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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.

Policies for the Minority Hurt the Majority

The date for your annual family picnic has been set. You’re bringing your famous corn casserole. Your mom knows you’re bringing your famous corn casserole. She looks through the coupons from the local and Detroit Sunday papers and finds they both have the same coupon for your number one ingredient. She clips them for you. You also clip both coupons from your copies of the Sunday papers and head out to the store.

You get to the checkout line with your four identical coupons from the newspaper only to be told you can’t use them. The store has a new policy limiting you to only two identical coupons per transaction. You feel like they’re looking at you out of the corner of your eye because you’re trying to cheat them out of an extra fifty cents on a can of corn.

Heck, the time it took you to cut those two fifty-cent coupons probably wasn’t worth it, but now you’re walking out feeling judged, and just a little ticked off that the store has such a ridiculously strict policy for something that seems so innocuous. The cashier, feeling your pain, tried to use the third coupon, but it shut down the register completely and needed a manager’s override which only added to your feelings of shame as you could feel the eyes of everyone else in line behind you judging you as the criminal you appear to be.

Does that sound far-fetched?

That is what has happened at a large, Midwest grocery store chain. Apparently to cut down on extreme-couponers and people printing multiple coupons off the Internet, this large chain has reprogrammed their registers to only allow two of any identical coupon per transaction. Use a third one and the register shuts down. Your only choices in the above scenario is to either cause the people behind you to wait even longer while you make the cashier ring up two cans of corn separately or forego the extra dollar in legitimate savings.

Either way, you feel like crap and are probably thinking you’ll avoid that store the next time you have coupons.

Plus, the store really didn’t change anything. The extreme-couponers are still going where the best deals can be made. If that means they stand in the self-checkout line and ring up thirty seven transactions, then they’ll stand in that line. The money they believe they are saving is worth their extra time (and they don’t care about the people behind them in line.)

The store doesn’t save any money or make their business any better, either. In fact, they slow down the checkout as people with three or more coupons have the cashier do multiple transactions. And unless the coupon is provided by the store itself, the store isn’t saving any money. Jolly Green Giant reimburses them for every coupon plus a little extra for handling.

Most importantly, the store sends a loud and strong message to its customers. We don’t trust you!

Here is where the retailer went wrong …

The retailer saw a tiny percentage of customers taking advantage of a loophole or doing something they just didn’t like. The retailer then enacted a restrictive, me-first policy that negatively affected all of their customers, including the ones who never had any intention of “taking advantage” of the retailer. Those customers were just doing what most would call common sense, using the system in place to save a little money.

As retailers we do that often. We create rules to stop the minority by inconveniencing the majority.

We do it with restrictive return policies. I saw one store that had a 30-day return policy. Period. No exceptions. Remind me not to go Christmas Shopping there before Thanksgiving.

We do it with limits for credit card transactions. (See my recent post on that here.)

We do it with rules. I used to have a rule of certain items we wouldn’t giftwrap for free. When we realized the rule was me-first, we changed it to only restrict items around which the wrapping paper wouldn’t stay (like an assembled tricycle). 

The funny thing is that these restrictive rules never really stop the behavior we intend them to stop.

People who exploit loopholes will exploit loopholes. If you close one, they’ll look for another. Fortunately these people are the exception, not the rule. So treat them like an exception, not the rule.

Set your policies up to be customer-first.

Make your return policy as liberal as possible. If you have one person taking advantage of the situation, deal with that one person. I had a customer bring back fourteen puzzles one year, all because they were missing a piece. As it turns out, I only had fourteen puzzles returned that year. Those fourteen pieces were the only ones out of a million pieces we sold that were “missing.” I pulled the customer aside, explained this fact to her politely and respectfully, and told her she was no longer allowed to return any puzzles.

You may be surprised to know, she continued buying jigsaw puzzles from us.

Make all your rules less restrictive than your competitors. First, very few people will take advantage of you. Second, most of them are still making you money because they are shopping in your store. Third, no one walks out feeling shamed in any way.

Part of the goal of every transaction is to win the right for another transaction. Piss off your good customers and all you’ll have left are those trying to find another loophole to exploit.

-Phil Wrzesinski
www.PhilsForum.com

PS Yes, LL Bean just changed their incredibly liberal no-questions-asked-we’ll-take-it-back return policy because of people trying to exploit it. But if you look at it, the new policy is still far more liberal than any of their competitors, still fits their quality-first guarantee, and doesn’t hurt any honest customers in the process.

PPS I’m still trying to understand why this grocer created this new coupon policy. If the coupons were from the brands, the grocer would get reimbursed, so no harm there. If it was because of online coupons being printed multiple times, there are many ways to avoid that issue with today’s technology, or even by going old-school with a really strong legal disclaimer. Either of those would be preferable to being stuck in line behind someone trying to buy seven cans of corn and not understanding why the coupons his sister gave him won’t work.

Product Selection – Curation or Saturation?

I went to visit a fellow toy store owner in Cleveland. At that time Michael had three stores in the area. The store I visited was on the opposite spectrum of mine in terms of size. He had about 1,100 square feet of selling space. I had 16,000 square feet of selling space. Yet we were both successful toy store owners in our markets. I love seeing stores like his and discovering the creative ways they show off all the wonderful and unique products they carry. I often saw many of the same brands we carried.

