Retailing is Selling What Part Don’t WE Get?

Retailing is so easy and we try to complicate it. Do you want to make more money, then do this. Sell MORE stuff to MORE people. (I will get more sophisticated and give you the technical way.) Period, that’s it. The answer to all of the problems in retailing is a store’s ability to move/sell more merchandise. Duh! Isn’t that what retailing is all about? In almost every speech I give, I talk about the 4 ways to increase sales and how every business needs to know which path to explore. Here they are:

1. Sell more of what you already sell to your existing customer base.
2. Sell new products to your existing customer base.
3. Sell more of what you currently sell to a new customer base.
4. Sell new products to a new customer base.

There are no right or wrong answers here. But the easiest way to increase your revenues is to just get better at the skill of selling. Let’s face it -- the recession may be over but the recovery is going to be long with its ups and downs. Besides there is too much competition out there, there are fewer customers, the web is getting stronger, and then we have the morons who fight to give it all away. Things have been challenging to say the least.

OK, I AM LISTENTING and it’s time to do something about it!

We just need to focus on the 3 key measurements that most retailers rarely pay much enough attention to. Then we need the tools to improve those components.

1. Conversion rate = This number is the amount of people who enter a store to the amount of transactions that occur. An example of this would be the following. 100 people enter a store and 40 transactions take place.  This would represent a 40% close rate which is very good. This is the most difficult to collect and is generally only tracked during certain test periods.
2. Units per Transaction = This is the average amount of units sold for every sale that occurs. An example of this would be a salesperson makes 3 sales. One customer buys 2 items, the next buys 3 items and the third buys 4. The average units per transaction are 3.
3. Average Transaction Size = This simply means the average dollars sold per transaction. An example would be 3 sales which would include one for $40, one for $50, and the last one for $60. That means your average transaction size is $50.

Now that we know how to measure the information, next is how do we improve sales? Just use my G.R.E.A.T. System for Retail Selling which is from my latest book The Retail Sales Bible. This book has been in our pipeline for a while and has gotten bumped by various projects. Shame on me for allowing this to happen.  I am really aggravated with myself for letting that happen because there is nothing more important than this book in times like this. So now that we have cleared all of the projects from our plate, and we have made this our top priority, it should be off to the publisher in the next 10 days and released by the end of September.

I also want to call your attention to our upcoming webinar on September 22nd called Effective Suggestive Selling which will give you the tools you will need to increase your sales exponentially. Click here for more information.

Let me give you an abbreviated excerpt from the book that explains the G.R.E.A.T. System for Retail Selling. G.R.E.A.T. is an acronym that stands for the different sections of the retail selling process.

G stands for THE GREETING – The greeting either makes or breaks the sale. The key element of the greeting is to determine the path for the rest of the sale. You always want to ask if the customer has been in the store before or if this is their first visit. You are building a bridge to the next stage of the selling process.

R stands for Researching the customer - That means we start to ask the customers as many questions as possible in order for us to make the proper recommendations.

E stands for Experimenting & closing the sale - Experimenting simply means the suggestion process. This is where we use lines, such as “from what you have told me, let me suggest __________”. It is important to note that closing the sale is included in this step because it should be a natural progression and NOT a separate step. (This area in the book covers 12 different ways to close a sale and they are there to match your style.)

A stands for Adding On or the Ad-On - My philosophy is one item and one clerk. We need, NO WE MUST make multiple sales to survive in this difficult market. Many times a simple, “Did you see this?” goes a long way.

T stands for Tethering the customer to the store - That means collecting as much information as possible. The sale is NOT complete until we can capture the customer’s information so that we can bring them into our community.

That is an abbreviated version of something that is approximately 60 pages long. I believe you get the essence of the system. We wanted to make the system an acronym so that it would be easier to remember.

G.R.E.A.T worked perfectly. That’s why we call the Sales Bible the GREAT book of Selling.

We hope it will become your G.R.E.A.T. book real soon.

Rebranding... Is It A Good Idea?

I received an email with two terrific questions that I thought would generate some interesting feedback from all of you. So please share your ideas with this store owner by putting a comment on the blog!

I have two burning questions. I have been in business nine years. I bought an existing store whose owner had run it into the ground and claimed bankruptcy five days later. At the time, I wanted to change the name because I hated it (and still do). However, people around me were saying to keep it as it was established.  DUH it was going out of business... I shoulda, woulda, coulda.

Fast forward nine years. The store is rocking.  It's well branded, is a destination store, etc, etc. I STILL HATE THE NAME! Each time I give it at a trade show or whatever, I am embarrassed of because it does not encompass what we are at all. I have tried adding a jazzy tagline but it still irks the heck out of me. I am wondering about changing the name to coincide with our 10yr anniversary. I have other changes on the way and the building needs a bit of a facelift so we'd do it all at once and do an "unveiling" of sorts.... Have window lettering saying formerly ________.

I can't even imagine the marketing campaign I would have to embark on! However, lame as it may be, most of my customers call the shop Vickie's. I got it at Vickie's ... you need to see Vickie, etc.  Now I KNOW you shouldn't call a shop your name but it would certainly be an easy transition…customers wouldn't be that rattled by it... What do you think?  Is it EVER a good idea to change your name?  How much marketing are we talking here?

