Friday, October 31, 2014

What Kind of Candy are You Giving Out?

There was a house on the next block that gave out full size candy - Milky Ways, Snickers, Butterfingers and M&M's. My friend Peter and I spent one Halloween changing into multiple costumes and running up the street to that house at least five times.

There was another house on the street we just avoided. Stingy old man who gave out only one single piece of that orange/brown wrapped tootsie roll wannabe. Wasn't worth the hassle to go to Mr Stingy's.

Are you the Mrs. Generous House that everyone goes to multiple times or are you the Mr. Stingy House that everyone ignores?

Depends on the candy you're giving out.

This Halloween is a good time to think about how you can be more generous this holiday season. Word gets around quickly where Mr. Stingy and Mrs. Generous live.

-Phil Wrzesinski

PS Generosity is one of those gifts that comes back to you in droves. It is one of the key drivers of Word-of-Mouth advertising. You need to incorporate it into your way of doing business.

PPS Happy Halloween!!

Tuesday, October 28, 2014

Do You Have Enough Staff or Just Enough Staff?

There are two ways to determine the right amount of staff to have on your floor.

You can have enough people to handle the average traffic expected that day.

Or you can have enough people to handle the peak traffic moment that day.

Yes, the second one costs you more in labor expenses because you never know when that rush will occur. But look at the pluses.

  • You're never under-staffed. You never have to worry about a customer having a bad time and flaming you on Yelp because your staff wasn't able to handle the rush of customers. Whelming? Yes, but never overwhelming.
  • You have plenty of extra bodies to do all the other stuff that you never seem to find the time to do. Make a list for your go-getters. Sweeping, dusting, rearranging merchandise, creating fabulous window displays, making signs, tagging merchandise, updating social media, etc.
  • You have the ability to exceed customer expectations on a regular basis. To get customers to talk, you have to do more than they expect. Imagine their delight when you have extra bodies to help them shop, wrap their gifts quickly and carry them out to the car. 

You can't do all that with average staffing and above average traffic. As for costing you more, if you think of your staff as your greatest asset, the more you invest, the more it pays off. My grandfather had an old adage that served him well for his life - it's impossible to overpay for great help.

Keep that in mind as you do your seasonal hiring.

-Phil Wrzesinski

PS There are ten employees in the above picture (some hidden behind big boxes). There are another ten employees not shown out serving other customers. My payroll is a higher percentage than most stores. I take that money out of my ad budget because delighting customers is every bit as important as a marketing tool as running great ad campaigns.

PPS If you need help hiring a better quality of employees, read the book Hiring and the Potter's Wheel: Turning Your Staff into a Work of Art. It is the method of hiring that has made the biggest difference in the quality of my staff.

Friday, October 24, 2014

Anatomy of a Promotion That Pays

What if I told you that you could market your business to 6,000 customers and instead of costing you a penny, you would actually get paid $328 to do it?

What if I told you that you would also get valuable market data from that promotion?

What if I told you that you would be praised mightily for the campaign?

Here is what we did... (shout out to Bob Negen of Whizbang Training for this idea)

I contacted the local public school district and asked permission to send each of their 6,000 students a $5.00 Gift Certificate. They said yes and sent us a breakdown of how many students in each school. I mocked up the gift certificates as postcards and had them printed locally for $278.

When we got the GC's from the printer we bundled them in bundles of 30 and made a bag for each school. I delivered them a week ago Wednesday to the main offices. They distributed the GC's to the schools the following day.

The GC's had only this disclaimer: "For Student Use Only. One Per Student. Expires 11/15/14"

Here is where it pays...

We are expecting a 10% return on the gift certificates. That's 600 GC's we expect to be used between now and 11/15. In the first couple days alone we already had 60 returned and not all the schools had distributed them! The average ticket so far has exceeded $12.00.

So let's do the math...

600 x $12.00 = $7,200.00 in sales

Minus Cost of the GC's  (600 x $5 = $3,000.00)
Minus Cost of the Products  ($3,600.00 - 50% of the retail price)
Minus the Cost of the Printing ($278)

7200 - 3000 = 4200
4200 - 3600 = 600
600 - 278 = $322

Here is the bonus...

Not only did we get the word out to 6,000 students (and their parents) about Toy House, but we will get 600 of them (and their parents) into the store right before the prime part of the holiday season where we will entice them with product displays, events, and wish lists for them to fill out and get them back for Christmas shopping.

Not only did we get the word out to 6,000 students, but we also will get 600 purchases to tell us what kinds of impulse items are popular with today's kids.

Not only did we get the word out to 6,000 students, but I have received tons of praise from parents and teachers for our generosity.

Not only did we get the word out to 6,000 students but I have had friends and customers ask me what is going on that has kept our parking lot so full the last few days.

Here is the kicker...

