Posted on Tue, Aug 26, 2008
I am just blown with the amount and quality of the questions that everyone sent in. I have enough (thousands) questions that I could literally write another book of just answering questions. (which I am thinking of doing)
So, instead of the usual format for my weekly tips of addressing a single subject, I will sometimes be answering as many of these questions as possible, focusing on the questions that have the most universal appeal and that have a strong learning point.
While we are talking about learning points, here is the first one. When was the last time you did what I just did, asking your customers their opinions or their input that will help you better understand your marketplace? Trust me on this one. The information is priceless and it creates a perfect alignment between you and your customer, readers, or clients. Just ask– you will be surprised at how valuable it is.
Q. What is the best way to move aged merchandise without running a sale?
A. In this new era of retailing, where the customer can get what they want, when they want it, at a price they want to pay every day, sales are no way even close to the effectiveness that they once had. That is why I am a big proponent in creating permanent, branded markdown sections in your store. In my store we called it “The LAST CALL WALL”. I believe these sections should be located in the worst or slowest selling area of your store. The reason why is because sections such as these will develop their own destination qualities. It is critically important to name the area and have a very professional sign made.
As for the price reductions: The initial markdown should be 20% but DO NOT use percentages. Physically, redline the ticket, if it hasn’t sold within the first week. Then mark it down again at least every other week BUT use small price reductions of between 1 and 6.% It is not the size of the markdown but rather amount of markdowns.
Q. How do I increase every sale?
A. This is a great question because of the way it was written. The word “every” is the key. So many times retailers, and I was no exception, focus on attracting new customers coming through the front door as the way to increase sales. Sure that’s one way but getting the most out of every customer is the key. Understand that retailers don’t necessarily get rich selling one customer one item. We make our money when we sell multiple items. Having said that, it’s time to focus our management and selling efforts on the Units Sold per Transaction .We, as managers and owners, need to make UPT a top priority. Put a sign up in the backroom with this battle cry, “ONE ITEM, ONE CLERK.” What that does is makes a statement that multiple item sales are the lifeblood of a retail business. It’s just a friendly reminder.
The other step to make which is even more powerful is to create a report that you post on your bulletin board at the store which lists every employee’s UPT number from the largest number to the smallest. Then draw a line on the middle where the medium score would be. That is motivation enough to get people focused on the multiple sale because no one wants to be below average.
This technique works well and you can do the same thing for your ATS or Average Transaction Size. It is the same principle as UPT only it focuses on just the dollar amount. Both are good and important but the UPT just simplifies the process. I could go on about training and styles but it is important to make your employees aware of your priorities. Understand that most employees want to please the boss.
Q. How do you motivate your employees to get them to take ownership for their position and results?
A. Practice Ownership from Inception. That means include your employees in meetings where management poses a question like this. “Sales are down, what can we do to increase them?” Let your employees brainstorm the question and then come up with a plan that you all agree to. You will not believe what happens when they are allowed to take charge of a specific problem. It is an attitude changer.
One more thing is to have a “Compliment Meeting” where every person at the meeting has to say something complimentary about another person. The rule is you can’t give a compliment to anyone who has already received one. This is magical because now you are having all of your employees focusing on positive behavior.
That’s it for this week. Let me know if you like this format!
Posted on Tue, Aug 19, 2008
I can’t believe the words I heard from someone who is supposed to be so smart. As most of you know, I love to write about situations or experiences that we can all learn from and this week I have a real winner. It all started about a year ago when I worked for a chain of stores that you are all familiar with. I probably delivered one of the best speeches of my career. The audience was with me from start to finish, hanging on every word. Then I received one of the longest standing ovations. It was almost embarrassing. And afterwards, I got a chance to discuss the points of my talk in smaller groups.
The chemistry was perfect. I was so sure I would be getting a phone call from the company to do a series of more regional events. But I never heard from them. However, I did get a call from the company asking me to speak at the same annual meeting that was coming up. But I was a little taken aback when the company wanted to interview me via conference call. I was a bit surprised but understood when I was told that the company hired a new director of stores.
What I want to share are a couple of comments made that should give every independent retailer a good feeling about competing with larger chains. The first comment was “I don’t hear many people quoting you or using your principles now.” Huh? My response was “How did you reinforce it?” They didn’t do anything. If I had the power or if any speaker had the power to change behavior without just a little positive reinforcement or reminders from the company, then they would be considered superhuman.
