Tips for the New Normal

Did you ever have a moment where you felt so good about yourself because of something you accomplished or completed? Usually, feelings like that are associated with graduation or a promotion. I get that euphoric feeling at least once a year when I host the RAMAES Awards, which is Retailers Association of Massachusetts Awards of Excellence.  I started this program 12 years ago and last Thursday we had the 11th Awards Luncheon.

We have given 74 awards over that time period and each retailer that has won has a special story to tell and a lesson to learn. Let me tell you about some of the winners. This year one of the best lighting stores in America, Lucia Lighting of Lynn, Massachusetts shared a quote that defines her business. Lucy said, “Lighting is jewelry for the home.” WOW. Six simple words that define a business and industry. Then she went on to share some of the questions she asks a customer before she suggests anything. She asks the customer to describe a day in their life. Then asks the customer to define their lifestyle and what what’s important to them.  Sure every store should do that, but how many do?  They sell lighting because it enhances the home and the customer’s lifestyle, NOT because it’s on sale. Maybe that’s why 75% of her business comes from interior decorators.

Then we honored Debbie Stark, from Debbie’s Gourmet Health Food. This store has dedicated its existence to the health of the community. That’s why they were such an obvious choice for The Community Service Award. The line between community service, servicing the community, and running a profitable business comes together in perfect harmony here. This store is bursting with tips and helpful hints to make their customer healthier and events that are centered around the well-being of their community or not just for financial gain.

As much as I want to write more about the winners and will probably do so in next week’s article, I must share some insights from Tracy Mullin who was the keynote speaker at the RAMAE Awards. Ms. Mullin is the President of the National Retail Federation and she delivered some powerful remarks about the current condition of retail. The following are the ten key points of her observations and predictions on the state of retailing.

1. The consumer is starting to “Hunker Down” which is the same as Cocooning.  It means because of the uncertainty of the financial markets, people are staying closer to home and not spend like they once did. Just this morning on the news in Boston, the local ski areas reported record sales for season passes. Too bad for Vail or Breckenridge – skiers are staying closer to home this year.

2. It’s cool to be cheap. Just because someone has a lot of money, it’s become cool to negotiate. Think of Donald Trump at his wedding. He negotiated his wife’s dress.

3. Customers are researching and sometimes know more about the products we sell than we do.

4. There is a trend toward more sophisticated business intelligence software. Computer software is going to become better retailers than we are.

5. E-commerce is still strong but we are looking at increases of only 10% to 12%. Increases like that in times like this are remarkable. If you aren’t into it, jump on now.

6. T.L.C.  Customers are willing to pay for the pampering. The population is getting older and these services are appreciated.

7. Free shipping has become the new standard.

8. The Electronic Wallet will finally live up to its potential. We will be able to do everything from our cell phone. Are you prepared for that?

9. There will be a rise of the Social Networks and finally a model to make it a business successful.

10. We are creating the New Normal.

The last point says it all. What once was, was. There is a new normal that we have to get used to. The world is NOT going back to the way things used to be.  Let’s just accept it.

Readers’ Responses

WOW! I have to be careful what I ask for. I cannot believe the response I got on this challenge. I PROMISE we will do things like this once a month.  The responses came from Australia, New Zealand, The Philippines, The UK, Canada and just about every state in the union except Alaska. (Of course, that’s also the one state I have never spoken in either. I don’t understand it—I like Gov. Palin.)

The response was almost universal which was to give the customer the $7.99 ball marker. It isn’t worth the hassle and look at it as a marketing opportunity. There were 2 questions that kept on coming up. First was how much was the jacket I bought? It was $109.98 so it wasn’t a cheap windbreaker. Second, was why a ball marker was so expensive? It was magnetic and clipped on a hat.

As for the responses, I have listed 15. Instead of picking the winner myself, I brought my family together and we selected the response from Philip Barcellona because it was the only one that suggested sending a note. Congratulations Philip, your book is on the way!