There are some people who will tell me that I have the math all wrong, that I sold $7200 worth of stuff and only made $322 dollars. Those people are looking at the gift certificate as the be-all, end-all of the promotion. The customer came in once, spent a little money, and left. Promo done. They missed the whole purpose of the campaign, which is to earn top-of-mind awareness by getting them in the store right before the time we really want them in the store. I am banking on my staff's incredible customer relations skills to earn their repeat business whether they spent $1.62 (our smallest transaction with the GC to date) or $58.02 (our largest).

Frankly, the $7200 in sales, while nice, is just a drop in the bucket. The real value is in getting the word out, getting them in to look around, getting them to buy into our generosity, and getting an idea of what is attracting their attention once they are in the store. The fact that I get paid $322 to get all of that is the icing on the cake.

Do you have any promotions planned that pay you to do them?

-Phil Wrzesinski

PS If you sell stuff for adults, is there a major employer or three that you could contact about giving away gift certificates to their staff? Colleges, hospitals and city governments employ a lot more people than you might imagine.

Tuesday, October 21, 2014

Tell Your Customers What You Stand Against

It is easier to rally a crowd against something than for something. Just ask any political campaign manager what really moves the needle.

The same works in business advertising, too. Tell the people what you are against and watch a flock of like-minded people come see you. Tell the world why you don't agree with your competitor's world view and everyone who feels the same way will pay attention. Compare and contrast. Tell them what you won't do.

Peter Reynolds, VP of Sales of Janod Toys did a presentation for my staff last night and put up this graphic.

It is a perfect contrast of Mass Market stores versus Specialty Stores.

MASS                                     SPECIALTY
More for Less                          Less is More
Promote Low Prices                  Promote Benefits and Features
Emphasize Quantity                  Emphasize Quality
Create Wants                             Fulfill Needs
Good Toys are Hot/Licensed       Good Toys are Basic
Toys are Possessions                 Toys are Tools
Toys are Consumables                Toys are Investments
Toys Entertain & Distract           Toys Involve & Empower
Toys Promote Imitation              Toys Promote Creativity
Toys Promote Conformity           Toys Promote Uniqueness
The Toy Directs the Play             The Child Directs the Play

There is a whole year of what-we-stand-against advertisement messages in that above list. Do you see it?

-Phil Wrzesinski

PS When people talk about what they stand for, it is usually in generalities - world peace, strong economy, health. When people talk about what they stand against, it is more often specifics - low pay for... discrimination against... injustice for... The power is in the details.

Saturday, October 18, 2014

9 Ways to Draw Traffic With Only $400 a Month

A fellow store owner was contemplating an advertising deal offered to her from Yelp that was going to cost about $400 per month. That got me thinking about what different things you could do to draw traffic with $400/month.

  1. You could rent a bouncy house and run it in your parking lot every Saturday.

  2. You could run a customer survey poll in your store and donate that money to the charity your customers vote on every month.

  3. You could give away eighty $5 gift certificates to people who have never been in your store.

  4. You could buy an espresso machine and give away free espressos every day.

  5. You could have your customers help you invest it in the stock market and track each investment on a big board in the store with proceeds going to a local charity.

  6. You could use it to send eight $50 gift baskets to your top customers each month.

  7. You could use it to hire a valet parking service for your busy days.

  8. You could use it to host classes and meetings at your store.

  9. You could use it to pay top-level local entertainers to perform at your store.

Don't be limited by your media choices for getting the word out. There are far more options than just online, broadcast, print and billboard. There are as many ways to draw a crowd as your mind can conceive when you let it get creative.

-Phil Wrzesinski

PS My favorite is #2. Just imagine all the charities sending their people in to your store to stack the vote each month.

Monday, October 13, 2014

Lose the Battle to Win the War

We all have those unreasonable customers. Ones that want to bring an item back months after they bought it, not in resell-able condition. Ones that demand money back without a receipt or they will flame you on Yelp. Ones that want you to do something that your stated policies say you don't clearly do.

You could take a page from Best Buy and fire those customers. You could be like the Soup Nazi on The Seinfeld Show - no soup for you!!

Here is another approach I want you to consider.

Kill 'em with kindness. Break your policy and do what they ask. Bend the rules and give them what they want. Do it with a HUGE smile on your face, sincerity in your heart, and genuine concern for their needs.

"I'm really sorry that item didn't work out for you. Yes, I can see why your husband would cut it in half. We'd be happy to take it back. Would you like to pick something else out? Maybe I can offer a couple suggestions of items that might work better? No? Okay, here is a refund. Let me know if there is anything we can do to help you out in the future."

It might sting a little bit. You might lose some money on that particular transaction. But don't be penny-wise and pound-foolish.

When you kill these customers with kindness, a few things could happen.

They might not notice and continue to be a thorn in your side.
But your other customers noticed. They didn't get the whole story of what was going on with the customer. They didn't see how unreasonable she was. But they did see how you reacted. They saw how you took incredible care of the customer. They saw how you had the customer's back. They noticed how you were calm and friendly and respectful and helpful and caring.

