For several years now, numerous articles have been published about the “installation crisis” that exists in our industry. In the vast majority of those articles, a lack of installer training and education has been identified as the culprit behind the crisis. But because the problem continues to fester, perhaps now is the time to consider an alternative cause of this phenomenon. I suggest it is a function of the recent economic climate or, to be more precise, the mechanics of the “trickle-down effect.”
This trickle-down effect starts when flooring manufacturers are forced to pass on their increased costs to the retailers who purchase their goods. These retailers then are forced to pass on those increases, in the form of higher prices, to their customers. This is basic Economics 101.
However, I feel that there is more at the root of the problem. Specifically, retailers are hesitant to pass along any price increases to the consumer, particularly in a somewhat soft economy. Instead, they look for places to make cuts in overhead and variable costs. Once the obvious cost cuts are made, labor becomes the only remaining place where they can squeeze the additional pennies per square yard needed to maintain their pricing.
Low-price, high-volume pitfalls
Because we, as an industry, have allowed many of our products to be reduced to commodity status, low pricing is now very important. In fact, reliance on low pricing is the only way some retailers feel they can make a sale. So, we now have order takers who write the sale based upon low price — regardless of the value of the products and services they are supplying.Could this be because the person in the Floor Covering Department worked in the Plumbing Department last week, and does not understand the products that he sells? You betcha!
We are allowing our industry to be reduced to the lowest common denominator by attempting to compete with the low-ball retailers in the marketplace. This, in my opinion, is bad economics — unless you are willing to deal with increased volume at reduced profits in order to reach any growth goals set for your company. If this is your plan, the only way to realize your goals is to prevent precious, finite selling time from being expended on profitless complaint resolution.
If you choose to opt into that volume game, it is in your best interest to help — not hinder — the guy or gal who could make or break your business: THE INSTALLER.
Hurt the installer and hurt yourself
Think for a moment, if you will. Is it your salesperson who really makes your customer happy? Who leaves the final impression of your company with the consumer? Who can almost guarantee a repeat customer or, conversely, increase the likelihood that the client is lost to the competitor down the road? That’s right, it’s THE INSTALLER.By limiting the amount of money you pay for labor, you tie the installers’ hands behind their backs. You force them to cut corners on the installation so that they, in turn, can make a living.
The corner cutting takes a variety of forms. Some money-pressed installers use improper seam tapes or adhesives because they are cheaper than the appropriate products. Others decide not to apply seam sealer or properly roll the products. When a carpet job doesn’t pay enough, you can be pretty sure that the installer won’t bother to power stretch the material.
But it doesn’t stop there. The cost of adhesive limits the amount that an installer can use and still make a profit. For instance, many try to stretch their coverages by installing glued-down carpet with a vinyl trowel notch, or by putting vinyl down with a VCT trowel, or even by laying VCT over glue that has been flat troweled or applied with a paint roller.
These corners that are cut may void your customer’s warranty.
By limiting what you’ll pay for labor, you force the installer to go to the supply house and ask for “whatever’s the cheapest, or whatever’s on sale” regardless of the needs and specifications of the products that are to be installed. You can’t make a silk purse out of a sow’s ear, and quality installation can never be realized when budget-quality products are used in insufficient quantities.
Penny wise may be pound foolish
Is there any debate regarding the lack of quality in our industry when it comes to installation? It seems to be a given these days. Perhaps this reduction in the quality of installation has nothing at all to do with installer skills. Rather, it might just be a reflection of the trickle-down economics that are being forced upon them.As a general rule, a decreased caliber of installation quality inevitably will lead to an increase in customer dissatisfaction. This, in turn, leads to an increase in customer complaints. Because someone, typically the salesperson, must address these complaints in the store — often at the cost of considerable time — sales personnel are left with that much less time to accomplish the selling job for which they were hired!
And from where will the money come when the cost-squeezed retailer faces the worst-case scenario where total replacement is required to resolve the complaint? If you, the retailer, are not paying your installers enough to do the job right, you certainly are not paying them enough to replace a job.
It occurs to me that it might be possible for retailers to experience addition through subtraction. Increased sales profits due to decreased complaints might just be the answer. However, in order for this to happen, retailers will need to “partner up” with their installers and help them help you.
