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Two Lessons From Selling a House

I’m typing this while surrounded by boxes, some full, some waiting to be filled. I’ve told you many times I’m not the most organized guy. I fear that most of the contents of my home office are just going to get dumped into whatever open containers are left, to be sorted (if at all) at some later date.

Yes, my house sold. It took seventeen months from listing to closing.

It took seventeen months, a dozen gallons of paint, a new stove, two dozen borrowed items for staging, fifteen open houses, four prices changes (the last one upward), and three written descriptions of the house before the sale happened.

I want to talk about those last two.

For the first year, we started with the house listed at $249,900, hoping to get $230,000 plus. We listed in late July 2016 so we missed the window for the families who wanted to move over the summer and be in the new place before school started. Although we had some traffic early on, most people complained about the old, dated kitchen.

Our old, dated kitchen

To their credit, the kitchen was old. And dated. And included four different types of wood (light maple pergo floors, dark cherry cabinets, dark oak trim around a tile counter, and medium oak trim around the light fixtures, oh and wood paneling—yuck!) But it was also functional and efficient and filled with good, usable storage.

No offers.

We lowered the price to $245,000 and then to $239,900 hoping to refresh the listing (by the way, the comparable values put it in the $250,000 range.) The rest of the first year was all the same. Plenty of traffic. Everyone had the same comments. Loved the location. Loved the spacious rooms. But the kitchen was dated. A few commented that the price was too high because of the kitchen.

No offers.

At the end of the first year I took it off the market for a month. I painted the remaining rooms that had yet to be painted, re-staged it, and put it back on the market at $259,900.

I also rewrote the listing to include the following paragraph …

The kitchen is dated—but completely functional—and will serve you well until you decide to build the kitchen of your dreams and turn this house into the home you’ve always wanted.

The higher price meant fewer lookers, but one thing changed dramatically. Not one person mentioned the kitchen as being an issue. Surprisingly, no one mentioned the price either.

Those two changes led us to the buyer we needed—someone who would see the house for the incredible value that it is, and not be scared away that the kitchen has to be redone.

Through our new price and new description we eliminated all the traffic that was pointless, and only brought the traffic that would be interested in a house like ours.

NEW PRICE

As I have been teaching for years, price is a perception game. In housing, that game has changed dramatically thanks to the Internet. Almost every house hunter goes online first. One of the first filters you use is price. You put a minimum and maximum price into the filters and your search appears. With a price of $249,900, we were at the top end of the $250,000 filter. People who put $250,000 as their top filter are not looking to buy a $249,900 house that needs a $20,000 kitchen. We needed to get out of that search mode.

Going to $259,900 put us into searches for people who put $300,000 as their upper limit. Now our $259,900 price looked like a value. Even with $30K worth of work, the buyer will have a $300,000 house for less than $300,000.

Yes, the perception of this new mode of search is that every house that pulls up in a search of houses between $200,000 and $250,000 has a maximum value of $250,000 because they put “$250,000 maximum value” in their search. Every house that pulls up between $250,000 and $300,000 is likewise a $300,000 home.

By changing our price, we changed the perceived worth of our house. Instead of being an expensive house that needed a lot of work, it went to being a value-priced house that needed a little bit of work.

NEW DESCRIPTION

My agent was good with my new description—even the part about the kitchen being dated. I heard from other people in real estate that you should never say anything negative about a house in the description. I respectfully disagree. By admitting the downside, I earned the trust that the other statements would have a better degree of accuracy.

Most of us know that keywords like “cozy” means “cramped” and “charming” means “hasn’t-been-updated-in-years.” Yet, by admitting the kitchen was dated, not only did it make the other statements feel more truthful, it eliminated any house hunters who didn’t want to remodel a kitchen.

Our traffic was down, but we got a buyer and closed the sale.

The lessons are two-fold.

First, price has a huge impact on the perception of an item. Sometimes a higher price is actually better than a lower price. You have to look at your prices through the eyes of a customer and see what she sees and reads into your prices. Do that and you can find the sweet spot that gets you the most bang for your buck.

Second—and this is something Roy H. Williams has been drilling into my head this entire century—you have to choose who to lose. Through our description and pricing we eliminated a lot of potential buyers, mainly because we knew they weren’t going to be the right buyers. Just having traffic to your website doesn’t make it good traffic. Just having traffic through your door doesn’t make it good traffic. You want to specifically attract your kind of buyers. You do that with your message. Our new message brought us the buyer we needed and got the house sold.

Time to go fill up those boxes.

-Phil Wrzesinski
www.PhilsForum.com

PS Before you ask, we got $230,000. We got where we wanted, but only after attracting the right people. The housing market hasn’t changed much in our area. We didn’t get any offers with the old description and old price during the peak selling season of April to July. We got our first offer during the off-season and only after the new price and new description. (Speaking of off-season, I am currently staring at a snowstorm out my front window that has closed one of the major highways through town. This is Michigan. When they close the highway here, it’s a real storm. Fun for my son because school was closed, but not so fun for packing and moving.)

