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Author: Phil Wrzesinski

Phil Wrzesinski is a Retailer, Speaker, Author, Golfer, Singer/Songwriter, and Klutz Kid who enjoys anything to do with the water (including drinking it fermented with hops and barley), anything to do with helping local independent businesses thrive, and anything that sounds like fun.

Lessons From Toys R Us

By now you have all heard about Toys R Us (TRU) filing bankruptcy. I have been personally tagged several times on Facebook linking to articles about the bankruptcy (a couple former staff members have even hinted I should reopen Toy House now.)

Here are some things you need to know.

Image result for sad face giraffeFirst, this is a Chapter 11 Bankruptcy which is a reorganization type of bankruptcy. The giraffe isn’t going away. They aren’t closing all their stores and liquidating. That’s a Chapter 7 Bankruptcy. Toys R Us is banking on being able to restructure (and relieve themselves from) their debt so that they have the operating funds to continue competing in the toy and baby retail industries.

Second, David Brandon, the former Athletic Director at my beloved University of Michigan, is not the cause of their demise. (Many UM fans who hated Brandon for his poor job hiring football coaches want to scapegoat him for this, too. It’s easy, but wrong.) They were in trouble long before he got there.

Third, this is not a happy day for the toy industry. Even though Walmart surpassed Toys R Us in toy sales in 1998, TRU still does a tremendous amount of business and sells a tremendous amount of toys. There are many vendors in position to take huge losses in this ordeal. While the big guys like Mattel and Hasbro can likely afford it, many mid-tier and smaller vendors would be gone without TRU. That doesn’t help the rest of the industry.

Toys R Us is also important for new toy launches. The big-box discounters want tried and true. Without a large store willing to take chances on new products, there won’t be as many new and innovative products from existing companies.

A lot of people have opinions why Toys R Us is where they are today. Many want to blame Amazon. Still others want to blame the economy. I’ve read articles bashing their expensive new headquarters building, their lack of leadership, and the leveraged buyout by Bain, KKR, and Vornado.

One article wanted to blame TRU for spending too much on their stores and not enough on their website. Considering that TRU reported $912 million in e-commerce and $11.54 billion in total sales, that puts their online sales at almost 8%. (For comparison, Walmart only does about 3% of their total sales online, but that is skewed by grocery.) While 8% is impressive, it doesn’t justify taking money from the part of your business that generates 92% of your revenue and giving it to the part that only generates 8%. 

My opinion is that they didn’t spend the money on their stores the right way.

The real demise for Toys R Us started in 1998. That is the year Walmart surpassed them in total toy sales by dollar (McDonald’s Happy Meal beats them both in units sold.) 

Toys R Us chose at that time to take on the beast to reclaim their crown as king. They didn’t stand a chance. Walmart had more stores, deeper pockets, a larger advertising budget, better operational efficiency, and no need to make money on a category they saw as a commodity traffic-driver.

Seth Godin said it best. “The problem with racing to the bottom is that you might win. Worse, you might finish second.” Toys R Us finished second and we all lost because of it.

Toys R Us allowed Walmart to dictate to the world that toys are commodities, not the valuable educational tools every specialty toy store owner and every educator in America knows them to be. Toys R Us allowed Walmart to dictate that price was the only reason to buy toys. Once Toys R Us decided to compete on Walmart’s terms, they were done.

Hindsight being 20/20, the best move TRU could have taken back in 1998 was to reestablish their position as the “toy leader” and put their emphasis on the value of toys as educational tools, on the value of toys for promoting growth and development, and on the importance of choosing quality toys for your children.

If toys were thought of that way today, Toys R Us would have diminished the commodity role of the big box discounters and strengthened the toy industry as a whole, while firmly establishing themselves as the clear “toy experts” instead of a warehouse full of only toys competing with warehouses full of toys, hardware, clothing, housewares, and grocery. It would have been a win-win for them and the industry as a whole. They weren’t going to beat Walmart at Walmart’s game and likely never would catch Walmart in total sales (Walmart now has over five times as many stores.) But had they played to their own competitive advantage they would still be the king perceptually and the industry would be better off for it.

That is the lesson. Play to your competitive advantage. Play on your terms, not someone else’s. 

