fbpx
 

Blog

JoTo #PRWIN: Furniture Store Owner Loses $7 Million, Gains Customer Goodwill and more Business

MATRESS_MACK“Goodwill is the one and only asset that competition cannot undersell or destroy.” – Marshall Field (American Businessman, 1834- 1906)

During the recent economic slump from which the U.S. is still emerging, the majority of American businesses experienced a sharp downturn. But one reason that some businesses survived the recession was due to their goodwill.

So what exactly is goodwill? And how do you get it?

In essence, it is an invaluable asset in business because it demonstrates a business’s mission. Goodwill increases your customer base, which occurs through word-of-mouth, PR & publicity and recommendations, but also helps to retain current customers.

Goodwill is, in other words, your business’s reputation – and by forging a bond with customers, you are rewarded with endorsements and trust, which one Houston business owner learned first-hand to the tune of $7 million:

Houston furniture salesman Jim McIngvale, better known as “Mattress Mack,” likes to run promotions that are tied to sporting events. Typically, the offer is something like 50 percent off your furniture purchase if you pick the correct winner of some game or another. He lost almost $700,000 two weeks ago when 100 customers correctly picked the winners of the AFC and NFC championship games. After that, he said he was done running contests.

And then he offered a deal: Spend at least $6,000 at his store, and if the Seattle Seahawks win the Super Bowl, you get your money back. Seattle was a 1.5-point underdog at kickoff.

Seattle’s 43-8 win cost McIngvale $7 million. (1)

MATRESS_MACK gives money backBecause McIngvale didn’t have an insurance policy on the bet, he is on the hook for the full amount. But what McIngvale lost in money-wise, he gained two-fold in consumer goodwill. Nearly 1,000 Houston families got an average of $7,000 worth of free furniture from him – and you can bet that each of those families will spread the word, likely driving more customers through McIngvale’s front door.

What McIngvale understands is what every business owner should recognize – you can’t buy consumer loyalty with an advertisement or commercial. With PR, the goal is to facilitate communications and forge a relationship between and a company and its publics – but PR is multifaceted and consumer goodwill is just one intangible aspect that can take your business to next level awareness.  Check out all the press he got:

 

And by the way – don’t be alarmed.  I’m from Houston and know that “Mattress Mack” could afford that $7 million dollar “loss” and he did it calculatedly.  He did not lose and he knew he wouldn’t.  Here is his story:

Jim McIngvale started Gallery Furniture with $5,000 and his own pickup truck, after a potential investor did not follow through with a proposed loan. (2) (3) Initially, he did fairly well. But, when the oil industry took a turn for the worse, he found his business slowing dramatically. Taking the last $10,000 to his name, Mattress Mack invested in local television commercials in 1983. (4)

“I was doing an ad, and I was frustrated,” said McIngvale, he continued, “I couldn’t come up with a punch line. Finally, I pulled some money out of my pocket and yelled, ‘Gallery Furniture saves you money!'” (5) The phrase stuck, and has become well-known throughout the greater Houston community.

Gallery Furniture, established in 1981, has been consistently ranked in Furniture Today’s Top 100 Furniture Retailers for some time and currently ranks as the Sales-per-Square-Foot leader for independent retailers in the United States.(6) The store has around $200 million in sales per year.(7) It originally sold less expensive furniture targeted toward lower income individuals, but has since expanded to include higher-end furniture.

So – take a calculated risk within your ability to create goodwill.  McIngvale took a risk within his comfort zone – $7 million to gain business to an already $200 million dollar business was a piece of cake for him.  And get some publicity for it – you will reap the rewards.

For more information about our services and how to incorporate goodwill into your business objectives, visit us online at www.jotopr.com. For a free PR Evaluation, click here.

  1. Corcoran, Tully. “Daily Buzz: Store Owner on Hook for $7 Million after Seahawks Win.” Fmsn.foxsports.com. N.p., 3 Feb. 2014. Web. 4 Mar. 2014. msn.foxsports.com/buzzer/story/daily-buzz-furniture-store-owner-on-hook-for-7-million-after-seahawks-win-020314.
  2. Duening, Thomas; Ivancevich, John; McIngvale, Jim (March 19, 2002). Always Think Big. Kaplan Business. ISBN 0-7931-5375-1.
  3. Butler, Kevin (February 7, 2000). “Retailer Jim McIngvale – Giving Customers Good Service Has Him Standing Tall”. Investor’s Business Daily (Los Angeles, California: William J. O’Neil).
  4. Butler, Kevin (February 7, 2000). “Retailer Jim McIngvale – Giving Customers Good Service Has Him Standing Tall”. Investor’s Business Daily (Los Angeles, California: William J. O’Neil).
  5. Engel, Clint (May 29, 2008). “Gallery, Select Comfort Lead in Performance”. FurnitureToday.com. Retrieved June 14, 2008.
  6. Williams, Roy H. (November 28, 2005). “What Are You Offering?”. The Monday Morning Memo.

Advice Disclaimer. This information is not intended to be a substitute for professional public relations or legal advice. Do not disregard professional legal advice or delay seeking professional PR or legal advice because of something you have read here. Contact an attorney to obtain advice on any particular legal issue or problem. Use of this Web site or any of its e-mail links do not create an agency-client relationship between JoTo PR and the user.