#1. THE SHELL GAME
In my last post I talked about how The major national chain stores were publicly traded entities and they were bound by their shareholders to maintain a certain level of profits, remember? So If you are a CEO muckity muck of one of these places, you have a bit of a problem to solve. How do you get customers in the door, and how do you make them feel like they were getting a great deal when in actuality you charge them full boat prices. One of the most tried and true practices they use to solve this is by using a technique best described as “The Shell Game”. Here are a few you will likely recognize:
“Buy one room of carpet, get 3 rooms free!”
“Free padding upgrade!”
“entire house installation for just $39.00!”
Two questions – Do they think you’re stupid? …and why are they shouting?
Okay, I know you guys get it, but just for fun let’s take closer look at one of these; let’s look at the home center $39.00 whole house install. You may be shocked to learn that there are a few catches to qualify for this amazing bargain, and there are a few potential upcharges. (six pages of them actually) First, to qualify you must purchase certain qualifying items, such as their “Deluxe” carpet pad. In actuality it is a pretty standard 1/2 ” 6lb pad, something I charge about $2.5o a square yard for. Well they are charging about double that, nearly approaching a number that I might charge for pad and install combined. Weird huh?
Then there are the upcharges. Let’s assume you are willing to pay extra for the pad because you know your house is full of furniture and is going to be really costly to install, so you are still going to save a pile, right? Oh, I’m sorry, did you say you live in a place that has furniture in it? OH! Sooorrrry, you should have mentioned that earlier! Yeah, furniture is extra…like $10 PER PIECE extra. Okay fine, you call in a bunch of favors with your buddies and they come over and help you unload the house into your front yard. Whew! gonna totally be worth it right? You can’t wait until they come and tear up this old nasty carpet and…wait. Did you say you had existing flooring in the house? (sigh) If you want it actually removed as part of your package, well that’s gonna be extra. Oh, are those steps? Extra. You live more than a few miles from the store? Extra. Angled walls? Extra. Gasp! You say you need this flooring installed sooner than next June? Extra.
Just for arguments sake, let’s say you live in a ranch style house 2 blocks from the store, you moved the furniture and removed the old flooring yourself, you did all necessary sub floor preparation, etc. etc. You are in actuality only going to pay $39 for your installation right? I for one really want to know where they are getting professional installation crews willing to do a days work for $39. (My personal theory is Oompa Loompas, but I’ll save that for another post) These guys have to pay for the material they are installing, and they have to pay the laborers to install it, so I promise you the money to pay for it is in your contract, somewhere- Thus the shell game. If they offer ridiculous discounts on one part, then the other parts are inflated to make up the difference, it’s just that simple.
So what’s the way around it? FOCUS ON THE BOTTOM LINE. That’s it, simple. Go to their “super Summer Sizzler Midnight Madness Door Busting Columbus Day sale” and apply your coupons to the manager’s special of the day – But – start paying attention when they slide that piece of paper across the desk. What are you really paying grand total installed and done. Then you take that piece of paper and tell them you are going to sleep on it, and you go to two or three other flooring dealers and you ask them for a quote on the exact same material, apples to apples. If they say they don’t carry that particular style of name brand flooring but have one that’s better for less money, and you notice that you do not recognize the manufacturer…walk. do not do business with that guy. He is trying to fool you with the topic of my next post, #2. The Bait and Switch