Posted on Tue, Feb 26, 2008
This is a simple little story that can impact sales significantly.
A couple of weeks ago, I worked in the Finger Lakes region of New York for an Economic Development group which was working with the growing amount of wineries in the area. It was a fun job because the day before I spoke at the conference I had the difficult job of visiting 5 different wineries and sampling their best wines. (It’s a tough job but somebody has to do it.)
To let the truth be known, I am really not much of a wine drinker but I do appreciate an occasional glass and I do have a few friends who fashion themselves as true students of wine. There were some great wineries and the people were just wonderful. Lots of family businesses with a sense of pride for their businesses, their industry and their region that was just awesome.
There was one winery, Hunt Country Vineyards, (huntwines.com) in Branchport, New York that did a few things that we can all learn from. They had a display of Ice Wine. I had never heard of Ice Wine before so they explained that the making of Ice Wine was limited to only a few areas of the world and the Finger Lakes was one such a place.
This delightful employee explained to me that Ice Wine is created when the grape is allowed to freeze on the vine. Then when it is completely frozen, it is picked and pressed while still frozen. This creates a wine with an unusually high concentration of sugar, therefore making the sweetest of dessert wines or any other time you chose to drink it. The thing that makes it so unusual is that it is unique to the area and you just can’t get it anywhere. Eat your heart out Napa Valley.
That is the reason it had a premium price of $40 for a small bottle. Of course the premium price just added to the mystique. Then I tasted the wine and it was way too sweet for me but again I’m no connoisseur. Frankly, I hated the taste. But that didn’t stop me from buying a bottle and I even paid extra to have it shipped home.
I bought the story. I have since served it on three different occasions and only a few of my guests really liked it but I can’t tell you how many people vowed to order it. They bought the story as well.
Here is the $100,000 question. How many items that you sell have a story? How many have a compelling story about the designer, the vendor, the owner of the company, or even where the product was made? How many products can you honestly say that people are buying because of the story, not because of the quality or the look of the product?
I will now show my age when I can remember Lady Diana’s wedding. She wore one of the ugliest dresses she had ever worn. I will never forget the dress because it had leg-of-mutton sleeves. Princess Di was known for her sense of fashion but this dress was not one of her best moves. It didn’t make any difference because the copies sold millions. Every bride wanted the look, every bridal party wanted the same look, and I swear every girl going to a prom for a couple of years wore that look.
Yes, that’s the power of the celebrity endorsement or why apparel and jewelry designers give the top stars things to wear for free for all of the award shows. It’s strangely interesting that I am writing this piece just a few hours before the 2008 Edition of the Academy Awards Show. Tonight there will be hundreds of dress manufacturers that have their designers glued to the show, who will be recording the event so that by tomorrow morning they will have the copies of the best dresses ready for order. They will be working late!
Every industry has the same thing. If you are a landscaper, affluent homeowners want looks from the Bellagio in Las Vegas. Antique stores are all about stories. The Land Rover has a storey and image. The reviews on the new models are terrible but that doesn’t matter because people are buying them. Gift stores need to find more stories, but they are out there. I could go on and on for one industry after another. Some celebrities become better known for their endorsements than their accomplishments. Michael Jordan might just become better known for his brand of sneakers from Nike than for all of the records he broke in basketball.
Please don’t just focus on the celebrity stories. Seek the stories of the things we have never heard of before. There is a wonderful reward for your effort. It’s called MARGIN. This is the time where you have focused the customer away from price and into other motivation. As I say in my speeches, “It’s time we focus on ways to increase our margins by 20% rather than just look for ways to reduce our margins by 20%.”
Become a store of stories. Your customer will love it, you will make more money, and you will have the best time because you will become a great storyteller.
If any of you are doing this, please share it and I will create a place for your stories to share with the world. Have a great week and I look forward to reading your stories.