The Winner:

In that moment, I would have realized our error. Firstly, I would have apologized for creating any confusion, and assure the customer what steps would be taken to correct the situation with proper signage. I would politely point out the freebies and then I would make a “gift” of one of the metal tees anyway……again with apologies for any misunderstanding………and emphasizing how much we appreciate our customer and his business. In addition, I would follow-up the incident with a friendly note hoping that no embarrassment was created and if so certainly not our intention, and spelling out the steps that were taken to correct the problem. I would then have a staff meeting to use the event as a teaching tool.
Philip Barcellona, Nyack

I probably would have laughed and said,” well sir the plastic ones are for stealing, the fancy new metal ones we have to charge you for, but aren’t they beautiful? They are only “7.99? ”
Melanie Boudar, Kailu, HI

I would say, “You want to “steal” it? First, let me throw the ball against the wall and if you can catch it after one bounce, you can have it.” And then when they looked at me like I was crazy I would say, “I am just kidding. Of course you can have it for free- we forgot to mark those and you deserve to have one! Enjoy it!” I like to make light of uncomfortable situations!
Rebecca, Louisville

In this instance, we would use humor to put that customer at ease. We would essentially say, “Oops, we made a boo boo. Those SHOULD have a sign on them. But we’ll go one better for you. Here are TWO ball markers (the plastic ones) just for you.” After that customer left the store, the very next thing we would do would be to place those markers WITH a sign in another location and put the plastic ones – front and center on the counter. How many times can you make the same mistake? Ooops!
Angela Veeck, Riverhead, NY

First If I was present and overheard the situation I would confront you the customer and apologize for the mis understanding and offer you a handful of the plastic ones that you have had in the past and a 20% off gift card on any merchandise in the store at your next visit. I would then once you had left talked to all of the employees about what just happened and how it could have easily been avoided and explain the cost involved to redeem the integrity of the store brand by offering the discount. We should not have to offer spur of the moment discounts if all of our actions are appropriate. This affects the bottom line but what more important is if not caught and handled with apologies a lost customer doesn’t just damage it causes critical damage. I would then take the two employees in private and have a simple chat with them and explain how that could have been avoided to reinforce it with them especially. I would also ask them to help out and take the time to go around the store and make notes on what needs to be tagged and tag appropriately so we can limit issues like this in the future. I could have just gave you the ball mark but you may be like me and still feel a little guilty for reaching in and taking something that you thought was promotional even though now it was given to you. That is why I would give you an abundance of the free stuff you have been used to in the past. I then want you back in the store and the reason why I gave you a gift card credit for 20% you next visit. By having a meeting with the staff and actually assigning two people to signage I am wagering when you come back on you next visit you will see improvement which may make you get that warm and fuzzy again and I may never have to offer you 20% off again because you want to do business with us.
Dan Novak, Mt. Prospect

One variable you did not mention was the retail price of the jacket. No matter what, for a regular customer who just made a nice purchase, I would have given the customer the ball marker. At a $7.99 retail the cost is probably $3. or less. For the sake of argument lets say the jacket was $60 retail. A ball marker that cost $3 is a 5% gift to a regular customer. No big deal. The customer would have left happy, and the good will of the gift would bring him back for more purchases.
Sam Wainer, Moab, UT

I would have said to you, “Sir thank you so much for stopping into our store today, as you frequently do when you are in our area. We certainly do appreciate your business, and value you as our customer. Please accept my sincere apology for this misunderstanding on our part at the register. We want you to have the BEST possible shopping experience here, please accept the metal marker on us today, and thank you for bringing our error to our attention. If I can assist you in any way in the future please keep my business card on hand, and contact me at any time. Thank you again Mr. Segel, and I hope the rest of your stay in our area is an enjoyable one!”
Gina Proctor, Hammonton

“Well, you would be stealing if I weren’t giving it to you as a bonus for catching my mistake. I should have had a sign on them that says they are $7.99?
Ellen Roy, North Little Rock