Now, if I can be so bold as to ask two questions, my shop started as a consignment shop. Over the nine years, we have become approximately 1/2 new product. There isn't much competition in my town... I'm IT if you want fashionable goods at a reasonable price. My NEW sales have now reached 70% of my total sales. At some point, I would love to switch over to just new as the consignment is labor intensive, etc. That 30% that the consigned is making me is still a good chunk of change though... I have divided into quarters how much more new product I would need to buy to sell that other 30% (working backwards) who knows?  Maybe I'd sell more if it was all new? The consigned goods are taking up ALL of my second floor (1200sq feet) and 1/3 of my main floor which is 1600sq feet so dollar for dollar, it's a no brainer... HELP!

I look forward to your reply.

Let’s break this down into separate discussion/learning points.  The first lesson to be learned, and I wish I had learned it earlier in my career, is that we must do our due diligence when purchasing a business. That means we have to do credit checks, check with key vendors, do focus groups with customers, and have all of the financials professionally examined with copies of the tax returns. The returns should be for the business, if it is a corporation, and the tax returns of the owners, therefore, avoiding some of the problems. 

Changing the name when buying the business certainly seems like it would have been the optimum time. However, do not beat yourself up over that because even the worst of business reputations can still have some value. Let me share a first- hand example of one of my biggest blunders. I bought a 98-year old men’s store that was run down, but to me had so much potential.  Many of my customers shopped both my women’s store and this men’s store. Perhaps I was a bit arrogant because of my retail successes and because my store did seven times the volume than this men’s store did (my store did $2.1 million in sales, the men’s store did $300,000). I changed the name of the men’s store because I didn’t see any real value in it. The bottom line was it did not work and as bad as I thought the reputation was, it still had some brand awareness. 

As for businesses with terrible names, you are not alone. Can you tell me that Abercrombie & Fitch is a great name? Or how about Aeropostale (I cannot pronounce that name and had to go to a mall directory to find how to spell it), Swarovski, Crabtree & Evelyn, and L’Occltane? And then “but with a name like Smuckers it has to be good!”  I never realized that Shakespeare was a retail consultant when he gave the advice “what’s in a name?” 

Again, I had to live with a name that I hated for 25 years.  The name of my store was Ruth’s. Now when you put an apostrophe and an s after Ruth, you almost need to have a hair lisp to pronounce it properly. Plus it is an old biblical name which hadn’t really been used and has fallen out of favor for a couple of generations. Basically, we only knew old people who would use that name. And coupled with the fact that the store was located in a city that had a blue collar and a rough reputation, it made for a difficult image. People would think that we only sold clothes to tough little old ladies. Then when the miniseries Roots was first broadcast, everybody would spell my name wrong. If all of that wasn’t bad enough, I worked with my mother, Ruth, which made me Baby Ruth.  For twenty-five years of my life, I was referred to as a candy bar! 

But with all that, I took a store that did $279,000 worth of business with 900 square feet to a store that produced $2.6 million with 10,000 square feet. Yes, I thought of every which way possible to change the name but am glad I never did.

Next point – whoever said that a store should not be named after an individual?  Sorry, that is bad advice. There are more stores named after people who are highly successful. I will list a few – Kay Jewelers, Jessica McClintock, Johnston & Murphy, Ann Taylor, Auntie Anne’s, Max Studio, Joseph A. Banks, Victoria’s Secret, and Chico’s. One of the points that I have made for years is that regardless of the name of the business, they will still refer to the store as Vicki’s.     

My suggestion to any store owner is to put your name in front of the business’ name. An example would be a store named Timeless Gifts, but you put “Sue Smith’s Timeless Gifts” or just “Sue’s Timeless Gifts”. I believe in your case that would probably be the best way to go. Then slowing eliminate The Timeless Gifts.

The store is going to be called by your name regardless. Go with the flow! 

As for your question in relationship to marketing costs, it could be gigantic and you run the risk of losing customers. What will happen is there will be a rumor that will get started that you went out of business. You can spend a lot of money and only hurt your business rather than help it. PLEASE DON’T DO IT... LOOK WHAT YOU HAVE DONE SO FAR. 

Let’s discuss the issue of consignment. Consignment can be the best part or the worst part of retailing. Let me explain – if you do a consignment agreement whereby you’re splitting 50/50 with the consignee, the return on your efforts can be limited. The way I have seen consignment stores do the best is when the store owner treats the buying process the exact same way as buying regular merchandise. What I mean by that is you have to look at a piece of merchandise as if you were buying it and say “what could I buy this for so that I could sell it at the highest possible mark-up and the fastest rate of sale?” That means you tell the consignee that you will pay $5 for an item while you might put it out for $14.99. There are some people who just want to get rid of stuff and will take anything.  By doing the 50/50 split, you are leaving money on the table and besides it is none of their business what you price it at. 

I realize that this is a major departure for many consignment businesses. To my defense, I will tell you that the 50+ businesses who have taken this recommendation have thanked me all the way to the bank. This past year, one of the award winning businesses in Massachusetts at the RAMAE Awards Program was a store that coined the term “reborn” and created a small birth certificate that she placed on the merchandise. Look at this blog article from December 2009 that talks about the store which is named Izzy’s. 