Right now the conventional wisdom is that Toys R Us owns too much real estate. Their stores are too big and costly. They need to close them down and sell off the real estate and focus online. I wonder how different the tune would be if back in 1998 they decided to make their stores more friendly and welcoming, filled with toy demos and play areas. What if they turned their stores into educational meccas offering classes on parenting, programs for preschoolers, and events that drew traffic? (According to this article, that is a little of what they are trying to do.) Instead they turned their stores into brightly lit warehouses with minimal staff and an entrance that makes you feel like a common thief just walking through the door.

Real estate is only an asset or liability depending how you use it.

There is still a chance for Toys R Us to turn the ship around. But they need to sail into different waters. I know a little about sailing. If you know David Brandon, tell him to look me up.

-Phil Wrzesinski
www.PhilsForum.com

PS It may sound like I’m suggesting Toys R Us be more like an independent specialty toy retailer. Umm … Yes! They have a far better chance being successful in that playground than in the big-box-treat-everything-like-a-commodity-warehouse playground they’ve been playing in. They had it right in their Time Square store and oh so wrong in the 865 other locations.

Working “On” Part 5 – Evaluating Progress

We all dreaded the blue sheets. As camp counselors at Storer Camps, we had to write up an “evaluation” of every camper in our cabin. The blue sheet was the worksheet we used. It had spaces for us to mark their daily activities and a few questions where we wrote short answers about their time at camp including what they seemed to like most, their strengths, and areas where they struggled.

The blue sheet dates back several decades. I remember my mom getting them from my counselors back in the 1970’s. I remember my own trials writing them late at night by flashlight on the porch of my cabin just to get them done on time. I remember turning them in to my director for approval only to be asked to rewrite them because of penmanship or to change a word or phrase. No time off until your blue sheets were finished and approved.

I also remember reading them as a parent and appreciating the thoughtfulness and insight that went into them. It made my boys’ camp experiences more meaningful. It gave me an outsider’s perspective of my children, a valuable measure of their growth.

Evaluations can be viewed as measuring sticks. They show you progress when you compare them to previous evaluations. They are also maps because they show you where you are in relation to where you want to go.

You are already using tools to evaluate your business. Your Profit & Loss and Balance Sheet are two of those tool. Your GMROI and Turn Ratio are also tools used to evaluate your business. These are easy tools because they measure hard, fast numbers.

If your Game Plan, however, is to exploit your Competitive Advantage of having better people offering better services, you have to have a map that shows you where your staff members are in relation to where you want them to go. You have to have a tool for evaluating their progress.

Some consultants believe in commission sales as the tool to evaluate your staff. If their numbers are going up, then life is good. The problem is that commission sales don’t always work in every type of retail store, nor are they truly an accurate predictor of someone’s selling skills since luck and timing and many other factors outside of pure selling skills have an effect on the numbers.

Some believe in written evaluations—blue sheets for your staff listing their strengths and areas they need to improve. I tried those and got frustrated by them. Although they measured, they didn’t map. Plus they took a long time to process and complete. They were as discouraging as they were encouraging. On top of that, if you don’t evaluate fairly and honestly without emotion using concrete, specific examples of problems needing to be fixed, these written reports could come back to bite you in a wrongful termination lawsuit.

Written evaluations are best for documenting unacceptable behavior to protect yourself in termination cases, but they don’t work as well for motivating your staff to improve.

Here are the concrete steps I suggest for mapping a path for your staff.

  • Talk to them. Sit down every so often and just have an informal conversation.
  • Ask questions. Ask them how they are doing. Ask them what they are working on. Ask them what they have learned from the training program (that I know you have implemented.) Ask them where they see themselves in the big picture of the store. Ask them if they understand their purpose for being employed. Ask, ask, ask.
  • Give them praise. Praise them for what they have done, what they have learned, and where they are. Roy H. Williams said, “What gets measured gets managed, but what gets measured and rewarded improves.” Praise is often enough of a reward to get the improvement you seek.
  • Offer suggestions. Based on your observations of their work, coupled with their own beliefs of where they are on their journey, give them suggestions for what they can “work on next” to reach the goals you have already spelled out for your team. Give them concrete action steps such as reading certain articles or books, or watching certain videos, or working on a specific task.

Do it informally and do it often. Formal evaluations are scary and make your team afraid of you. Because of the amount of work involved, they also happen too infrequently to be of good value. Informal discussions following the format above build trust and help motivate your team. Plus they give you a much quicker read on the talent and potential of your current players so that it is easier to spot new, better talent when it comes along.

