Thursday, January 24, 2013

Sales Reps are People Too

Christmas is over. The dust has settled. The inventory is counted. The phones are ringing. Sales Reps are invading, loaded down with 2013 catalogs, samples, and stories.

Some of us dread this. Some of us look upon our sales reps as a whole different breed of creature designed to suck the life out of us (not to mention every penny). Every page of every catalog needs your full attention. Every product is a home run. Every product is a destined best-seller. Every product should be bought deeper, every company bought wider. There is so much hype, you need to wear waders just to get out of the office.

Ugh! When will this plague end?

It ends when you get better. It ends when you realize that your sales reps are people, too. In fact, they are more than just people, they are YOUR employees. They work for YOU. They help you fill your store with products that make you money. They help you find hidden gems and stay clear of sure-fire dogs. They help you keep your look, your philosophy, your reputation intact. They make money for you and you don't even have to pay them.

What? You say your reps don't do this? That is because you haven't trained them.

Yes, you need to train your sales reps. You need to train them just as you would any other employee. Teach them your core values, your philosophy. Teach them what products you want or don't want. Teach them how you want to receive information, what information you want, and when you want it. Teach them how you place orders, when you place orders, why you place orders. Teach them how you handle mis-ships, defects, back orders. Teach them what you expect from them and you will be surprised how much better they will become.

Your reps take you out to lunch to try to buy your favor and buy an order. Have you ever taken your rep out to lunch to thank them for the job they do for you?

Your reps send you gifts to thank you for your orders and the commissions they have received. Have you ever sent your rep a gift for helping you find the products that made you money?

Treat your reps as good or better than your employees and they will work incredibly hard for your business.

Your reps will get better the moment you do.

-Phil Wrzesinski

PS I was at a conference years ago when one session turned into a bitch-session about reps. I watched with amusement because for the most part, my reps are wonderful. Treat them well and you will see a huge improvement.

Monday, January 21, 2013

Once Size Does Not Fit All

I am doing a training next week for a number of different businesses on Shareworthy Customer Service (with Tim Miles who deserves credit for coining the term Shareworthy). I have been doing a little research on each of these businesses to make sure that what I teach will fit for each business because when it comes to Customer Service, one size does not fit all.

Too many of the books I have read on Customer Service focus on teaching your staff a simple, repeatable system. Their system, they write, is the one and only way to offer great customer service (sarcasm fully intended).

There isn't a one and only way. Heck, for each business there are a handful of different ways to offer memorable and shareworthy customer service. Don't get me wrong. There are founding principles behind Shareworthy Customer Service.  There are characteristics that are similar for all businesses. But the systems each company must implement have to be unique and flexible to truly be shareworthy.  Focusing only on the system, not the reason behind the system, guarantees that your company will meet the letter of the law, while never grasping the spirit and never really being shareworthy.


For instance, we all know that it is important to greet customers when they walk through the door. The other day I entered a Rite-Aid store and heard a voice cry out "Hello! Welcome to Rite-Aid." I looked around and saw no one. There was a stack of boxes a couple aisles over. I heard some rustling behind the boxes. Sure enough, a young gal was down on her hands and knees stocking the shelves. She heard the automatic doors open, assumed someone was walking through, and because she was trained to greet every customer, yelled out her greeting over the stack of boxes.

This is the back of the "Pick up orders here" sign in the pharmacy at  our Rite-Aid
(as seen through the drive-thru window)
She thought she was giving great customer service because she was doing what the system told her to do. I don't blame her. But here I am - with you nodding in agreement - telling her tale as an example of far less than shareworthy customer service.

Now, if she was taught that it was important for customers to be greeted so that they actually felt welcome, that they felt important, that they felt like you were there to serve them, then she might have stood up, looked me in the eye, welcomed me, see if I needed any direct assistance, and explained that she was available and could be interrupted if necessary. Nope, instead she was taught a system - greet every customer.

Shareworthy Customer Service should be the goal for every independent retailer. But before you simply put a system in place, make sure you know why the system is there and what the goal is for each step. Then make sure you build some flexibility in so that when the system fails the goal, you can momentarily change the system.