Posted on Tue, Feb 19, 2008
Sometimes the universe sends you a message or puts you on a path that you hadn’t planned on following. That is what is happening to me — all because of one reader who made a simple request. The owner of the Village Trader, a better gift shop on Cape Cod, asked if I could poll my readers and ask them anonymously about some financial questions regarding their businesses to see how she compared. She was curious about sales per square foot, how much you paid your full and part time help, how much you were spending on advertizing, and a bunch of other questions.
At first I tried to ignored the request because I thought information like that should be gathered by some big research firm or consulting company. Then I realized that the strength in the findings or reports were dependent on the questions asked, the quality of the participants, and size of the group. My reader list is approaching 10,000 retailers and related businesses. The quality of my list couldn’t be any better and the size of my list should generate a strong sampling. As for the questions, they came from you the readers of this column.
Well the first survey we did 3 weeks ago had almost 700 people participate and the findings were eye opening to say the least. I then asked if anyone would be interested in forming some type of Benchmarking Group where we formed smaller groups of like businesses. These groups could share financial data and any other topics the group wanted to discuss, such as marketing, management, or personal issues. Quite a few of you responded and we have categorized every business and have created this master spread sheet of every type of business and size of the business. Obviously, in some areas we have more than others. That creates an interesting challenge.
The issue I am facing now is the actual structure of these groups. There are a few possibilities and I decided to ask everyone which way we should proceed. So here are the choices that I see, but if you have some better or different ideas, I have created a box for you to write those in. Some industries refer to this initiative as a Management Focus Group. Others call it Mastermind Groups, some refer to it as their Executive Board, while others call it a Benchmarking Group.
Typical Program Formats:
1. THE MASTERMIND MODEL
(This is probably the most common and most expensive format)
It is comprised of 8 to 20 businesses from the same industry but the preferred number is 10 (automobile dealers like 20 members).They will meet twice a year. Generally they meet before a trade show. Every store must submit their financial statement to the organizer. The organizer employs a Public accounting firm to collect and collate all of the financial statements. Then the CPA generates one combined statement showing every expense and the range in percentages and the medium score. Now you can see where you excel or need some work.
The meeting agenda usually consists of a welcoming and networking dinner the night before. The next day is a full day of meetings that will consist of going through all of the numbers, and then there will be sessions highlighting individual businesses, and finally a sharing of marketing and management ideas.
The organizer’s responsibility is to make sure the agenda is planned and the financial reports collected and analyzed. In short, my job is focused on the process and to facilitate all of the discussions and meetings.
The benefits of these groups are that you will start to create new friendships within your industry and share some great ideas. It is as if you were creating your own board of directors.
Many groups even meet via a conference call monthly or quarterly. Some even create an electronic bulletin board to keep in touch with one another. The fees for membership are usually paid monthly via credit card to avoid any big bills.
This model is a proven model in many industries and you rarely see much turnover within the group. But each group creates their own set of rules to live by and after a 2 year period can even change organizers if they see fit.
2. THE BIG GROUP
This concept is made up of as many stores as possible from an industry (gifts, jewelry, apparel but all from the retail industry). Again the financials are submitted and analyzed. Each store will receive an individual report as to where they stand.
This is where these groups vary:
- Some just get the reports and it’s their responsibility to analyze them.
- Some plan an annual meeting to review the numbers and network but these meetings are mostly half day events.
- Some copy the more involved Mastermind format only it is done with more people.
3. THE ANNUAL SURVEY
This would be an online survey that would ask a series of questions (more detailed than the last survey) and report the detailed report only to those who participate.
Industry average costs for some of these groups start at $2500 depending on the hard costs involved in generating these reports and the frequency and format of meetings. Many of the executives groups that bring business CEOs together from small to mid sized businesses meet monthly and the minimum charge is $1,000 a month. Another company I worked for offered a benchmark report and an optional extra charge meeting for $2,500. Having said that I am more in favor of a reasonable monthly membership fee depending on the format and frequency appropriate for each group.
