Posted on Tue, Oct 28, 2008
The world economy is in a tizzy. I don’t know if tizzy is even the right word. Tail spin might be better but complete surprise would probably be the unanimous feeling. No one ever anticipated a world wide financial collapse. BUT despite all of the negative press, the world is still turning and businesses are still doing business.
Last night I took my son in law and my grandchildren out to a new Japanese Steak House – the kind where they prepare the food in front of you. I wish someone would have told all the people who jammed the restaurant (and it was a big place) that we just had a financial melt down. I also wish someone had told the ski shop that was having their pre-season sale about a recession that’s coming because you couldn’t get near the parking lot.
It’s too bad no one told my friend, a real estate broker, that the world is in a crisis because she is finishing one of her best months in almost 3 years. By the way, no one told the children’s shop and the gift store owners that they shouldn’t have such big inventories… but of course they were pretty busy.
Lastly, what is wrong with Barron’s, the prestigious financial publication, whose headline on October 20th was “The Economy May Be Better Than You Think”? That’s a pleasant surprise but when you go to the article the headline gets better. It says, “Sorry Chicken Little”. Let’s get something straight. There is business out there to had and the sharp retailers are going to see sales increases that will become unprecedented?
Why?
Larger stores have all the classy high priced economists who are going to advise the buyers to cut back. Guess what? Their business will fall off. That’s sort of a self-fulfilling prophecy. Then the economist will take credit for their accurate predictions. Then we will see stores go out of business and they will blame the economy. Sorry, I will NOT buy it. Poor management puts stores out of business. Recessions reward the flexible and nimble. Last week on my weekly Question and Answer session on the Retailers Advantage, a store owner gave us the best line that all of us need to say. He said, “We choose to NOT participate in the recession”. Right on!
OK, so what do we do? It’s back to the basics. It’s really pretty simple.
- We need to have merchandise that will make a customer want to buy. That generally falls in to two categories: merchandise that wows the customer with that feeling I have to have it! Yes! the buyer did their job. Great merchandise and the HOT item are the trump card to any recession. Don’t ever forget it.
The other type of merchandise also creates a buying frenzy and that’s the merchandise that is such a great buy. You know that great buy we just can’t live without. I was at the airport in Louisville and I walked past the PGA store. Right in front they had a table with some terrific buys. I was shocked when I saw the price of the sweater of only $9.99. I quickly tried it on and it was mine. Of course the only employee that was there suggested another sweater that was $39.99. I bought it.
Look at it like the classic bell shaped curve. It’s the merchandise at the ends of the curve that people talk about. There are some great buys available today because vendors are more willing to negotiate due to the fear factor. Trust me, there will be some very shrewd vendors as well who aren’t panicking.
- We need to have promotions, do window displays, have contests, and present our merchandise that people TALK ABOUT! Businesses are built on word of mouth advertising, but if you want word of mouth advertising, give people something to talk about. People talk about what’s different–what makes your business special, unusual, or a skill that you do that no one else does? Are you the first, the only, the best at something? People talk about that. You don’t have to give the store away to bring people into the store. The key to having your existing customer come back rests with the Art of The Friendly Reminder. I have seen stores have huge increases just by requiring their employees to call customers on the phone. The key is to just leave a message on their answering machine. That is putting a different twist to marketing.
The last basic point I want to share is that it is our job to maximize every customer who walks through the front door. That means we work as hard as possible to sell every customer. That’s impossible I know but if we change our attitude that everyone who walks through your front door has the potential to buy, it makes it easier to sell more. However, just selling one item to one customer is NOT good enough. We make money when we are selling multiple items to the same customer. That only occurs when someone suggests another item. It does not take place when someone says to a customer, “Is that it for today?” or “Did you find everything you were looking for?” or ” Is there anything else you need” Those terms have never sold a thing.
I believe the glass is half full. I believe we are about to observe an unprecedented period of growth. It will take a while to get started but it will. When Warren Buffet says to buy. I BELIEVE HIM. After all, he owns some of the best retailers in the country. Let’s not forget that he loves the retail business and knows how to make it work.
Just remember, even on the darkest of nights we can still see stars. Who will be the next retail star that is reading this column? Is it YOU?
Posted on Tue, Oct 21, 2008
It was a dark, cold, rainy night and we had been traveling for over 2 hours on the country roads of Iowa. I had finished my evening presentation later than we had expected and didn’t think that the rain would slow us down as much as it did. We were going to be staying at a Bed and Breakfast called The Weaver House in Bloomfield, IA. This house was built in 1876 and was set way back from road. The driveway to the house was probably paved about 50 years ago and wasn’t much better than a dirt road and it had big chucks on cement that had deteriorate over the years.
During the day in bright sun light, the Weaver House was an intimidating structure. But on a cold rainy night in late October, with the house decorated for Halloween with witches, goblins, and gourds that looked like snakes on the front porch, it was flat out scary. I was sure that either the Adams Family or Steven King lived there. Of course you know when we opened the door it made that eerie squealing sound. It was a little scary (OK I was a lot scared ). It looked like a haunted mansion and I don’t know about you, but I have never spent a night in a Haunted Mansion before.