Last point is the issue of eliminating consignment. This is a personal one, but trust me, if you are working on margins of 4, 5, or 6 times you have to pay the consignee, your feelings toward consignment change dramatically. A few years ago the thought was “let’s separate them”. But because of the popularity and the acceptance of this type of store brought on by the recession and our lingering economic woes, I would be reluctant to totally eliminate it.  Let’s see what the readers have to say. 

Please write in and I invite everyone’s comments. Share with us your opinions. I look forward to reading them.

P.S.  Why is there a bank named the Fifth Third Bank?  It sounds like two losers came together – fifth place and third place but went on to become a major force in banking today. Whatever happened to “we are number one”?      

Customer Service – Isn’t It the Little Things That Matter?

In Charles Dickens’ book A Tale of Two Cities, he starts by saying “These are the best of times, these are the worst of times.”  Within the last week, I experienced the best customer service and the worst customer service I have ever experienced.  They were both pertaining to doctor appointments and scheduling.  The worst customer service experience was about an appointment for a minor surgical procedure.  This doctor was very busy and it was difficult to make an appointment, but I was able to make an appointment 5 weeks later.  Fifteen minutes before I was ready to leave for the scheduled procedure, I received a phone call cancelling this appointment because of an emergency the doctor had.  

I asked when it would be re-scheduled, and I was informed that the doctor was busy for the next 3 weeks.  Then the person informed me that he would have to get back to me.  I did not receive a phone call the next day, but I did call the office and left a message which was never returned.  Then, I called back and I was told that the other doctor in the office could do the procedure two days later, and I did take the appointment.  Why wasn’t I told this before and why did I have to make the call?  The bottom line: I did not receive a feeling of professionalism and consequently cancelled the appointment.

I am sure the doctor would probably have done a great job, but because of an arrogant “I am doing you a favor” attitude, he lost a patient and probably doesn’t even care.  However, if this happens enough times, he will care.  

Now contrast that with another doctor’s office that confirmed an appointment in advance.  When I was there for the procedure, I was taken right on time.  Everything that was going to be done was clearly explained (I had received the same information in advance).  Then I received follow-up calls, not just the day after but also 3 and 5 days after just to be sure everything was OK.  

How does this all apply to us rests in the area that I believe is the root cause of 90% of all customer service issues we face.  That is: controlling expectations.  What did I expect from both of these experiences?  I think basically the same thing: a reminder call, a short wait, a clean office, the procedure done in a professional manner, and a follow-up call.  But that’s not true.  If you read carefully what I wrote and what I was complaining about, you will realize that the part that really annoyed me the most was not so much the change in appointment, but rather the “attitude of the service provider”.  He didn’t make me feel important.

So, is it the services that you offer or is it the way that service is delivered that is more important?  There are two parts to every business transaction.  There is the business part, such as all of the items that are mentioned like reminder calls, clean offices and follow-up calls.  However, it is the human part that creates delighted customers, raving fans, and the coveted word of mouth advertising we all seek.  

I have probably described this wonderful service experience to 15 people of how impressed I am with this talented doctor. He truly cares about his patients because he has created an atmosphere and a way of doing business that makes the customer feel important and special.  How are you making your customers feel important and special?  

I have always been of the belief that service is selling and selling is service.  When you are servicing a customer well, you are truly selling yourself, which is the first step of selling anything.  It is difficult for any of us to buy from someone we don’t like or respect.  The bottom line is as Walt Disney said, “everything speaks”.  The attitude of one person reduced the business revenues and created a negative word of mouth effect. On the other hand, the management of another business increased revenues and created positive word of mouth advertising.

The sad part about this scenario is that they don’t even realize what they are doing and the effects they are having on their business.  The reason for that is it is a slow growing cancer that eventually will kill a business.  What is the solution?  Have a friend shop your store, hire a mystery shopping company, and if nothing else, walk through your store and your procedures the way a customer would.  It might just change the way you do things.  It’s the little things that matter.

What’s The Story Behind That Product?

Increase the Perceived Value by Sharing the Why of The Buy

Have you ever gone to a store, looked at a piece of merchandise, and not bought it because you thought it might be an inferior product?  That just happened to me.  I was shopping at a store in the Boston area that is known for everyday bargains.  It is the type of store that people rarely go to for a specific item.  It’s the type of store that you end up buying a bunch of stuff that you never knew you needed.  Their prices are extremely low and their advertising slogan is “don’t you just love a bargain?”

I affectionately refer to this store as an old fashioned five and dime store on steroids.  They sell lots of party products, kitchen items, gift items, books, packaged foods, cosmetics and probably another thousand categories.  It is a chain of 20 plus stores that is not necessarily the neatest and most organized, but no one really expects it to be either.  You get the feeling you are getting a great deal on everything you buy.

One of the reasons for some of the great values that they offer is that many of the time dated products will have closer expiration dates, which is perfectly OK as long as you aware of that.  The majority of the items are not this way.  What I am saying is you are looking for reasons why something might be such a great deal.  That was the case with me.  Let me explain.