We got to talking about the different challenges of running small versus large stores and one of those challenges was buying product to fill the shelves, especially something as simple and common as jigsaw puzzles. Michael had about 4 feet of space dedicated to jigsaw puzzles. I had about 44 feet of space.

Michael said, “It must be hard for you to buy puzzles to fill up all that space.”

“Are you kidding? It’s easy, I just go through the catalog and buy them all and let the customers decide which ones I should reorder. I think it would be way tougher trying to narrow it down to only four feet.”

That was the big selection difference between our stores—Curation versus Saturation.

Both methods have their pros. Both have their cons. Both can be used as your calling card to advertise to potential customers the advantages of your “Selection.” (As I said in a previous post, the customers you can most easily steal from your competitors are customers who shop the category killer in your industry for the Experience and the Selection.)

This was just the young kids puzzles. Opposite that was another 44 feet of jigsaw puzzles!

SATURATION

Saturation is when you give your customer all the possible (or likely) options for any given product category. I found it was much easier, when buying jigsaw puzzles, to pick the ones I didn’t want than to pick the ones I did want. I often heard myself telling the rep, “I’ll take everything from that collection except this one.”

In a store of my size, Saturation wasn’t only easy, it was necessary. We needed a lot of product to fill our shelves and make our store look full. We used that method of stocking for many different departments and categories. We also played up the strengths of Saturation by pointing out that we carried more toys from more vendors than any other toy store in America—even Toys R Us! We bragged how we were the largest toy store in America because of it. (He who has the most toys wins!)

The downside to Saturation was twofold.

First, we had a lot of products that didn’t sell well. We had more than our fair share of slow movers. I solved that problem by having an annual clearance sale every July to get rid of the merchandise that didn’t move. Our inventory turns, however, were lower than the average for indie toy stores.

Second, sometimes we overwhelmed our customer with too many option. Analysis Paralysis. To overcome that I needed to have a staff that knew our products inside and out. We spent a lot of time training the staff to curate the selection after the customer explained what she needed.

Your Category Killers built their entire business models around Saturation. Saturation appeals to the customer who wants to browse and sort through the options. Saturation appeals to the customer who doesn’t know what she wants. Saturation makes you look like the expert. Bigger, better, bestest.

When these stores first opened up they were amazing. Nowadays, however, that saturation (especially without a knowledgeable sales staff) seems overwhelming or simply a waste of time and space. Many of these same stores are now building smaller footprints because they realized they don’t have the payroll to staff such a huge store properly.

CURATION

The other side of the coin is Curation—when you pick only the best items or options to offer your customers so that they don’t have to make any tough decisions.

Curation is great because it streamlines the process for the customer. It is attractive to that same customer who didn’t know what she wanted because it takes some of the guesswork out of the equation for her.

A carefully curated product selection can also send your customers the message that you are the experts in your category … As long as you have first earned their trust.

Curation without Trust is just a “poor selection”.

Here is how you win their Trust with your Curation:

  • Make sure you have the best solution available, no matter what it costs. If one of your competitors offers a better solution, you didn’t curate well. Be ready to defend why it is the best option. (PS You don’t have to sell a lot of that option, but you do need to have it.)
  • Make sure your selection is neat, clean, organized, and well-merchandised. If it looks like you don’t care about your products, no one will trust your Curation.
  • Make sure your sales team knows every product inside and out including how each item is used and the difference between the Best, Better, and Good options.
  • When you show a customer your options, ALWAYS lead with the Best.
  • If you don’t carry the “most popular” item in that category have a simple and understandable explanation why. (“We can’t get it,” or “It sucks.” are not good answers. Try “It is an exclusive to … but we prefer …” or “It doesn’t work as well as this option because …”)
  • Make sure you are never out of stock of the best selling option.

If you have a carefully Curated collection of merchandise, you can win the Selection crowd just as easily as if you have a Saturation of products. You do it by advertising that you’ve taken all the guesswork out of the equation.

Both methods can help you steal customers away from your competitors, but only when you do them right and with purpose.

-Phil Wrzesinski
www.PhilsForum.com

PS One big discussion taking place in the indie toy world right now is whether indie stores should pick up more of the mass market lines Toys R Us used to sell to try to win over those customers. The answer to that is Yes and No. Yes, if the product is both one of the best options to have in your Curated selection and also one that you can be profitable selling. No if it doesn’t meet those two criteria. More often than not the Category Killer had the “most popular” item. More often than not, that item was not one of the best options. As long as you can answer why you don’t carry the most popular item in a solid way, you’ll win over customers.

PPS Of the two methods for product selection, Saturation takes more money, Curation takes more time. If you have the resources (space and money), go for Saturation and combine it with a killer trained staff. You’ll be well on your way to becoming a Category Killer.

PPPS There is a Third Option. Curation with special order. The newer, smaller Category Killer store formats are using their distribution centers to order in the products they don’t keep in stock in the stores. They don’t want a customer walking out the door empty-handed. While this is the ultimate situation where you can get anything a customer wants in a day or two, it is built for the customer who knows exactly what she wants. Until your vendors can support you in that manner, make sure you have the right solutions and a staff that knows what you sell.

KB-Toys Making a Comeback(?)

