Friday, July 29, 2011

Customer Service: From Weak to WOW!

Every business thinks they offer great customer service. Yet every one of you reading this has experienced lousy customer service, probably within the last week!

I think the problem is that we don't have a definitive guide of what great customer service looks like.

Until now...

I also think great customer service isn't enough. Just being great merely gets you a thanks from the customer (if that). It doesn't move the needle towards referrals or word-of-mouth advertising. It doesn't grow your business.

You give great customer service. She says Thanks. Transaction over.

We need to WOW her to get her to talk and get her to bring others to our store.

Check out my new eBook, Customer Service: From Weak to WOW! Like all of my eBooks, this download is FREE. The eBook takes you through 8 different interactions a customer has with your store and ranks the type of service she gets from Weak to WOW! so that you can see where you fit on the scale and where you need to improve.

Customer service in this country has been devalued because it has been so weak. We need to reverse that trend. Please download the eBook. Share it with your staff. Share it with your fellow business owners. Share it with your Chamber of Commerce, your DDA, your Shop Local program.

If we collectively raise the bar on what WOW customer service looks like, we make customer service an important element in the shopping equation once again.

-Phil Wrzesinski

PS If you would like me to come to your town to do a one-hour presentation on this topic (or any other topic), send me an email. While I think the info looks good on paper, those who have seen the live presentation will tell you it is much more powerful in person.

Tuesday, July 26, 2011

Three Keys to Remember About Advertising

As business owners we are often the worst judges for determining what to do with our advertising.

We're bad because we don't act like the typical consumer. We see ads that most people would miss because we are an advertiser. So all advertisements are relevant to us, ads that would not be relevant to the average consumer. And we read them more carefully, so we know them better than most.

Then we make advertising decisions like where to place the next ad based on what we do and see, not what our customers do.

So if you are debating where to place your next advertisement or what to say, remember these three things about advertising.

First: You cannot reach all of the people. No matter what you do, no matter how much you spend, there will always be some perfect customers for your business that never heard or saw your advertisement.

Second: That is okay because chances are they will know someone who has heard or seen your ad.

Third: Therefore, the most important thing is for you to impact the people you do reach well enough to make them want to tell somebody else about you.

Picking your medium is now easy.

Choose a medium in which you can create a compelling ad, one with a strong emotional connection to your potential customers.
Choose a medium where you can get your potential customer's attention and move her into action.
Choose a medium where you can tap into her powerful right brain, the side that deals with emotions and actions.
Choose a medium where you can paint a mental image so she sees herself doing exactly the behavior you want her to do.
Choose a medium where you can make a point that is relevant to her lifestyle and choices.
Choose a medium where you can afford to reach her often enough on a continual basis until she has no choice but to think of you first when she is ready for your product.

Personally, I like radio for that purpose. But that's because I learned how to write radio ads. An awesome graphic designer might have a different opinion.

No matter which medium you choose, the most important thing is to craft a powerful, emotional message that causes her to act. Anything else is just a waste of your time and money.

-Phil Wrzesinski

PS The quickest, easiest way to come up with a powerful, memorable, emotional message is to unlock your Core Values. Read more in my free eBook Understanding Your Brand. Then download the Branding Worksheet and get your advertising doing what you are paying it to do.

Friday, July 22, 2011

Design for the Many, Not for the One

Too often we design policies for the wrong reason. We design them because somebody tried to take advantage of us. And in the process we restrict the many to protect us from the one.

Yet, no matter where we draw the line, there is still someone out there who will try to skirt around the edges and push past our boundaries. It never fails. Draw a line in the sand and someone will dare to cross it.


Quit drawing lines in the sand.

For instance...

We offer layaway. Most stores that have layaway have fairly strict limitations. K-Mart's policy was 25% down, 25% in 15 days, paid off and taken home in 30 days. Period.

We offer a 6-month layaway with only 10% down and one payment of any size per month. And we are pretty lax in enforcing it.

Now ours may seem like a more generous policy, but the truth is, the vast majority of our layaway customers use it less than 30 days and would fit easily into K-Mart's model. In fact, only a small handful of layaways each year pass the 60 day mark, and maybe one per year hits 6 months.

But by offering 6 months, I look so much more generous and customer-friendly than K-Mart.

Here's another example...

We just launched our Birthday Club. The postcard $10 gift certificate we send out has NO expiration date. Some stores give you only 14 days to come in. They want the gift certificate used right away or it expires.

They are afraid that someone will hold their birthday gift certificate and not use it until Christmas or some other time.

But how many kids are really going to do that? And even if they did, wouldn't that be encouraging that the kids were learning how to save?

The reality is that the vast majority will be in right away to spend that $10 gift certificate. Only a small handful will not - regardless of the expiration date. And those who come in after 14 days will be pretty upset with you for not honoring it 4 weeks later.