Again, remember I went into the store not looking for anything in particular and just killing some time.  I did, however, have a shopping cart which I was filling up with a bunch of useless items I had to buy.  Then I came to the men’s personal item area and picked up a can of shaving cream and noticed a razor from Gillette.  I had never heard of this type of razor; it was a Fusion ProGlide Power Razor that was only $8.99 which seemed cheap enough to make me buy it.  BUT where I had never heard of this razor, I was afraid that it might be a discontinued item that Gillette had experimented with, didn’t work out, and were dumping the balance of the products into this discount store.  That was OK because I go through a lot of razors since I travel so much and I have a tendency of leaving them somewhere.  So, I figured since I probably wouldn’t be able to get the blades for this in the future, I would purchase the 8-pack of blades.  I was a bit surprised that the 8-pack of blades sold for $26.99, but I happened to need a razor so I bought it.  I want you to know I did have buyer’s remorse because I felt I had bought a discontinued product.  The reason why I felt that way is because these razors and blades were thrown into a bin.  Then two things happened to me.

First, I used the razor.  It was the most unbelievable shave I have ever received and with a bald head this is an area I am expert at.  I am still believing and questioning why they would be discontinuing such a great razor.

Then, I went to CVS to pick up a prescription where right there in front of me was this beautiful display on an end cap announcing the newest and greatest razor by Gillette, the Fusion ProGlide Power Razor.  It was selling for $12.99 and the blades were $29.99.  It is not a huge discount, but it is still a substantial discount, especially on a brand new product.  Here is the interesting part.  I happened to ask the cashier, who I believed was some type of manager or assistant, how those new Power Glide Razors were selling?  Her comment was “we keep them in stock”.

I will go as far as saying that CVS is doing a far superior job on selling these products than the store that is known for lower prices.  There is an old expression that says “its worth is what it looks like it’s worth”.  CVS increased the perceived value of the product by featuring it, signing it and supporting it with professionally prepared displays by the vendor.  The discount store didn’t even have a hand written 3 x 5 card saying “new product” or “great buy”.  It got so bad that even though I purchased the item, I actually considered returning it.

Are you doing the same thing in your store?  Are you making it easier for the customer to understand the products you are selling?  I was at an airport shop the other day that sold art by the artist, BRITTO.  The products were posters, framed art, t-shirts and ceramic pieces.  It was OK, however, the value of those products skyrocketed when I saw the artist pictured with various world leaders, including President Clinton and an announcement that he was selected to create a new stamp for the United Nations.  That’s credibility!  That’s the story behind the product.  Share the story and you will increase the value of your products.  Try it, it works!

Here Is a Simple Idea That Works

I just got an interesting job that I think could become a great business tool for you. This is so good a business model that I might even want to pursue it even further and use it for more than this one client.  But the best part is that anyone can do it and reap the rewards from this model.

I will be working for a distributor that has two major trade shows a year. All of the vendors he represents attend these buying shows. They offer 2 educational programs before the show begins and I will be doing one presentation for their sales reps and another one for their retailers.  

In addition to the presentations, the distributor asked me to do a rather interesting assignment that could become a major trend. What I will be doing is going from trade show booth to trade show booth, with a video camera and a microphone and asking the vendors sales/managers or sales reps a few simple but powerful questions:

1. What is HOT from your company?
2. Why is it HOT?
3. Why should the consumer buy it?
4. What’s new?
5. What are the advantages of doing business with your company?

When I edit the responses I will break the videos down to a 3 to 5 minute maximum.  They will be converted into YouTube and placed in a private section of YouTube.  Then the distributor will offer this library of videos for the retailers to use on their websites. FREE Content.  And the distributor will charge the vendor an advertising fee.  

What makes this important for you to do?  

One of the reasons that online sales have been strong is because of the amount of educational data, product reviews, customer feedback, and owner’s polls. When you think about it, an online merchant is able to beat the retailer at their own strength which has traditionally been customer service, expertise, and dependability of the specialty retailer to know and stand behind the product.

Things have changed and the difference is in the area of expertise and sharing that expertise. Having a website filled with instructional and informative short video makes your website one that people will return to again and again. Even if someone doesn’t buy from you, people will be talking about you and in time that will pay big dividends.

SO WHAT IS THE ACTION STEP?

First, ask every vendor you do business with if they have created short instructional, fun, or informational videos that you can use on your website. If not, start to bring a camera to trade shows, any point and shoot camera works since they all take movies today. Then, ask the questions I listed earlier. OR When a sales rep is in your store, take a video.  OR you can use SKYPE (it’s free or has a tiny charge) to capture a video recording right through your computer.

I have found someone to edit my videos. Trust me, there are plenty of people who do that work as a part time job. Then just have them up load it to YouTube (it’s really pretty simple- I even did 2 of them a month ago myself). Once they are on YouTube, you can easily add them to your website and Facebook site.  You can even use these videos in your store if you have a flat screen monitor.  You can use some of the smaller screens that are not very expensive.  

This is really a winner and it just enhances the shopping experience within your store. It also makes your website far more interesting and encourages your visitors to return again and again. 

The Seven Breakthrough Marketing™ Tools

If you are a regular reader of this column you are beginning to better understand that there is truly is a revolution taking place in marketing today. There is an explosion of ideas coming to market. But it’s more than just the number of ideas-- it is the speed in which these ideas become accepted and used by large numbers of our marketing audience.

The days of saying, “We do it this way”, or “Why fix it if it’s not broken” are no longer a part of a marketer’s vocabulary. Then you add one more element to the mix of quantity of ideas, the speed of acceptance, and universal use --the cost. Most of these ideas are either low cost or no cost but do require commitments in both time and education.

