would he buy one for just one installation?

The fact is that the homeowner probably needs more than $600 in tools, four trips to the store and much more in assets even if he has the skills to do it right the first time. How much is his time worth?

If you do the math, you will see that your professional installation is a bargain—even if you don’t count the emergency room visits he will probably be making.

Focus on Service

You need to point out to the homeowner all the value you provide. Not only do you provide a diagnosis of the water problem and a custom solution, you provide factory-trained installers. If the homeowner’s equipment fails to function, does he bring it back to the big box store? No, he ships it to the manufacturer. What does that cost? How long does it take for a solution? If it is improperly installed, does that invalidate the warranty? If the manufacturer sends him a faulty part replacement under warranty, can he install and test it?

If the homeowner fails to diagnose the water problem properly and needs to get different equipment, will the big box store take back what he already purchased? If there is a problem at 2 a.m., what is the value of making a phone call and getting help on the way? What is the value of not hearing your spouse say, “I told you so” when something goes wrong? We think it’s priceless.

Today’s buyer wants recourse and that is what you provide. Quick response times, parts and tools, manufacturer warranty, financial backing, no hassle: These are all valuable to the right customer.

Interestingly, we find that dealers who rely on call-ins for sales and who sell based on price have a problem with the big box stores. Dealers who have great service, who generate leads and who do full demonstrations have no problem at all.

So, sell yourself on your value and then go forth without fear to battle the big box stores.

About the author

Carl Davidson and Ric Harry are directors of Sales and Management Solutions, Inc., a consulting firm specializing in sales & management video training, recruiting and live seminars exclusively for the water equipment industry. A free demonstration video and list of products and topics is available at 800.941.0068. Send comments on this article to them at [email protected]; www.carldavidson.com.