Tuesday, February 26, 2013

Two Types of Customers (and Other Generalities)

(Warning: there are enough bullets in this post for the Zombie Apocalypse. You may want to save it in your favorites just in case...)

I sat through a webinar today on advertising. The hosts (whose names shall be withheld to protect the ignorant innocent) said there are three types of customers:

  • Frequent (loyal)
  • Infrequent (fickle)
  • New (not yet a customer)

Now I like There-are lists as much as the next person. My current favorite is...

There are three types of people in this world. Those who are good at math and those who aren't.

Those of you who know me, however, know I believe there are only two types of customers:

  • Transactional
  • Relational.

But this webinar did get me thinking... You could also say there are only these two types of customers:

  • Those who shop with you
  • Those who do not shop with you

And you can break that second group down into three subgroups:

  • Those who do not shop with you because they know you
  • Those who do not shop with you because they think they know you (but don't)
  • Those who do not shop with you because they don't know you

And while we're on this list kick, your customers come from three primary sources:

  • Repeat Traffic
  • Referral Traffic
  • Advertising-driven Traffic

What percentage of each do you think is in your store today?

That last one - Advertising-Driven Traffic - is really only aimed at two people - Those who think they know you and those who don't know you. What can you tell those people that will change their minds? Go write that ad.

-Phil Wrzesinski

PS Repeat and Referral business come from Shareworthy Customer Service. If they aren't the bulk of your business right now, forget about advertising. You got a bigger leak in your boat that needs serious fixing. Start training your staff to delight and WOW your customers. Otherwise the money you spend on advertising will only hasten your demise.

Thursday, February 21, 2013

Can You Afford to Be a Snob?

This was an actual poster put up in a Borders store that was closing.

There were three bullet points in there that bothered me (well, okay, the whole thing bothered me, but that's another story).

  • We hate when a book becomes popular simply because it was turned into a movie.
  • Nicholas Sparks is not a good writer... If you like him, fine, but facts are facts.
  • Oprah was not the “final say” on what is awesome. We really didn't care what was on her show or what her latest book club book was. Really.

If I was a bookstore and Oprah said a book I sold was awesome, I would be loving it! I'd buy more. Make a fancy display. Sell the heck out of 'em.
If there was a writer that everyone wanted his or her books, as far as I would be concerned, if I had no moral judgment against the actual books, I would love that! I'd buy more. Make a fancy display. Sell the heck out of 'em.
If there was book I was selling that became more popular because it was turned into a movie, I would love that! I'd buy more. Make a fancy display. Sell the heck out of 'em.
After reading this poster, I often wonder if Borders went out of business because of Amazon or because of the attitude of the staff.
When the sun shines, make hay.

-Phil Wrzesinski

PS Some of you may be ready to call me out on this since there are certain toys I won't sell, one of them being toys that are tied to a movie. My reasoning is that most of those items aren't toys so much as novelties. If the toy has great play value first, the movie tie-in is wonderful. I have sold a ton of LEGO related to Star Wars, Harry Potter, and now Lord of the Rings/The Hobbit.  First it has to be something I would sell. Then if I get a movie tie-in, an endorsement from Oprah, or the general public falling in love with it - that's a bonus I'm going to run with, not lament.  See the difference?

Monday, February 18, 2013

Reading List (Short Version)

For some reason, I have found myself recommending the same three books over and over the past couple weeks. So before anyone else asks, here are those three books.

Why We Buy by Paco Underhill - Buy this book if you want to be better at merchandising your store. Buy this book if you want to think about merchandising and traffic patterns and aisle widths and aisle lengths and sight lines in a whole new light. Buy this book if you want to read fascinating case studies about retail successes and failures at merchandising. Buy this book if you have any plans at all to change the layout or design of your store.

Drive by Daniel H. Pink - Buy this book if you want to understand how people are motivated to do their best work. Buy this book if you want to find different ways other than money to reward your staff. Buy this book if you want to find ways to make your trainings stick better. Buy this book if you want your staff to work harder.

