Tuesday, March 24, 2009

Ambassadors Among Us

The wristband was teal and marked with the date March 24, 2009. It was my ticket on the ferry that would take me 8.5 miles from Fernandina Beach, FL through the Amelia River, Cumberland Sound and St. Mary's River to the quaint little town of St. Mary's, GA. No wristband and I was swimming back.

The wristband was also a signal to the people of St. Mary's that I was a visitor in their midst. A signal that I had paid money to visit them and see what their town had to offer.

And from the moment my family stepped on shore, the signal was being read loud and clear. Strangers on the street welcomed us to town. One person in a city uniform showed us a baby owl nest in a nearby tree. Another out walking his dog suggested restaurants and other attractions. Every shopkeeper offered a nugget or two of history and a favorite spot to eat. And when we strolled into the visitors center to see about upcoming tours, they decided right there on the spot to do a private tour just for the six of us plus the dog.

I pulled out my wallet expecting to pay the premium to load the family onto their 8-person golf cart for our own private tour only to find that because of my wristband I got the friends and family rate. $26 later we had the lady running the center giving us a history of St. Mary's that you wouldn't find in a book, plus a tour of all the restaurants that were dog-friendly.

Other than an incredible history, St. Mary's didn't offer much. A few B&B's, some nice restaurants, a couple of quaint shops (one of our ferry mates came to buy her prom dress there), and a beautiful tree-lined avenue make up this southern-most Georgian port.

But I will remember it as one of the friendliest towns I have ever visited. I tipped the tour guide, the ferry driver, and the waitress more than I imagined for making me and my family feel so special.

Obviously, someone got the message. And they spread the message to the entire town. Visitors should feel welcome.

Does your town make visitors feel welcome? Does your business make visitors feel welcome? Does your staff have a list of restaurants they recommend? A list of hotspots to visit? A list of favorite things to do or see? A little bit of history?

Does your community have any type of ambassador training to teach all locals how to welcome the visitors, the ones who paid to come see you? If not, you should start one. If St. Mary's, GA can do it, so can you.


Friday, March 20, 2009

Do You Have It In Stock?

Took the kids to Florida. The pool was heated. Parker brought his swim fins. Ian's didn't fit.

No problem, we'll be in Florida on the ocean. We'll have no trouble finding Ian a new pair. Right?

A couple of stores that we thought might have fins failed to produce. Plenty of goggles and masks, but no fins. That's okay; we had an ace in the hole. A huge swimwear store was right up the road. We were sure they would have what we wanted.


According to the kid behind the counter, swim fins weren't due in for another week. "It wasn't season," he explained.

Being in the toy industry with both summer and winter items, I understand the concept of seasonal stock. I just don't buy into it. If you want to buy a sled from me in July, I can sell you a sled. I may not have the biggest selection, but I will have a sled.

My son, however, doesn't yet get this concept. Needless to say, he was heartbroken.

So ask yourself this... How many customers are you sending away heartbroken because you didn't have something in stock during what you consider to be off-season?

Perception is reality, and although you may think it is off-season, you never know when a customer might believe it is in-season. Is there a corner of your store that doesn't move much merchandise where you could put a small display of off-season stuff? Or a corner of your stock room?

Imagine Ian's reaction if the kid at the counter said, "Hold on," and ran into the stock room and produced a set of swim fins.

Heartbroken or Happy?

Which do you want your customers to be?


PS Six stores later we found some swim fins. SIX STORES LATER

Monday, March 16, 2009

What Are They Talking About?

When people talk about your business what are they saying? Do you know? More importantly, are people even talking about your business?

Have you given them something to talk about?

Roy H. Williams, aka Wizard of Ads, mentioned three ways at a recent conference to help you get WOM (word-of-mouth) from your customers.

First, you could choose to be over-the-top excellent in Design. Your store layout, merchandising, decorating, facade and mood could be so unique and outstanding that people talk about it for days and weeks afterward. Have you ever seen the Ferris Wheel at the Times Square Toys R Us? That's over-the-top Design. Does your business have a cool and unique characteristic? Do you flaunt it? I saw a program on the Travel Channel of the 20 coolest public bathrooms. It was totally intriguing. My grandfather always had the idea of building a carousel on the front of the store with half the ride inside, half outside. Kids could get on the carousel and enter the store that way. Imagine what kind of WOM that would generate (and yes, I'm still considering it).