Then, in almost an instant, my opinion of the Weaver House changed. Was the inside less scary? NO! But the Weaver House had a secret weapon. It was the owner, Joyce Gaston. She was a 60ish, retired, master degreed, school teacher. Joyce has a zest for living, a brilliant mind, is extremely perceptive and very opinionated (but in a good way).
She was captivating when she would tell a story and she also had a quest for learning that I admire in a person. The bottom line is that she made us forget that we were staying in a haunted house, which she did confirm. I guess old General Weaver, who had died 100 years, makes special guest appearances when you least expect him.
I see this phenomenon happen again and again, in store after store. One person makes the difference and is truly the trump card, the Dragon Slayer, or call it what you like. It is the power of one that can build a business with just their presence and attitude.
And this is the perfect segue to BELK, the second part of this article.
I went shopping at Belk Department Store for the first time ever. One opened up near me and I got the opportunity to shop there this past weekend. It was a wonderful store, great merchandise, excellent values, and a Manager named Larry.
Larry made me a customer for life. Not only for what he did but because of the way he did it.
Let me explain: I walked into the store and saw that the store was having a Red Dot Sale where you could take off an additional 40% any marked down item. Considering that they carry some of my favorite lines, looks, and understanding because of my travel schedule and living in Florida for the winter, I can buy almost any season, this was a great deal.
That’s what made the additional 40% off a sensational value to me. I shopped the store and my arms were loaded with merchandise to try on. Then, as I walked to the fitting room area, I saw this store employee who was on a mission, much like the Mad Hatter from “Alice in Wonderland”. Her assignment was to take down all the 40% off signs and replace them with 25% off signs. I spoke to the Mad Hatter and told her that I was selecting these items because of the 40% off. Her response was that they had extended the sale time by 45 minutes and announcements had been made to end it. But I never heard any announcements. She then said I should have gotten to the store earlier. She didn’t say that meanly or with an attitude but it was the wrong thing to say. However, just as I was ready to put Belk into a “typical department store “category, I heard the voice of Larry.
I never asked him what his last name was and I am still not sure of his position. I am assuming he was the store manager or at least next in line to become a general because he was just that good.
When Larry overheard the conversation I was having with the Mad Hatter, he quietly took over the situation . He didn’t put anybody down and said that he would personally ring up my purchases. Apparently the cash registers must have been pre-programmed to only take off 25% after a certain time. He wrote up every item by hand using a calculator. What really impressed me was something he did that is right out of the pages of the book , Good To Great.
He did not take any credit for his actions. Instead he told me about the owners / family at Belk and how they want the customer to be treated. Larry was a real pro. He knew his stuff; he averted 4 potential problems.
Me and my customer experience- They might have lost me. The Mad Hatter could have been a problem employee but Larry handled her perfectly. He helped the cashier/department head not only with my sale but with other transaction as well. Lastly, he diffused another potential problem when another customer came to check out and the register only took off 25%. She was ready to walk out but he saved that customer as well.
It’s time for all of us to realize that one person can make a difference. One person can set a mood, raise the bar, improve everyone’s attitude and of course make the register ring. Now the questions I ask are: Do you employ someone like that? How did you train or nurture them? Is that person you?
By the way, thanks Larry. You made me feel important and special the way a good specialty store makes you feel. Today we call it the customer experience but to me it all came down to how they made me feel and I feel GREAT!
Posted on Tue, Oct 14, 2008
I, like many people, lost money on paper with the fall of Wall Street over the last two weeks. My broker and my son, who is a well respected trader who works for Fidelity Investments, have assured me that I must stick to the plan of dollar cost averaging that was established during a less volatile time period.
That all sounds good, but when you are seeing years of savings drift away day after day, it does take its toll. So what do I do? I do the thing any strong American Man would do. I decided to whine. Not just whine, I complained, I cried, I blamed the Republicans, then the Democrats, then the government, then the thieves on Wall Street. I became a whining complaining fool that no one wanted to be around.
Then I FINALLY met my match with one of my oldest 40+ year friends who put the world back in perspective for me. My friend is a single mom who raised her son working only part time due to medical issues at a University in Cleveland, OH.
After listening to me whine and rant for a respectable time period she finally said, “Are you done?” Now Maxene is a soft spoken woman who is painfully honest and she calls it like she sees it. If you should cross the line of reason, her soft spoken nature turns into an attacking tiger. Well, you guessed it. I got the attacking tiger and it wasn’t Tony. She slapped me on the side of the head and gave me a dose of reality.
I don’t have space to share the gory details and I was also embarrassed that I needed to hear what she told me. I suppose the best way to sum it up was the reference she made to the old story of the person who complained that she didn’t have any shoes until she saw the person without a foot.
Now that was certainly as graphic as I needed to curl up in a ball and feel totally embarrassed by my behavior. But then she proceeded to filet me like a master chef with a brand new Ginza Knife. Her weapon was a simple poignant story that was not a business example but an interpersonal (you know those touchy feely kind of stories) that gave me one of those Eureka Moments that left my bottom jaw wide open, sort of like saying, “I should have had a V8.”