The bottom-line is that the value of these groups is unlimited. Learning from your peers is the best form of learning. The more information you have, the better decisions you will make. There are countless stories of business success because of this style of learning and sharing. But it won’t only change your business, it will change your life. You will start this for the information but you will keep coming back because of the friends you will make and the ideas that will make you money.
Please let me know what you think by taking my 1 minute survey at the link below. I will not do this until it’s right for all involved. While taking the survey please take advantage of the option of including your name and email so that I may keep you abreast as the programs develop and not devote my weekly newsletter to this one topic. To all those that have already sent in your numbers and information – thank you, we have it all organized! But also please sign up on the survey so we can keep you informed as well. Here’s the survey link:
Posted on Tue, Feb 12, 2008
Our lives are made up of the words we choose and say. Sometimes we don’t mean to harm anyone but sometimes it just comes out and a great relationship can be ruined in an instant. Sometimes people reveal who they really are when they lose their cool or composure. We have all seen the law shows on TV where the attorney works to make the person on the stand crack and show their real feelings.
Choose your words carefully and with compassion. Avoid all sensitive subjects such as religion and politics. They have no place in business. Remain neutral for the sake of the business. Also be aware of jokes about relationships. Some men still like to tease or crack jokes about woman’s issues. There is NO discussion here– just grow up.
Sometimes people are just trying to be funny but they joke about something that other people deem too serious a subject to joke about. Anytime you try to put labels or negative description about a group of people, you could alienate not only that group but anyone with any sense of social responsibility.
I have, and I am sure many of you have, lost a friend or a customer because of a comment taken the wrong way. Last week when I introduced the survey, I copied some of the questions a reader had submitted. Originally I asked for responses from stores doing between $250,000 to $500,000. It should have read sales up to $500,000. Well, I really hurt some people because of that slipup.
One person accused me of only caring about businesses doing over $250,000. That is DEAD WRONG but I was clear about what I asked for and what I asked for was being as discriminating as a racial slur.
Don’t generalize or stereotype people. It’s just not worth it. I once had a friend not talk to me for 12 years because I tried to make her laugh before her mother’s funeral. I thought I was doing the right thing but I lost a good friend for a long time.
I also lost a customer and a very big sale when I joked, “Is that all you are buying?” The customer was buying 26 items. She took my comment the wrong way and said something to the effect that I didn’t appreciate her business. All of the apologizing in the world made no difference and that hi-roller was gone.
I once did a speech in Aruba for a chain of restaurants. The speech went well until I started to tease a beer salesman (it is a very popular national brand) about him having a little beer belly. Without going into the gory details, trust me I have NEVER made comments like that again.
I have a neighbor who has a fun-loving, happy daughter, married to one of the most wonderful and sensitive men I have ever met. The daughter was teasing her husband with a harmless comment and I thought this guy was going to have a breakdown over it. He asked her in a harmless way, “Are you my lover?” She simply responded, “OK buddy, Oh yeah, you are my lover.” This guy almost started crying because she was joking about their love. He was just a serious guy who idealized his wife and that was a taboo subject.
Why even mention a personal story like that in a business column? Because many retailers sell to couples and a misguided comment can ruin the sale. Don’t try to put your values on someone else. Don’t assume you understand the relationship between married people. A line that’s funny with one group might cost you a lawsuit in another situation. Respect everybody’s point of view and, for heaven’s sake, try to be flexible (but that’s easier said than done).
Choose your words wisely because you never know when someone is going to take a comment the wrong way. Humor is a wonderful tool in bonding with another person, but never try to gain pleasure or laughter over someone’s pain. Only joke about things you own and have a right to joke about. I can tell 10 bald jokes but when someone tries to make me the butt of their joke, I don’t like it.
We just never know and should always be aware of the words we use and the jokes we tell. As for my neighbor’s daughter, she is learning to better understand a deep and sensitive man. She also is beginning to teach her husband to relax a little more, be flexible, and go with the flow. Don’t we all have these different personalities in our stores? Some of them are the customers while others are our employees. It’s our job to better understand both our customers and employees so that we can maximize those assets to the fullest.
Have a great week!
