It’s time for our annual retail survey!

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These are questions that readers have been asking. Your answers are all tabulated electronically and will be available for reviewing next week. I will comment on the results. If you have any comments about any of these questions just leave a message in the section for comment.

The results are to benefit YOU, so the greater the participation the better the sample. We will be posting the percentages only for easier comparisons.

Click here to take our survey »

Follow-up to Star Performer or Troubled Employee

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After five years of writing this column plus all the other articles and books I've had published, I have never been so intrigued by the quality, insightfulness, and divergent points of view that my article about a star manager or problem employee brought out. That doesn't even mention the sheer quantity of the responses that the article triggered! I invite anyone who hasn't read last week's column to go to my blog and read it there. It will help you understand this piece. I also want to thank everyone who participated.

Let me give a quick summation of what the article was about. It was about a husband and wife retail ownership team (that sounded better than a mom-and-pop store) that bought another business and made a star employee the manager of the existing store so they could spend time building the business of the newly acquired one. The manager did a spectacular job in every aspect of the retail business. The only flaw in her behavior was that every time the storeowners tried to compliment her with bonuses, perks, or even asking her opinion, she never thanked them or acknowledged their efforts. Again go to the blog for more detail.

One thing that some people picked up on was that I wrote this story as a reporter--I gave no opinions. Trust me, it wasn't easy for me but I wanted to get your opinions before I shared mine. I did not want to corrupt any of your thinking with my point of view. (Many of the comments are posted on the blog but that majority of comments were sent in the form of e-mails specifically to me.)

There seemed to be two ways of looking at this situation. Many of you wrote that you had similar situations of having employees who did not appreciate the things you did for them. Many of you also mentioned the fact that you are looking forward to my response for ideas on how to get your employees to appreciate what you do.

The other and very outspoken interpretation of this is that the storeowners were degrading the employee by pitying her because she was a single mom and they were the wealthy storeowners. What they were really doing was giving charity and wanted the recipient to jump hoops in appreciation.

There are a few clichés that seem to work well here. The first one is "the road to hell is paved with good intentions". Bob and Sue, storeowners, are really wonderful people who just can't do enough for the superstar employee. As difficult as it may be, it's time to take the emotion out of this relationship. They're running a business not running a family party. They should create a formula with a performance bonus clearly stated and understood by all parties and live with it.  
I must agree that putting five $100 bills in a pay envelope is looking for trouble. As someone said there is too much that could be misinterpreted by inserting cash. No, it is not illegal to give cash bonuses, however they must have a paper trail but that's not the reason. Someone pointed out that Amy might wonder if it was from the husband and if the wife was aware of it and what does it mean? Or what's the catch? Is he hitting on her (which by the way is about as far from the truth as you can get but you never know) and is this a little extra and he might want a little extra in return?

However there are some very definite incongruities in this story pertaining to Amy's behavior. Obviously she's a strong salesperson and/or she can motivate her people to sell. Then why is she failing so miserably with some of the very basics of people/selling skills, having an attitude of appreciation?

As one comment said, "Check inventory and cash receipts closely because I'm suspicious of this one. If it's too good to be true it probably isn't."

There was also an issue of pride and charity. Amy is a very proud person and, as it turns out, resents being treated as a charity case. I am able to make that statement because of the follow-up phone call I made to the owners this week. My recommendation was to sit down with Amy and share their feelings. It was interesting that someone wrote in and used the words that Sue finally admitted to. They were being childish. Someone said, "I was raised to say please and thank you and if any member of my family doesn't employ those words I promptly bring it to their attention. But this is a professional situation and although it's nice for the thank you's, they're not required."

There are a couple old another issues that need to be mentioned. Some people don't take compliments well. Trust me, I know. I am the worst at accepting a compliment. I even get embarrassed with standing ovations, which is not a good thing if you're a professional speaker. I have actually been coached on how to accept compliments. I think the problem exists more with retailers than perhaps other industries. It seems as if we have a constant flow of people, be it customers or employees, who are constantly reminding us that we are doing something wrong. In short, as a retailer, we're not allowed to have an ego.

That perhaps answers the incongruity: Amy was a good manager and her people loved her but didn't respond to acts of kindness because she didn't think she was worthy enough, perhaps due to her family situation. I have no idea about the difficulties and social challenges a single mother must go through. But I am sure they look at life different than I do.

The other side issue is why Amy didn't comment on the article. The reason is simple but sad. Amy isn't a reader and hates to sit down to read anything too long. So she skims a lot of stuff but is never quite confident about what she reads.