Is it worth ticking them off? No.

Once again, our policy looks more generous and customer-friendly than the other, although both get roughly the same results.

The key here is to draw up your policies to allow for those customers who push the boundaries to push all they want. The vast majority won't push. Make your policies look generous and in the favor of your customers. You give the appearance that you are putting the customers' needs ahead of your own.

Sure, someone will try to take advantage of you. Someone always tries to take advantage of you. But the vast majority of your customers will not.

Look at all of your policies and see where you can make them more generous. The vast majority of your customers will still comply with what you expect, and you eliminate the nasty confrontations with the one or two customers who try to push beyond your boundaries.

-Phil Wrzesinski

PS My newest eBook "Customer Service: From Weak to WOW!" will be coming out next week. Look for an annoucement soon.

Thursday, July 21, 2011

Don't Marry Your Inventory

Marry your spouse. Develop a long-lasting relationship built on love, trust, fun, and shared interests.

But don't ever marry your inventory.

Your inventory shouldn't be around for long. It is simply an affair designed to bring you some short-term enjoyment (profit). If it overstays its welcome, you both suffer.

Oh, sure, when you first get your inventory it is exciting and new. There is an infatuation. And people tell you how great your inventory looks with you.

But if it stays around, it starts to look old and tired, and so do you. Be heartless. Kick it to the curb and get something newer and younger and fresher.

(Note: this is the only situation for which I'll give you this advice, so use it for what it's worth:-)

-Phil Wrzesinski

PS Yeah, a lot on Inventory Management this week. That's what happens when I'm divorcing my inventory in our Summer Fun Sale.

Wednesday, July 20, 2011

Discounts or Dating, Which is Better?

The first question out of every retailer's mouth at the trade show is, "What's the Show Special?"

The vendor responds with some incentive such as Free Freight, a percentage discount, or extended credit (net 60 instead of net 30 days for instance) if the order is large enough.

If given the choice, which should you choose?

Your Choice
Most retailers jump on the Free Freight. And they would be smart. With shipping costs the way they are, freight bills run from 12% to 20% the cost of the goods. That's a major savings.

Most retailers, though, ignore the extended dating. It is hard to quantify what an extra 30 days to pay actually saves.

Unless, like me, you've done the math.

Doing the Math
Extending your payment terms from Net 30 to Net 60, in terms of cash flow, is the equivalent of a 15% discount. In other words, it's just as good for your cash flow as Free Freight, and far better for your cash flow than a 3% or 5% discount.

The key lies in the phrase for your cash flow.

If you are under a cash flow crunch, you should look at trying to extend your payment terms in lieu of any discounts under 12%. It will help you out far more than the 2-3% or 5% or even 10% discounts offered.

But if your cash flow is already strong, take the discounts. The one shortfall of extended dating is that it does nothing for the bottom line. Freight is an expense so Free Freight decreases your expenses. Discounts lower your Cost of Goods Sold. Extended dating merely helps cash flow.

Discounts or Dating?

  • If you need cash flow, choose the extended dating.

  • If you need profit, choose the discounts.

  • If you can get Free Freight (which helps both) take it
But never, ever, ever buy something you don't want just to qualify for the incentive. Never. Okay?

-Phil Wrzesinski

PS Need more help with your inventory management? Download my free eBook Inventory Management

Tuesday, July 19, 2011

Who's Training You?

I talk a lot about the importance of training your staff. But who's training you?

Oh, don't get me wrong. I'm honored that you're here reading this post. That's a fabulous start. What else are you reading? Other blogs? Books?

Are you attending any conferences? Sitting in on any workshops? Listening to any podcasts or webinars?

Are you visiting other stores and seeing how they do things?

Here is one of my favorite ways to learn... Teach!

You can't teach what you don't know, so agree to teach something. Then you'll be forced to learn it. That's what I did to write my free eBook Reading Your Financial Statements. I took a topic that was tough for me and forced myself to learn it. Talked to accountants. Talked to other retailers. Read articles. Got professional opinions. Wrote a rough draft. Took the criticism like a man. Re-wrote it. And learned.

How do you get the chance to teach something? Simple. Ask.

Ask your local chamber if they are looking for an presenters for upcoming workshops or academies. Offer to speak to philanthropy groups like Lions Club or Rotary. Talk to your shop local group about doing a training.

Don't worry if you don't think you know enough. First, you know a lot more than you think. Second, once you book it, you'll do what you need to do to learn the rest, and you'll be all the smarter for it.

Your staff will model what you do. If you keep learning, so will they.

-Phil Wrzesinski

PS If you would like a suggestion or two for good books to read, send me an email. Tell me the subject and what you hope to learn. Chances are there is a book I've read or one on my to-read list that will fit the bill.