Combine these conversations with a kick-ass continual training program and you will see the progress before your very eyes.

-Phil Wrzesinski
www.PhilsForum.com

PS There are many who might disagree with this procedure. There are valid arguments for a formal evaluation process. If you are a small business with only a handful of employees, however, a formal evaluation process could be (or at least feel) overwhelming. Your true goal for evaluating your staff is to see where they are and motivate them toward the ultimate goal of being the best at serving your customers. Daniel H. Pink in his book “Drive” points to three things that intrinsically motivate your staff—Autonomy, Mastery, and Purpose. A simple measuring stick of growth compared to where you were previously is Mastery, but a map of where you are in relation to where you want to go is Mastery and Purpose.

Working “On” Part 4 – The Game Plan

When my dad retired in 2005 his biggest concern for me was what was my plan. He’s a football fan just like I am. We’ve heard coaches time and time again talk about their Game Plan for beating their opponent. We had a new opponent that had just opened in Jackson named Walmart. How was I going to beat them?

The newspaper had asked me a similar question when Walmart announced the opening of their super center in Jackson. “How will you compete with them?”

Phil Wrzesinski ringing birthday bell
Phil Wrzesinski rings the Birthday Bell at Toy House on 11-11-11

My answer to both was the pretty much the same. “We have over five times the selection of toys as Walmart and several services they don’t offer, not to mention the smartest staff in town. The better question is, How are they going to compete with us?”

Sure there was some hubris involved. You can be a little confident when you do have a plan.

Our Game Plan was simple.

  • Increase our levels of customer service.
  • Offer more in-store activities and events.
  • Create more memorable moments.
  • Set up more demonstrations and hands-on displays.
  • Write more powerful messages for our advertising and marketing.

We were going to take our competitive strengths and put them on steroids.

Even with Walmart opening that summer, in 2005 we had our largest Christmas season ever. Two years later we surpassed every record in top line sales. 2008 was looking to be another record-breaker, only falling short at the last moment. (I think the housing bubble burst had something to do with that.) 2009 was the most profitable year in the 60-year history of the store. Even when we decided to close seven years later, our share of our shrinking market was still holding steady, even with Amazon’s growth into toys.

The key to a successful Game Plan is two-fold.

First you have to get the strategic part right. I knew we couldn’t compete with Walmart on price. I also knew they couldn’t compete with me on service. If a football team has a great player no one can tackle, you keep feeding him the ball until they stop him. I was going to keep improving my customer service and in-store experience until no one could match it.

Second, you have to have concrete steps to achieve each point of your strategy. I created year-long training schedules to transform my staff, focusing on small, incremental improvements each month to reach our goals of better engagement with customers and better selling skills. As a team we evaluated our current event offerings and came up with new ideas to make sure we had something special going on every month. My buyers were instructed to look for more toy demo options from our vendors.

Believe it our not but our Birthday Bell—one of our customer’s favorite activities—didn’t come into existence until 2010 as we were trying to come up with ways to offer more memorable moments. (Nostalgia is one of our Core Values.) That bell is now at a local museum.

Here are the steps you need to take to develop your Game Plan.

  • Identify your Core Values. The most effective Game Plans must fit within and accentuate your Core Values. If they don’t, they won’t last.
  • Evaluate both yours and your competitors’ strengths and weaknesses. Be brutally honest. Figure out where you have the competitive advantage and where you don’t. Highlight and exploit where you are already better and concede (or at least don’t waste valuable resources) on the areas where you cannot win.
  • Develop concrete actions you can take to increase your competitive advantage that also fits within your Core Values.
  • Play the long game. If you already own the competitive advantage in an area of your business, growing it slowly and incrementally helps your gains stick better with your staff and customers. Every bit of growth is positive, no matter how small because everything you do builds on what you have already done.

Having a Game Plan gives you two other benefits.

First, it makes working “on” your business easy. You have the blueprint right in front of you at all times. You have your marching orders for what to do next. Your Game Plan determines the kind of people you hire and the kind of services you offer. It guides your decisions and makes those decisions easier. You even have the tools for measuring your progress.

Second, it keeps you from chasing after every new fad that comes down the pike. You and I both know how often we get bombarded by some salesperson with the “next great thing” that will transform retail. When you have a solid Game Plan you can determine much more easily if the next new fad fits for you or doesn’t. You can also see whether it will affect your competitive advantage or not.