-Phil Wrzesinski

PS There are still a few seats available for next week's class. Come to Austin, Texas. Tim and I will teach you the foundation for SCS and how to implement systems that make sense for your business. Soon they will be writing books about your legendary customer service, too.

Wednesday, January 16, 2013

Are You Open To Buy?

I've written about Open-to-Buy programs for Independent Retailers and how difficult they are to manage.

For those of you who have also struggled with the OTB's and want a simpler, more intuitive way to manage inventory and cash, here is a plan you can follow...

First, understand that the ultimate goal is to have the right products at the right time at the right price. There are three simple rules that apply no matter what...
  1. Don't out-buy your terms. If you get Net 30 (30 days to pay the bill), try not to buy more than 30 days worth of products.
  2. Don't buy anything you don't want. Padding an order just to reach a new discount level rarely works. You usually end up marking down those extra items that you were never fully convinced of carrying and lose any discount in the process.
  3. With the exception of December Dating (for businesses that do most of their sales during the holidays), smaller orders done more frequently is always better than one or two really big orders per year, regardless of the specials.
Post those rules at the top of any OTB plan you decide to use. With those rules in mind, here is my plan...


Rank Your Vendors

The first thing you need to do is rank your vendors. Split them into three tiers.
  • Tier #1 - your top-selling vendors that help define your store, have the most of your 'must-have' products, sell through the fastest.
  • Tier #2 - your second level of vendors who have great products that you love to carry and sell, who are profitable and have generous terms, and who have a few of your 'must haves'.
  • Tier #3 - all of the other vendors who are left including seasonal customers.
By knowing this information, you have a better idea of which vendors deserve more of your attention so that you do not spend your limited resources in the wrong places.

Break it Into Quarters

The next thing you should do is break up your buying schedule into the four quarters. Plot them out on a calendar. You can use the standard calendar quarters (Jan-March, April-June, etc) or break it up whichever way makes sense for your business. Some summer-based businesses consider June-August to be their "4th quarter".  Label each quarter with what is most important for that quarter. For instance, you might label 1st quarter "Prepping for Easter", 2nd quarter might be "Outdoor and Summer", 3rd quarter might be "New Releases" and 4th quarter could be "Christmas!!!"

Just by labeling each quarter you get a clearer picture in your mind of where you need to focus your dollars. The mental aspect of this simple activity will alone make a huge difference.

Schedule Your Vendors Each Quarter

Here is the meat. After you have done the first two steps, take your tiered vendor list and write into the first month of each quarter all of your Tier #1 vendors. Write Tier #2 vendors into the second month. Write Tier #3 vendors into the the third month.

You're almost done.

Now look at each quarter a little more closely. If there is a Tier #2 vendor that is more important to that quarter, move it to the first month. But be sure to move a Tier #1 vendor to the second month to compensate. Do the same with any Tier #3 vendors, especially the seasonal vendors.

Now you have a comprehensive buying schedule to follow for your year that will help you manage your inventory and cash flow a whole lot better.  Each month simply look at your list of vendors and write your orders accordingly - being sure to follow the rules at the top.

Adjust, Adjust, Adjust

Sure, you will have to adjust regularly. You might get to a new quarter and find you don't need to order a line, or you might run out before the quarter is up. All OTB's require constant juggling and tweaking. Just remember that for each time you add a vendor onto that month's buying list, you should move a different vendor out to compensate. By having a list, you are now making those choices consciously.

Sure, sometimes you cannot buy within the terms, or sometimes you need to over-buy just to make sure you have enough product for the busy season because you know the company will run out. Those issues will usually be offset by the line that moves so fast you find yourself writing eight to ten orders per year.

Sure, sometimes your cash will be tight. you might spend it all up in that first month of the quarter. But at least you spent it on the most important lines for your business.

If you follow the guidelines as much as possible, you will see the payoff in the long run.


If you are placing at least four orders per year for all of your vendors, your Turn Ratio will likely outpace your industry (most hard-goods retailers like clothing, toys, hardware, furniture, etc expect about a 2.5 to 3.5 turn ratio - perishable goods like florists and grocery have much higher terms and much different OTB's - and  four orders per vendor per year typically yields a 3.6 turn ratio or higher). 