Pendulum by Michael R Drew and Roy H Williams - Buy this book if you think the world has changed dramatically over the past ten years. Buy this book if you want to see what the next thirty years will look like. Buy this book if you want to know why your advertising that worked in the past isn't working today. Buy this book if you want to see how society changes every 40 years from one extreme to another and how to navigate each of these extremes.

It will be the best reading you do all year.

-Phil Wrzesinski

PS I purposefully did NOT include links to any of these books.

  1. Print out this list (or keep it on your phone) and walk into your local bookstore (if you still have one). 
  2. Order these books through the local store. 
  3. While you are there, browse the business section for one more book that catches your eye. 
  4. Buy that book, too.  
  5. Then buy one more book, just for fun.  

You are as good as you read.

Wednesday, February 13, 2013

Believing or Behaving?

I could probably fill up a whole page with "I Believe..." statements.

I believe... specialty independent retailers need to have better customer service than their competitors.
I believe... cash is king and sometimes more important than profits.
I believe... the store owner who quits trying to learn quits trying to grow.
I believe... what gets measured and rewarded gets improved.
I believe... we need to know and understand the financials of our business inside and out.
I believe... we need to stay true to our core values, but be willing to change everything else
I believe...

What do you believe? I challenge you to write it down. All of it. Take an hour and type up everything that comes to mind. It will be a powerful hour.

But then I'm going to ask you to do something else.

I was reading Drew McClellan's blog (Drew's Marketing Minute) and he said this...

"One of the sure signs of a person who is going to be successful is that they wholeheartedly behave in lifelong learning. I didn't say believe in life long learning because I've found just about everyone believes in it. But few actually act upon that belief."

I have some strong beliefs. But does my behavior match those beliefs? Can I prove it?

Can you prove it?

Write down underneath, next to, or over the top of each of your belief statements the behavior you are actually doing that proves your belief.

I believe specialty independent retailers need to have better customer service than their competitors.
I attend and teach customer service trainings, constantly look for new ways to train my staff on customer service, read books on the topic and explore new ideas and thoughts.

I believe cash is king and sometimes more important than profits.
I get rid of slow-moving merchandise regularly. 

I believe the store owner who quits trying to learn quits trying to grow.
I attend workshops, read books and blogs, and teach (to teach something, you have to learn it deeply first)

I believe what gets measured and rewarded gets improved.
I praise regularly and am implementing new rewards programs in other aspects of the business.

I believe we need to know and understand the financials of our business inside and out.
I run reports at least monthly. I wrote a book on financials for the toy industry. I look at that book frequently.

I believe we need to stay true to our core values, but be willing to change everything else.
I have my core values posted on my wall and use them as a guide for everything we do, including changes for the better.

How does your behavior stack up to your beliefs?

-Phil Wrzesinski

PS You don't have to agree with my beliefs. You are more than entitled to your own. Just live up to them. If your behavior doesn't match your belief, maybe it isn't something you actually believe in???

Friday, February 8, 2013

Are You Playing Your Best Card?

All through the 80's, 90's and even the early 00's specialty independent retailers had the misfortune of competing with the big box stores like Home Depot, Toys R Us, Michael's, etc. These Category Killers and the discounters like Wal-Mart, Target and K-Mart forced a dramatic shift in the marketplace.

No longer could we afford to carry much of the product that these guys carried. They used their size to bully vendors into better pricing, and used their centralized administrative functions to keep overhead down so that they could work on lower margins and sell that stuff much cheaper than we could.

We could still compete, though, because there was enough product those big boxes didn't carry. And they never could match our knowledge. Yes, in many industries we went from being big stores like them to smaller boutiques and smaller stores. But there was still plenty to be done by playing the differentiation card.

Today we are facing another dramatic shift in the marketplace.  The Internet.