Any coach can tell you that talent alone doesn’t win games. It takes a solid Game Plan that plays up your competitive advantage and solid execution of that Plan to seize the day. If you want to win in retail you need to schedule part of every week for working on your Game Plan.

-Phil Wrzesinski
www.PhilsForum.com

PS If you don’t have a competitive advantage, then you need a major disruption. You need to do something huge and wild and spectacular that sets you apart from your competition. Offer a brand new service no one else would ever think of doing (like Amazon did with drone delivery). Change up your product selection to get into a niche no one else is touching. Think of it as the trick play in football. No one saw it coming. Then build on the momentum it gives you.

PPS Not sure where your strengths and weaknesses lie? Check with your local business agencies. Some of them offer SWOT analysis (strengths, weaknesses, opportunities, threats) at low or no cost. Sometimes an extra set of eyes is all you need to see what you missed.

Working “On” Part 3 – Hiring a Manager

I’ve only been flown in for an interview once in my life. I went to the Catskills in New York to interview for a position running an experiential education and wilderness trip program. I was a perfect candidate for the job. Not only did I have the experience running a similar program in Michigan, this program also had a strong bike program and owned a fleet of several dozen bikes they had to maintain. I had spent my teenage years assembling and fixing bikes at Toy House. It was a perfect match!

I figured I had the inside track on this job. They flew me in so they must have thought quite highly of me. I had the perfect skill set. I also knew the other two candidates. Both were currently working in the program where I was interviewing. Both had previously worked for me. Neither had the experience in a managerial role I had.

Although I thought I interviewed well, I didn’t get the job.

Only later did I find out the guy doing the hiring had always and only promoted from within. He flew me in only because his boss demanded he interview someone outside the company. I didn’t have a chance. I never had a chance.

Hiring from within makes sense on the surface. You’re hiring a known quantity. You’re hiring someone who already knows your culture (and likely fits in). You’re hiring someone who already knows your procedures. You’re hiring someone who is already loyal to you. The risks seem low.

Laurence J. Peters published a management theory in 1969 about the promotion and hiring from within now called the Peter Principle. According to Wikipedia, the concept is “that the selection of a candidate for a position is based on the candidate’s performance in their current role, rather than on abilities relevant to the intended role. Thus, employees only stop being promoted once they can no longer perform effectively, and ‘managers rise to the level of their incompetence.’ “

The risks may seem low, but the downside to the Peter Principle is that you end up with incompetent people at every level of the organization because you elevate people until they are no longer competent. Does that sound like a good plan?

You need to hire your manager the same way you hire anyone at your company. Make a list of all the traits and skills necessary for a person to be successful on the job. Then figure out what you can teach your new manager and what that person needs to bring to the table.

When you make a list for a sales associate you get different traits than your list for a store manager. A perfect salesperson is great at selling. A perfect manager is great at teaching and motivating. Yes, one person can be good at both. But if you are promoting your best salesperson to manager just because they are your best salesperson, you might have made two positions on your team worse off.

Your manager is most important hire you will make. Your manager is the person who gives you the most time to work on your business instead of in it.

Here are concrete steps you can use to find a great manager.

  • Make a list of the skills needed to be a great manager. That list better include the ability to teach, the ability to motivate, and empathy. You probably need to throw trustworthy onto that list, too, and the ability to learn.
  • Make a list of questions you can use to identify those skills in your candidates. Here are some on ability to teach and trustworthiness. Tell me about a time where you had to teach someone else a new skill. How well did it go? What would you do differently if you could go back in time? Tell me about a time when you weren’t able to keep your word. How did you rectify that situation later?
  • Talk to your current staff, especially the high performers who are great in their current role, but not necessarily skilled for the next role. Many people feel the need to want to move up the ranks. Your best salespeople might feel resentment if you pass them over. Talk to them about the importance of their current role and why you need them in that position. If it about money, give them a raise. If they are truly your best salespeople, they are worth it. If it is about power, give them responsibilities that fit with their skill set. They feel better, you feel better, and you haven’t promoted anyone to the level of incompetence.
  • Move “industry knowledge” lower down your list. Sure it helps if someone is as enthusiastic about your niche in the market as you are. But it isn’t nearly as important as the ability to learn, the ability to teach, and the ability to motivate other people. Given the choice between hiring someone who can step in and lead the team while they learn the products or someone who knows the products but is still learning how to lead, you know the smarter choice.