Second, you could choose to have over-the-top excellent Performance by your staff. I'm not talking about "excellent customer service". Everyone says they have that. And, frankly, customers aren't impressed by people who are just friendly & knowledgeable. They expect that. In fact, the only WOM you get from excellent customer service is when you don't supply it. And that's WOM you could do without.

What I'm talking about is a performance so rare that it's exciting, extraordinary and unique. Customer service that is so over-the-top it becomes an experience. And it has to be an every day, all the time experience. If you've ever been to Pike's Place Fish Market you know what I'm talking about - and what customers are talking about. The throwing of fish, the yelling, laughing, playing, the customer involvement. What can you do every day to make your customer's experience more memorable?

The third, and most intriguing way Roy described was Generosity. What are you giving your customers to make them talk about you? A jeweler who replaces watch batteries for free, a restaurant who gives out free desserts to dinner guests, a hotel that has free curling irons, cell phone chargers, or web connections. Those are just some examples of generosity. But here's the clincher. To get WOM from your generosity you have to do it, but not advertise it.

Imagine you go out to eat and see a sumptuous dessert menu on the table. You know you want one, but aren't sure if you want to fork over the dough for an extra you don't need. But then your waiter says, "How about a dessert tonight? It's on me." How could you resist? And won't you be talking about that meal to your friends? Pretty soon, you'll be saying, "Hey, let's go to so-and-so's. The last three times I was there the waiter gave us a free dessert."

For the cost of some flour and sugar, a restaurant that does this could buy a lot of WOM, and a lot of loyalty. (And that flour & sugar could probably already be fixed into the cost of the meal.)

Word of Mouth is the best form of advertising - always has been, always will be. But you have to give someone something to talk about. Start looking at your Design, Performance and Generosity and see if you can find something worth a conversation. Then maximize it to the extreme and watch the talk begin.


Wednesday, March 11, 2009

When You Don't Know What You Don't Know

I just got back from Grand Rapids. As a favor, Jackson Radio Works invited me to join them for the Great Lakes Broadcasting Conference to see Roy H. Williams, aka the Wizard of Ads, do a 3-hour presentation on how radio broadcasters can turn around the Michigan economy.

Whenever I see Roy, it rocks my world and gets my juices flowing. He makes his points more clearly and in a more convincing way than any speaker I have had the pleasure to see. Unfortunately, he made so many points in those three hours that I am having a hard time wrapping my brain around all of them.

The one thing I learned is how much I don't know what I don't know.

When you are aware of what you don't know, you get to choose whether or not to learn it. The problem, of course, is when you don't know what you don't know. Then you don't know what to learn. When I see speakers like Roy, I realize I have that problem. I don't know what I don't know.

Do you have that problem, too?

So I thought of some simple solutions.

Attend classes and trainings. If you're a retailer, the Jackson Retail Success Academy is a good start. Also look at your industry to see if there are any conferences with speakers. The American Specialty Toy Retailers Association (ASTRA) hosts a great conference every spring. Maybe your industry has a similar event? At every training, class or seminar you learn something new, something you probably didn't know you didn't know.

Attend events with speakers and presentations. Here in Jackson we have events like the Economic Luncheons of the Greater Jackson Chamber of Commerce and the Midtown Morning Breakfast, among other events that have speakers of interest. Because each speaker brings a different perspective to light, you are almost guaranteed to learn something you didn't know you didn't know.

Pick the brains of your peers and contemporaries. Have lunch sessions with these people and choose topics of discussion that you publicize before you meet. Have each member of your lunch bunch pick a topic of discussion. They may bring up a topic completely foreign to you. Ta da! Something you didn't know you didn't know.

Actually, it's quite easy to learn stuff you don't know you don't know. You just have to be willing to learn.

Your business decisions are only as strong as the info you have. When you don't know something, your business suffers. When you don't know what you don't know, your business suffers more. What are you wiliing to learn?


Friday, March 6, 2009

What Are You Going to Do Now?

The headline in the Jackson Citizen Patriot was about another manufacturer closing doors here in Jackson. I haven't been doing the math, but add those 206 jobs to the layoffs and closures already announced and it paints a bleak picture.

Our county administrator spoke on the Bart Hawley Show that despite the "goverment estimates" that say our county population is growing or at least staying constant, there are signs that Jackson County is shrinking. The home foreclosures, the homes for sale versus the homes being bought, and the vast availability of rental units says people are moving out, looking for work wherever they can find it, just not here.