The bottom line is that we reach people differently today. Consumers have new buying habits and ways in which they receive information about the products and services they seek. The following is my list of The Seven Breakthrough Marketing Tools we need to know in order to compete in this overcrowded marketplace:

1. The Touch Tools - These are the ways that we get in touch with people-- from face to face, to telephone calls, to communicating via answering machines, to traditional mail, e-mail, text, newsletters, etc. The reason why this tool is so important is because if a business is collecting email addresses but the majority of their customers prefer to be contacted via the telephone, then the method is worthless. Making a business aware of the preferred touch tool can make a dramatic impact on the effectiveness of their marketing efforts.
   
   
2. Multiple Landing Pages - Today a businesses DNA is made up of the words that our prospects use to find our type of business, our products and or our services. This is perhaps the most important of all of the tools because people do not go into websites from the front door anymore. They do searches for specific words and phrases and we must have a single landing page where they land and then we can redirect them to the rest of the site or sites. In other words, if you sell Blown glass by Josh Simpson. Make sure you have a separate dedicated page for just Josh Simpson Art where you use Josh Simpson’s name as often as possible. That page links to the rest of your site.
   
   Then you want to have another site that just talks about “Blown glass” and again the term “Blown glass” appears as many times as possible. These pages are not generally long. They have only a couple of short paragraphs and, of course, they must have some graphics that will encourage the viewer to explore or learn more about your  company and entice them to click on other sections of your website.
   
   
3. Call to Action Graphics - The call to action is the action step we discussed in #2.  These are the graphic nudges that will encourage the reader to seek more information. This is perhaps the single biggest mistake that we all make when we don’t create a vehicle for a prospect to find out more what we can do for them. That is why websites today should have multiple forms to fill in to receive “additional information”, a “trial period”, or “free offers”, etc. The reason why you need graphics is to make it stand out. A call to action without graphics draws 73% less action.
   
   
4. Create Your Lead Nurturing System - When someone expresses an interest in a company or a product, what system do you have in place that will follow up with the customer? This can be a series of emails, letters, newsletters, or even phone calls over a desired time period, generally from 3 months to 1 year. I like to say, “until they Buy or Die”. But trying to come up with an idea of what to send or say every month or quarter can be a daunting task that rarely ever gets done. However, if you plan the pieces in advance the job is less intimidating and gets done.
   
   
5. Opt-in text/M-commerce - This is perhaps the fastest growing of all marketing tools and one that I am about to make a major personal investment in Texting Advantage for Retailers ™.  Here is the concept:  You will see in an ad on a sign in your window or on the side of the bus that says something like text 71277 and in the message type in “specials”.  Or it could even say get our tips on ………………………  This message can be on a billboard, store window, plastic bag, etc. The bottom line is that people can opt in to your list without ever having any contact with your business. That is a powerful concept that in turn will result in sales.
   
   
6. You Tube and the Video - This powerful technique is changing how we not only learn but also the way we entertain our self and it’s all FREE. It’s important to separate the concept of using Video and YouTube. YouTube is important because it is a first rate delivery system that has an unbelievable distribution network. But it is the use of video that is so important. These include:
   
   
1. Video Testimonials - Here you will capture comments by customers, make a video of them, and post them on your website. They can also be played in the store.
   
   
2. To Learning Minutes - These are 2-4 minute educational videos that should be branded and can teach the customer something about a product or technique. Again, they can be played in the store, in a section of a website, and can be combined in a collection that can be sold.
   
   
7. The coupons - I recently wrote an article pertaining to the use of the various coupon services. My advice is that I would get involved with as many coupon services as possible. Why? Simple, they are all pay for performance. So as long as you make an appealing offer without giving the store away, you can’t lose.
   

These are my seven tools but the way things are happening so fast, be prepared to learn new twists on some old rules and some ideas that could only happen because of the new technology that the internet delivers to us almost daily.  My advice: select what makes sense to you adapt and adopt it. But fasten your seat belt and get ready for the ride of the explosion of marketing ideas and concepts.

Are You a Groupie? You Will Be!

BUT FIRST LET ME SHARE A PERSONAL THOUGHT.

I had company over the weekend and I was asked when I was going to slow down and enjoy life. Are you kidding? What could be better than what I am doing now? I get the opportunity to learn about the latest and greatest ideas, concepts, strategies, techniques, and tools. Then I get to share them with the world and make a difference in the lives of people that do what I did. I think that’s called fulfilling, rewarding, and exciting.   Why do I say exciting? Because I love the new and shiny. As a retailer, it was the love for the different, exciting, the bright and shiny new whatever that made me a success. As a writer I still share that same love. That’s why this is my moment because we are experiencing an explosion of ideas and here is another one that has the potential to change your life and business.

No, I am not trying to be dramatic but the results are. Get ready to be a Groupie, because you will.

The concept is called is called group buying or better referred to as Group Couponing. There are websites popping up all over that are offering coupons from retailers to their groups or subscribers. Basically it’s a site that lists coupons that are paid by the retailer that is really pay for performance advertising. Yes, I would be a groupie for that type of advertising.

