What we can learn from Progressive’s ‘Flo’

Lisbeth Calandrino – By now I’m sure everyone has seen ‘Flo’, the fictional insurance-obsessed salesman from the Progressive Insurance commercials. For Flo, who clearly loves her job, it’s all about saving money for her clients. (She’s also charming and full of enthusiasm—the perfect combination for a great salesperson.) The latest Progressive Insurance campaign features real-life actor Jon Hamm, who is clearly in love with Flo. Despite his numerous attempts to wine and dine Flo, she remains determined to join Mr. Hamm, while she seems oblivious to his advances.

This is all very entertaining, but there is a lot to learn from Flo when it comes to sales and price bundling and how it can help us build our flooring business. The concept of bundling products and prices is not new. It’s a practice used by companies like McDonalds (get some kiddie fries, apple slices and a drink with that Happy Meal burger?) and new car dealers. Even cable TV companies are becoming more and more adept at bundling services. A typical cable TV provider might offer three packages for a “good price.” They have one or two channels that I want and one that I don’t, but I buy it anyway because there is value in the bundle. You may not get much with bundling, but there is a little bit of everything; bundling makes choosing easy.

Why is bundling a good idea? It makes it easier for the seller and the customer. It is also a way for the store to dump certain products.

Let’s see how bundling can work for your business.

  • The box shops offer “free installation” with their floors, which infuriates the specialist flooring store. The knee-jerk response might be to tell the customer, “Nothing is free” and “You get what you pay for.” I don’t think this is a good tactic as there are plenty of free stuff out there in my opinion. Stores like Marshalls and Home Goods taught me that if I’m a good shopper, I get more than I pay for.
  • I’d put it this way: “I know it sounds great, but let’s take a look at the products and prices to see if it compares to what I’m selling.”
  • Suppose the customer combines two or more products and wants to buy them at a lower price than if they were sold separately. In a pure bundle, the customer cannot make changes for the same price. (This is like your cable TV when you can switch products and this is called pure bundling; it’s just how it is.)
  • The other type is a “mixed bundle”, where you give the customer the option to purchase each feature together or separately for a higher price. The bundle is better done with discontinued or unique items.
  • What can you bundle? I was in the liquidation business and we looked for items that were cheap for us to buy and bundled them with more expensive products. For example, we bought discontinued area rugs and sold them with hard carpeting. In this way, the customer could not match our hard surface prices with other stores as they got a rug at a discounted price. Work with your suppliers to identify flared items that you can bundle and still deliver good margins.

Lisbeth Calandrino has been promoting retail strategies for 20 years. Contact her at lcalandrino@nycap.rr.com to have her speak at your company or to schedule a consultation.

Comments are closed.