Well first I would shoot both clerks and include the footage in my training video! Just kidding If I was aware of the situation as it was happening, I would walk up and introduce myself. I would then apologize to you for the lack of signage leading to the misunderstanding. At that time I would probably offer the marker for free or some other item in the store. Signage would be made immediately even if only a temporary sign If I were not present at the time but was made aware of the situation, signs would be made immediately. If I had your contact information, from either store records or found within your book, I would call if possible or send some type of apology gift…maybe a gift basket with assorted golf items and yummy goodies, along with a store gift certificate to entice you back in, Of course a sincere apology would be included. I would also have a training session (without shooting) emphasizing customer service and making sure my employees felt empowered enough to make decisions in the best interest of the customer (within reason of course).
Debra Stahmer, Surprise

Hi Rick My grandpa always told me that giving people a deal is most worthwhile when you tell them you’re giving them a deal. In this situation, I think most of your readers are going to say “I would have just given it to you!” (the ball marker, not a verbal bullet) I agree with that – it would have saved your embarrassment. I think we could take it one step further and put a price on the “free” ball markers. Now each cashier gets to make the customer feel like they made a new friend when they are able to say “oh, don’t worry about it – have a couple – I hope they end up close to the hole!” Hopefully you’ll hear a good report from the business that they were able to make good use of your book.
DW Horton, Breslau, Ontario, Canada

This is easy, Rick. First I would have apologized to you, my good customer and explained that those markers were actually 7.99 and the free ones were around here somewhere. Then I would have given you a free one of the plastic ones, and then flipped the expensive one like a coin, handed it to you and said that one is on me for not having them priced correctly. I can assure you I wouldn’t have much money in them anyway but you wouldn’t know that. The bottom line is you would have felt good about doing business here and would have definitely come back. As soon as you motored out of sight I would have moved the free markers back on the counter with a “please take one” sign and I would have put a 7.99 sign on the metal markers. Not having items priced is something that really irritates me.
Charles Villarreal, Dix

Small retail stores need to cherish each and every customer. A custom name engraved ball marker with a hand written letter of apology from the store owner would be the most appropriate thing to resolve the issue and would build a customer for life.
Jeremiah, Las Vegas

I would like to say that this kind of white lie advertising strategy about their promo is not a good example to patronize this retail store. The customer has the right to complain in Dept. of Trade & Industry about this false alarm strategy promo and this dept have an access to condemn their license to operate. They should do a big convincing and attractive signage in a proper place of product promo to see to it, the customer have an awareness to focus this kind of promotional product, even passerby customer not intended to buy have great effect or intention to come back , if this promotional product is still available. About the store staff attitude, they should have a knowledgeable and friendly explanation about the promo, or they must have to attend seminar regarding people handling skills to have a multiple skills in order to influence people from achieving their goals.
Julie, Phillippines

First, we require prices clearly marked on ALL our merchandise. If something, like that ball marker, were NOT correctly marked, then the fault is MINE, not the customer’s. Time to fall on our sword. I try to use humor to alleviate tricky situations. My guess is that I would have said something like “well, I guess I’m going to have to let you steal that one! Certainly isn’t your fault we didn’t get around to marking the basket. Here, take an extra one just for bringing this to our attention!” Our staff is empowered to make decisions on the spot. It says that right in our employee manual. It also says NEVER do or say to make any customer feel bad. When in doubt, err on the side of the customer, and management will ALWAYS back you up. When this type of situation occurs, and it has, the employee sells the merchandise to the customer without comment, and, after the customer leaves, makes the correction and reports what happened. I learned a long time ago that “bad will” spreads twice as fast as good will. That is in our employee manual too! I also remind our staff that everywhere else, other than when they are on duty in our store, they are customers. So, before saying anything, I ask them to put themselves on the other side of the counter and make sure they wouldn’t mind hearing what they are about to say. I think that heads a lot of situations off at the pass! Just my two cents. By the way, we own and operate a fairly large scrapbook and papercrafting store.
Bud Izen, Salem, OR