Pay for performance advertising says that you would be willing (actually any business person would be willing) to just pay only when the coupon is redeemed. If I would ask any small business owner if they would pay $10,000 in a month for advertising, the answer would probably be NO or way out of my budget. Then if I asked if $1,000 would be better? The response might be that it’s more in keeping with the budget. BUT if the $1,000 were to deliver only $2,000 in sales than the $1,000 would be way TOO MUCH. On the other hand if the $10,000 delivered $100,00 worth of business then the $10,000 would be cheap.

However if you through in the guarantee that you would only pay the $10,000 if you did the $100,000 worth of business, then it’s a home run.

This is what Larry Joseloff, director of content at Shop.org, the National Retail Federation's digital division said about this concept in a recent interview with USA Today in an article published on May 14th, 2010. “This is a way social media can be measured and a way for it to be monetized. I'm not prepared to say it's an overwhelming long-term consumer trend, but it's definitely something that's having an impact."

Gregg Pupecki, sales and marketing director for Wendella Boats & Chicago Water Taxi, is more effusive. His company sold more than 5,000 discount tickets on its first Groupon promotion and 20,000 on the next, which offered a 75-minute architecture tour of the Chicago River.



Here he talks about the coupon service, Groupon.com, one of the leading services (I will list the others as well). "I think Groupon is one of the best sales and marketing tools to come out since the Internet," he says. "Groupon is something any business owner or marketing manager can do themselves, no matter what size the company is."

Here is a partial list of companies that offer these services:

• 8coupons.com
• BuyWithMe.com
• LivingSocial.com
• CouponMountain.com
• CrowdSavings.com
• CouponCabin.com

The following is copied from BuyWithMe.com which is a site that explains why retailers should get involved. It explains the concept better than most of the other sites I reviewed.

Our partners (BuyWithMe.com) rave about our simple, seamless and speedy process.

1. Propose a Deal. Together, we work out a “win-win” offer by determining the service you want to feature and the minimum number of buyers required for your deal to go through, so that you’re guaranteed the volume you want. Simply provide your pictures, deal details, and business information, and our editorial staff handles the write-up for you, representing and protecting your brand as if it were our own.
2. Present the Deal. Your discount will be featured as “Today’s Deal” on our website and remain active under the “Other Deals” tab until the promotion ends.
3. Promote the Deal. Our tech-savvy customers visit our website and use social networking tools to get others to sign up in time for everyone to get the deal. BuyWithMe promotional support, email blasts, strategic alignments, and online contests help spread the word all over town.
4. Profit Without Risk. There is no “deal” if you don’t get the sales volume you require. We collect the pre-payment for you and deliver it in one check, so you can focus on all of your new customers!

Here is a way many of these services will earn extra money and is a win/win for all. Again this is from Buyfrom me.com

“Our “Bonus Deals" are valuable alternatives to reach our consumers even when you’re not running as “Today’s Deal.” We can also retweet your offer to our twitter followers, offer you banner ad space and generate other creative word of mouth campaigns.”

Why get involved in this type of advertising?

1. Almost every major retailer is jumping on this bandwagon.
2. It’s a completely measurable from Start to Finish.
3. There is NO Upfront Capital Expense: what could be better?

4. It will build your brand and exposure.
5. It’s easy to track your results. How many other forms of advertising can say that?
6. Built in loyalty. Loyalty is not easy to gain these days but coupons create a magnetic pull that just works.
7. Don’t feel as if you have to register for all of the services out there. Most of these coupon companies have affiliate programs where your coupon will appear on multiple sites because one coupon company will pay a fee to another company for the exposure.

My last bit of advice. Coupons WORK especially in higher ticket priced merchandise. They literally built my retail business. This is just putting the concept on steroids. And remember one more thing, rich or the better customers love coupons. (That’s probably why they are rich!) This system is a keeper.

The Passion of Commitment

What would you do if someone just told you that what you were selling was an unhealthy, immoral product, and could cause cancer? No, I'm not talking about the fast food industry or even the supermarket industry that sells all the fattening, unhealthy food which is causing an epidemic of obesity today. No, I am talking about what happened to the Indoor Tanning industry.

Can you imagine what it must be like? I experienced a similar situation many years ago when I sold real fur coats. At one point, my fur department represented a third of my business and to lose that business really hurt. Yes, we were picketed and on several occasions we had people come into the store with razor blades in their hands and proceeded to slash as many as 20 fur coats and jackets. The protesters created an atmosphere where retailers became afraid to carry furs and customers were afraid to wear them. I finally made the decision that I would never carry furs again. I actually lost up to 25% of my revenues in the first year alone. But in the indoor tanning industry, these small businesses stand to lose everything.

Let's put it this way. You are a long time Tanning Salon owner; you have had customers coming to you for years; and haven't even had one customer ever mention anything about developing any form of skin cancer. Yet someone published a research report telling the world how bad your product is. Then you start to contact your colleagues and even your trade association to find out if anyone has reported such a problem. When the answers come out the same as your results, then you start to question the validity of these reports.

You especially get upset and depressed because you don't want to sell bad products and you have spent years developing your business. That can mean countless hours and sometimes life savings invested.

So why should we even care about this topic? For a few reasons: First, to show you what can happen when we demonstrate our passion and our commitment to an issue. Secondly, to give you tools to use when you experience negative media coverage. Lastly, to make you aware that similar situations take place in retailing on a rather regular basis. The bad part is that the retailer is always the one that takes the heat.