PPS For our last staff meeting I put a dozen or so of my favorite business books on a table, gave a quick synopsis of each book and offered the staff 3 bonus hours if they do an oral presentation on the book at the next staff meeting. You would have been amazed how many grabbed a book.

Friday, July 15, 2011

Building Your Customer Email List - Stolen Idea Made Better

I stole this idea from George Whalin.

To build your customer email database, put a fishbowl on your counter with a sign-up for your email and offer a drawing for a $25 gift certificate each month for anyone who signs up that month.

Works like a charm.

I shared this idea with some of my toy store owner friends. Tracey Harding of Kidz Enterprise in Tyngsboro, MA took it one step smarter.

She posted that the winner would be announced in her monthly email.

Guess what her open rate is?

Yeah, a lot higher than yours and mine.

Thanks, Tracey!

-Phil Wrzesinski

PS Follow this link for some words of wisdom I wrote on how to make an email newsletter campaign work for you. I wrote it in 2009 and the principles haven't changed.

Wednesday, July 13, 2011

Get Rid of Your Dogs

What if you bought this shiny new crib for your store. It measures 62" wide and 35" deep. It takes up 15 square feet of your store.

What if six months after you bought it, you still hadn't sold it?

One calculation some stores use to see how healthy their sales are is Sales per Square Foot. Take your total annual sales and divide it by square footage of selling space to find out your Sales per Square Foot.

Now you know how much business you should be doing for those 15 square feet.

But if you haven't sold a single crib, where are you? You're in the hole. You're out whatever it cost to bring that crib in. You are in negative numbers.

Not only have you not made any money, you've lost money on that space.

And chances are, since no one wanted that crib in the last six months, just taking 10% off the price isn't going to move it any faster.

The best move is to mark it at cost and sell it quickly. Get it out of there. Get back to zero for your 15 square feet. Then you have six more months to try something else in that space that will make you money.

Hey, we all make bad buying decisions, dogs that just won't hunt. That's part of the retail game. But a worse decision is not getting rid of the dogs soon enough.

Make sense?

-Phil Wrzesinski

PS If you want to know more about managing your inventory including the two formulas every retailer should know and track, download my FREE eBook on Inventory Management.

PPS Follow this link for my post on the best way to make your dogs bark.

PPPS Check with your industry to see if there are standards for what your Sales per Square Foot should be. But understand that every store is different. The bigger your store, the more of your space might be used for extra cash registers or wide aisles for shopping carts, thus lowering your numbers.

Monday, July 11, 2011

Customers Can Be Frustrating

She loves to tell you how your prices are high, how she can get everything cheaper somewhere else. She does everything but call you a price gouger and cheat to your face.

You feel your blood pressure start to rise. You know she doesn't know the truth.

She doesn't know that you check prices at your competitors a couple times a month so you know you are at the right price.
She doesn't know that 70% of your product mix isn't even available in any of your local competitors.
She doesn't know that all those 40% OFF signs she saw in the other store were off some inflated price no one would ever spend on that product.
She doesn't know that your competitor bullied the vendor into a better deal on that product.
She doesn't know that you pay more for your staff, pay more for your property, pay more in taxes, and offer more services than your competitor.
She doesn't know the research you did into finding the best products that make the most sense (unlike your competitors that only research which products make the most dollars).

And frankly, she doesn't care about most of that.

She is a Transactional Customer who is driven by one fear - paying too much.

She will drive to four or five stores (well, maybe three or four with these gas prices) to find the best deals, oblivious to the costs of time and gas.
She will do all the research she can to find the best deal.
She will only buy from you the stuff that offers her the best savings.
She loves watching Extreme Couponing.

She will not make you profitable in the long run.

Treat her well. You treat everyone well, don't you? But don't lose a minute of sleep over her comments or attitude.

For every one of her there is a Relational Customer who wants the expertise you have, who wants the knowledge you share, the services you offer.

As frustrating as the former can be, the latter is why we are independent retailers.

They are the customers who bring us the most joy because they get all that stuff above.
They know we want to steer them into the products that make the most sense.
They know we offer competitive prices, convenient services, and expert advice.
They understand the impact of shopping local.

You can't win them all. And some customers you'll never win. So don't fret the losses. Just celebrate the victories and move on.

-Phil Wrzesinski

PS I learned about Transactional and Relational Customers from Roy H. Williams, aka The Wizard of Ads. Want your socks blown off? Sign up for any one of his programs. Want to know more about Transactional & Relational Customers? Download his free eBook.

Friday, July 8, 2011

I Couldn't Have Said it Better

I stole this...

Bob Phibbs wrote this on his blog yesterday and it is worth repeating.