They might become one of your best customers ever. 
I could regale you with many tales of unhappy customers we have turned into mega profit machines because we bent the rules a little. Heck, you can regale me with many of the same stories. In fact, retail is the only place I have actually seen true alchemy - turning lead weight into gold.

At a time when we are all screaming about how to draw more traffic, maybe firing our current customers isn't always the best tactic.

As one anonymously brilliant person said... Your customers will get better when you do.

-Phil Wrzesinski

PS Never let short-term profits get in the way of your long-term goals. This strategy may "lose" you a battle or two, but you'll win the war. Yes, it requires patience. Yes, it requires eating a little crow (but crow sprinkled with a helping of cold hard cash can be rather tasty sometimes). Yes, there will be customers who make you duck into your office for a few minutes. Yes, they got more than they deserved. Isn't than the hallmark of incredible over-the-top customer service?

Friday, October 10, 2014

Putting Amazon and eCommerce Into Perspective

It is about that time of year when you start hearing all the news about Amazon and Wal-Mart and low prices and discounts and the death of mom & pop shop retailers.

Yeah, Amazon is huge. In 2013, they did $75.4 billion in sales. That was 28.6% of all US eCommerce!

But it was only 2.5% of all retail. In fact, if you take gasoline and groceries out of the mix, eCommerce only accounted for 8.8% of all retail dollars last year.  (see references below)

Think about that for a moment. All the hype about Amazon and the Internet, yet over 9 out of every 10 dollars spent in retail were spent in a brick & mortar store. Brick & mortar is so far from dead, that any report you hear otherwise should be discounted immediately.

Yeah, Wal-Mart is huge, too. Almost four times bigger than Amazon. In 2013, they did $279 billion in sales in the US. That was 9.2% of all retail - more than all of eCommerce!

But once again, that shows you there is still plenty of room for you to do business. Add up Wal-Mart and all of eCommerce and you still have 82% of the retail dollars going somewhere else. That's almost $2.5 trillion dollars going somewhere else.

That somewhere else ought to be you and me. If we quit worrying so much about Amazon and Wal-Mart and the demise of the mom & pops and start focusing on making ourselves better, it will.

-Phil Wrzesinski

PS I used two sources for the numbers you see above. The first source here from claims that all retail was $4.5 trillion. But I felt that number was inflated by things like gasoline purchases and other non-eCommerce retail, so I also used the numbers from the US Census here to get a true product purchase number just over $3 trillion.

PPS And the number from Amazon is their total sales, not just US sales, so their percentage of the US market may be a little bit lower.

Wednesday, October 8, 2014

Think Big to Draw Traffic

I was visiting a jewelry store in a sleepy northern Michigan town. The store used to be known for having a $32,000 diamond ring. Now those of you in a big city might think no big deal, but to this community, it would take the entire population pitching in $6 each to buy that ring.

People used to flock to the store to try it on.

After about ten years on display someone finally bought the ring a few years ago.

You would think that was a good thing. The store owner thought so at the time. But on the day I visited, she was lamenting how her business was down. Traffic wasn't what it used to be. I asked her when it started. You all can probably guess - right after she sold the ring.

No ring, no draw.

Sometimes you have to take a little bit of your ad budget and put it toward buying something completely outrageous that you don't expect to sell (but people will want to see.)

We do that all the time. Nothing better than hearing a customer say to someone shopping with her, "Oh you have to come over and see this!" You know she and her friend are going to be talking about it to others, too.

Some might look at a $32,000 diamond ring and say, "That's pretty expensive advertising." Unless you consider she got ten years of advertising from it, and then had someone refund the money back to her by buying it.

When you are looking to generate Word-of-Mouth advertising, you gotta give them something to talk about. A 32,000 piece puzzle that is almost eighteen feet long and over six feet wide and comes with its own hand cart is gonna make people talk.

-Phil Wrzesinski

PS I suggested she needed to buy another $32,000 ring or bigger. That was an investment in advertising that paid off big the first time and will pay off big again. There are a few tried and true ways to Generate Word of Mouth (click that hyperlink to download my FREE eBook on the topic). Over-the-top design including over-the-top products is one of those ways.

PPS I guess 32,000 is my lucky number today.

Saturday, October 4, 2014

Your Frontline Staff are Your Ambassadors

Seth Godin nailed it today.

"Would you send the clerk on aisle 7 to speak to a head of state or vital partner on behalf of your company? Because that's what he's doing right now."

If you cannot answer a resounding Yes! to Seth's question, you need to re-think your hiring and training program today.

-Phil Wrzesinski

PS Hire for certain traits. Hire for people who want to represent you and your store. Hire people who already have the ambassador gene in their DNA. Then train them on all the rest.