The motivation for this article comes from the fact that I just spent last weekend working for Smart Tan, a network/trade association for the indoor tanning industry. This organization represents over 6000 tanning salons across America. They are also some of the nicest people I've ever worked with. Over the weekend I listened to one doctor after another and all different types of experts who rebutted the research that has caused this industry so much trouble.

Before anyone has any thoughts or opinions about this issue or you just know that tanning is bad for you, just ask yourself where am I getting my information from? So many times we read a headline and think were experts. We are living in the age of sound bites.

My perspective is different because my mother had a terrible case of psoriasis and was part of a research study done at Massachusetts General Hospital over 35 years ago that used state-of-the-art equipment which helped her keep her psoriasis under control. That state-of-the-art equipment became the birth of the indoor tanning industry. So I have never looked at this industry as anything that was bad in anyway.

So what do you do when you're in a situation where a product that you are carrying receives bad press? The first place you go is to your trade association to find out how to handle the situation you're in. The Smart Tan Network has done a wonderful job of helping the members with the necessary information to combat any negative articles, reports, and even concerns that their customers might ask. The reason why I titled this article, The Passion of Commitment, is because I experienced the passion that the leadership demonstrated over this topic. Then I saw the total commitment that this group of independent businesses people had to save their industry.

The tools that you use if you are ever placed in a situation such as this, which would be described as a product liability event, you cannot to hide from it. Understand that the media thrives on controversy so be careful about any statements you make. We live in very sensitive times. It doesn't take much to say the wrong words that you'll live to regret, be careful. We must also remember that what gets us into trouble is not the action but the cover-up. I realize that there were many people who have strong opinions in relationship to the David Letterman, but the majority of people agree that the way he handled his situation was the right way to do it. Remember, President Nixon was forced to resign, not because of what took place at Watergate but because the cover-up that followed.

So, if you should ever have happen to you what happened to the tanning industry, you must combat accusations or reports with facts and truths as the Smart Tan Network has done. Hopefully, this will never happen to you but it's something to think about and be aware that it's happened before and there are the right and wrong ways to handle it. When JetBlue left passengers on a plane for six hours and took a lot of heat in the press, they addressed the situation and created a passenger's Bill of Rights so this would never happen again. They turned lemons into lemonade. Just something we all need to think about and be aware of the consequences. Have a great week.

Signs Sell… Harnessing the Power of Your Silent Salespeople

As many of you are aware I am unbelievably passionate about signage and the effects that is has on retail sales. This weekend I finally finished all of the editing required for my newest book called Signs Sell, Harnessing the Power of your Silent Salespeople. Although I had another article that I was working on, I decided to share Chapter 3 from my book that will be available for sale on October 15. This book has over 100 pictures and graphics and it is in full color. Unfortunately, this article doesn’t have any of the pictures but this is the critical chapter of the book. Enjoy!

I’m often asked if there’s a set of rules or guidelines for creating the perfect sign. What are the essential elements a sign has to have to be effective? What criteria can be used to differentiate a good sign from a bad one?

In attempting to answer these questions, I’ve developed The I.S.E.E.E. Formula.

The I.S.E.E.E. Formula spells out the five functions a sign can have. To be successful, a sign must fulfill one of these functions. For the ultimate, you’ll want to have a sign that combines two, three, or even all five functions.

Additionally, you need a balance of signs within your store. So many times I hear retailers say, “But I have lots of signs in my store, and they’re not doing anything for me.” Yet when I look at their stores, all they have are sell signs. That’s only one of the five types — by forgoing the other four types, not only are these retailers selling themselves short, they’re depriving their customers of a great shopping experience.

What are the five functions and types of signs? Let’s take a look:

The I.S.E.E.E. Formula

For maximum effect, a retailer needs signs that:

Every one of these categories serves a specific purpose, and communicates a different type of message to the customer. Let’s look at each one individually:

I is for Inform

Signs can inform the public. They can identify sale merchandise, pinpoint new items, and provide direction to the bathroom. The majority of signs should be informational: spelling out product benefits and the difference between lookalike merchandise is one way to help customers; detailing store policies, hours of operation, and payment options is another.

S is for Sell

Sell signs are far and away the signs you’re most familiar with. If you have only a handful of signs in your store, I’d bet dollars to donuts that they’re sale signs.

These are the signs that act to make the sale on your behalf. They pique interest, capture the imagination, and persuade the customer to buy. This can be done by using sale words:

• New
• Exciting
• Must Have
• Hot
• Two for One
• Did You See This?
• You’ll Also Need…

E is for Educate

The best signs can educate the customer, telling them something about the merchandise you’re offering. You can highlight benefits this way — for example, an apparel retailer could explain that the way a given fabric is woven means that any clothes made out of that fabric would never wrinkle and would be easy to care for.

Another way to use this technique is to explain how a product can be used. This is done very well at stores like Home Depot and Lowe’s, where the customers may be familiar with a circular saw on the conceptual level but have less than no idea how to use one in real life. Basic information is very effective at reducing the intimidation factor an uncertain customer faces.

Additionally, educational signs can be very effective when it details how the products you’re offering were made. One of the best examples I’ve ever seen of this was at a glass blower’s shop. To enter this shop, you literally walked through the artists’ studios, where the artisans worked behind protective glass windows.