There is one overriding issue that needs to be reviewed. Just as so many retailers focus only on price, why do these storeowners focus solely on compensation? It's not the number one motivator for keeping employees and having them work for you for less money. That motivator is convenience. The closer that someone lives to work, the more they want to stay regardless of other considerations. Then you couple that with a passion for the product. Amy loves to ride horses and loves the industry but also loves her kids and needs to be close to home for them as well.  You now have two of the three major components for employee retention. Ironically, the third component is being appreciated at work. The only problem here is that you had owners who perhaps tried to hard and mixed personal feelings, emotions, and employee compensation together when they should be clearly separated.

The tool that I have written about in the past that worked effectively in this type of situation is a concept called "involvement from conception". This simply means to ask your employees for a solution and you'll be shocked at how creative and insightful they can be. That was the case here.

My suggestion was to go to Amy the same way they came to me, simply share their feelings, and ask her for a solution or remedy. It worked and now I have to return 3 phone calls thanking me for my advice.  Maybe if they read this article, I won't have to return the calls.

Have a great week.

Star performer or troubled employee?

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Last week I spoke at the equestrian show outside of Philadelphia. The attendees sell both English and Western equipment for the professional and recreational horseback rider, often referred to as tack stores. This is a group of very sophisticated retailers and I always enjoyed returning to this industry.

My seminars were both breakfast meetings from 7:30 AM to 9 AM. Because of that schedule, I had plenty of time after my presentations to hang around to answer questions and just talk to retailers. I had one very interesting husband and wife team who had been long time subscribers to my newsletter. This probably made them feel comfortable enough to share an interesting dilemma. They did ask to remain anonymous but thought the situation would be the type that my readers might like to respond to. They were also curious about your reaction and wondered if anyone else had ever experienced what they were going through. Here it is:

They've had an employee, whom I will refer to as Amy, who has worked for them for 15 years. They described her as "perfect in almost every way". Three years ago, they had an opportunity to buy a second store, an existing business that was once a leader in the field. It was now was a declining business only because the owner who was dying of cancer. That owner made them an unbelievable deal that they just couldn't pass up. However they realized the business needed some tender loving care and nurturing.

Amy was a single mom and was always looking for any opportunity to work extra on new projects at home because she needed the money. The owners felt that Amy was more than capable of managing this store and would appreciate the extra income it would bring. Amy was delighted with the challenge and of course the money and proceeded to do nothing short of a sensational job. The store looked better than when the owners were running it. The employees' morale was higher than ever before yet the payroll costs were down a couple of percent. The remarkable thing about it was that store's sales for the 2+ years that Amy was the manager averaged over an 18% increase.

If you think that I'm going to tell you that Amy was caught stealing, you're wrong. On the contrary, shrinkage actually improved. They jokingly said the only problem was Amy was actually a better manager than they were. Amy made them a lot of money and they couldn't do enough for her.

So what could be wrong with this situation? You are probably thinking that Amy was planning to open up her own business and compete with them. Wrong! That is the last thing she would ever want to do. She loved the arrangement. So what could be wrong? The owners, which I will refer to as Bob and Sue, would constantly try to show their appreciation for what Amy had done by buying her and her children gifts. They even put an extra $50 or $100 bill in her paycheck at least once a month.

Amy's husband had left her without much money and never gave any money to support the children. Yes, the courts look at him as a deadbeat dad, but he was nowhere to be found and had no contact with the children for years. It was as if he died without life insurance. So you would think that Amy would really appreciate all the little things Bob and Sue would do for her. And she did appreciate it but she never or rarely ever demonstrated that appreciation. In short, she hardly ever said thank you and never wrote any kind of thank you note. It was as if she just expected it or didn't care about the effort Bob and Sue would make. As they described it, it was weird.

Then to make matters worse, Bob and Sue wanted Amy to be aware of everything that was going on in the store and shared all of the plans they had. But Amy was always nice and polite about it. She never had much to contribute other than the cursory, "nice job" or "that's good".

I know this sounds strange but it all came to a head in January. In December, Amy's store did exceptionally well-- not only saleswise but it was profitable as well. On top of a regular Christmas bonus, in late January, Bob and Sue gave Amy an envelope that had five $100 bills in it with a note that said GREAT JOB! Sue NEVER said a word about it. But she continued to work as if nothing ever happened.

Then they asked Amy her opinion on an article Sue had written in the newsletter. She never responded at all. The story was about Amy and her family and how she was a remarkable woman and what she meant to the business. After a week, they asked her what she thought of the article and she told them that she thought it was very nice. But no thank you.

These storeowners are sadly and deeply hurt but just don't know what to say or do. They don't want to lose a great employee but they just want a little recognition.

