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”?      

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!

A Lesson From The Dentist… There Is A Lot to Learn Here

The other day I had an appointment with my dentist because I broke a tooth and needed to have a new veneer made.  Because of the moves I have made in the last few years, I have only been with this dentist for two years. However, of the four different dentists I have used over the last 35 years, my current dentist and his company is the best, most professional dental firm I have ever encountered. There are actually 3 or 4 dentists, at least 6 hygienists, and lots of assistants who are just buzzing around all day.

There are 3 wows about this practice:

1. Appointment times are always honored and I have never had to wait more than 5 minutes from arriving.
2. Your first appointment has a 30-minute sit down face-to-face meeting so that the dentist can better understand the whole patient. It’s a nice touch but isn’t that what wows are?
3. My dentist is a nice, very personable, wonderful man, a great employer, and also a brilliant man without being obnoxious about his intelligence.

So what could a gift shop or a garden center learn from my dentist? LOTS.  

See if this sounds familiar:

I will refer to my Dentist for the purpose of this article as Dr. T. We were discussing the phenomena of the effect that Extreme Makeover TV Show had on the dental industry. On the show they used a method that was called the Davinci Process for capping or putting veneers on teeth to create beautiful white teeth. Dental labs and dentists across the country were getting lots of inquiries for this process. It got so big that the process developed by a dental Lab in LA actually developed a license/franchise agreement with the labs and dentists around the world. (Great PR works…That’s the first lesson to learn.)    

It is a very good process but most dentists and labs can do similar things.  That’s what started a most interesting discussion.  Dr T then made the statement, “Doesn’t it kill you when a patient (a customer in our world) tells you that they went someplace else to have work done and it’s work you do?” In his case, this meant someone going to another dentist for cosmetic dentistry.  He said that’s what he does and besides he hated the term cosmetic dentistry.  

My response was, “What do you expect? How are your patients supposed to know what you do?” He didn’t have a sign, a testimonial, a before and after picture other than one created by dentists for dentists. He didn’t even have a simple brochure describing his services. He responded that he never advertised and everything was done via word of mouth advertising.  Now understand, this is a very bright man but something doesn’t seem right.  He is dependent on his patients to tell his story about an extreme makeover of someone’s smile. If he is busy now, I wonder how busy he could be with the proper marketing?

So then I asked the biggie. “How does your website handle your services?”  His response was “not great because I even have a problem navigating the site.” Now that’s a bad sign-- if you can’t navigate it, how is your reader going to do it? And speaking of signs, I suggested that he should have signs on the ceiling right above the chair. Is there a more captive audience than a patient lying down in a dentist’s chair with nothing else to do but read a sign?

I explained that today we can’t just depend on word of mouth advertising like we used to because the natural way people look for new services or goods is NOT by asking a friend. It is by “Googling it”. Plus customers today are bolder about negotiating or at least not afraid to ask the price and shop dental services more than ever before. So I said when he finished my tooth repair, I would take a look at his website.  

His website was absolutely beautiful. The graphics were first class. BUT that always scares me because if they look pretty, somehow they aren’t always functional. Plus they just never seem to score high on web results testing.  

Dr T showed me the services section and I saw before and after shots. However, there was no testimonial or endorsement or any type of emotional connection. It was all insider shop talk void of the people and personalities.

There were no videos on the site at all. There weren’t any video endorsements or dental tips by the dentists. Even a video on what to expect if you have Cosmetic Dentistry. I then ran the website through websitegrader.com. His website’s score was 24 out of a 100.  That was terrible. This site cost him thousands of dollars to create. It was written on a graduate school level but that’s not who his clients are. The before and after shots lacked any type of touchy feely feeling and certainly sounded like insider talk about the various procedures. The site was just too stuffy and didn’t serve the needs of his community.  

I then graded the website developer that was charging these dentists huge fees. Their score was 84%. Although this is good, people who do this for a living should have scores of 95% or better.  

My last comment was that the site was all about the dental practice. NOT HIS PATIENTS or the benefit he brought to his patients. He didn’t offer anything to his patients, no newsletter, no blog, no ask the dentist section, no videos to make the flow of information easier, no CALL TO ACTION BOXES TO MAKE IT EASIER TO DOWNLOAD ANY SPECIAL REPORTS, tips or anything else.  

The goal TODAY: TRY TO POSITION OURSELVES AS THE EXPERT. Dr. T already has that level of professionalism but he is throwing it all away by not reinforcing it. People pay extra for expertise which also means he should create his own brand for his process for capping teeth. Call it the Michelangelo Method or better yet, he could use his own name in the process.  

The bottom-line is that it is about the customer. Not us. How can we serve them better? How can we communicate what we do and how it benefits the customer? What can we do for them and how are we teaching them today? Now act on what you have learned. I know Dr. T is going to.

This is an alternative ending:

Last point and this is the tough one. As you can plainly tell from my tone I really like Dr T. I would recommend him in a second. I am as loyal a customer/patient as you can get. BUT 5 weeks ago my wife needed a crown and we were still in Florida.  She went to a dentist that we had no long-term relationship with. He told her she needed a new crown and the price would be X. She then called Dr. T office to have it down there. After making the appointment she asked how much would it cost? She was shocked when she received the estimate which was $500 less. Guess where she had the work done!

We still have to price competitively.