This will increase your cash flow, while also keeping your store well-stocked.

Remember, Cash is King (and you are the adviser!)

-Phil Wrzesinski

PS For more on how to manage your inventory better including an understanding of how to calculate Turn Ratios and Gross Margin Return on Inventory, download my free eBook Inventory Management.

PPS For a list of Turn Ratios by industry go to this article on Rick Segel's blog.

Monday, January 14, 2013

Is This the Right Price?

I just published my third book.

Welcome to the Club, Daddy is a book for expectant fathers based on the class I have been teaching twice a month at our local hospital for the last ten years. It is a funny, yet practical guide for new dads that helps them learn how to change a diaper, deal with a crying baby, understand what their wives are going through and how to support them, and addresses the top concerns most new dads are feeling.

The book is a hardcover that sells for $17.99.

My wife asked me why $17.99. Why not $19.99 or $14.99 or even $9.99?  Good question...

I chose $17.99 for a number of reasons based on my Pricing for Profit eBook.


When the perceived worth of an object meets the actual price, the item has value. This book, based on its size and being a hardcover, fits in the $12.99 to $19.99 price range. Most other books this size fall into that price range.  Fiction tends to range a little lower, business books a little higher. The better known the author, the higher yet.  Self-help falls somewhere in the middle.

So just on size/style alone, we can narrow down the price to the $14.99 to $17.99 range.

Two factors raise the perceived worth of this book. First, it will primarily be bought by women for their husbands/sons. They perceive a greater need for this information which raises the perceived worth.  Second, this will primarily be bought as a gift, which also increases the perceived worth. We will spend a little more on a gift for others than we will on ourselves.

5-10-20 RULE

People also make calculations based on the actual bill they have to pull out of their wallet.  Believe it or not, but $14.99 and $17.99 are both basically the same price to a customer. Both are a "twenty dollar item". Since there is little distinction between the two, take the highest number that fits into the Value Equation.


Numbers themselves have stigma and perception. We generally do not like the numbers 0, 3, or 6.  Zero is lonely. Three conjures up unlucky thirteen. Six six six is the sign of the devil. Prices like $13.99 and $16.99 just don't look as attractive as $14.99 and $17.99 for subconscious reasons.  Numbers like 5 and 7 are okay. Thanks to Las Vegas, sevens are considered lucky.

So to recap...

  • The Value Equation says the price range is $12.99 to $19.99.
  • Being a Self-Help book narrows that to $14.99 to $17.99.
  • Being a gift in a category with high perceived worth suggests the upper limit.
  • The 5-10-20 Rule says that there is little perceived difference between the lower and upper prices so it also suggests the upper limit.
  • The BOGG Rule says that sevens are okay numbers, definitely better than fives or sixes.

Therefore, the suggested retail price is $17.99.

See how that works?

-Phil Wrzesinski

PS For more on rules that govern pricing to help you pick the most attractive price for the items you sell, download the free eBook Pricing for Profit.

PPS Those who have read Welcome to the Club, Daddy all agree - that price is way too low for the amount of information given.

PPPS If you would like to sell this book in your store, contact me for wholesale prices. Margins are great, terms are generous, and this book is not sold on Amazon.

Thursday, January 10, 2013

Convenience Trumps Price

I've been telling you all this for years. Price is not the only thing. Convenience trumps price both in the store and more importantly online, too!

Here's the proof.

Quoting the article...

Continuum's 2012 Service Design Report looked at data from more than 1,000 consumers across the country and uncovered the top reasons they choose whether to shop in-stores or online.

The top reasons respondents say they shop in stores are:
• For convenience (40%);
• They don't trust the quality online (22%);
• They don't want to pay for shipping/returns (17 %);
• For better prices (17%); and
• For personal interaction (4%).

The top reasons respondents say they shop online are:
• For convenience (43%);
• It is easier to find what they are looking for (29%);
• For better prices (25%); and
• To avoid interaction with employees (3%).

(Doing a tiny little happy dance.)

-Phil Wrzesinski

PS That begs the question... How do you become more convenient? Come to Austin, TX January 29-30 and I'll show you.