Your goal is to get the most competent people into every position possible. The manager role is the most important of all those positions.

-Phil Wrzesinski
www.PhilsForum.com

PS I have seen the Peter Principle in almost every place I have worked. I have even been guilty of it a few times myself. It never seems to end well. The easiest way to prevent it from happening in your business is to look at each role as being a separate position requiring separate skills, not a benefit or reward for time served or a promotion for those who do best in their current role.

PPS My son wrote a college entrance essay on “Leadership”. He identified empathy as being the most important character trait of a great leader. I couldn’t argue with his premise at all. Hopefully he still has that essay saved somewhere so that I can use it in a future post.

Working “On” Part 2 – Study Your Competition

Back in the early 80’s my dad encountered a customer in our LEGO aisle. She had a notebook and was writing down prices on some of the LEGO sets we carried.

“I’m taking notes because my son’s birthday is coming up.”

Apparently that birthday never happened because every week she was in the LEGO aisle writing down prices.

Image result for lego spyEventually we learned that she worked for Kmart and was paid to go around town checking prices on certain items. She was their scout, checking out the competition. We never banned her. In fact, we kinda felt sorry for her. Our LEGO prices didn’t change over the course of the year, so she was paid to come in every week to write down the same information. At least she had a job. Oh, and every now and then she would buy something (other than LEGO).

Today you can price check your competition without having to leave your house. You can do it in the evening lying in bed. You can do it in the morning over your cup of coffee. When I talk about scouting your competition, however, I’m not so worried about prices. I can pretty much guarantee that with enough digging you will ALWAYS find someone selling the same product cheaper than you. That shouldn’t be your biggest concern.

Your biggest concern with your competition should be the strategic moves they are making to outflank you or destroy your competitive advantage. Are they offering new services? Are they moving into new product categories? Are they adding new training programs for their staff? Are they opening new store concepts? Are they rolling out new marketing and advertising campaigns? Are they moving to new locations?

Here are some concrete steps you should take to work “on” your business by keeping an eye on your competition.

  • Subscribe to your competitor’s newsletter. Pretty much every retailer has some sort of email communication. Get on their list so that you hear firsthand from them when they are rolling out anything new. Not only will you get the news, you’ll see how effective (or ineffective) their email campaign might be.
  • Subscribe to news channel outlets for your industry. I get emails daily with a compilation of news stories from Chain Store Age. I also get emails from Toybook Magazine, The All Baby & Child Conference, The Bloom Report and many more that give me headlines and links to stories that may be of interest. I went into work early and spent the first part of every morning reading those stories.
  • Visit your competitors. You can learn a lot in just one visit to your competition. You can learn about their scheduling and staffing. You can learn about how well the staff is trained. You can learn what new products or categories they are showcasing. You can also get tips and ideas that might work in your own store. (Note: If you are not comfortable visiting your competitors in your town, go to stores the next town over. But make sure you make at least one visit to the chain store in your town each year. Chain stores are only as good as their managers. You need to know if you have a formidable foe or not.)
  • Be their CEO for a day. When you visit a store or read an article about your competition, put on their CEO hat and think about what you would do if you were in their shoes. Brainstorm ideas to make their stores better. Think about the resources they have and how you would allocate them differently. Then think about how those moves would impact your business. This exercise prepares you in advance for moves they might make. (Don’t think they haven’t had the same ideas you just had about their business.) It also helps you discover strategic moves you can make to position yourself better to counter any moves they make.

In football, every defensive coach will tell you that if they know which play the offense is going to run in advance they will always be able to stop it. The offensive coach, at the same time, will tell you that if he knows which defense the opponent is going to run he can call a play that will beat it every time.

You cannot control what your competition will do, but you can control how you will react. The more in advance you know their moves, the better your reaction will be.

-Phil Wrzesinski
www.PhilsForum.com

PS Playing CEO for the day is one of my favorite exercises. Not only does it help you understand your competition better, it puts you in the right frame of mind for strategic thinking for your own business. Do this enough and you’ll find you’re spending way more time “on” than “in” (and that’s a good thing.)

PPS Price is important, but not as important as you think. The public perception is firmly entrenched in people’s minds that you will be more expensive than the big chains, big-box discounters, and online predators. No matter how cheap your pricing, you will not overcome that perception. Yet even with that overwhelming perception people still choose to shop with you. Work on your competitive advantage to the point that price is no longer an issue and it won’t be an issue.

