I like a good suit even though I work mostly in what I wake up in…yeah it’s not pretty, but you are jealous. Now, un-burning that image from your mind, some may say I am a bit of a clothes horse, which is why I pay attention to the constant back and forth battle on TV between Men’s Wearhouse and Jos. A Banks for the men’s wedding -funeral-interview dress up dollar.
These two companies are what are left of the national men’s clothing vertical, and they are beating the snot out of each other by giving more away than a bridge and tunnel hooker.
This is mutually assured destruction at its finest
I have been waiting to do a post on these two (and how poorly they are presenting their brands) until I thought it got really stupid. Roll the stupid:
“Buy one thing, get six things for free”
That’s right. Buy a blazer, get six other items of clothing gratis. Sounds ridiculous right?
Now, how does this impact contractors?
Well, first of all. I now won’t even go into a Jos A. Banks store, and here is why. Knowing a few things about clothing manufacturing, I know a suit costs about $20-$30 to make…at most.
So to give it away may not be a big deal, except for the hit your brand takes being labeled cheap or a cheap, low-cost provider. In other words, I ask myself how well made can something be if they are willing to give away not one, not two, not three, not four…you get the point.
Secondly let’s talk about margins
How can doing a buy one get six free not COST them (or you) money? You would be losing money each time someone walks in the door. Think about it, there must be an old sales guy from a store in Albany running the show who made his way up the corporate ladder selling at a lose while making it up on volume, which obviously doesn’t work. You get that right?
Lastly, let’s talk long-term sustainability
Everyone understands that in doing business with you, you have to make a profit. In order to honor warranties and stand by your product or service in the future, you have to make a profit today.
These two companies are on a path of destruction for sure. One will not make it, one won’t. I promise you that one if not both of these companies are struggling right now for a number of reasons; changing tastes in clothing, price fluctuations, store build outs and staffing, all things that make retailers go bust.
And then there was one…
Sure, there is plenty of room for contractors in the marketplace. But not everyone has to compete on price. For example, companies like Brooks Brothers, who have been around for like 200 years, are happy to charge you a king’s ransom for a suit, yet their cost of goods sold is only slightly higher at best.
The point is…
Getting into a pricing war with your competition is a sure way to destroy your brand, your margins and your reputation. Now, I know you have to stay competitive, and that’s why you have to study up on how to TREAT PEOPLE BETTER than your competition. Companies like Zappos and Southwest have beaten up on their competitors just by treating people better…and being able to hold pricing in place to make a profit too!
So, if you need help selling, or building a list, or developing leads, get cracking, cause people are really starting to loosen up on the purse strings, and this spring should be pretty active for the right home improvement contractor.