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?

“Maximize The Customer” …Responses So Far

As I said last week, I really believe the concept of “Maximizing A Customer” is such a powerful and descriptive play on words. But it is so much more important than just a play on words. Those 3 words almost completely define a marketing strategy, a way to do business, and a way that our customers understand how we do business.

Below is a sampling of some of the interpretations from our readers explaining how they define “Maximizing” their customers. I will share my comments when I feel it’s appropriate.

#1
I also think that you need to stress the fact that customers don’t like pushy sales people. In an effort to maximize your customers you could be driving them away. I hate to go to a store where the sales person will not leave me alone and asks me too many questions. I can go to a department store and no one will bother me.
- Anonymous

I completely agree with what you are saying, but I feel that “being pushy” is a management issue and is controllable with the right strategies and training.

#2
If we don’t have what someone inquires about, we ask them to help us fill in a WISH LIST card. (We ask questions and take notes. It lets them focus on their ideas, not how they write them down! ) We get their name, phone # and email for follow-up. That is so important– it sounds so obvious but sometimes we have forgotten to get a phone number and we can’t track them down again when the item arrives. p.s. I love your ideas in this e-letter! Thank you for being so inspiring!
- Anonymous

Great reminder!

#3
I always have a list of the needs of my customers that we have right in the store. It is a timeline that we have in the wedding business, and I keep up with emails directly to the customer for all of these items. When we get a bride (we are a bridal shop) we then show her bridesmaids, and how we can match the tuxedo vest and ties to her bridesmaid choice, then we follow up with an email, and send them future emails about all the things they will need that we have. On their fitting appointment we talk about accessories, shoes, slips, and flowergirl dresses that need to be ordered. We also discuss gifts they will need for the bridesmaids, and groomsmen. We mainly keep up via email but mostly while they are in the store we plant the seed. We make it seem unnecessary to shop elsewhere.
- Jennifer from Broken Arrow

We are in complete agreement with your strategy.

#4
We are a Turf Maintenance/Landscape company. Every quarterly newsletter we have a prize box with 100 of our customers. We draw one winner for a prize each quarter. Prizes have ranged from outdoor lighting, small landscape renovations, maple trees etc. Prizes range from $200 to $500.  Point is it gets our clients to read our full newsletter. They see services we offer, tell their friends they actually got this for free and so on. It has been great for us for add on sales, referrals and creating value in our services to our clients and continuing to show we are a quality oriented and truly appreciate our customers doing business with us. It has been some of the cheapest advertising we ever did.
- Dan Boak from Eagle

Thanks for the input.

#5
I am a jewelry designer. I encourage my customers to submit design ideas. If I decide that the design has enough appeal to sell in a reasonable quantity, the person who submitted the design gets the first one in sterling silver as a thank you. I have gotten many great ideas this way as well as developed very committed customers. All customers want to feel that they count.
-Ronna Lugosch from Round Pond

That’s maximizing!

#6
For retail stores that sells gifts and accessories. I cannot tell you how many outfits we sell from our manequins. We dress them not just in clothes but add accessories for further customer suggestions.
- Beverly Goodman from Encinitas

Bev, you are right on target (as usual). It’s always the basics.

#7
I get a lot of return customers, who either order custom rag rugs or buy rag rugs, placemats, totes, etc on my web site. Not long ago, a lady called me who had already bought 5 rugs from me on different occasions. She admitted to me that she LOVED my web site, and checked it out frequently. There were two rugs that she was interested in, and couldn’t decide which to buy. These rugs had been on the shelf for awhile, so I offered her a discount if she bought both of them. She did. She has also been very helpful, pointing out things on my web site that she liked, offering suggestions, for instance, marking “Sold” on a rug, instead of taking it off the site.

Giving her a break on two rugs has paid off in several ways, and created a customer who will keep coming back, and who will tell everyone she knows.

I also often put a set of 4 mug rugs in the box of repeat customers, as a token of my appreciation. It is a nice touch that people are pleased with. It is always nice to get a gift, especially when you don’t expect one.
- Hilary Cooper-Kenny from Crazy as a Loom Weaving Studio

That’s a great technique—overdelivering.