KB-Toys is coming back from the dead. The toy retailer that went bankrupt in 2009 is going to stage a comeback to try to pick up some of the business dropped by the closing of Toys R Us (TRU). According to one article, they will likely have a bunch of pop-ups this fall and more permanent locations by next year.

(picture from edplay magazine)

My expectation is that they won’t pick up as much of the toy industry as they think.

When TRU closed they were still doing billions of dollars in sales. They still had over 100 million customers. They actually showed a profit last year. Unfortunately it wasn’t enough to pay the massive debt they had acquired.

While a lot of uneducated pundits and many comments on several articles about Toys R Us closing want to blame Walmart and Amazon for their demise, those two companies had already taken their sizable bites out of TRU’s hide. People who wanted to shop purely on price or convenience were already going to Walmart and buying toys with their groceries. People who knew exactly what they wanted and didn’t want to leave the house to get it were already shopping on Amazon.

The customers still shopping at Toys R Us (over 100 million times, mind you) were going there for one of two things …

  • The Experience
  • The Selection

As an independent toy store owner who offered events, demos, and a fun, friendly environment for shopping, I can rightfully roll my eyes when someone mentions the “experience” of going to a Toys R Us. In fact, most of your independent toy stores will be able to offer a consistently better “experience” than going to TRU. But the customers going there weren’t comparing it to an indie toy store. They were comparing it to Walmart or Target.

You never heard a young kid pleading, “Please, take me to Walmart, puhleeeeezzzze!”

The Selection crowd was going to Toys R Us to browse the aisles. Amazon, as incredible as it is, isn’t built for browsing. Oh sure, you can search stuff on Amazon. As of last September Amazon was closing in on Google as the primary place people go to search for products. But Amazon searching is not the same as browsing. You still need a starting point.

If you want to walk aisles, touch and feel products, and get inspired, you have to go to a brick & mortar store to do that. Outside of a handful of my friends in the independent, specialty toy industry, no one had a larger selection of toys to browse than TRU. Customers went there because it was a better selection and an easier browse than the cramped, too narrow, too tall, too messy aisles of a typical Walmart or Target store.

When KB-Toys opens their pop-ups this fall they won’t have either The Experience or The Selection to truly catch the ball dropped by TRU. Sure, they will make sales. The pop-up model has been proven to be effective to an extent. Whether it will be enough to jump back into the toy market full fledged, however, time will tell. My guess is it won’t be enough and KB will become a perennial pop-up along the lines of Halloween USA. (At least that is what I would advise them to do if they were to ask me.)

The lesson here for specialty retailers like you is to recognize the different types of customers and why they shop at the different competitors you face.

Walmart is all about price and convenience. The cheaper the better. Amazon is for when you know (roughly) what you want, and you don’t want to go out to get it. Your category killers (JoAnn’s, Michael’s Toys R Us, Cabela’s, Barnes & Noble, PetSmart, et al) are more about Experience and Selection. Of the three, the one who most closely shares your customers is the category killer. Your growth is dependent on how many of those customers you can peel away. You already know you can beat them on Experience. Tomorrow we’ll talk about how you can beat them on Selection, too.

-Phil Wrzesinski
www.PhilsForum.com

PS The toy industry, with the closing of Toys R Us, offers a lot of opportunity for different stores to pick up the slack. There will be a lot of disenfranchised customers. Most everyone in the channel from the big box stores to Amazon to the indie stores stand to gain from their disappearance. The biggest winners will be those who have the most compelling message to the former TRU customers. Knowing why they were still choosing TRU over Walmart and Amazon gives you the heads up on what to say to get them to notice you.

Hire Me to Be Your Coach

I played the role of Father in The Nutcracker Suite on stage at the Michigan Theatre. I was in eighth grade. It was part of our LEAP class (Learning Experience for Academic Progress). It was a play more than a ballet, although we did have a dance troupe come in and do some dance numbers. I don’t remember much of anything about the play itself. I couldn’t tell you anything about the story, the other characters, or even my performance. About all I remember was I played the role of Father and I loved being on that stage.

Panorama of Phil Wrzesinski speaking to a large crowd
Phil Wrzesinski speaking to a packed house in Grand Rapids, MI

I’ve never really been afraid of standing on a stage in front of people. Oh sure, I had a kaleidoscope of butterflies fluttering in my stomach moments before I took the pulpit to do a guest sermon at church. But those butterflies settled down the moment I began to speak.

Whether it is a crowd of 500 at a trade show conference, a group of screaming kids in the dining hall at camp, or a room full of revelers at a brewpub, I love to perform.

That’s why when I began building Phil’s Forum I focused on speaking and presenting, doing workshops and seminars and webinars. That’s what brings me the most joy (and people said I was pretty good at it.) 

But my real goal, my true focus of Phil’s Forum is about YOU. Your success. That’s all that matters.

That is the reason behind all the Free Resources for you to download. That is the reason behind writing over a thousand blog posts for you to consume. That is the reason behind offering all those classes, presentations, workshops, and webinars for you to attend.

That is the reason why you’ll find a new page on my website.

Many of you have contacted me about private, one-on-one consulting and coaching. While I often said yes, I didn’t have a plan in place for how to handle and structure those requests. Nor did I have a firm concept for how I felt I could best work with you.

Until now.

Coach /kōCH/ (noun) An instructor or trainer. A tutor who gives private or specialized teaching.