Working “On” Part 1 – Scouting New Talent

In 1989 my parents bought a new computer for Toy House. It was an IBM AS400, It had three hard drives and a whopping 999kb of storage (yes, almost an entire megabyte!) The whole unit was about the size of two large microwaves stacked on top of each other. Don’t even ask about the ridiculous cost for that thing and the accompanying cash registers and work stations.

My parents didn’t know much about computers at the time, just that computers and data were the new thing to propel retail to the next level. We were ahead of the game … indie retailers weren’t computerized, heck, UPC codes weren’t yet “universal” …for a moment.

Fast forward a few years. My mom and I were reading an article about Walmart’s computer system that rivaled the US military at that time. Data was the new buzzword. Everyone was marveling at the data these new computers could churn, such as the fact that 63% of the people who bought a collector Barbie doll at Walmart also bought a candy bar. Our near megabyte of storage wasn’t up to that task.

Back then Walmart was winning the “big data” war. Today Amazon has a stranglehold on that one. It is their competitive advantage.

While data and the technology to collect that data are incredibly important, they aren’t our calling card. They aren’t our competitive advantage.

Image result for recruitingOur advantage is our staff. A carefully selected, properly trained staff can do far more than data. Data can tell you that people who bought a plastic model car also bought a plastic cement glue. People can tell you which glue, why one glue is better than the other, and how to use it in a fraction of the time that surfing online would take you. People can show you the options, give you the tips, find you the right solution (including the solution you didn’t know to search for), giftwrap your package, carry it out to your car and make you feel good about it all.

Therefore, you have to have the right talent to keep your competitive advantage.

Amazon is always looking for, even developing, the next new technology to keep their advantage. You need to always be recruiting new people.

As I promised, here are some concrete actions you can take to help your recruiting process.

  1. Make up business cards with your contact info on the front and these words on the back, “Thank you for providing wonderful service! I would love to talk to you about a job opportunity.” Hand these cards out to people who give you the kind of service you desire in your store. Unlike the NFL, there are no tampering laws. (As a courtesy, however, don’t go stealing your fellow indie retailers’ peeps.)
  2. Groom your customers. Plant seeds in the minds of your top customers about working for you. First, they already believe in you and share your values. Second, they know your products. Third, they know the level of service you already aspire to bring. As you serve them, look for the customers that would fit best on your team and start dropping the subtle hints.
  3. Always take applications. First, if your laws are anything like Michigan’s, you have to accept applications. If someone asks, “Are you hiring?” your response should be, “We are always looking for great people.”
  4. Train your current staff. The only way you’ll truly know if the new people you find will be better than the current team is by first giving the current team every chance to improve. This is the NFL model. The scouts look for potential. The coaches are the ones tasked with helping individuals reach their potential. Help your current staff reach their potential and you’ll know exactly what potential you need from new recruits to get better.

If you do these steps well, you will have a pool of talent available to you for when one of your employees decides to move on. You’ll have the talent to call on for the busy season. You’ll have good people on your sales floor and in your office all the time. You’ll have your one competitive advantage.

-Phil Wrzesinski
www.PhilsForum.com

PS Even though #3 is important, do not have a “Help Wanted” sign up in your window or on your door or anywhere for that matter. It sends a scary message to customers that you are under-staffed and that people don’t want to work for you. It also doesn’t help you get qualified applicants. Instead you get a lot of applicants who just need to be “looking for work” to keep their benefits. The people who really want to work for you will ask if you are hiring.

If you need to advertise for new people, do it through a carefully crafted help-wanted post on your social media and/or website.

Get the State of Michigan to Pay

Hey Michigan peeps!

What if I told you that the State of Michigan would pay for you and your store manager to enroll in a Jackson Retail Success Academy™ style program in your area? Rather than you driving all the way here to take the class on your dime, I would do it in your neck of the woods for you and your friends, and the State would pay most* of the bill.

The Skilled Trades Training Fund in Michigan exists for that purpose.

Here’s the thing …

You need to get your local Michigan Works! office to submit the grant for it to happen (have them contact me for details.)

Send this to your DDA Director, Chamber Director, and Economic Development Director, too. Tell them you believe a Retail Management Training Program (especially the JRSA™ program) will help save jobs and boost the local economy.

Tell them all to contact your Michigan Works! office and help you push this through.