Any suggestions? Please let us know. Just click here to send an email with your ideas to me. I will share my opinion next week as well.  Thanks and I look forward to hearing from you!

What Do You Do When a Customer Loses Trust in You?

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Trust is a difficult thing to gain but it is a very easy thing to lose. My mother had an expression that she used all the time--she would say "There is nothing deader than dead love".  She used that expression in so many different ways, from personal relationships to relationships with customers. My Mom passed away 13 years ago, and yet this week her quote came back to haunt me and make me think. (She was good at that.)

I have always believed that your integrity manifests itself in the trust that a customer gives you. That trust is your most important asset and should never to be violated. There is no sale that is more important than the value that a customer places in us. Our reputation is our gold. One of the exercises I do in my seminars is that I will ask the audience what's the one thing a business can do that would prevent you from ever going back to that business again? Without fail, someone will say, "They cheated me!" Or "They lied to me!" And because of that, the customer will never return to that business.

But what is trust? I believe trust is a promise of what to expect from another person, leader, or business. I personally feel terrible that President Obama has lost the trust of so many people who voted for him. He simply made promises that he wasn't able to keep, and therefore lost the trust that he had built. Only time will tell if he can rebuild that trust, but this is article is not about politics. It's about running a business.

This past week I experienced a personal crisis in trust and integrity that might not be to the scale of the president, Bernie  Madoff,  Enron, or John Edwards. But to me it is something that quietly kept eating me up inside and a lesson that all of us can learn from. It comes in two parts. Here is the first part.

Last week on The Retailer's Advantage, I had promised to do a program on planning a business' buying utilizing the three basic and most popular ways of planning and controlling merchandise that a retailer needs to do business. I had advertised that I would have the proponents of the various methods (the traditional Open to Buy Method, Gross Margin Return on Inventory Invested Method better known as  GMROII, and my simple alternative the 40/55 formula or what I call Open to Thrive ).

I traveled to Anaheim, California to speak at the craft and Hobby show last week and I had planned on recording the session when I was out in California. However I simply forgot what I had promised and preceded to do the program without the two other guests. Shame on me for not checking and double-checking what I had planned and promised. But then to make matters worse, when I went to record the session, the quality of the recording was as bad as it could get.

Yes I could certainly make the excuse that last week my computer had the worst virus that it could possibly ever have. I actually went out and bought a brand-new Apple MacBook Pro so that I would never be haunted by another virus again. But that would only be an excuse. I received a terrible blow from one of my listeners who said it was bad enough that the program was not as advertised but she couldn't even hear it. I lost her trust. Shame on me.

This person was not a subscriber to The Retailer's Advantage. However, she did spend $25 for a program that was not as promised and was inferior in quality. My mother's words haunted me because she was of the belief that you build a business one customer at a time. It is better to under promise and over deliver. I couldn't agree with her more, but I didn't do that.

I believe that people get into trouble, not for what they do but for trying to cover up for what they do. Richard Nixon would not have resigned if he had just admitted his involvement in Watergate. It's the cover-up that is worse than the crime. So this is how I am handling my violation of the customer's trust.

• Step one-- I immediately refunded her money.
• Step two-- I gave her a free membership to The Retailer's Advantage for a month.
• The final step was my sincere apology never to have that happen again.

Yes, I'm upset with myself for being so caught up in the actions of the day that I forgot my responsibilities. However, I'm pleased with myself that I addressed what I needed to address in the first part of this problem. But as I said there were two parts.

The second issue is that I have a team of people who are working extremely hard to build The Retailer's Advantage to become the preeminent retailers' membership site that is a true advantage to the independent retailer. You see, I did not just let the customer down. I let my team down as well. Oh sure, they will probably forgive me but I must work as hard as I can to regain some of the trust that I have lost.

These are the actions steps I plan on taking:

1. The first step is to admit what I had done and not try to hide it.
2. The second step is to demonstrate and maintain my level of integrity. I must be overly cautious about the promises I make so that I will not default on them.
3. The next step is to simply communicate better as to what I am able to accomplish and not. None of us get upset when we know what to expect and good communications helps us avoid problems before they become a problem
4. Treat my employees, subcontractors, and team members as equal partners. It is important to make people feel that they are important to me.
5. Lastly do the right thing, which is what I am trying to do in this situation. It somehow always works for me (as well as for so many other people).

Thank you for reading this and being part of my therapy. We can all learn from this lesson to maintain the trust of our customers by keeping our promises, which will in turn keep our relationships alive and well. Thanks Mom for a lesson I thought I knew but I guess I didn't. Somehow I think you're smiling.