Elvis is on the Rig! Mattress Mack & Domino Principle #2: Determined Proactivism


“I lost 12.5 million dollars last year but it really raised the trust in the brand.” — Jim “Mattress Mack” McIngvale, March 17, 2015, at The After Hours Network.

Can you make money during an economic recession or industry downturn?

Of course you can.

The 10 Domino Principles provide a framework for taking control of our lives and businesses, navigating the present, and shaping an exceptional future. Over time, I am introducing and applying the 10 Domino Principles through articles on this blog. Today we are going to delve into Domino Principle #2, the principle of Determined Proactivism.

People often find it easier to be a result of the past than a cause of the future. Domino Principle #2: Determined Proactivism, tells us that we must continually strive to be a cause of the future rather than a result of the past. The first step is to have the courage to understand what elements of our life and business we can change; the second step is to put together a realistic plan that will then result in desired changes; and the third step is having the courage to go ahead and make those changes to lead to desired results.

Even on the downside of a business cycle, some people and companies come out winners. There is always, ALWAYS, a way to make money on the downswing in a cycle. When the dominoes fall, those who are clever find a way to take advantage of the situation, and it can be done without resorting to opportunistic profiteering. (See also Elite Daily: It Is Not What Happens To You It Is How You Respond To It.)

Through the end of 2014, a booming oil industry in Houston translated into big business for many Houston-area retailers (see CultureMap Houston, February 4, 2015 “High-end Houston stores completely unfazed by the oil bust: ‘The rich are still rich . . .’“).

The thriving oil industry meant good earnings for petrochemical industry employees, along with a continual influx of new families into the Houston area as job opportunities expanded. Spending by these families trickled down through the Houston economy, as these individuals purchased products and services from other local businesses, which in turn fueled income and spending by those owning as well as by those employed by those companies.

With the 50% decline in the price of Texas crude oil in late 2014, this influx in cash into the Houston area began coming to a halt. Additionally, as individuals see uncertain times ahead, they tend to increase savings and reduce spending. That isn’t the best of news for many Houston-area retailers.

In response to the strong potential of a looming economic downturn, one of Houston’s most famous business icon’s, Jim “Mattress Mack” McIngvale (often referred to simply as “Mack”), launched a promotional strategy designed not only to increase his business during the downturn, but also to show his customer base that he cares deeply about an issue affecting their lives… so deeply that he is willing to put tens of millions of dollars of his own money on the line.

Mack’s company, Gallery Furniture, was established in 1981, and has been consistently ranked in Furniture Today’s Top 100 Furniture Retailers for some time. The company currently ranks as the Sales-per-Square-Foot leader for independent retailers in the United States. Focused on providing day-of-purchase delivery, the store generates around $200 million in sales per year. (See Wikipedia: Jim McIngvale). Over the years, Mack has transformed his image from a seeming carnival huckster into one of the most savvy and insightful entrepreneurs in the world, as well as a frequent philanthropist, reinvesting his earning by supporting a wide variety of charitable causes.

Gallery Furniture’s “85 and It’s FREE Promotion” advertises that if the price of West Texas Intermediate Crude Oil is $85.00 or more at end of trading day on 12/31/15, customers who purchase $7,000 or more of Gallery Furniture will receive a full refund or 150% of their purchase dollar amount back in the form of a Gallery Furniture In Store Credit. The price of West Texas Intermediate Crude Oil has dropped from a high of near $100 per barrel last summer to a current price of $47.51 as this article is written. You can see Mack’s promotional ad here:

Last year Mack ended up giving away $12.5 million in free furniture when he was on the losing end of similar promotions related to NFL and Super Bowl outcomes and the season performance of the Houston Astros. These experiences generated significant news and social media buzz along with online word-of-mouth from individuals opining, after the fact, that they had taken advantage of the promotions.