So my wife turned to me and asked, "What are you going to do now?"

It's a valid question. How do you keep your business afloat when your population base is shrinking?

A shrinking population may be more challenging than new competition. With a new store entering the market you know their strengths and weaknesses and can exploit them to your advantage. But when the people are going, going, gone, what next?

The first answer is "expand your territory". If you're a neighborhood store, become a city-wide destination. If you're a county-wide store, become a regional destination. Of course, that means you have to make some radical changes to your business model. You have to give people a reason to drive that much farther to see you.

That reason could be product. Is there something you sell on which you could corner the market? In today's Internet world, that is hard to do - possible, but hard.

That reason could be service. Is there a service you offer that no one else offers? Is there a way to offer such over-the-top service that people call their friends to talk about it? Sure. It takes time and effort to get to that level. But it can be done.

That reason could be store design. Is there something remarkable about your store that makes people want to drive just to see it? I have never been to an Ikea store, but I hear so much about them that I'm compelled to eventually make the trip. In the toy industry, you can't go to NYC without stops at FAO Schwarz and Times Square Toys R Us. Of course, store design on that level requires thousands, nay millions of dollars. And who has that to spend?

The second answer is to become more important to the community you currently serve. Are you involved in community groups? Serving on committees or boards? Not only do you gain in visibility for your store, you gain relationships with people and businesses that can help you through tough times. You also get your ear closer to the ground so that you hear and can respond faster to changing times.

A third answer to meeting the challenge of serving a shrinking population is to expand your offerings. Are there categories of products you haven't offered that you could? Are there items customers request because they think you would carry it but you don't? Grocery stores used to sell food. Now they sell everything from stamps to socks.

I'm not saying you should run out and invest in a whole bunch of inventory just because, but ask yourself if there is an area in which you could expand that would draw some traffic. Years ago, when Hughes & Hatcher went out of business, we applied for the right to carry Boy Scout and Girl Scout merchandise. The target audience was a perfect fit. And although profit margins are fixed quite low, the draw of the line more than makes up for the low profits.

To recap, here are three things to do in a shrinking market:
  1. Expand Your Geographical Reach - exclusive products, over-the-top services, or incredible merchandising that will bring 'em in from miles away
  2. Expand Your Involvement - Get involved in your community and network, network, network
  3. Expand Your Product Selection - Look for new product areas to serve your current customer base
Yeah, we're trying to do all three.


Wednesday, March 4, 2009

The Third Mistake

The boss says,"Cut your spending." The acountant says, "You've got to cut spending." The board says, "Reign in the spending."

But as you pour over your expenses, they all seem necessary. Utilities? Yep, gotta keep the heat on. Insurance? Don't want to be caught with our pants down. Selling Supplies? Can't sell without supplies. Payroll? Don't want to be like Circuit City. Advertising? Advertising? Yeah, advertising... everyone says advertising doesn't work any more anyway. Let's cut advertising.


Before you make the first cut, you better know what you are doing. Cutting money out of the ad budget must be done with the skill of a diamond cutter. One wrong move and you'll cut off your business at the knees.

You have to know how your ads work for you, how they grow your business, how they attract new customers and keep old ones, how they influence the decision-making process of your potential clients. You have to know where your ads are most effective and where they are wasting time and money. You have to evaluate each and every component of your ad budget before dropping the axe. And then, only drop it sparingly.

Advertising is your lifeline in a down economy. It is also your ticket to the top of the hill. Way too many businesses in an economy like this take the easy road and cut huge chunks out of their ad budgets without truly evaluating why their ads work or don't work. They say things like, "I tried radio for 4 weeks and it didn't work, so I'll cut all radio ads." Or they muse, "That newspaper ad did nothing for business, so I'll cut all newsprint ads from the budget."

I know, because I used to have those kinds of thoughts, too. It was always the media's fault my ads didn't work, never the fault of the ad I designed, never the fault of making wrong assumptions about how my ad should work within the medium.

But once you begin to understand first how each medium is designed to work and then how to design ads that work well within the medium of your choice, you will find your business getting a better return on your advertising investment.

And when you choose to continue advertising while all your competitors cut back, you'll find your return ever greater. The cold stark truth is that no matter the economy, business is still being done. The beauty and danger of doing business in such times, however, is that customers are more fickle, less loyal to their usual shopping patterns. To the stores who disregard this behavior and cut back their advertising and customer service, these customers are turning their backs and looking for someplace new that is willing to serve their needs.

