In the world of sales, there are often no right answers. What would you do in this tough sales situation? Make the call below, and see instantly how your judgment compares. Final results will appear in LBM Journal. Be sure to check back next month for a fresh Tough Call.

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Tough Call - Pennywise Promotions

Sales won’t return until you get your message out, but your advertising budget has been slashed.

Like virtually every other lumber/building material dealer in the U.S., 2009 doesn’t appear to be a year for new sales records. Even though you’ve been holding your own in your market, your year-to-date sales are down about 18%. Naturally the owner is none-too-happy about any decrease in sales, and has asked you—as the company’s sales manager—for a detailed plan to boost sales to last year’s levels.

Given the historically soft housing market, that is no small feat. However, you think you may be able to pull it off. Here’s why:

First, as it does every year, spring gave your business a healthy boost. While sales are still below prior years, you’re sensing especially solid potential in the decking/fencing category. With a little promotion, you believe a healthy deck building market could go a long way to rebuilding your bottom line.

Second, the government is being especially generous with tax credits for energy- efficient home improvements. With homeowners sensitive to volatile energy prices, they’re hungry for ways to cut utility bills. What better way than with new, energy efficient windows and doors, and additional insulation—from your yard? Again, a little promotion to ensure that homeowners make the connection between tax credits and your store, you see the opportunity to capitalize on sales.

Third, with the economy down, most of your competition has cut way back on their advertising and promotions. Without all the usual marketing noise of competing advertising to cut through, you see this as a rare opportunity to get your message out—and seen. Again, with just a little advertising and promotion, you could position your yard as the place to go for decking and energy-efficient home improvements.

You’ve reached out to the local paper and coupon magazine and secured excellent pricing with timing and placement that you’re confident will deliver results. Plus, you’ve reached out to your vendors—and learned that they are more than happy to provide co op dollars to help you sell their products. You now have a promotional plan to present to your boss that includes minimal investment from your company. While you may not hit last year’s numbers, you’re confident that your plan will make the most of a tough market. So it’s with a little extra bounce in your step that you walk into the boss’s office to present your plan.

He listens carefully to your proposal, and waits until you’ve finished before gently bringing you back to earth. “It’s a good plan, and you’ve obviously done your homework. Unfortunately, your plan still calls for more advertising dollars than we have available,” he explained. “If you can cut this number in half, we may have something to work with.”

Leaving his office, you take a fresh look at the situation. A) You’re expected to boost sales during the ugliest economy you’ve ever experienced. B) Since most of your competitors have eliminated all advertising, you see the opportunity to get a lot of attention for a minimal investment. C) In a classic chicken/egg situation, sales won’t return until you get your message out, but budget cuts may make it impossible to get your message out.

What would you do?

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