Residential Lighting: Tell us about Elm Street Economics.
Mike Anderson: It does no good to worry about the headlines coming out of Wall Street or Washington. Focus on Elm Street, your local customers. Think about the real estate meltdown. You can make the news useful by focusing on “term of residency.” The person who has owned their current home for four years or less took advantage of the real estate meltdown. They didn’t just buy a house; they got a great deal. And they probably have money left over to make that house their home.
On the other hand, somebody in a home for four to eight years bought at the peak of the real estate bubble, and now they’re upside-down. But if they were going to be foreclosed on, chances are they’ve already been through that wave. They’re probably not going to sell their house anytime soon. We’ve been out of the recession now for 34 months, and the grieving is over. They’re installing experiential, tangible home improvements like spot lighting, home theaters and outdoor kitchens to enjoy late into the evening.
The last group is eight years plus, for whom home improvement is infrastructural — roofing, siding, windows, the expensive stuff; though they have cosmetic projects, too.
Speak to people’s motives. In a crowded room, there can be a loud din, but if somebody says your name, you perk up. In a crowded advertising space, if you’re saying something that appeals to certain people, it’s like you’ve just called their name.
RL: How do you view social media?
MA: It’s difficult to know what to do with all the infinite options out there. Don’t worry about being an expert in social media and digital marketing. Be an expert in your customer. Ask them how they are using Facebook. Ask them what other media they’re consuming. Then serve that relationship. I’m not a digital expert, but I know social marketing is social first and marketing second. The consumer is in your showroom and they’re trying to decide between fixtures. Say, “I have an idea. Let’s ask your friends. Do you have a smartphone? Let me take a picture of you standing next to Fixture A and then another one of you standing next to Fixture B. Pop them up on your Facebook page and ask your friends which one they like.” Boom. You’ve just done social marketing. We make it so complicated sometimes.
RL: What’s something key about in-person sales?
MA: A key word is empathy. When you have a prospect in the showroom, listen to them. Ask, “How do you use the room? The same during the day and in the evening? Who else uses the room?” If you’re 18 to 34, you don’t think of it as the living room. You think of it as the game room; the big TV is for the Xbox and the Wii. Is the lighting right for my iPad as I watch TV? Empathy is where upselling begins.
RL: Any final thoughts?
MA: Apples-to-apples advertising might not be enough. The customer is thinking, “Big home improvement project this year or Disney vacation?” A lighting showroom does not just compete with other showrooms, but with travel destinations, home theater stores and car dealerships. Don’t just focus on the competitors in your category. Develop a relationship with your customers. Understand their needs. Make them feel special, or else all they have to judge you by is price.