The businesses still advertising, still investing in their employees, are in position to win the hearts of these customers. Yes, even in tough times, some stores thrive. And I can guarantee you they all have one thing in common. They didn't cut back on their marketing. They just learned how to do it smarter and more effectively to win the customers other stores are neglecting.

Would you like to learn how to market your business better?

As part of the Midtown Morning Breakfast, I'm going to present two workshops in April and May on How Ads Work.

The first one will be April 15th from 7:30am to 8:45am at Jackson Coffee Company. In this class we'll explore how the different mediums work and how to use them most effectively. We'll also look at the absolute best formula for calculating your ad budget that doesn't overextend your resources. And we'll demystify the 4 biggest myths of advertising.

The second class will be May 20th, same time, same place. In this workshop I'll show you how to identify the true essence of your brand and make it work harder for you. Plus, we'll discuss different techniques to make your marketing more impactful and memorable in ways that move customers toward your business.

Before you make a classic mistake and slash your marketing just to cut expenses, learn how to make the most of what you do spend. You're bottom line depends on it.

Will you join me?


Sunday, March 1, 2009

Three Mistakes to Avoid

Circuit City is just about gone. The remaining stores are liquidating as we speak. This once fabulous chain (one of the 11 companies featured in Jim Collins' book Good to Great) made two of the three classic retail blunders so common in a rough economy.

First, they slashed prices. In December 2006, in an effort to gain "market share" (the usual wrong-thinking excuse) Circuit City cut prices on flat-panel TV's so low, there was no way to recoup the lost profits. The result? The worst loss in their history - $16 million.

Price-slashing is a desperate move at best, and usually backfires. Why? Most businesses never do the math. They don't calculate the extra costs involved in selling the many more pieces they have to sell to make up the lost margin. If you make $500 per TV sold and you cut the price by $250, you need to sell twice as many TV's to make the same profit. How much extra staffing and advertising will it take to do that? And how realistic is it that you'll sell that many? Chances are you'll spend more trying to sell the extra units, and also fall well short of your goal of units sold. Net result? Huge losses.

But, you say, Wal-Mart does it. Really? If all Wal-Mart did was slash prices they'd have been long gone years ago. No, Wal-Mart revolutionized operational efficiency. They made it possible to be successful on smaller margins. The volume came later as they gobbled up competitors in their ruthless expansions.

Unfortunately, price-slashing seems to be the retail mantra du jour. Sears & K-Mart have entered the fray, with JC Penney's close on their heels. How's that working out for you guys?

The only price-slashing that works is marking down the dogs as discussed in the previous post. Unless your business strategy is to go after the highly unprofitable Transactional Customers, price-cutting is only a recipe for disaster.

The second blunder Circuit City did followed right on the heels of the first mistake. After realizing such huge losses, in 2007 Circuit City went on an expense-cutting spree. The first to go? The high-priced, experienced sales personnel - the front-line sales staff with knowledge and sales expertise. To save money, Circuit City fired all the highest paid sales associates and replaced them with lower-paid hourly workers. And as anyone could have predicted, customer service dropped just as quickly.

When you're selling commodities, maybe this works. But when you're selling technology that evolves faster than the average mind can keep up, experience counts for something. Knowledge and know-how are your ally.

Unfortunately for Circuit City, this loss of knowledge in the sales staff left them with only one tool to compete in the electronics market - price. And we all know how that worked out.

In tough times, when sales are slow, one of the biggest expenses is payroll. The temptation is to cut payroll to save money. But when cutting payroll means sacrificing customer service, you're just cutting off the nose to spite the face.

When your goal is to be the expert your customers can trust, payroll is no longer an expense, it is an investment. Instead of cutting staff, teach them to service better, to connect stronger, to sell more. Help them become more profitable for your business. Treat them like an asset, like an investment, and leverage that asset to get you the best returns it can.

If you have to make cuts, trim the fat. Cut out the inexperienced, non-productive, non-performing staff. Just as you would drop the stocks that don't perform in your portfolio, drop the staff that don't perform. And don't worry about what they make. There is a reason all those Circuit City employees were making so much - they knew more, they worked more, they sold more. And the same is probably true with your staff, the most productive members make the most (if not, they deserve a raise). Keep the productive ones, give 'em raises, and cut the non-productive staff.

Price-Slashing and Payroll Cutting, two big mistakes you can't afford to make in this economy.

The third? Marketing. We'll save that for next time.