#8
1. Never assume the client is done. Rather, when one transaction is completed, simply say, “who’s next on your list?”.

GOOD

2. Always add-on. As you have previously stated, if one bought golf clubs, but no one told you needed golf balls, they would not have done their job very well, would they?

3. Your thoughts on the compliment being answered with asking for a testimonial is fine, but if I might add; “…very kind of you to say. If anyone else within your social circle would enjoy a similar experience, I would be honored if you would pass my name to them.”
- David Mazer from King of Prussia, PA

Great ideas!

#9
I was at a sports store yesterday with my 15 year old son; we bought a $70 pair of sneakers, among other things. The sales manager tried to convince my son (while I was browsing elsewhere) to purchase $20 inserts for his new sneakers, for better comfort, and to ensure that the brand new sneakers would last longer than 3 months, (when most sneakers become worn out according to this sales clerk). The sales manager did not get a response out of my son (15 years old? who would?), so he soon tracked me down in the back of the store to give me the same sales pitch. I politely said no thank-you. The sales manager then told me about the specials they were having on socks. I said no thank-you. When I got to the register to pay, he reminded me once again about the special on socks. I said no thank-you. (I was becoming irritated by now) Next he asked if I wanted to sign up for one of their special cards for deals etc, I said no thank-you. Phone number please? No thank-you. Zip code? No thank-you. When he rang up my purchases, he neglected to give the sale price for one of the items–(there was a sign that said buy one at full price get one at .99 cents.) I asked him about the sale he said the sale was over, but he’ll give me the sale price anyway. (whew!!) He then went over to the rack and ripped the sign down.

Service is alive and well.

My long winded point is that I think we, as retailers, need to be sensitive on how much we “maximize” our customers. I believe, in my situation, this sales manager was desperate to maximize sales and my “data”. In doing so it was a total turn off for me as the customer which he would have noticed if he were really paying attention to me.
- Ann from Mansfield, MA

There is still a fine line that we must be careful not to cross!

#10
We do coupons. We have a Frequent Buyer Program that produces a gift certificate. We collect emails and have an on-line newsletter. We LISTEN to our customers and, with enough requests, stock the items they ask us to – and notify the people who made the requests that the merchandise is now part of our inventory. We have an advisory board (I make GREAT pizza!).

But the thing we have done that seems to have struck the greatest nerve in our area is to have taken a stand on the environment. We make available environmentally sensitive products and recycle shopping bags, both paper and plastic, supplied to us now by our customers. We put our sticker on each recycled bag and when a customer comes in with a bag with our sticker on it, 5¢ goes to the local animal shelter. We are located in Midcoast Maine and these are two things important to our community.

I have had new customers march in and tell me they are shopping in my store because of my environmental stand. And they often bring me a bag of bags!

Also, we never give up. If one idea doesn’t get as great a response as we had hoped for, we set it aside, examine it for impact, timing, etc. and try something else (usually from Rick Segel’s bag of tricks!)
- Carol Jaeger from Damariscotta, Maine

“Green” is important and a strategy that many businesses are using successfully. Thanks for sharing and thanks for the compliment.

#11
I agree that we need to “Maximize” the customer.  We think of it in a little different way. We teach that if we truly try to make the customer happy, sincerely, taking in account their needs and do not concentrate on the “sale” it’s self, the sale will come. The customer will become a loyal customer, because you really care about taking care of their needs.
- Adrian Taylor, Monroe, W

Very well put.

And finally…

#12
Well, you are right on. Last year I did 24% over goal in sales with help from seeing you at the tanning conference and using your methods with my own . My lotions sales were up 40%. I change my display and painted the wall behind the lotions black and it pops the lotions. I looked at my salon with customer eyes and took pictures. Wow was that an eye opener. Pictures do not lie and they show everything. This year we are still growing and maximizing our reliable customers as well as the new ones that are pouring in from the corporate salon. They want service as well as a good price and are willing to pay a little more for it as well. They see the value in it–you get what you pay for! We are getting awards from everywhere. Radio stations, internet sites, and magazines. I promote that on my website as well as in my salon. You are so right about the internet. I get more than half of my new people from their Iphone. You got to love them…. So keep it up. Hope to see you this year in Nashville
- Matt Turner from Halsted Street Beach

Here’s someone who is working his business and not just waiting for the customers to come in. It’s the same thing that I have been saying—there’s business out there and you have promote and market to make sure that you are the one who’s going to get it!