A Consultant is someone you consult for advice and opinions. A Coach is someone who teaches you how to do what you need to do to be successful.

I am chock full of advice. I give it away freely. You can shoot me an email with a question and it is highly likely I will answer it (for free). If you read this blog regularly then you can probably guess my opinion on a topic before you even ask. Lots of people get paid for their opinions. It always seems a little disingenuous to me. If you make your living that way, you always want to keep your client in a position of needing your opinion. There is almost a built-in need for keeping a client partially in the dark so that they don’t form opinions on their own.

A Coach, however, knows that his role is to teach you something so that you can do it yourself. A coach puts you in the best position to succeed.

I know this is mostly semantics. There are amazing consultants out there who really are more like coaches. They teach. They instruct. They help you grow. They never hold back.

Words, however, are important. Choose the right words and your advertising messages will sparkle. Know which words make up your Core Values and your business will attract the right people. I needed to know which word I wanted to use and why before I could be of best service to you.

I chose the word Coach.

If you want one-on-one, private, specialized instruction to learn how to:

  • Hire Better
  • Train Better
  • Serve Your Customers Better
  • Market Yourself Better
  • Manage Your Inventory Better
  • Manage Your Staff Better
  • Manage Your Cash Flow Better

Let’s get together for an exploratory meeting.

The first meeting is FREE. In that meeting we’ll discuss where you are, what problems you’re facing, what tools you might need to solve those problems, and how best I can help you. After that I’ll send you a few different proposals explaining what I will do, what it will cost, and how we’ll measure success. From there the choice is yours as to how much coaching you want.

While my love is still the stage and I hope to spend as much time there reaching as many people as possible, coaching is the next best way I can help you find your path to success.

-Phil Wrzesinski
www.PhilsForum.com

PS Yes, I do coaching remotely. We’ll use phone and email to get the job done. (Or if you want to fly me out to meet face-to-face, I’ll let you do that, too. The best way to get me to town is to convince your local Chamber or DDA to hire me for a presentation and have them pay my way.)

PPS One thing I will ask of any client who wants my coaching services is for you to know your Core Values. You can download the new, updated worksheets here.

PPPS Yes, you can hire me to do stuff for you, too. I’ll run a Team Building event. I’ll write your Hiring ads. I’ll write your advertising messages. I’ll teach your staff how to sell. I’d rather teach you how to do those things yourself, though. That’s what serves you best in the long run.

You’re Looking at Credit Cards Wrong

I was having a recent discussion with a friend about credit card usage. She uses her credit and debit cards almost exclusively. I still prefer cash. Many people think exclusive credit card usage is a young person, Millennial thing. My friend was born on the cusp between Baby Boomers and Gen X.

She isn’t the only person I know who prefers cards over cash. In fact, many smart shoppers prefer to use their cards. They have rewards cards that earn them miles or cash back. Some of my fellow business owners use their cards almost exclusively for their business and go on vacations virtually free.

Image result for credit cardsCredit card usage is the way of the world. It is the way most customers wish to pay you. And with the expansion of Apple Pay and other mobile wallets, that usage is going to continue to increase and become the preferred method of payment not just for Millennials but for all generations. (My son wants me to change banks just because my bank doesn’t yet support Apple Pay.)

Yet many small retailers (and some larger ones) are still stuck in the dark ages when it comes to accepting credit cards.

Yes, you need to accept chip cards. Yes, you need to accept mobile wallet payments. Those are necessary changes in today’s retail climate.

More importantly, you need to check your attitude about accepting credit cards.

I still see retailers who have “minimum charges” for credit cards. If you have that, you’re penny-wise and pound-foolish. You’re telling your customers those few extra cents on that transaction are more important to you than taking care of the customer and serving her the way she wants to be served. You’re telling the customer your needs are greater than hers.

When my friend sees those signs it pisses her off, makes her want to spend less, and makes her not want to come back. Would you rather she comes in once a week to spend $5 or spends zero money and tells people what a horrible store you are?

Heck, even if you allow credit cards for any amount yet you cringe when a customer pulls out her card for a $2 purchase, you need to check your attitude at the door. Swipe fees and percentages are part of the cost of doing business. Period. Unless the majority of your transactions are under $5, those fees are actually quite minimal in the grand scheme of your business. (And if your business does have a lot of $5 and under transactions, you should be making enough margin on your sales to cover those fees quite easily.)

If you want to cringe at a $2 credit card transaction, don’t cringe at the extra pennies you might pay to Visa. Cringe, instead, at the inability of your sales staff to make a larger sale. Cringe, instead, at your lack of connection with the customer that might compel them to buy more. Cringe, instead, at your failure to price things enough to cover your expenses.

Better yet, don’t cringe at all. Celebrate that customer and her purchase. Make her feel as special as the customer who spent $200. Be happy she came in. Be happier that she spent money. Be happiest that you have the chance to build a long-term relationship with her. That is the winning attitude.

You are going to have credit card fees. That is an expected expense in today’s business climate. Your job as a merchant is to make enough money to cover your expenses. Whether you do it through better profit margins or cutting other expenses, your attitude towards those expenses shapes the attitude you have toward your customers.