Mack doesn’t want to be on the losing end of all of his promotions of this type, but he doesn’t want to be on the winning end of all of them either. By paying off on his losing “bets,” he enhances the trust in his brand. (When I caught up with Mack last week, I asked him specifically whether he carries insurance to hedge his bets, and he told me no, if he loses, it comes straight out of his own pocket.) You can see Mack talk about his previous experiences with losing his bet on some of these promotions here:

So why is he doing his current price of oil promotion? Well, there are many reasons:

1) It shows he cares deeply about an issue that is near and dear to the hearts of many of his customers, and he is willing to take a major risk related to it. As such, it gives him a topic to promote around which is both timely and relevant to his customer base.

2) The buzz the promotion creates through news stories, blog posts (like this one), social media, and word-of-mouth is extensive, and could not be replaced even with millions of dollars spent on advertising. The buzz generated also brings business and awareness well outside the Houston area, where his paid advertising is focused. See, for example, this story covering his promotion on CNBC:

3) While oil and gasoline prices stay low, Gallery Furniture saves big as the costs of shipping their furniture to their Houston stores, and the costs of delivering it to their customers, is vastly reduced. When oil prices do eventually go back up, a new round of hiring in Houston will occur, and Gallery Furniture will take advantage of that as well.

4) If one were going to spend $7000 or more on furniture and/or mattresses, and Gallery Furniture has the products that one wants to purchase, in the eyes of many consumers it likely becomes a no-brainer to make the purchase at Gallery, where the purchase could end up being fully refunded.

5) The mattress retail industry, in particular, is one that generates little consumer trust. Walking into a mattress store often provides a feeling similar to walking onto a used car lot. Gallery Furniture may have a carnival atmosphere to it, but by consistent action over a period of many years, Mack and his brand have built a reputation for providing a quality product at reasonable prices. I remember taking my daughter shopping for a mattress in Atlanta last summer, and wishing there had been a Gallery Furniture there where I knew I could walk in and not get ripped off. I will not often buy my other furniture at Gallery… the styles he carries are not consistent with my tastes. But for mattresses, I know of no other place I’d rather make a purchase, and Gallery’s same day delivery policy is seldom matched by others.

6) Finally, the entire promotion is just plain fun and exciting. It takes a rather mundane industry and links it into world affairs and the price of oil, which fluctuates and is in the news on a daily basis. It energizes employees and gives them something interesting to talk about, with every customer who walks into the store. And it sure makes the boss’s life more interesting, too.

Cliff Kurtzman with Jim McIngvale at The After Hours Network, March 17, 2015.

My personal connection to Mack goes back to 1998, when both of our companies were recipients of the Mass Mutual Blue Chip Enterprise Award, and we each gave speeches at a luncheon honoring the Houston awardees. These awards, established in partnership with the U.S. Chamber of Commerce and Nation’s Business magazine, recognized businesses that have demonstrated the ability to withstand the cyclical nature of business, overcome adversity, seize opportunities and succeed.

In 2003 and 2004, Jim and his wife, Linda, invested heavily to bring the Masters Cup (the year end men’s professional tennis championships) to Houston’s Westside Racquet Club, which the McIngvale’s also owns. In addition, Westside and the Mcingvale’s also became host to the annual U.S. Clay Court Championships and the Houston Wranglers World Team Tennis team. I frequently covered these tennis matches at Westside on a press credential from my online tennis publication, The Tennis Server. Mack, who is a collector of Elvis Presley memorabilia, was often referred to by the tournament staff by the nickname of Elvis, and when he would arrive on the grounds of the tennis center, the tournament support staff would send out word over their walkie-talkies: “Elvis is on the lot” or “Elvis is in the house.”

Now, it would seem, Elvis is also on the oil rig. When the dominoes fall, will you be crushed or will you profit? Jim McIngvale exemplifies how to be determinedly proactive to take advantage of an industry downturn for fun and profit. And you can do the same.



“DOminoes are activists. Their first name is DO.“ I could use just a little help from my friends to enable The Domino Principle to gain sufficient critical mass to become more successful and useful. Our readers, like you, are influencers, and YOU can DO something quick and easy that would use your influence to help us out. Below each article we publish on The Domino Principle blog (like this one), you’ll see buttons to share the article on social media. Please use these buttons to share our articles, especially the option to share our articles with your friends on Facebook. It will really help spread the word of what we are trying to accomplish!

Cliff Kurtzman
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