The Internet has taken away the differentiation card. Almost everything you sell can now be found and purchased online. Usually at a lower price than what you are offering. And with a convenience that you cannot touch - being able to shop at midnight in your pajamas in the comfort of your home with all of the information, product data, specs, and reviews just a mouse click away.

That's a pretty big card.

Sure there are some hold-outs. There are some wonderful companies like Trek Bikes and Stihl Yard Equipment that are supporting the independents fully 100%. But those are now the exceptions, not the rule.

The old model of product differentiation is dead. It isn't coming back any time soon.

The new reality is that we have fewer and fewer cards left in our deck to play. We still have the desire of the customer being able to touch and feel the product before she buys. We have the immediate, take-it-with-you convenience that Amazon is trying to copy with their same-day delivery model (that I believe will bankrupt them, but that's a discussion for another day).

And we still have Customer Delight.

That's the best card in our deck. That's the one card that will be difficult for our competitors to be able to take away. We have the ability to make a connection with her that resonates deep in her heart and makes her want to come back and bring her friends, too.

Instead of going blue in the face complaining about Amazon, Gilt, Zullily or any other online seller... Instead of complaining about which vendor is now selling the mass... Instead of complaining about the government and how its actions or inactions are hurting you... spend your energies bending over backwards to delight your customers. Spend your time anticipating her needs, meeting those needs, then exceeding them beyond her wildest dreams. Win her heart, you win the hand. The one that reaches for her wallet.

-Phil Wrzesinski

PS To win her heart, you have to surprise and delight her. To surprise and delight her, you have to know what she is expecting and then exceed that. The easiest way to do this is to quit thinking like a retailer and think like a customer. What do you want when you shop? How do you want to be treated? What do you expect when you enter a store to make a purchase? That is the bar. Now go over it!

Monday, February 4, 2013

Bacon and Eggs for Breakfast

This morning for my staff meeting I served my staff bacon and eggs. Brought in an electric frying pan, started up the bacon about 30 minutes before they arrived. Had some coffee, orange juice and bagels ready, too.

Not a bad way to start the day post-Super Bowl. A couple of the more hungover staff truly appreciated it.

I got the idea from Jeff Sexton. He wrote a killer blog breaking down one of my favorite ads from the Super Bowl - the Audi ad where the kid was going alone to the senior prom. If you don't follow the link to his blog (you should - in fact, if you do all your own advertising, you should be following his blog), the basic premise is that it is storytelling at its finest through a series of rituals. There are twenty "rituals" shown in one minute.

Rituals are powerful. Summer camps know this. Summer camps are full of silly, goofy rituals. And those rituals are what make campers want to return. Rituals make kids feel like insiders because they know what to expect, they know what to do, they feel important and special.

Rituals are comfortable. We love rituals. We have so many rituals in our everyday lives, many of which we aren't even aware. Your morning routine is a ritual. You do it the same way almost every day. And if something throws you off your ritual it can set you back for part or even all of the day.

In the past I have served my staff crazy breakfasts like ice cream. I did it to make a point that there are no rules on what you can and can't have for breakfast. It felt uncomfortable. But they got the point. Too often we limit ourselves to the norms and are afraid to break the rules.

This morning I served them bacon and eggs because those are the comfort foods. Just the smell of bacon was a reminder of the ritual of breakfast. It was comfortable and comforting and felt right. Only a handful of staff had ice cream. They all had bacon. They all knew the ritual.

As I type this, the bacon aroma is still wafting through my office door. And the discussions of the rituals we have here at Toy House (free gift-wrapping, the birthday bell, the flag-raising ceremonies, the way we interact with customers) and how we can make them more memorable and consistent, continues to reach my ears.

Your business has rituals that remind your customers of you, that make your customers comfortable, that make your customers feel like insiders. Identify those rituals. Make them more consistent and memorable. You'll create more loyal customers in the process.

I'm off to go test drive that Audi.

-Phil Wrzesinski

PS Which Super Bowl ad made you actually interested in the product?

Saturday, February 2, 2013

Measure and Reward

I've often used some form of the quote, "What gets measured, gets managed."  If you don't measure what you're doing, you don't know if it is improving or getting worse.

