Saturday, April 30, 2011

Are You Working ON Your Business or IN Your Business?

Morgan Freeman’s character “Red” said it in The Shawshank Redemption, “You either get busy living or get busy dying.” Never have more truer words been said about retail.

So what are you busy at right now?

Are you busy coming up with new ways to market your business?

Are you busy evaluating your inventory mix to make sure you have the right items, the right amount of items, the right prices?

Are you busy measuring your financials to make sure you have enough cash flow, are keeping expenses in line, and building profits for the future?

Are you busy training your staff, teaching them how to please your customers and make their experience both memorable and worthy of talking about?

If you want to get ahead, you have to spend just as much time working ON your business as you spend working IN your business. Maybe even more.

Here are some simple things you can do to find more time to work ON instead of IN.


  • Don't waste your time stapling, folding, cutting or hole-punching. If you don't have a staff person in need of a simple project, give it to your kids or grand kids. (And if that isn't an option take it home with you and do it while you catch up on your favorite show).

  • Don't micromanage. Train your staff how to do it. Then empower them to do it. Even encourage them to come up with their own ways to do it better.

  • Don't ever say or think "it would be quicker for me to do it myself." The first time, you're right. But if you teach someone else how to do it, the first time will be your last time.

  • Hire somebody. Let them do all that day-to-day stuff that bogs you down. Not only does it free up your time, but it forces you to work ON your business just to find the money to pay them.
And if you aren't sure where to begin working ON your business, think about it as a three-legged stool.


  • The seat of the stool is the products. Without the seat there is no need to prop it up.

  • The first leg, then, is the marketing. What are you doing to get people in to see your products?

  • The second leg is selling. How well trained is your staff? Do they know the benefits of the products?

  • The third leg is the financials. How is your cash flow? Profit? Inventory levels? Expenses?
Pick the wobbliest leg and get to work. (Let me know if I can help).

-Phil

Friday, April 29, 2011

A Room Full of Sellers

I attended a networking conference yesterday for entrepreneurs. It was designed to be a way for people looking to go into business for themselves to meet people who could help them along the way.

It looked more like a shark feeding frenzy.

There were at least 5 people per entrepreneur in attendance. That's 5 people hoping to sell their services for every one person with a dream.

And that's the biggest complaint I hear from anyone who attends a networking event. It's a room full of sellers and no buyers.

But networking is still a powerful tool for growing your business without spending a ton of money. You just have to be smart about how you do it. You have to know that you are walking into a room full of sellers.

The best advice? Be a buyer. Take the attitude that you are going in to meet only a handful of people and see how they might be able to help your business. Don't worry if they have services you don't need or want. Don't worry if they give you hard sells. Just listen, ask questions, and give them a platform to talk. At the end of the conversation you'll know somebody new, and if you listen hard enough, you'll know them well.

And best of all, you will have planted a seed in them without turning them off. Yes, selling turns people off. Listening turns them on. So listen and learn, and plant seeds that will sprout somewhere down the road.

If you make it a goal to be a buyer in a room full of sellers and try to meet only one or two people per event:


  • You'll have more fun

  • Your dance card will always be full

  • You'll make connections that will pay off down the road
Now imagine the seller at a networking event who can't find a buyer. He'll call the event a waste of time. And you'll be laughing all the way to the bank.

-Phil

Tuesday, April 26, 2011

Oops, My Fault

No, this is not a post about admitting your mistakes as a way of better customer service. I already covered that here.

This is about a mistake I made in marketing my marketing class.

Last night I gave a talk titled "Main Street Marketing on a Shoestring Budget" to a group in Ortonville, MI sponsored by the Ortonville DDA. The talk was marketed to the 90+ member DDA, the local Chamber, and every other business in town.

Ten people showed up.

Afterward the DDA Director came up to me and said, "Phil, you know a lot about marketing. Here is what I did... ...What did I do wrong?"

And then the light bulb went off. Surprised that I didn't get it before. But it was right there in my presentation, and it was something Roy Williams has said to me many times before.

It isn't so much about who you reach as it is what you say.

Yes, she did a great job of getting the word out about my talk. The problem was, she used the wrong word.

No matter what type of marketing you are doing, the first, last, and most important element of your marketing effort is the MESSAGE.

And the most powerful message is one that speaks to the heart. Emotions. That's what moves us to action. Raw, powerful emotions. Rarely do we act on pure logic. Rarely do we respond to facts and data. But when you speak to our heart, we can move mountains.

And if I'm going to be doing presentations on this stuff, I need to first teach it to the organizers so that they can use it to draw up the kind of crowds for which this info would be helpful.

So to those ten wonderful people who showed up last night - thank you! And to last night's organizer, I'm sorry. That was my bad. I promise not to do it again.

-Phil

Friday, April 22, 2011

The Price is Right (Where it is)

I don't recall any time in the past 18 years where price has been such a driving issue for retail. Is it the economy? Is it the Internet? Is it the smart-phone barcode apps?

For whatever reason, all most retailers seem to be thinking about is where to set the price. How low do you go?

The easy answer is to set the price at what the customer perceives the product to be worth. Figure out what the average person would expect to pay and charge that amount. You'll sell tons!

What about profit, you ask?

Well, for that, you'll probably need to raise your prices.

But how?

Simple... Raise the Perceived Worth of the item in the mind of the customers. You do that three ways:


  1. Merchandise the product more effectively. Give it a special place on the shelf. Put a table cloth under it and a spotlight over it. Build a display that tells a story about the product. All of these things make the product appear more valuable to a customer.

  2. Make a sign for it. Put on the sign the story behind the product, the benefits of buying/using that product. Signs sell.