It was the story of a couple that she had been friendly with for a long time that were going through some difficult times in their relationship. (BTW my friend should have been an analyst.) She explained that the two people really loved each other but they were getting caught up in protocol, procedures, or the pecking order. Maxene listened to both of them until she finally quoted me. She told them, “Don’t worry about the mule going blind, just load the wagon.” (That is my all time favorite quote because it applies to so many business applications and issues with employees.) She flattered me by using my material but I just couldn’t understand the application here.
Now I must admit that really frustrated her and actually she started to lose it with me when she said, “Don’t you understand what your own quote means?” I didn’t shout back because she was trying to help me but I was flat footed and didn’t have a clue what she meant.
I said that the quote means that people are always worrying about things that might never happen. For example, I don’t want to take the car out because it might rain. Or I wouldn’t do that because someone might not like it. Or my favorite–Don’t schedule a certain person because she might get sick.
Then she challenged me when she said I was missing the beauty of the whole quote by interpreting it in a very narrow-minded way referencing it only to starting a project. It applies to anything that distracts us from our goal or path. She said her friends had developed a Paralysis from Analysis. They had gotten bogged down with who should do what and when they should do it as opposed to just living their lives. They were worrying about the mule going blind. They stopped talking about how something should or shouldn’t be done and they just did it. (Thanks Nike!)
Then I got the rest of my lecture that turned the light switch on for me. She politely complimented me on all of my business successes. Then came the dagger when she said that I hadn’t built all of my businesses over the years by whining, complaining, or blaming other people. I had done it myself! I wasn’t worrying if the mule was going to go blind, I had just loaded the wagon.
It not only made perfect sense, but it was such a freeing feeling knowing what I had to do and not to do. I swear my blood pressure dropped about 20 points. Of course I felt more than a little embarrassed. No, actually I felt like a big jerk. But sometimes we do need people around us who aren’t afraid to tell us the things we need to hear. Focus on what you can control. When you have a friend who’s not afraid to slap you on the side of the head and use your own words to make a point, appreciate them. They are your most powerful and humbling asset because they are the only people who can point out the best solutions that are right under our noses. And don’t forget: just load the wagon!
Posted on Tue, Oct 07, 2008
I received an interesting comments about one of my articles that was reprinted in the Rochester NH, Main Street Program Newsletter. One of my most basic beliefs is that Specialty Stores should be special. Duh! What a concept. The specialty store should also sell special merchandise. (I bet that was another revelation.) I also believe that basic merchandise is the category of merchandise that discount stores and online retailers have targeted as their market. That is why over the years so many successful retailers have been forced (by their customers) to trade up and become more of a specialist within certain markets.
Ask any retailer that has been opened more that 25 years and they will agree with that statement. Having said that, I had come to the belief that “basics” have almost become a bad word for retailers, because of the pricing pressures and an independent’s inability to inventory the stock required for many of the “basic categories” of merchandise.
I then interpreted what I said into a simple battle cry, “Sell the wants, not the needs.” Just because we need something doesn’t mean we are going to jump through hoops to buy it from the specialty retailer, especially when the selections are bigger and cheaper in the big boxes and with many online merchants. So when someone wrote that I was wrong and we should only be selling what people need, I questioned if I was trying to do the wrong things to my customers.
So I compiled a list of things we don’t need at all and these businesses would be much better served if in fact they didn’t focus on wants and shifted over to a needs based retailing.
The first business that should definitely eliminate the want aspect is Las Vegas and all of those casinos. NO ONE NEEDS TO GAMBLE, that is just a big want. Not to mention those cocktail waitresses that are half undressed pushing cocktails. Put long sleeves and pants on them. We don’t need that kind of stimulation (ESPECIALLY at my age.) Convert those gambling halls into places of worship because we need to live a more religious life.
Now tell me honestly does anyone need a new painting for their living room or a nick nack in their kitchen. Who needs pizza? No one! What you need is a good home cooked, well balanced meal. For that matter, shut down MacDonald’s too. NO ONE NEEDS to eat that crap.
While we are getting rid of the wants, lets shut down all of the bars as well. No one needs the evils of alcohol. What about dry cleaner? Who needs them. Don’t be so lazy and do your own.
Yes, I could go on and on and I AM NOT really serious about my comments. I am just trying to make a point. I am also not upset with the person who wrote the comments of disagreement. Actually I appreciated those comments because it makes me think.
So what are the lessons we can learn from this? Simple, Sell the Wants. I don’t think there is one gift store owner that wouldn’t love another Beanie Baby phenomenon. Margins are much higher in the “Want” categories. These are the areas where we can make money.
There is another lesson to we can all learn from this. Some disagreements and controversy are very good. They keep us thinking and remaining responsive to the people we employ and the customers that fuel our business. Now here comes the big ending with the clever play on words:
Remember, especially in times like these, that we “need” the “wants” to move our business where we want it to be.
Have a great week!