I learned a lesson a long time ago from my seventh grade home room teacher who put a quote on the blackboard and made the whole class repeat it twice a day for a month. It was “Constant iteration and reiteration conveys an alien thought upon a reluctant mind.” If she had told us to say it once I wouldn’t be writing it now. So the first lesson is if you want any type of training to work, you must reinforce it.
The next line really shocked me and would put this man’s tenure at this company in jeopardy. He said that he wanted every store manager to be the CEO of the store. So I asked the question about how much control will the store manager actually have. The response was “Well, they can’t control any of the merchandise coming in, they can’t vary from a store layout, and they have guidelines for every procedure that the manager does.” It doesn’t sound like the job description of a CEO. Actually I just downloaded a definition and it doesn’t seem to match. Does this company really believe their employees will buy into this it? Do you think it’s a bit of a stretch and could create a credibility issue.
A chief executive officer (CEO) or chief executive is the highest-ranking corporate officer (executive) or administrator in charge of total management of a corporation, company, organization, or agency, reporting to the board of directors
Obviously the chemistry was very wrong and I won’t be going back there. But what a waste of an asset and a relationship. I wish them well but I fear they are going down a path that I have seen others go. It’s too bad because they had a GREAT group of managers that lots of other chains would love to have.
The lesson to be learned from the whole experience is that you must treat people with respect. Don’t come up with a cute buzz word that can be transparent as calling the store managers CEO’s. The bottom line is that there is good management and bad management. Good high level managers look at training as an ongoing, never-ending series of lessons to be learned and reinforced. It is a process–not an event. Be sure to use reinforcement as part of your training process so that you can bring your employees to the next level.
Posted on Tue, Aug 12, 2008
The computer is the lifeblood of my business. They say they should last a few years but I’m thrilled if I get 2 years out of a computer. It’s not because the old one doesn’t work well, but we always seem to be adding or buying some software that requires a bigger faster machine.
We took the time to determine the capacity we needed and even the brand of computer. We were quite sure of the exact model. (I won’t mention the brand for obvious reasons.) We had good luck with the brand and the service before and planned on buying that brand again. This brand now has retail locations and there is one which isn’t too far from where we live. Great, we can go to the store and ask some questions we have about a few different models and then we can buy it and bring it right home. So we decided to go out to eat in the mall and then purchase the new computer. We weren’t shopping–we were BUYING.
We got to the mall and instead of eating first, as we had planned; we went right to the computer store. For background information, we had called the store in advance to make sure they had the models we saw online in stock. The person who answered the phone assured us they had those computers in stock and the store was offering some “fabulous deals.” We were sure we were coming home with a new computer. We entered the store and a very professional individual greeted us. I was sure she was the manager and she seemed to really know her stuff. I explained that we were here to buy a computer. I asked if she had a salesperson who really knew their stuff because some of the questions were a bit technical. This was not the first computer we had ever bought and it was a computer used for businesses.
The manager introduced us to a fellow and she described him as one of her top salespeople. Perfect. Well it was perfect until we started to ask our questions. He had no clue and was literally making stuff up as he went along. We asked questions about a certain computer that came with Windows Home Edition and if it was a business computer. He told us to ignore that. When we asked a question he had to look up the answer either online or from a manual and then he would read the answer to us.
We are getting turned off but we were determined to BUY a computer. The store did have computers with internet access so we did we went on to the company’s website and started comparing the models we liked online.
I walked up to the manager and politely said that the chemistry was wrong between us and we had no confidence in the salesperson. We were hoping she would take over the sale. She politely said that it was too bad and then just walked away from us into the backroom and we never saw her again. But we still didn’t give up…until the last two things happened.
We narrowed down our choices and we were ready to purchase our new computer when we noticed that the same computer was a little cheaper online. So I asked about the “fabulous deals” and the salesperson’s response was a classic. He said, “We are trained to say that to get people into the store. And it worked because we were in the store.” That gave me a warm fuzzy feeling. But the final straw was when we asked if they had a certain machine in stock. His reply was NO but he can order it online and we would get it a week or so.
We then politely thanked him for all of his time and left that store as fast as we could. Of course the salesperson did get his last jab in when he said, “I thought you were here to buy a computer.” Then he gave me a look that said, “Ya Right. You were just here to waste my time.” We didn’t say another word.