These responses were great! Let’s keep this going.

Please click here to share your techniques and ideas and I will post the answers for all to see.

Have a great week!

“Maximize The Customer” Hit A Nerve

I think we hit a vein of gold. In last week’s newsletter article, I used an expression that I don’t know if I have ever used before. The expression was “Maximizing a Customer”. Well, that apparently hit a tender spot to many of you because the floodgates of comments started flowing into my office. The majority of the comments were really questions about how a store could maximize a customer.

Think about it. We are in a recession, business is tougher than it has ever been, yet there are businesses that keep on doing business. What are they doing? Well, one of the things they are doing is definitely Maximizing Their Customers. They are getting the most out of every customer who comes in, logs in, calls in. Doesn’t it just make sense? We are going to have fewer customers coming through our front doors. We better start maximizing the ones we have.

Here’s a partial list of my ideas plus ideas that I have received from everyone that I have interviewed regarding this concept. The question that I asked was, “What does maximizing a customer mean to you?”

1. Sell the customer as much as possible. To me this is the most logical way of maximizing a customer. After all, businesses make money when customers are buying more than one item. Therefore, in order to sell the customer more, we have to establish a mindset of multiple sales with our employees. Here’s a great time to remember my 4 magic words: Did you see this?
2. Collect as much data as possible about the customer that will aid in selling the customer. In other words, find out what a customer can buy from you, when they are likely to buy it, the price range, and how to keep in touch with the customer (telephone, email, text, etc.).
3. Create a system of keeping in touch.  Even if you are a resort store, there is no reason today not to keep in touch with the customer. This doesn’t mean sending out sale or price notices all of the time. It can range from a birthday card, a short article of interest, or even something newsy about your industry. The goal is to be in the mind of the customer.
4. Create a system that encourages customer referrals. Having customers refer people to a store that they like isn’t anything new, but in this economic climate, we have to embrace it more than ever before. This means that we must ask our customer for friends who would like what we sell. You should collect contact information and then make them an offer that they cannot refuse. An example could be 25% off on their first visit to the store and then reward the referring customer with a $20 gift card. Yes, it seems like you are giving a lot, but think about the lifetime value of that customer.
5. Bounceback coupon. This is a practice that is becoming more popular because of the need to maximize a customer. It means offering the customer a percentage of their current purchase in a coupon that must be used at a later date. For example, if a customer buys $100 worth of merchandise, he will get a coupon for $20 to be used 3 days later but must be used within 7 days.
6. Use coupons. Recessions bring out the value minded customer. Don’t fight it-join it. Make sure that the coupons that you are sending out have tight expirations dates. Avoid percentages and use dollar amounts.
7. Testimonials. These are the most powerful form of marketing. Here is the 21st century way of doing it. Always have a digital camera and a notepad near the cash register. When a customer gives you a compliment, thank them, and ask if you can write it down and take their picture. Give the picture and quote to a graphic designer (or do it yourself) who can lay out them out to be used in one of 3 ways: a framed picture hung in the store, on your website, or even as part of a mailing piece sent out to your customers.
8. Use the customer for research. Ask the customer where they have shopped and about any interesting merchandise or ways of doing business they have seen. When asked the right way to the right customer, you will get unbelievably valuable information.
9. Customer service survey. This is something that we don’t always do, but it can be so valuable. Understand that our goal today is to develop our own community of customers or customer base. Our customers can look at our businesses as part of their personal network. Some of the advice that you can get can be so powerful. On a personal level, any time that I ask my community for advice, it never ceases to blow me away!
10. Advisory board. One of the best things that any business can do is to create a board of customers that you meet with on a regular basis like 4 times a year. You can have a dinner and then just ask their opinion of merchandise, the way you do business, etc. Just remember that you limit the term of service and that it is not a forever appointment.
11. Maximizing the relationship. I had originally on having the top 10 ways to maximize your customer, but I had to add an eleventh for two reasons. First, in times like this, businesses must give a little extra. In New Orleans, this concept is referred to as lagniappe. The second reason is because when I started surveying about maximizing the customer, one of the more interesting responses I got was when someone said that it is about maximizing the relationship. In other words, when you focus on maximizing the relationship, you will maximize the customer.