When you reached the shops, many of the items were signed with photos of the artists who made the piece — often the same individuals you’d seen at work while making your way to the shop. Each sign carried a story — a small piece might be the work of an apprentice, and carry a small price tag. Another, more sophisticated perhaps, carried a sign revealing it was the work of the same artist, with some more experience under their belt. Other signs talked about the techniques used to make a certain item. It was all very illuminating — and allowed the customer to feel like they ‘knew’ the artists and a little about how they created their work. This was integral in developing a relationship with the public — and driving the strong sales this glass blower enjoyed.

E is for Entertain

Retailing has changed fundamentally. Nobody needs to go shopping anymore — anything and everything in the world can be found online. Going into a store is now just as much about the experience as it is about actually purchasing an item: shoppers want to be entertained.

No longer is it enough for a retailer to have a clean, well-lit store and offer good merchandise at good prices. You have to do more. You have to offer an entertaining, engaging, fun time to your customers.

One way to offer that fun time is to make your customers laugh. Laughter is the great social lubricant: it breaks down barriers and makes people feel good. However, you can’t hire a full time comedian to stand in the store telling jokes, and clowns scare off small children — and their mothers! How can you get your customers laughing? That’s where signage comes in, offering a way to be entertaining. Consider these examples:

• If at first you don’t succeed, skydiving is not for you! (In a sporting goods store)
• No appointment necessary — we hear you coming! (A muffler shop)
• Push! Push! Push! (On the door at the obstetricians)
• We really know our stuff! (A taxidermy studio)
• Children left unattended with be given candy, a double shot of espresso, and a puppy. (At a small café)

As you can see, the best humorous signs are related in some way to the products and services the business offers. Change humorous signs often — half the fun is from customers coming in to see what you’re saying NOW.

E is for Emotionalize

OK, emotionalize is not a word — but it should be! When I say emotionalize, I really mean “Forge an emotional connection with the customer” – but that would change the formula to ISEEF, which just doesn’t work for me.

So, anyway, emotionalize — using signs to pull at the heartstrings and get customers to feel — hope, love, optimistic, hungry, nostalgic — whatever emotional response you need them to feel in order to buy your merchandise.

The easiest, most fool proof way to create an emotional connection with your customer is with a great picture, and the most emotionally powerful pictures are often of children and dogs. Whenever you can include one or the other in your signage, you should consider it.

Mind you, this does have to be appropriate — it’s a bit of a stretch to use small golden retrievers in your advertising if you sell plumbing fixtures, for example!

There you go: the I.S.E.E.E. formula, spelled out in detail. Use any one of these elements in your signage, and see your sales go up. When you really want to give a product a real boost — a 300 – 400% sales increase, combine the elements of the I.S.E.E.E. formula for a super powerhouse of a sign.

Just remember: I.S.E.E.E.: Inform – Sell – Educate – Entertain – Emotionalize.

Three Little Lessons for Retailers to Think About

I think like a retailer. I act like a retailer even though I haven’t been an active retailer for almost 12 years. As an active retailer, and one of the reason for my success, was the philosophy that I always wanted to put 15 pounds in the 10 pound bag. In other words, give the customer more than they ever expected. From my point of view this is what created the best word of mouth advertising.

However, sometimes you could kill yourself with a customer and they didn’t appreciate all that you were doing for them. I would try to give them extra bonuses or coupons just to sign up for my mailing list but they wanted nothing to do with it. I did a lot of 2-fers. Buy one at regular price and the second one is half price. However when I explained to a customer that it was in their benefit to buy another item, I was bluntly told that all they wanted was the one item. I even had a customer refuse my offer to help carry their purchases to their car. It was as if I was treating her like an invalid or something and I was just trying to be nice.

We can’t please everyone as much as we try. Bill Cosby had a great quote about that. He said “I’m not sure what the path to success is but the path to failure is trying to please everyone.” Does that mean you shouldn’t give the extra effort? NO! It just means that every customer is different and we can’t sell the world or please everyone.

The reason I bring this up is because when the economy slows down people get cranky.

They are cranky for lots of different reasons. When housing was booming we all felt rich because of the equity we had in our homes. When home values decline it’s upsetting. Now is the time to show more compassion than ever before.  We have to be more sensitive to customers’ emotions than ever before. Sometimes 15 pounds in a 10 pound bag doesn’t work because we sometimes confuse the customer.

This is not the time to confuse the customer with too many choices. It sometimes backfires on us.  As retailers we love to brag about our inventory. We also can’t have the inventories we once had either. Let’s start learning how to sell what we have.

The second lesson I learned this week is about the people we employ. When things get more difficult we start to ask some of our employees to wear multiple hats. That’s the right thing to do but be aware that just because they are good at one thing doesn’t mean they are good at everything. We can turn a strong employee into a weak one by giving them a job they can’t do well. Just be aware of it and be careful.

One last thing, I was at the Nashville airport and saw a great store with some really different merchandise and some real eye catching displays. As I walked into the store the first thing I heard from an employee was that there were markdowns in the back of the store.

I didn’t come into the store because of the markdowns. I came into the store because they had some different merchandise. First sell me on what I came into the store for, and then you can suggest a markdown.

These three little points can make the difference between success and failure. Retail is detail, isn’t it?