If I had put a basket of ball markers on the counter without a sign on it and a customer wanted one, I’d have given it to you. I’d have given you a big smile & told you to help yourself. Since you were buying a jacket, a little gift with purchase goes a long, long way. I like to think of those things as a little bit of honey. You’re happy with your jacket & gift, and I’m sure you’ll be back. And I’ve learned a valuable lesson in never putting anything out without a sign on it. Or the cashier could have said: “Oh, you caught us, we put something out without a sign! These markers are brand new, they are suppose to be the hottest thing on the block. Those fancy metal things are suppose to be $7.99 each, but because you caught us, I’ll let you have it for 50% off.” You would probably buy it, because it is a good deal and we are obviously embarrassed for not putting a sign out. Of the two situations though, I’d just go for the first one. In fact, today I ran into the same situation, I was unloading boxes from my car and a customer came over & wanted to know what I had. I told her I had finally found the most gorgeous wreaths, that I had been searching everywhere for something natural and had finally found them. I opened all the boxes & showed her what I had. She was torn between 2 fall wreaths. When her husband finally asked the price, I quoted them a price $5.00 under what I’d of sold them for if they had been in the shop. And I explained that they had caught me in the act. And that they would be marked up higher if they chose to come back, but I was willing to honor what I’d quoted them. They chose to buy the higher priced one, then at the register, I gave them an additional 10% off. They were pretty surprised & asked why? I told them to cover the tax. They loved it and I know they will be back. I manage a produce stand, and we made a good amount on the wreath. I figure I would have had to sell about 35 heads of lettuce for the same amount I made on the wreath. It’s a win-win situation. Thanks for the question. And thanks for all the newsletters you’ve sent me. I’ve kept every one.
Sarah Smith, Salina, CA

Every week I will also be giving a book to the BEST WHAT WOULD YOU SAY OR DO Scenario that will be part of the book we are all going to write together. This week’s winner goes to Penny Bolton from Murfreesboro, TN who sent in a situation that could happen to any of us and it has happened to me. I feel badly for the other entries because they were also terrific and will probably make it into the book. I will keep you in the loop. This is an ongoing challenge and I will be awarding a book every week. So please send in some more scenarios. See the Special Announcement below for more information about what I am looking for and where to send the situations/solutions.

Here’s Penny’s:

You innocently advertised in a local paper that had included in their paper a political humor column with some racist undertones. You were bombarded and hit blindsided by people that emailed you and wrote comments online saying that they were offended by the statements in the column and they were boycotting all advertisers in the paper until they took corrective actions by pulling their ads. The emails and online comments were very mean spirited toward the advertising retailer. The ads rotate and the advertiser had no idea where the ad would appear nor did she have any idea that they would include in the paper a column that was so racist and controversial.

1. Check the loyalty program to see if any of these people writing had actually spent money in the store. I checked and they hadn’t. To not reply or respond at all. Let it all die down like yesterday’s news.

2. If any of the people commenting were actual customers to call them personally and explain that I am certainly not a racist at all and I personally did not know that such a column was going to be in the paper and I do not agree with the comments in the column.

3. To pull my ad for a week or two till the controversial column is forgotten.

4. To request that the editor of the paper write an apology and a statement that the opinions of the columnist is not the opinions of the advertisers.

What Would You Do or Say If This Happened to You?

I was shopping at one of my favorite stores. It’s a small independently owned golf shop that  I always stop in whenever I am in the area. The people are friendly and although their inventory is limited, they always seem to have what I am looking for. I picked out a new jacket (wind breaker) that they were just taking out of the box. (Isn’t it always special when buy something as it just arrives?)  I am at the cash counter and I am in the process of purchasing the jacket when I noticed a small basket of ball markers. This shop always gives away golf tees and ball markers at the counter.

I then said, “I’m going to steal one of these new ball markers.” When I said that it was as if the world stopped turning and the friendly people turned on me. The cashier blurted out, ” Those aren’t free–they are $7.99 each.” The free ones are plastic, these are metal. Then the person that was actually wrapping up my jacket sale said, “Would you like me to put it on your card?” He was a little nicer than the cashier but the attitude had certainly changed. I felt like a criminal.

Understand that this ball marker had the trade mark of the golf shop on it. So I assumed it was a form of advertising as were the other free products they gave away. Talk about feeling embarrassed. Yes, I did buy the $7.99 ball marker.