I have always believed that the definition of true intelligence is knowing what to say when you don’t know what to say. I use the term “maximizing the customer” without really thinking about the true impact this could have. I would love to get your impressions and how you maximize your customers. Some larger stores maximize their customer by having an employee anonymously follow a customer around the store to find the hot spots, places a customer stops to look at something.

Please share your techniques and ideas here and I will post the answers for all to see. I think we’re on to something here. I can’t wait to see your responses.

It’s Time to “Maximize The Customer”

OK, it’s true. We are in a recession, but understand the end is in sight. The reason why I say that the end is in sight is because of a term that is often used in the financial community when a market truly hits bottom. It’s called “Total Capitulation”. It’s when we just give up and stop believing that things will ever get better. When that happens we have started the road to recovery.

Now starting on the road to recovery doesn’t mean we are out of the woods yet because we are not. But let me share an interesting statistic from the Institute for Local Self-Reliance, a non-profit research organization.  They confirmed something that I have been preaching for quite some time. The average independent store is outperforming the chain stores by a significant amount. I believe the reason for that is the independent knows their customer and market much better than the chain store ever could.

An article in USA Today quoted Janet Hoffman, Accenture’s global retail managing partner, saying,
“Retailing must go back to its roots. Know the customer, and offer unique products or services.”

That perhaps simplifies it a little even for me, but there is a new attitude. It is summed up with my new favorite line “Retailing is a Contact Sport”. The customer today is reading from the right side of the  menu. How smart a shopper you are is the new status symbol. We are now living in the era of “Celebrating Savings”.
Yes, the hunt has begun for the customer and we better be prepared. They will try to negotiate with us more than ever before and we can’t get all bent out of shape when they do. Look at it this as the new way of doing business. Don’t get upset when they ask for a better price. Respect them for trying. Compliment them on trying, then use the line, “I wish we could.”

Because new customers are going to be harder to attract than ever before, we need to MAXIMIZE EVERY CUSTOMER. I define MAXIMIZING EVERY CUSTOMER by getting the most out of every customer which means selling multiple items. It means suggesting more ideas/products than we ever had done it the past.  It also means selling our promotional goods and our better merchandise as well. It means collecting as much data about the customer as possible. It means adding them to our data base with more than just an email address, with information that includes what they have the ability to buy from us, when are they most likely to buy, and how we are going to reach them. It also means employing the right people who know how to MAXIMIZE NOT MINIMIZE.

I am a sucker for any gadget for traveling, for my telephone, my PDA, or my computer. Every time I travel I always look for these mobile gadget stores and I also leave with spending at least $50 to $100. Well, that was until recently. The store in the city I fly out of the most has this new employee. I don’t know if she is the manager or not but the likelihood is pretty high that she is. I stop in the store quite frequently just looking for new or different merchandise. The problem I have with this employee is when I ask for something specifically, the answer is always NO. It’s as if she is too lazy to look for something. There have been a couple of times I actually found what I was looking for myself. She never makes a suggestion or highlights anything new.

The final incident that really set me off was when I asked for an adapter for my headset. I just switched phones to a Blackberry and the slot for a head set is a little larger. She found them and asked how many would I like? I asked the price and she told me they were $12.95 each.

I said I bought them from Verizon for $3 or $4. She then responded that they must be inferior.  I told her that they worked great. That much of a price discrepancy usually indicates that the item was priced wrong. So I asked if she could just check the price. She refused telling me that was the price. I said OK and walked out. I drove 5 miles down the road and went to a Verizon store where I bought 5 adaptors for $1.45 each. See, instead of Maximizing the Customer, she Minimized the Customer.

The consumer is in the hunt for the best buy of the day and we, as business people, are in the hunt to convert the hunters into the hunted (in a nice way of course) and turn the lookers into buyers and buyers into loyal customers. It all starts with the attitude of MAXIMIZING EVERY CUSTOMER.

So tell me, how many customers have you Maximized today?