  3. Teach your staff everything on the sign and then some. Make sure they know what problems the product will solve so they can match customer to the product.
Quit worrying about price and instead focus on raising the customers' perceptions and expectations. You'll sell more and make more at the same time. Oh yeah, and you'll have more fun doing it!

Happy Easter!
-Phil

PS For more on Pricing for Profit, download the FREE eBook.

Thursday, April 21, 2011

It Takes a Big Person to Handle a Tough Customer

I was watching Cake Boss with my wife and kids last night (great show on TLC) and Buddy, the Cake Boss, had a really tough customer. How he handled it was a teachable moment for anyone in customer service.

Background: Mother & daughter came in to order a wedding cake. Daughter was totally not into the idea of a big fancy wedding. She never really gave much feedback but said okay to the design he offered.

The day before the wedding she came in to look at the tastefully decorated ivory cake as agreed, called it ugly and asked for something different. While Buddy went to talk to his team she grabbed tubes of colored icing and began squirting them all over the cake, basically ruining it.

Buddy came back and was shocked. He booted her out of the bakery.

The Dilemma: What should he do next? He basically had three options:

  1. Bake her a new cake. His business was swamped and it would mean overtime for his staff, plus the extra cost of the new cake and decorations, but they could do it.

  2. Give her the cake as is and say, "You did it, you get to live with your actions."

  3. Tell her that he wasn't going to make a cake for her at all.

What would you do?

The Decision: Buddy called the mom, a good customer of his, and told her he couldn't do the cake. She began to cry. Buddy then changed his mind and promised he would take care of her. As he hung up he said to his team, "I'm gonna show her that I can be the bigger man in this and make her a cake she's gonna love."

The result was a phenomenal cake that made the mom and bridesmaids cry. (Bridezilla refused to even get up from her chair to look at the cake. I give that marriage about 3 months at best.)

The lesson, however, was telling. At the end of the day Buddy decided that doing the right thing (making a new cake to the customer's satisfaction) was more important than doing the easy thing (not making a cake), or the deserved thing (giving her the cake she "decorated").

You could justify any of those three actions, but only one of them will get you repeat and referral business. Whether the bride was happy or not, the mom and the bridesmaids will always remember what Buddy did and will tell others about it, too.

That is how you get
Word of Mouth from over-the-top customer service.

Wednesday, April 13, 2011

Can You Read Your Financial Statements?

I know for years I could not.

Sure, my dad would try to explain everything to me. My grandpa helped, too. Even the accountant would chip in from time to time. But it always seemed like they were speaking a foreign language.

Let's face it, most independent retailers have little or no accounting background. And accountants & bankers speak in a tongue very few understand.

If we want to be successful, we need to know what those statements say and what those numbers mean.

Here's some good news...

I have finally broken the code!

I have deciphered the two biggest financial reports your accountant gives you and translated them into language we all can understand.

It's all in the FREE downloadable eBook Reading Your Financial Statements.

Think of it as the Rosetta Stone for accountant-speak.

A HUGE shout-out goes to Frances Schagen who helped me tremendously in finally understanding the relationship between Assets, Liabilities & Equity, and for making sure my numbers all looked right. Thanks, Frances!

As Frances says, "What gets measured gets managed." May this help you better manage your finances this year.

Cheers!

-Phil

PS This is just one of many FREE downloadable eBooks for Retailers you can find on my website - http://philsforum.com/.

Monday, April 11, 2011

Merchandising Visuals

If you struggle with creative visions for your merchandising displays I just found something perfect for you.

Check out the new blog I'm following - Retail Details.

It is chock full of pictures of creative retail merchandising displays from around the world.

As you know, better merchandising leads to increased sales. Check it out and get inspired!

-Phil

Friday, April 8, 2011

When Bunnies Multiply

Easter is coming.

If you're a store full of seasonal merchandise there are bunnies sprouting up everywhere you turn. And just like the real critters, they tend to multiply at a rate faster than expected.

When Bunnies Go Wild
And in 17 days you'll have a dilemma... what to do with all of the Easter Bunnies that didn't find their way into someone's heart and home.

Your first thought is usually, "Well, they're paid for, might as well keep 'em and sell 'em next year. I'm gonna need bunnies next year anyway." That was always my first thought. Plus, we have a large enough warehouse that no one was going to care about a small box of Easter leftovers.

Get over that thought. There is a better thought to have...

"Yes, I paid for them. I want my money back!"

When the season ends, the smartest thing you can do with your leftover seasonal merchandise is mark it down and try to turn it into cash.

Four Ways to Better Cash Flow
First, it helps put money into your pockets for buying other (more profitable) merchandise. Throwing it in a box until next season just means you have fewer dollars available for merchandise right now when you really need it.

Second, if you have leftovers, part of the reason is that you bought too much, but even more likely, you bought the wrong stuff. If it didn't sell this season, it isn't selling next season. Cut your losses and move on.

Third, even though Easter happens every year, the product mix available for the season and your store's mix both change frequently. Maybe you'll find an even cuter bunny, or maybe you'll decide chicks are the way to go, or maybe you'll decide that you'll sit out the next season. If you're holding merchandise from the previous year, you are less capable of making those choices.

And finally, your financial numbers will improve. If you are measuring your Gross Margin Return on Inventory (if you aren't, you should!) then you know that part of the equation is keeping your inventory levels lean and tight. Holding merchandise that isn't selling costs you money.

Hare Today Gone Tomorrow
So for the next couple weeks, sell your Easter goods to the best of your ability. Make your margins and move on. But if April 25 arrives and you still have plenty of bunnies, give those hares their marching orders.

-Phil