The State of Michigan wants you and your team to have the right training to be successful. They are willing to pay for it. You should let them.

-Phil Wrzesinski
www.PhilsForum.com

PS *I say most of the bill because I don’t know all the details of the program. In the cursory explanation I received there is still a small amount you might have to pay depending on the circumstances of the class and what gets approved for the grant. For instance, you may have to pay employee wages while they take the class. But if you get your local economic development people on board, those costs might be even further minimized.

PPS Don’t put this on the back-burner. They are taking submissions right now for 2018. Call your Michigan Works! office this week!

Proof That Customer Service is Not Dead?

I read two stories yesterday that caught my interest for two different, yet related reasons.

The first story is about the results of a survey of 600 mall shoppers across the country. The results showed that a larger percentage of Millennials believe that sales associates are “extremely important to their retail experience” than Boomers believe that statement. Doesn’t this fly in the face of conventional wisdom about Millennials that they just want to be left alone to shop with their headphones on and smartphones in hand?

Haven’t we all been told that today’s young adults don’t value customer service as much as previous generations?

This study says you’re wrong. Only 9% of the Gen Y respondents did not believe sales associates add value to the experience. In other words, Customer Service is not dead. It is as important as ever, even to this current generation of tech-savvy shoppers.

Image result for nordstrom localThe second story is about a new store concept launched by Nordstrom called Nordstrom Local. The store is 98% smaller than the typical department store. In fact, it doesn’t stock any merchandise. It is a location for BOPIS (buy online pickup in store). It is a location for fashion advice. It is a location for meeting with a personal stylists. it is a location for alterations and tailoring. It is a location for manicures and refreshments. It is a location for all of the services that make Nordstrom special except for one thing—the actual product.

I am watching this project with a lot of curiosity to see how it pans out. It will be a true test of whether customer service is really that important to a significantly sized crowd or not. In many ways Nordstrom Local seems to be embracing the concepts I read about in this article. Nordstrom is betting that customer service and experience is more important than the product.

Me? I’m not too sure. I’ve always believed you need a solid mix of both to truly be successful. At the same time, I would love to see this concept be successful if for no other reason than to prove once and for all the Customer Service is not dead.

-Phil Wrzesinski
www.PhilsForum.com

PS The first two links come from a daily email I get from Chain Store Age. If they didn’t open up for you, you need to get an account (It’s free!) If you are a retailer and are not getting this information and these stories, you should sign up. While many of the stories are about chain stores, the information you will glean about retail in general and about your competition is priceless.

Measuring the Right Result

This is the year of confessions. I’ve told you I don’t like cleaning up and filing things away. I’ve admitted I only went to the University of Michigan to get football tickets. As much as it pains me to be one, I’ve even admitted I’m a Detroit Lions fan.

I have one more confession. I love musical theater. I get cranked up watching Broadway shows. I even get excited watching live Broadway-esque performances like the one Neil Patrick Harris did here.

Image result for disney newsiesLast night I watched Disney’s Newsies on Netflix. Not the 1992 movie starring Christian Bale but a filmed stage production. Loved it!

While reading more about the production on IMDb.com, I noticed it had a pretty high rating from the public. I started reading reviews and and they were mostly 10’s. The reviews that weren’t so stellar didn’t talk about the acting or singing or dancing or storyline. They talked about camera angles and editing of camera shots.

One person gave it a 4 solely because of the choppy editing of the dance sequences. Tough critic.

It got me thinking about how we measure success of our business and how our customers measure success of our business. The two criteria are completely different.

Your customer considers your business a success if she comes in, gets what she needs, and feels good about it. You consider your business a success if you can pay all your bills and make some money for yourself. Two completely different sets of measurements, yet when you stop and think about it, the more you take care of your customer, the more likely you’ll have enough business to pay all your bills and make some money for yourself.

You need to measure what is important to your customers as much as you measure what is important to you.

Notice that I didn’t say, “instead of.” I said, “as much as.” You need to measure both.

You need a method of keeping track of how many times you say, “No we don’t.” to a customer request. I have a friend who has a “No List” she keeps by the cash register just for that purpose. Every time a customer asks for something they don’t have, the staff has to write it down. She figures if a lot of customers come in believing she might have a certain item, then it would be in her best interest to look into carrying that item.

You need a method of tracking how many customers are repeat and referral customers. Only customers who get their needs met and feel good about it will come back and bring their friends. If those numbers are rising, your customer service is succeeding.