Monday, January 7, 2013

A Reason to Belong

For those of you who have read the new book Pendulum about the shifting outlook of society, you will remember that we are ten years into a "We" cycle. We still have another 30 years to go.

For those who haven't read the book (and I believe it may be the single most important book you can read for business), the general concept is that there is a 80 year swing in society between two prevailing outlooks - Me and We - each taking about 40 years of that swing.

A "We" cycle has "community" and "collaboration" as two of the main themes. People want to belong and be a part of something.

One way to use this understanding is to help people feel like they belong to your store. You probably already have a FB page and have a bunch of "likes". But how do you transfer that into a "community"? How do you turn those casual likers into loyal insiders?

Make them feel special.

Two ways you can do this...

  1. Insider information
  2. Shared unique experiences

Insider Information

People love little secrets. Men, especially, love secrets because men speak vertically - did what I say make you think higher of me or lower of me? Knowing little tidbits of information that most people don't know gives men a chance to say something that will make you think higher of them (at least that's how we perceive it, ladies, bear with us on this).

Ladies also like secrets. Unlike men, ladies speak more horizontally - did what I say draw me in closer or push me away? Ladies want to be in the inner circle. They feel special when they know the secret handshake. Little tidbits of information make them feel like they belong and also give them something to share with others and draw others into their inner circle.

Sharing personal stories, fun facts, and insider information with your fan base builds a level of loyalty among those who are in the know. Just keep it positive and interesting (i.e. did you know that the same man - Tom Murdough Jr - invented both Little Tikes and Step2? Yes, he went into business a second time just to compete with the first business he created!) Two examples of entities that have created a loyal band of followers... Lady Gaga & her Little Monsters and Jimmy Buffet & his Parrotheads. When your fans give themselves a name, you've done your job well.

Shared Unique Experiences

We have a special kindred spirit when we share a unique experience with other people. Those strangers become less strange. There is a nod of understanding between the people who have had those moments, a nod of "I-know-you-know-exactly-what-I'm-thinking".

When you do something completely and uniquely different than any other retailer out there, you'll get your customers giving those nods to other customers.  They will feel like they belong to something special. The best thing is that they will want to bring their friends into this inner circle.

The key is that the experience has to be unique and special and unadvertised. For example, when I was in the world of rock climbing, there was a gal in Colorado who was the best at resoling rock climbing shoes. Many climbers I knew sent their shoes to her. And she sent them back, resoled. The unique experience, simple as it may sound, was that in the box she included a Jolly Rancher candy. If you saw a guy with newly resoled shoes, all you had to do was ask, "What flavor?" If he had sent his shoes to Jules, he knew exactly what you meant and responded right away.

In a "We" cycle people want to belong to something special. Give them something special with your business and they'll be naming themselves soon enough.

-Phil Wrzesinski

PS Once you get your fans to become so loyal they name themselves, you can stop spending money on regular advertising. They'll do all the advertising for you.

Wednesday, January 2, 2013

Most Missed Posts from 2012

I posted my top ten most viewed posts in 2012.

In all fairness and just for fun, here are the bottom ten - the ten least viewed posts (although I like to think they were just missed.)

Read on if you dare...

10. From the Mouth of Babes - Two great lessons on Customer Service I learned on a field trip with a bus full of fifth graders.

9. Don't Marry Your Inventory - Some of the best advice ever on how to manage your inventory better and make it work harder for you.

8. Thoughts From a Wedding - Four really simple but important ideas I got from a wedding I attended.

7. Politics and a Plan - How to be prepared for the unexpected and not have to play the blame game.

6. Stay Above the Fray - Why negative advertising is so powerful in politics and so dangerous in retail

5. Make it More Fun - An NRF study said 78% of consumers would shop somewhere else if they thought it was more fun. Here are ways to make your business more fun.

4. Thanks! It Works! - The power of saying "Thank You!" and how those two simple words can make a huge difference for your business.

3. Tell Me a Story - Emotions move the needle far better than data. Stories are powerful. Are you telling yours?

2. Measuring People - Three different ways to "measure" your staff to make sure you are getting the most out of the investment you put into them,

1. What Do They Know? - One simple thing you can do to become more knowledgeable about the products you sell.

-Phil Wrzesinski