Hope for Home Improvements
For companies in the home improvement categories, the tight economy is especially painful. Home improvement projects have come to an immediate stop. Contractors who months ago had a year’s worth of projects on their plates have found themselves laying off staff and completely without work, all because people are cautious about funding that big renovation. Likewise, retailers in home furnishings are seeing little or no product movement for the big-ticket items like furniture and home theater.
There is hope, however, and the premium brands who play their cards right today could find themselves coming out of the economic slump quicker than even their lower-cost competitors. Here are some thoughts on how to play those cards:
- Keep prospects engaged —The fact that buying has slowed so much in home furnishings and remodeling means that customers have time to make their decisions. This means they will research more, compare more, and will likely avoid making financial commitments. This is the premium brand’s opportunity to engage the customer in meaningful dialogue, and if your brand is well-positioned, it could mean you have more opportunity to disqualify your competitors. If you have a retail storefront, you should be working hard to get face-time with your prospects, having them frequent your store.
- Don’t forget to deal —Since many customers want to avoid big financial commitments right now, they may feel that actually buying is far off in the future. However, even premium buyers like a good deal. Allowing your sales team the appropriate negotiating power on the prospects who will matter most allows your brand to turn the negative economy into a strategic opportunity. But you have to be selective and careful not to discount to a level that erodes your brand’s perceived value.
- Put on the customer’s shoes —With sales being slow, your brand may have the time now to focus on things that have needed repair for a long time. For instance, try shopping for your own product, consider the competition, and evaluate whether or not your brand can command the price you’re asking in today’s economy. If not, use this down-time to clean-up your brand’s position and articulate your superior differences.
- Don’t do nothing —For many home brands (even premium ones), spending has stopped because sales have stopped. While we don’t recommend spending in a “business as usual” manner, doing nothing is very risky, and could prove fatal for your brand. If you’re not in a financial position to take advantage of the great media buys that abound today, develop some appropriate, low-cost ways to keep the conversation alive among prospects who are shopping. When you consider what a great investment a person makes in his/her home, their patience in this category is wise for them; your brand’s challenge is to rise to the top of their mind for preference in your segment. When they do purchase, they’ll be happy, satisfied, and a vocal champion on your behalf. But you’ve got to do something to make that happen.
Marketers of premium brands should not lose sight of the fact that, even in home furninshings and remodeling, people purchase because of an emotional benefit as well as a rational benefit. The emotional benefit is the biggest driver in impulse buys when project timelines and healthy budgets are pushing consumers to purchase. However, current economic conditions allow a lot of time for the rational part to influence their decision. Will this extra time to consider the rational benefits of your brand talk your prospects out of choosing you over the competition? The premium home brands that will emerge as winners will justify a higher price point and win the sale by satisfying both the emotional benefits and smart, well-articulated rational benefits.