So many “retail brand experts” and C-level executives have bought into the belief “our customers just want to get in and get out.”

Do you know why?

Because their customer experience sucks wind, blows chunks, is one step up from the necessary evil of a root canal by a guy in a clown mask.

Your store will not succeed if you take this approach. The one true advantage every independent store holds over the big box discounters, the vast majority of chain stores, and the Internet is the Customer Experience.

You can give your customers an experience like none other.
You can make customers have so much fun they do not want to leave your store.
You can make customers so happy they have no choice but to tell others about you.

In fact, you have to do those things. You and me both. That's our calling card.

Thanks, Bob, for the reminder! (If you're not following Bob's blog like I am, you should! You can find the link in my sidebar.)

-Phil Wrzesinski

PS It starts with you and your attitude. And it continues with the type of employees you hire. If you don't get the right raw ingredients in your frontline staff, no amount of training will make them better.
PPS (Not sure what I mean by "raw ingredients"? You need to read the book Hiring and the Potter's Wheel: Turning Your Staff Into a Work of Art. It will change the way you do your hiring and training forever.)

Monday, July 4, 2011

What if the Coach is Wrong?

Everyone knows in sports you do not question the coach.

The coach says.. You do...

Everyone has to be on the same page for the team to be successful.

But what if the coach is wrong?

Every season someone ends up in last place. Someone is the biggest loser. Even though the team did everything the coach asked. Either the team didn't have the talent or the coach was wrong.

But in sports, unlike retail, if you're the biggest loser this year, that's okay. Next season you start 0-0. In retail, if you go 0-16 this year you start next year in a deep hole. There is no reset.

Two quick lessons from this...

1) If you're the coach, you better be right. You better have done your homework, planned for all contingencies and plotted a fabulous course. Then all you need to do is get the team to buy in.

2) If you have a coach and you know the coach is wrong you have to decide. Do you try to change the coach's mind or simply do the right thing?

Yes, I do advocate mutiny. If your coach is obviously leading you into last place, you need to do what you can to change that, even if it means subordinating the coach.

There is no reset in retail. You carry over your wins and your losses from last year into this year. The bank and your customers will remember and judge you on your previous season.

When the coach is right, all is good. But when the coach is wrong...

-Phil Wrzesinski

PS Before you choose mutiny, however, you have to understand. Following a coach into last or subordinating the coach are both going to lead to struggles. But as long as you're playing to win, at least you have that to fall back on. And if you don't know where your coach is leading you or why, you need to ask first. They may have a vision they just haven't explained well.

Saturday, July 2, 2011

How Many Customers Can You Afford to Anger?

I've been following a handful of private conversations in my industries about how to treat customers who really aren't our customers.

You know these people.

Bleeding You Blind
They find every loophole to get the most out of every transaction with you. They rarely shop at your store unless there is a discount or special going on. They always want more, trying to squeeze every penny out of your turnip. Rarely do you even know their names because they never come in until they need a donation or want to complain. They always want to use a coupon after it has expired, get a discount because the corner of the box is crushed, or complain about how they are a regular shopper at your store (even though no one on the staff has ever seen them) and should get a better deal.

These customers cost you money. They bleed your profit margins, take up your staff's time, and keep you away from more profitable customers. They frustrate and anger you and bring down the entire store's morale.

Best Buy took the approach years ago to fire these customers, send them to Circuit City.

What do you do?

Better yet, what should you do? Can you really afford to anger somebody in this economy? Are you big enough to take a PR hit because you wouldn't put up with an unreasonable customer?

What I Do
I'm not Best Buy. I don't believe I have the capital to purposefully anger any customers - even the customers I don't like. Oh, I've done it a couple times. We all have. But more often than not I look at it this way... I get to choose whether I am nice to someone or not. And it doesn't matter whether they are nice to me.

  • If I let someone use a coupon after it has expired, I am showing generosity.

  • If I give an extra discount because an item is crushed or the customer makes a fuss, I am being compassionate.

  • If I allow a customer to return an unopened item 10 months later, I am being helpful.

  • If I apologize to a customer for our failings even when she made the mistake, I am being understanding.
Generous, Compassionate, Helpful, Understanding. Yeah, I'd like to own those words in my customers' eyes. Wouldn't you?

The essence of Branding is simply...

Every single interaction a customer has with your business plus how they feel about it.

You cannot always control the interactions, but you can control the feelings by how you treat others. And don't ever believe that your best customers are not watching. Fair or not, they will measure you not at your best, but at your worst.

So make your worst pretty darn good by treating even your worst customers pretty darn good. You might just turn one of them into your best customer.

-Phil Wrzesinski

PS Even if you do have to fire a customer, do it with kindness and respect. At the end of the day the one thing you always have left is your character.