Technology. Say the word and a majority of flooring professionals automatically tune out—a similar phenomenon happens when I mention chores to my teenage daughter.
A while ago I was asked to host a discussion on “5 Ways to Boost Business Performance Through Technology.” Attendance was embarrassingly sparse. I will admit I may not be the most entertaining public speaker, but I think if the presentation had been called “Guaranteed: More Sales in 3 Easy Steps,” or “Secrets of Floor Covering Millionaires,” attendance would have been a different story.
The experience underscored a concerning problem and that is flooring professionals invest a great deal of money into marketing, products, showrooms and salespeople, while often ignoring technology—a magic bullet with the power to bring a significant return on investment (ROI) and substantially affect the worth and profitability of your company.
Most people grudgingly acknowledge technology is needed to conduct business today. As many voices have warned, the millennials simply expect tech-savvy businesses. To them, a website is as important as a storefront. When you don’t have it, you lose their business.
Some people in our industry make the mistake of thinking of technology as a necessary evil, sort of like paying the utility bill. But when technology does its job, it should bring significant ROI, and improve your success as a company.
The right technology can even make the difference in your survival.
Case in point: We all know late 2007 through 2012 were very tough times for the industry. I have seen several reports estimating 20% to 25% of flooring retailers went out of business.
My software company, QFloors, also tracked what was happening, and during that same period, only 9% of our total customers went out of business. But the amazing piece of data is only 3% of customers who reported they were using our software on a daily basis went out of business. That means 97% of customers who were using QFloors regularly stayed in business. The difference between 3% and 25% is too remarkable to ignore. And when I talk with our customers, they confirm using the software played a major role in keeping them afloat.
So it really isn’t being overdramatic to say that your survival as a company is tied to incorporating technology. However, and this is something people don’t always realize, you can and should expect that investment to pay big dividends.
Technology shouldmake you money. End of story.
It’s not just a new toy and it should never be a money pit. Any investment you make should result in higher profits for you. That’s the bottom line. If that isn’t happening, perhaps you are not making the right purchases.
To ensure your return on a technology investment is what it should be, you need to educate yourself: About software, about your website and about online marketing. Know what the options are, and what results you should expect.
Most dealers don’t realize the true total cost of ownership between different technologies. In the presentation mentioned at the start of this article, I showed a detailed analysis of how an inexpensive $500 QuickBooks package could easily end up costing some dealers tens of thousands of dollars more over time than if they had invested a little more upfront for one of the many flooring industry-specific solutions available.
The following is not an all-inclusive list, but it is five key areas where you should consider utilizing technology to improve your business:
•Operations.Technology should result in sizeable efficiencies at the heart of your business. Benefits like the electronic transfer of information through the industry’s buiness-to-business protocal (fcB2B) should streamline operations and save lots of time. This means either fewer employees needed, or having those employees do less busywork and focus on other parts of improving your business.
Technology should give you the real time information you need to make better business decisions. An important aspect of this is being able to get correct answers easily and quickly. Sounds like a given, but it isn’t always.
What you are really looking for is accurate financial statements. Some software will get you the correct answer eventually, but only a few can give you the right answer without requiring a huge painstaking process. That’s important because any improvement must begin with knowing where you are in a timely manner.
•Lead generation. The second way technology can help you is by driving business to you. An example of this is the all-essential website. Much has already been said about how important it is for every company to have a website, but it’s also essential to make sure your site comes up when your potential customer is searching online, which is where online marketing and SEO (search engine optimization) come into play.
Let me emphasize, website development, online marketing and social media should be a significant part of your advertising budget. If they’re not, you’re in trouble. I see far too many retailers spending a couple hundred dollars a month and thinking that is sufficient. It isn’t. It requires a greater focus and investment. But the way to make those investments pay off is to become educated so you can make the right decisions.
For instance, too many people are paying a lot of money to website developers and SEO experts and not getting the return they should. A common practice of these web developers is to create templates that are used over and over, regardless of the client. That keeps their development time down, but these templates may not meet your specific needs. So what do you do?
Once again, you need to gain a basic understanding of what all of this means. There are independent consultants out there who can walk you through the basics of what is needed. Typically, these are not the people selling websites. Two helpful sources we have used in the past are asklicia.com and Webinars through jm-seo.org, but there are many good advisors out there.
Secondly, track, track, track. Track your results, track your traffic, track what your dollars got you and, if the results aren’t what you want, find new solutions that give you a better bang for your buck.
For example, examine how many people came to your website through Google adwords or a banner ad, what pages they looked at, and how long they stayed on your website. Perhaps you received quite a few clicks, but they only stayed a few seconds, so were not genuine leads. Do a little investigating, and then adapt accordingly.
•Lead management. You should know exactly where your leads are coming from—walk in, phone, website, referrals, etc. Then you need to make sure those hard-fought leads turn into sales. Customer relationship management (CRM) software helps track and prioritize leads, and sets up systems to ensure follow-through.
You can purchase generic CRM software to be used along with your other software. Examples of this would be salesforce.com, ACT, Goldmine, Sugar, etc., Or you can invest in some floor covering specific software such as QFloors, which offers CRM features built right into the product.
•Sales Productivity. Technology can provide a very clear picture of what’s happening with sales—who is getting the sales, on which products, with what close rates and margins, and so on.
The right investment in technology can help you analyze which products potential customers are most often looking for, and purchase inventory to match. You can even review how well your sales team is following up on leads. Once this information is analyzed, you replicate what is working and change what is not.
•Marketing Analysis. Technology can also help ensure you are getting a good ROI on other investments, such as marketing. You spend so much on advertising promotions it’s silly not to invest in technology to track the power of your dollars. Through metrics and measurements you can see if the radio campaign you ran last month was worth the money. Once you have the results, you can respond accordingly.
In conclusion, yes, you mustinvest in technology, if you want to survive. But it shouldn’t be a one-sided relationship. Make sure your technology is paying you back, in profits, efficiencies, lower overhead, higher sales and better performance. Ask yourself, “What ROI am I expecting on this technology investment?” Then find the right one that can deliver.
The results of doing so will be anything but boring.
Chad Ogden is the CEO, president and developer of QFloors flooring software. He grew up in the flooring industry, has a B.S. in computer engineering, and worked many years in the technology field before coming back to his flooring roots. He currently serves as the secretariat of the fcB2B committee and is a widely recognized leader in floor covering technology. To contact him, call (801) 563-0140, or email firstname.lastname@example.org.