When you limit how your customers can pay you or simply take an attitude when they pay you in a way that is least convenient for you, you’re taking a business-centric approach. When you have no limits and no worries, you’re taking a customer-centric approach. One leads to smaller average transactions and fewer transactions. One doesn’t. You know the difference.

-Phil Wrzesinski
www.PhilsForum.com

PS The same can be said about whether or not to accept American Express. Yes, you need to accept it … with a smile on your face. You need to be happy when a customer pulls out her Amex instead of her debit card. You need to celebrate the customer, not worry about the fees. You do that by adjusting your margins and expenses to cover it. (As for Bitcoin and other cybercurrencies, because of their volatile nature, you can draw the line there without angering customers. Those of you who do accept cybercurrencies, however, are going to find that you attract a whole new level of clientele that could possibly be quite good for your business.)

PPS Here is the best thing you will read about how to increase your margins enough to cover those credit card expenses.

Your Advertising Media Reference Guide

Here are links to the recent posts on how to best use the different advertising media. Like I said before, all advertising works and all advertising doesn’t work. It depends on two factors, how you use the media and what you say (work on that last one first, then pick the media best suited to say it.) You’re going to want to bookmark this page and share it with your fellow business owners. Before you spend a penny on advertising, spend a few minutes reading these posts.

Television – The Super Bowl of Ads: Television is a powerful branding tool and a powerful direct marketing tool. The downside is it is expensive and people spend as much time and energy trying to avoid TV commercials as they do trying to see TV content.

Radio – The Marathoner: Radio works best for long-term branding campaigns. You can reach a lot of people at a reasonable rate. You just need a great copywriter to craft the kind of ads that can get people’s attention. Boring ads that sound like everyone else are where most radio dollars are wasted.

Billboards – The Drive-By Advertising: In terms of eyeballs per dollar, billboards are one of the best values out there … As long as you can tell a heartfelt story in one picture and six words.

Does Newsprint Even Exist Anymore? Even though it has fallen out of favor with most advertisers, newsprint (whether in print or on a screen) advertising can work if you remember to create the ad the same way a journalist creates a story. You need an engaging picture and a killer headline to grab someone’s attention with this passive media.

Magazines – Speaking to the Tribe: Magazines are newsprint without the daily frequency or the large readership. That’s the downside. The upside is that the niche readership of the magazine means their readers are already qualified members of your tribe. Speak their language and win their hearts.

Why Email Works (And When it Doesn’t): One of the more affordable ways to reach your current customer base to get them back into your store. This post includes tips for getting better open rates and more traffic in the store.

Shares, Comments and Likes (How to Get Facebook to Work for You): Social media is exactly that—social! When you learn how to have two-way conversations and how to reach customers in a way that makes them interact, you’ll find the time you spend on social media is finally worthwhile.

Websites – The Silent Salesman: In today’s retail landscape where everyone has the Internet in their pocket, you need a website. Here are some tips for how to build a website worthy of your brand.

Direct Mail – Do the Math: Direct Mail is for Direct Marketing. You need a relevant offer at a relevant time to a relevant audience to make it work. You also need to know the math to see if the ROI is worth it. This post shows you the math.

Yes You Can Buy Word-of-Mouth Advertising: The most effective form of advertising is Word-of-Mouth. It has always been that way. This post shows you where to put your “advertising” money if you want to get people to talk about you.

Google AdWords – Wasted Money or Well Worth It? When you have a great solution and can convince people of that on a single web page, you can get a lot of customers through Google AdWords. If you don’t have a great solution or cannot communicate that solution well, you can blow through a lot of money quickly with little to no effect.

Mobile Marketing – Winning the Transactional Customer Today: Mobile marketing works well for making a Direct Marketing offer, but be careful how you use it. If you have a “deal-of-the-day” or are a restaurant with daily “chef’s specials” it can be highly effective, but as a branding tool, it won’t get the job done.

Movie Ads, Placemats, Yellow Pages, and More: Here are some of those other more obscure and/or obsolete media someone may try to pitch you. Be wary.

If there are other media you are considering that aren’t covered here, let me know. I’d be happy to explore the ideas with you. As always, if you ever have a question about your marketing and advertising, whether it is about your message, your media choice, or anything else, send me an email.

-Phil Wrzesinski
www.PhilsForum.com

PS If none of these forms of advertising are in your budget, go to the Free Resources page and download one of my Marketing on a Shoestring Budget pdf’s. You’ll find a few more tools to throw into your marketing and advertising toolbox.

Movie Ads, Placemats, Yellow Pages, and More

One thing I actually do miss about being in my retail store was all the ad sales reps with their crazy pitches. Sure, they were a distraction, but as a student of advertising I also saw them as a mental exercise to try to figure out if they were effective and how would I best be able to use them. Plus, I’ve never been one to shy away from a good distraction. (Squirrel!)

To wrap up our discussion of the different media for advertising, here are some of the more obscure or obsolete forms of advertising I’ve been pitched that someone might try to pitch you.

MOVIE SCREEN ADS

Upside: You have a captive audience sitting in the theater that cannot fast-forward and will be much more likely to watch your larger-than-life, powerful, heartfelt television ad.

Downside: You won’t get a lot of frequency. Many people don’t arrive early enough to see the ads. It costs you the same regardless of how many butts are in the seats.

Pro Tip: Watch the movie release schedule carefully. You’ll get far more viewers the weekend of April 27-29 this year than the weekends before or after. Plan your ads around the blockbuster releases.