Last week, I was reminded of a simple change in that statement that raises it to brand new heights.

What gets measured and rewarded, gets improved.

Measuring is only the first step. Rewarding the behavior you seek will lead to you getting more of that behavior. Rewarding the behavior shows your staff what is important to you. Rewards in the workplace are the scorecards by which your staff rate themselves.

Do this. Get a reward.
Do more of this. Get more rewards.

That is simple enough for everyone to understand.

Rewards don't have to be huge. They don't even have to be monetary. Praise is a reward. The more public the praise, the bigger the reward. Recognition is a reward. Recognize those who have done well at your next meeting. Honors are a reward. Whenever we had no groups signed up for our Saturday morning flag-raising ceremony, I would honor one staff person by picking that person to raise the flag and telling everyone else why I chose them. The pride they beamed was worth far more than a gift card to a local restaurant or an extra vacation day (although those do make good monetary rewards that are far more memorable than cash).

Measure and reward the behaviors you want improved. You'll get more of what you want.

-Phil Wrzesinski

PS You'll also get less of what you don't want. It won't take long under this kind of system for you to find out who doesn't want to put in the effort and doesn't fit in to your system. Although it is never fun to fire anyone, the best way to get the staff you want is to get the right people in the right jobs.

PPS Tim Miles and Roy H Williams both brought this concept of Rewards to light during our Shareworthy Customer Service workshop last week. Yeah, I like to work with really smart people.

Friday, February 1, 2013

Sit in the Hot Seat for a Bit if You Want to Improve

I made Ernie sit in the Hot Seat.

Ernie knows a lot about sitting in comfortable seats. His company makes the best, custom-built, ergonomically correct office chairs you'll ever take for a spin. You just haven't heard of him. Yet.

Ernie knows that his product is amazing. He wants his customer service to be amazing, too. So he spent two days with Tim Miles and me at Wizard Academy. He jumped at the chance to sit in the Hot Seat.

Ernie and I broke down all of the touch points, all of the interactions his company has with his customers. We identified seven steps...

  1. Sales Rep Calls Customer
  2. Sales Rep Makes Appointment for Demonstration
  3. Sales Rep Does Demonstration
  4. Sales Rep Asks for Sale
  5. Company Confirms Sale
  6. Company Delivers Product
  7. Sales Rep Follows Up

We then went through each of those steps and scrutinized what his company was doing and where they could improve. We looked at it from different perspectives.

  • What are you currently doing?
  • What would the customer prefer you to be doing?
  • What would be above and beyond the customer's expectations?
That middle question is the key. The biggest breakdown that gets in the way of offering amazing, shareworthy (Tim's really cool word) customer service is when your sales staff does what they want instead of what the customer wants.

First you have to figure out what the customer expects. Then you have to meet it. Then you have to exceed it. Ernie squirmed a little when we found a few areas needing attention. But now he knows how to exceed customer expectations on a consistent basis.

I have no doubt Ernie's company is gonna catch his competitors. No, check that. He's gonna blow right by them. You'll probably be sitting in one of Ernie's chairs long before you claim your gold watch.

Are you willing to sit in the Hot Seat first to see where you need to improve?

-Phil Wrzesinski

PS Ernie, if you're reading this, I had another thought about Step #3. When your rep shows up, have him or her bring food. If it's a morning demonstration, bring doughnuts from the LOCAL bakery that everyone loves. If it's an afternoon demo, bring pizza from the hottest pizza spot in town. Don't tell them you're bringing it, just do it. Covers that Over-the-Top Generosity thing we discussed. Also covers the "above-and-beyond". Just make sure you have the right brand of doughnuts or pizza. It says a lot about you when you get that right.

PPS Most of you reading this just imagined what it would be like if your sales rep showed up with your favorite food, didn't you? Bet you would be thinking... Yeah, this rep gets me. He knows my business. I bet you end up doing more business with him, too.