Inventory levels, cash flow, profit margin, and sales are all important and need to be tracked, but they are as much a result of the first two numbers as anything else. The more your customers think of your business as a success, the better those other numbers will be.

If you have a lot of items on your No List then you need to figure out why your customers have such a different view of your business than you do. If you have a lot of new customers not referred by a friend, then either you’re a tourist destination, your advertising is stellar, or you need to up your game on taking care of your customers.

When your customers come in, get what they need, and leave feeling good, that’s the singing, acting, and dancing that gets you the standing ovation.

-Phil Wrzesinski
www.PhilsForum.com

PS Speaking of measuring the right things, here is the survey that the American Specialty Toy Retailing Association (ASTRA) uses for the presentations at their Academy.

Here are the averages of the survey responses from your presentation, “Cash is King & You are the Advisor:”

1—Unsatisfied  4—Completely Satisfied

Did the presentation meet your expectations based on the session description? Were you satisfied with the speaker(s) level of knowledge on the topic? Rate your overall satisfaction with this session:
3.9 4 3.9

Those of you who have followed this blog a long time know that the three things I stress the most about Customer Service are:

  1. You have to meet your customer’s expectations. (Question #1)
  2. You have to build trust. (Question #2)
  3. You have to leave them feeling good about the transaction. (Question #3)

Did the audience come in, get what they needed, and feel good about it? Those results were my standing ovation.

Retail is More Like Football

I am a Detroit Lions fan. There, I said it. That’s the first step to healing, right? I got to watch my Lions play yesterday. Owning a toy store was probably the best thing for this Detroit Lions fan. I never got too invested in their season because I knew I’d be too busy on Sundays in November and December to pay attention to the team. The let down each year wasn’t as bad because of that.

Related imageLast year’s record-setting eight come-from-behind-in-the-fourth-quarter victories was quite exciting, followed by another season-ending debacle all too familiar to die-hard Lions fans. Lots of people want to blame the coach. Others want to blame the now highest paid player in the league, quarterback Matthew Stafford. Some want to blame the organization as a whole. I’m in the latter category.

Although teamwork is important in all of the major team sports, it is at its highest in football. A great goalie in hockey or a mega-star in basketball can change the tide in those respective sports. Baseball is a team sport built almost exclusively around individual actions and talent. But football is truly about eleven guys doing their prescribed job in sync with each other. And even that isn’t enough.

Success in football only happens when the entire organization is in sync and performing at peak. Success happens when the front office brings in the right kind of talent and personality to fit the values of the coaching staff. Success happens when the scouts figure out the best schemes to combat the opponent’s tendencies that also fit with the talent available. Success happens when the coaches are able to teach the players the right schemes and the players are able to execute those schemes.

Individual talent is important, but not the only thing. The Lions had Barry Sanders, arguably the best running back in the history of the game, and still managed to miss the playoffs almost every year.

Retail is far closer to football than the other sports. To be successful you have to have a game plan that not only fits the talent on your team, but also takes into account the talent and tendencies of your competitors. To be successful you need more than just a mega-star, you need a team working together. You might have the best salesperson on the planet, but all her hard work can be undone by an unskilled cashier or dirty restroom. She might not even get to use her skills if your website fails to deliver or the person answering your phones hasn’t been trained.

You can limp through retail with a bunch of mediocre 8-8 seasons, and even earn a living doing it. For some, that is enough. For those of you reading this blog, that isn’t enough. You want to taste the champagne.

So let me ask you …

  • Are you putting in the same kind of effort a football team puts into the scouting of new talent?
  • Are you studying your competition to help you create game plans for how you will beat them?
  • Are you hiring coaches (managers) who can teach your game plan to your team?
  • Are you evaluating your game plan on a regular basis?
  • Are you evaluating your talent and their ability to execute your game plan on a regular basis?

All football teams do this. The ones that do it best win divisions, win playoff games, win Super Bowls. Your competitors are doing this. When people talk about working “on” your business instead of “in” your business, those bullet points are the place for you to start.

Huddle up. Your season is upon you.

-Phil Wrzesinski
www.PhilsForum.com

PS In the coming weeks I will give you concrete actions you can do for all five of those bullet points. In the meantime, start figuring out what you need to do to give you more time on than in. You’re going to need it (and it will definitely pay off).