 

 

PLACEMAT ADS

Upside:  Yeah, still working on that.

Downside: Passive ad, usually monochrome, covered by a plate, and not seen by the person who, if they had time to read the ads on the placemat would most likely be staring at their phone instead.

Pro Tip: This isn’t an advertisement. It is a “sponsorship”. If you want to donate to a worthy cause through placemat ads, then so be it. (If there isn’t a cause, spend your money elsewhere.)

 

PROGRAM ADS

Upside: People who arrive at an event early will read the program. They might even look at the ads. If it is a school program, they might even hold onto it a little while longer and show it to a relative.

Downside: Limited audience, passive ad, and usually black & white.

Pro Tip: This is most definitely a sponsorship more than an advertising media. If you want to support the program, place the ad. Put it in your sponsorship expense column, though. (Note: those sports posters with the boy’s wrestling program schedule are pretty much the exact same thing as a program.)

 

YEARBOOK ADS

Upside: People keep yearbooks for decades.

Downside: People don’t look at yearbook ads for decades.

Pro Tip: Like program ads, this is a sponsorship. Treat it accordingly.

 

YELLOW PAGES

When phone books were still being produced, you needed to have your free listing, but paying for anything more was never the best investment. Now they are promoting yellow pages online. Have you ever seen a yellow pages listing show up in the organic feed of your Google search? And if so, was it above the actual website for the company you were searching? No, me neither.

 

CLOSED-CIRCUIT TV:

Select businesses like your local coffee shop will place televisions in their shops that will run loops of ads for the customers. Nope, nope, and nope. Don’t place one of these in your store to annoy your customers. Don’t waste your money annoying someone else’s customers.

 

If any of you get a pitch for a newfangled advertising media that I haven’t yet covered, let me know.

-Phil Wrzesinski
www.PhilsForum.com

PS I used to spend money on Yellow Pages. Took years to wean myself off and put that money to better use. It broke my heart to say no to high school kids selling yearbook ads because these kids were just learning how to be salespeople. Rejection can be tough. We had thirteen high school yearbooks in our county. I couldn’t afford to sponsor them all. I always tried to be polite and encouraging and thank the students for coming in.

PPS Sponsorships aren’t a bad thing. They just aren’t an effective form of advertising. If you’re going to do some sponsorship ads, at least put the effort in to make the ads sparkle. At least those few who see your ad will know you’re a top-notch business. I did some placemat and program ads over the years for causes I believed in such as Toys for Tots (our largest charity) and the high school boys swim team (of which my son, like me in my day, was one of the captains), but purely as a form of sponsorship. The picture above is a color business-card sized ad I had ready to go. I also had a slew of business-card sized ads optimized for black & white for sponsorship purposes shown below.

Mobile Marketing – Winning the Transactional Customer Today

I remember the first time someone pitched me the idea of mobile marketing—sending texts out to customers to convince them to come into the store. Two things stood out from that meeting. First, they gave me a stat that said there were 4.5 billion smartphones in use on the planet. Second, they showed up just shortly after I had read Seth Godin say, “What if you actually won the race to the bottom? Worse yet, what if you finished second?”

They lost me with the first statistic because it was a blatant attempt to overplay the significance of the smartphone. 4.5 billion phones? Sure, maybe that many had been produced and even sold, but to believe that 64% of the 7 billion people living on this planet were on a smartphone was just a little over-the-top. I wasn’t ready to jump to the conclusion that even 64% of Americans had smartphones. My mom and dad were still using flip phones at that time. My younger son did, too. My older son had an iPhone, but I was still on my Blackberry, barely touching the “smart” part of that phone. In an upper middle-class, tech-savvy, American family, only 50% of us had a smartphone back then*.

(There is a quick marketing lesson here. If your statistics seem too good to be true, you better justify them or don’t use them at all. Any strain to your credibility will kill the rest of your message.)

Image result for mobile marketingThere was a second statistic they gave me (by the way, I would link to these statistics if I could, but I can’t find evidence online to support them) that said 51% of smartphone users responded to coupon offers sent directly to their phones.

That number actually made sense to me. You and I have already talked about the two types of customers—Transactional and Relational.

Here’s a quick recap to jog your memory … Transactional Customers know exactly what they want and are on a hunt to find the best price. Relational Customers are looking for an expert they can trust to help them find the right item. We are both Transactional and Relational, depending on the category and product. About half the buyers will be Transactional and half will be Relational in any category, too. But Relational Customers will be more profitable to you and have more loyalty.

The 51% who responded to deals and discounts on their phone are likely to be Transactional Customers. I tend to lean more Relational. It would drive me crazy to get bombarded with texts like that all day.

That’s the key to understanding Mobile Marketing. It is a Direct Marketing offer that is most likely to be seen and used by a Transactional Customer. It isn’t a tool for Branding. It isn’t a tool for building relationships. (Transactional Customers have no loyalty to anything other than the discount or deal.) It is merely a tool for attracting the least profitable customers out there.

That doesn’t mean Mobile Marketing doesn’t have a place in your advertising toolbox. It can be incredibly effective for specific uses.

If you do have a deal-of-the-day and want to let your Transactional Customers know about it to help you move some inventory, Mobile Marketing can work well for you. If you have a restaurant and want to highlight today’s specials, Mobile Marketing can work well for that, too.