Then the person who was waiting on me says that happens every day here. Now that’s stupid.  How many other people/customers have they embarrassed? I’m so embarrassed that I am not looking forward to going back to the shop again – although I probably will but just not right away.
Then I put on my “retail guru hat” and asked why there was no sign on the basket? The response was, “We just didn’t get around to it and besides most people know they have to pay for metal magnetic ball markers.” Now that gave me a warm fuzzy. I must be part of the dumb group. Now I don’t want to come back if these two are working. I then tried to explain more about the power of signage and pointed out some other sections of the store where signs could enhance the shopping experience. It was like talking to a brick wall. They really didn’t know who I was or what I did so their response was probably appropriate.

So the next day I dropped off a copy of the brand new Retail Business Kit for Dummies, 2nd Edition that was just released. It has a great chapter on signage. Who knows if they will change.  All I know is this is the type of business that will come to me and ask the question:  Why are my sales off and what do I have to do to get some of my older customers back? They have NO clue that incidents can start to snow ball out of proportion and become a slow spreading cancer.

Here is the challenge: Let’s have a mini contest and hear from you as to how you would have handled the situation. I will publish the best ones and I will give a copy of the Retail Business Kit for Dummies, 2nd Edition to the most creative response.

For review here is the challenge: What would you do or say if you, as a store owner or manager, were confronted with the same set of variables. One rule: You can’t say it wouldn’t happen to me because I would never put any merchandise like that out with out proper signage. Just assume you didn’t for this example.

Enter the contest here

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SPECIAL ANNOUNCEMENT
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How would you all like to write a book with me? What I would like to do is create an entire series of WHAT WOULD YOU DO OR SAY IF ….

Your job is to come up with the situations and 4 possible solutions. However, if you don’t have any suggestions to solve the problem, we will ask the group for ideas to your problems/challenges. The book will be called RETAILERS: WHAT WOULD YOU DO OR SAY IF a Collection of everyday challenges and answers on how to handle them. Written by the best retailers in the world.

The model is similar to the Chicken Soup for The Soul Series. Don’t miss this opportunity. If you have any questions about exactly what I am looking for, please don’t hesitate to email me at rick@ricksegel.com for more information. It’s time for you to be the consultant and blow your own horn. This is going to be fun!

Participate in the Book here

A Simple Promotional Idea

There is a new promotional idea that is being adopted by many retailers with a great deal of success.  Here is how it works. It starts after the customer purchases something. For example, let’s  say the total of the sale is $100 which is made up from 2 items, but the amount of items is not relevant.  You, the store, gives that customer a coupon for 15% or 20% of the purchase they just made. The coupon must be used within 6 days.

So the customer who spent $100 gets a $20 Gift Card. But the card can’t be used the day of the original purchase. Some stores don’t even allow the gift card to be used for the day following the purchase which means that the customer who earns a $20 gift card on Saturday can’t spend it until either Monday or Sunday if you choose to go that way.  But the card must be redeemed   by Saturday.  Very few people want to throw away $20 worth of FREE merchandise so they find a way to get into the store.

What it means is that our customer has a compelling reason to get back to the store and they do. The return rate on these cards is over 70% according to recent studies. That is a bunch of customers who wouldn’t have come back at all.
There is another advantage here that you might be missing. Many of you are saying that this is no big deal because all you are doing is giving away 20% and you know that people will only spend the $20 they have and leave the store.

NOT SO! First of all, you are not considering that if the customer returned and only spent the $20 card you would be giving a 16.6% discount over all. Understand the % off is spread between 2 purchases not one. However, that is really a moot point because although the customer comes back only to spend the gift card, 93% of the customers who come back to the store will exceed the $20 or whatever the amount of the card is.

Let’s address two other factors. I said you can give 15% or 20%.  Which is better?  Whatever the amount that is enough to bring the customer back to the stores. That’s why some stores will have a sliding scale. 20% under $100 and 15% if it’s over $100. In other words, if the customer spent $300 and got a $45 gift card that would be sufficient to bring them back. The goal is to bring them back so they are giving you the opportunity to sell them again.

This is such a powerful tool because it helps increase shopping traffic that has been missing for some retailers. Some stores only use it for certain items and that’s fine too. But either way, it’s a winner!