We never did see the manager again. What a shame. The store just lost a $2,000 plus sale. The sad part about it is that they don’t have a clue as to why they lost the sale. I am sure they are referring to us as difficult customers. On the contrary– we wanted to buy a computer.
Is it the salesperson’s fault? NO! This entire situation could have been avoided with a manager who was what I call a strong floor general. A good manager is aware of what is happening on the sales floor. Their job is to match the right customer with the right salesperson. The salesperson should have been trained to answer the type of questions customers might ask. What are the frequently asked questions and how should they be answered?
The salesperson should have been trained to turn a customer over when they are losing the connection. The salesperson we had was probably great with first time computer buyers especially during a back to school period but he didn’t answer our needs.
I am not sure the manager realized what happened or why she wasn’t motivated enough to do the right thing, but the bottom line is that the store lost a big sale and they have no one else to blame but themselves. It’s not a bad economy—it’s bad training, bad service, and poor selling skills. Don’t let this happen in your store.
Posted on Tue, Aug 05, 2008
If I were to ask any audience “What’s the best form of advertising?”, there would be no question that the unanimous instant response would be Word of mouth advertising. Every businessperson knows that but there is one component that many business people miss. That component is that if you want word of mouth advertising, then you must give customers something to talk about. People talk about things that are different and unusual.
It’s not enough to offer service, selection or price. We must give unusual service, a WOW selection, and unbeatable prices to have customers talk about us. There is one other component that is often overlooked, and that is sometimes we have to tell our customers and even give them the words to use. An example is Volvo which tells us that their cars are safe and we in turn tell others how safe they are.
Enough of the build up. I had 2 terrific days in one of the most wonderful towns in America, Livermore, California. Livermore is located about 45 minutes outside of San Francisco. It has a great looking downtown with a streetscape project that is something to see and some wonderful merchants who make the town come alive. The other interesting thing about Livermore is that it is the home for 40 wineries.
I delivered a 2-hour program on the first day and then worked with 11 different businesses over the next 2 days. I want to share my experience with one of those merchants because there is a lesson to be learned from it. I informed the business that I would be writing about my experience but I will still omit the name of the business.
First, my goal in a short consulting session is to find their story or what makes them different than their competitors. The business I worked with was a winery. It had a beautiful tasting room in the down town. That in itself is unusual because most wineries have their tasting on the premise. The second interesting point was that this winery didn’t own a vineyard. They bought all of the grapes they needed from various vineyards. That’s interesting because they can select the best of the grapes from the best vineyards. And not only do they buy the best, but they also are only concerned with making fine wine. They are not grape farmers; they are Master Wine Makers. Now I have some great material to work with.
It gets better because the owner didn’t come from the wine industry. He came from high tech and had NEVER made wine commercially before. However, it was his hobby and passion as a young boy learning from his grandfather. It was his hobby for 25+ years. In 2000, he took the plunge and bought the grapes and made his commercial wine. Of course it takes 2 years before it is ready, so his business didn’t really start until 2002.
Think about all of these great talking points. Goes from avocation to vocation. It’s the American dream. He even named his vineyard after his 2 sons. I then positioned him as the Award winning master winemaker, having the focus squarely on the owner. Sounds good? I thought so and suggested the story be written up and used in their marketing and advertising.
There was only one problem. The owner HATED the whole concept. He didn’t want anyone to know it and even told me that there were some vineyards that were 4 generations old. My response was so what. It doesn’t affect this. Every time I would try to make a point, he would come back with another weak rebuttal.
Then I realized the problem which is quite common among retailers. For any better words, it’s a lack of self esteem. So many times we have customers complaining to us, sales reps telling us we didn’t buy enough, and vendors calling us on invoices that are 2 days late. How can we have an ego? We don’t think we are good enough regardless of our story.
I made the suggestion not because I wanted to flatter the owner. On the contrary, I know that focusing the marketing around the owner is a tough sell but if that is the “lead story”, the thing people will remember them by, I am obligated to suggest and sell it. Many times we think we aren’t good enough. That is common among people who do anything easily and well.
This winery didn’t even like that part of just being a winery and not a vineyard. I don’t understand why but I left that shop so frustrated because I couldn’t reach him. There are three lessons here:
- Stories sell. Stories are the core of word of mouth advertising.
- It’s about the business and the effect it will have on the customers. It really isn’t about you even though the marketing focuses on us.
- Word of mouth advertising is about having your customers repeat the right words as well.
So give your customers the words to say and your message and your word of mouth advertising just got better.