If you’re just throwing out coupons to anyone walking by your door, however, you’ll get traffic, but it won’t be that profitable and won’t have any long-term positive effect. In some cases, you’ll just be throwing money away.

Would I, as a Relational Customer, use a coupon sent via text when I walked into a store? Of course! But that’s just lost profits. I was already going in to buy something and was already willing to pay full price.

As with every form of advertising, there are pros and cons. There are ways it works and ways it doesn’t. Mobile marketing is one of those that has a specific use. If you know who you’re trying to attract and why you’re trying to attract them, then you can pick the media best suited for the task.

-Phil Wrzesinski
www.PhilsForum.com

PS *Even today I find it impossible to believe that 4.5 billion number (and by now I’m sure they are boasting some higher number). Some might argue that for every person not on a smartphone there is some guy on Wall Street who owns three phones. Okay, I get that. But do you want to pay to reach him three times?

Google AdWords – Wasted Money or Well Worth It?

On four different occasions I received coupons in the mail from Google. Each one was worth $10 to $25 to be used on Google AdWords. I started researching how to use AdWords. I learned about different search terms and how some terms will be more expensive than others.

For instance, the word “toys” was going to cost me far more per click than the word “crayola”. The more generic the search term, the higher the cost to get clicks.

Image result for google adwordsWait, let’s back up a moment. For those of you who have never used Google AdWords, here is how it works. You select a word or phrase you wish to use. If someone searches for that particular word or phrase, your name will appear in the paid section in the search (above the organic results) if—and this is the key—you agreed to spend as much per click to be one of the top three to five businesses who also chose that word.

Yes, it is a bidding war to get eyeballs to your link and clicks to your website. The more you are willing to pay-per-click, the more likely you’ll make it onto the page. That’s why it is important to pick the proper words. The more common the word appears in searches, the more businesses will pay to get on that page. The more obscure the word, the cheaper the pay-per-click.

In other words, Google AdWords is a game you play. You can pay more for the more common search words and fight the crowds trying to reach the masses, or you can choose cheaper words that might not get the overall traffic but can still draw people to your site. You have to find the right mix.

Oh, but it is far more complicated than that.

First, you have to choose the right words. Second, you have to write a short blurb—shorter than a tweet—that might actually convince someone to click on your paid link rather than the organic results. Finally, you have to have your AdWord link to a page that has the actual solution the searcher desires. Your account gets charged every time someone clicks, whether they spend ten minutes or ten seconds on your site.

Here is the truth about paid search results …

The only person who clicks on a paid search result is someone who has a problem and is looking for a clear-cut solution.

If you are considering using Google AdWords, you need to ask yourself the following questions …

  • Do I have a solution for a problem people are actively searching?
  • Is that solution on my website or can I create a web page with that solution?
  • Is my solution one that can be easily described in 96 characters or less?
  • Is my landing page optimized to convert traffic into sales/solutions?
  • Will I make enough money with my solutions to cover the cost of acquiring clicks?

Those are some tough questions. The last three are the heart of the matter. Not only do you have to have a solution, you have to have a landing page that the searchers go to that not only solves their problem but convinces them you are the best solution and gets them to buy from you right away.

In other words, this isn’t the place to put your Branding Dollars. This isn’t the place for building Top-of-Mind Awareness. This is the place for solving problems for customers desperate for a solution. If you can do that, you can drive a lot of traffic via Google AdWords.

If you’re going that route, here are some things to do:

  • First, work on the solution. Make sure your solution is simple, clear, easily understood, and exactly what customers will want.
  • Second, work on your landing page. You choose where the searcher lands when she clicks. You want her to land on the solution page. Make sure that page is optimized to be clear and simple and easy to navigate. She shouldn’t have to click more than once to know everything she needs to know. Take down as many barriers between the customer and the solution as possible.
  • Third, once you have your solution, figure out the most common words and phrases someone might type into a search bar if they are looking for that solution. The more exact you are, the more likely you’ll get the right people clicking. This, more than anything else, will help your conversion rate go way up.
  • Fourth, determine exactly how much you are willing to pay for each click. Google will give you a range of what to expect. Make sure you are getting your money’s worth.

The cool thing about Google AdWords is the analytics. They’ll tell you exactly how well your campaign is running. You’ll know how many people are clicking, what it is costing. You can figure out your conversion rate from there. (Conversion rate is simply the percentage of how many of those who click actually use your solution.) According to this article, the best ecommerce sites are converting over 6% of their pay-per-clicks. Your ROI, then, is to figure out what each conversion is worth to you, and whether you are getting the conversions you need for the money you spend.

Pay-Per-Click (PPC) is all about Direct Marketing. The return on your investment is in the strength of your solution and your ability to find the people with the right problem you can solve. Google AdWords is a powerful tool for that purpose, but only if you have a great solution people need.

Before you embark on Direct Marketing, though, please read this article from Roy H. Williams. It will help you understand a little more about the solutions you might want to offer.

-Phil Wrzesinski
www.PhilsForum.com

PS I call them solutions instead of offers. That is the mentality you need to take if you are going to use PPC advertising effectively. The people searching aren’t looking for “offers”. They are looking for solutions. Make sure you give them one or your money will be wasted, and wasted quickly. The first $100 I spent on Google AdWords was gone in less than an hour at an average rate of about 33 cents per click. They all went to my home page where they stayed an average of less than eight seconds. There was no solution on that page. No conversion.

PPS A lot of businesses like mine (speakers, consultants, etc.) will use PPC advertising to get your email. The method of operation goes like this. You search for something. I offer you a free solution. You click on my link. I make you subscribe with your email before I give you your free solution. Then I bombard you with emails trying to convince you to sign up for my paid services. It is the tried and true method for many in my position. (Well, okay, I don’t know how “true” it is, but it is tried by several people.) It also isn’t me. I believe if my free content helps you, I’ll get enough paid business to keep doing what I do.

PPPS The analytics that Google offers in their AdWords program is one of the best tools out there. You can A/B test your solutions, your blurbs, your landing pages, your budget, and every other element of the campaign to see what works best. But if you don’t first have a great solution and know exactly what words people are using to search for that solution, nothing else will move the needle enough to make it worthwhile.

Yes You Can Buy Word-of-Mouth Advertising

Celebrity endorsements don’t work like they used to. Sure, some fanboys will buy a particular brand because their favorite star told them, but the general public knows these actors, athletes, and entertainers only promote the stuff they get paid to promote. We see right through the pay-to-say ploy and aren’t convinced to buy.

The idea behind celebrity endorsements, however, was a sound investment at one time because Word-of-Mouth advertising was and still is the best, most powerful form of advertising. You are far more likely to try a new brand or a new store or a new product because someone you know and trust told you than you are because that brand or store told you.

The majority of Americans see advertising as the hype that it is. According to an omnichannel retail study done by Euclid, only 53% of Baby Boomers are inspired by traditional advertising to try something new. Generation X is even more skeptical at 40%, and the Millennials are under 33%.

After spending the last two weeks trying to tell you how to use traditional advertising more effectively, I’ve just linked you to a study that says the majority of shoppers won’t believe your ads anyway. (Note: the real reason behind those paltry numbers is because Most Ads Suck and violate the six principles of effective advertising, but that’s a post for another day.)

As the trustworthiness of traditional advertising declines, shoppers are looking more to their friends and family for advice where to shop and what to buy. Word-of-Mouth.

The good news for you is that you can still buy Word-of-Mouth. That’s what celebrity endorsements really are—a company paying someone trusted and known to talk about their products. But I’m not advocating you buy that kind of Word-of-Mouth. The way you buy Word-of-Mouth effectively today can be done four ways:

  • By spending money on the design of your store to make it so fabulous and unexpected that people have to talk about it.
  • By spending money training your staff to the point that they exceed your customer’s expectations to the point your customer has to tell someone just to validate that it really happened.
  • By being so generous giving away the unexpected to your customers, that they have to brag to their friends..
  • By showing off products in your store so outrageous that people have to tell their friends what they saw.
32,000-piece Jigsaw Puzzle!

We sold jigsaw puzzles, over a million pieces worth of jigsaw puzzles a year. (I did the math once.) Mostly we sold 1,000-piece puzzles and 300-piece puzzles, but we showed on the shelf a 32,000-piece puzzle. The box alone weighed forty-two pounds and came with its own little handcart for hauling it away. The finished puzzle was over 17 feet long and over 6 feet tall. I spent $160 to put that puzzle on my shelf. I never expected to sell it. I never really wanted to sell it. In fact, I sold it three times and immediately ordered another one.

Why?

Because every week someone would take a selfie with that puzzle and post it on social media with #toyhouse. It was worth more to me for advertising than the profit from selling one every couple years.

 

I spent $200/board for three chalkboards on the outside of our building where customers could write their own answers to the questions posed on each board.

Why?

Because every time a scavenger hunt took place in the city of Jackson, one of the stops was to write something on that board.

 

I spent another few hundred dollars to create the mileage signpost outside our store.

Why?

Rarely a day went buy that someone didn’t take a picture of that sign with our logo conspicuously in the background. Those pictures invariably made their way onto social media.

I spent about a thousand dollars a year giving away helium balloons free to children of all ages. No questions asked. No purchase necessary.

Why?

Not only did it help with crying children who didn’t want to leave the store, it made it more likely that parents would bring their kids in the store, knowing they could get out the door with a free balloon (and on Saturdays with free popcorn). Many customers told me that was what they bragged to their friends when asked why they shopped at my store.

You can get your customers to talk about you to their friends and family. You just have to do something worth talking about. Spend the money to be fabulous, outrageous, unexpected, and over-the-top and then let your customers do all the advertising for you.

-Phil Wrzesinski
www.PhilsForum.com

PS You can read even more by downloading from the Free Resources section of my website the pdf Generating Word-of-Mouth.

PPS In 2009 Toy House was featured as “One of the 25 best independent stores in America” in the book Retail Superstars by George Whalin. Every single business in that book got there because of Word-of-Mouth. Whenever George traveled he asked everyone he met about their favorite places to shop. The stores he heard the most made it into the book. In other words, it was worth it for us to spend so much time and money trying to buy Word-of-Mouth. Oh yeah, and it worked, too!

PPPS Here are the links to the posts on the other forms of advertising … Television, Radio, Billboards, Newsprint, Magazines, Websites, Email, Direct Mail, Social Media