PPS I apologize for the sporadic posts the last few weeks. It will probably continue into next week as well while we make the move. Stay tuned, though. I have some fun thoughts for how we can make 2018 amazing. You might want to tell your other retailer friends to sign up for the blog here.

Are You a Top Down or Bottom Up Company?

I once won five pounds of bacon. It was a naming contest. First prize was an Apple iPad. Second prize was five pounds of bacon. Since I primarily use my iPad as an expensive alarm clock and to play FreeCell, this was one contest I was happy to take second place.

The item we were naming was a pyramid for business owners developed by my good friend, the super-tall-and-pretty-darn-smart Tim Miles.

This is Tim Miles’ “First Order of Business” (my name suggestion was just simply “The Order of Business”)

Tim developed this pyramid because many of his clients had been buying and creating their advertising the wrong way.

They would have an advertising sales rep come in and convince them that his media was the best place to reach their potential customers. Once that was done, the sales rep would ask them what they wanted to say.

Tim was right (did I say he was really smart?) when he recognized this for being the absolute most backwards way to advertise. Your message is far more important than the media. In fact, you need to know your message before you even pick the right medium to deliver it.

Before you can know your message, however, you have to decide what kind of customer experience you want to deliver on a consistent basis.

Of course, to deliver a consistent customer experience requires some strategic planning.

And you know that strategic planning is of no value if you don’t first know your own Core Values and the Goals you are trying to reach with your business.

Yet isn’t that how we all bought ads for many years?

The sales rep for the media company came in with a fancy presentation about how his media had the best reach, the best market penetration, the best demographics, the best falsified statistics to convince you that this media buy would transform your business. He got you all fired up and had you signing on the dotted line before he once asked you about your goals and values. He got you convinced this was going to be your best year ever before asking about your strategic plans for taking care of the customers. He got you sold on the idea that unlike all your other failed media buys, his was truly the one that would make you a millionaire before he even asked what your message was going to be.

It doesn’t work like that.

I want 2018 to be your best year ever. I want to help you craft and create the best, most effective messages for your business ever. If you hire me to help with your advertising this year, the first question I’m going to ask, however, will have nothing to do with advertising. I’m going to ask you if you know your own personal Core Values. Then I’m going to ask you if your goals for the company line up with your personal values. Without that foundation, there is no media buy you can make that will get you where you want to go.

Tim is a smart man (he tries to play dumb by surrounding himself with an incredibly smart team, but that just shows you how brilliant he truly is). If you are looking for a long-term solution to your advertising needs, Tim and other Wizard of Ads Partners are your go-to peeps.

If you are looking for someone to set you on the right course and help you DIY your advertising, give me a call.

-Phil Wrzesinski
www.PhilsForum.com

PS I get nothing from Wizard of Ads Partners for telling you about them. I’m not a Partner myself. But I have learned so much from them and from Roy H. Williams, aka The Wizard of Ads, that I can’t help gushing about them. I’m a DIY kinda guy when it comes to business. I like to help small businesses learn how to help themselves. If you’re someone who just needs a good push every now and then, maybe we should talk.

Few Things Go As Planned

Back in the early 1990’s I ran a wilderness trip program out at YMCA Storer Camps. I had a team of trip leaders who would plot out backpacking, biking, rock climbing, and canoeing trips around the Midwest and Ontario. One of the planning stages for the trip leaders was to build an itinerary showing what they would be doing each day, where they would be camping each night, and what goals they hoped to accomplish on the trip.

Papa Moose and family on the Missinaibi River, Northern Ontario 1987

Before each trip I would go through their itinerary with them, making sure the trip looked sound on paper. Then I would have them fold up the itinerary, place it in a Ziploc bag, and stick it in the bottom of their rucksack to only pull out if necessary.

Rarely if ever did a trip turn out exactly as it was written on paper. Flat tires, flash flooding, lost canoes, or other unexpected obstacles would always throw the itinerary off track. Sometimes the itinerary had to be adjusted to meet the needs of the group. One of my bike trips added an extra 100 miles to their trip because the kids had the skills to make that extra jaunt. There was always something.

What I learned through this exercise was one simple lesson—the future will not turn out exactly as you planned.

That doesn’t mean you shouldn’t plan for it. The two most important days of the itinerary were the first and last. The first set the tone, the last got you home. What happened in between was subject to change at a moment’s notice. A skilled trip leader knew when to adjust the itinerary to make the trip fun for everyone. A skilled trip leader expected to make changes mid-stream and was prepared to do so.

So here is my best New Year’s advice to you.

2018 will not turn out how you planned.

I’m not being a Debby Downer here. In fact, 2018 may surpass all your wildest dreams. Or it may take a hard 90-degree turn down a path you never imagined that might be the best path you ever could take. It may be close to what you thought, but there will be plot-twists, obstacles, detours, re-routes, and even a dead-end or two along the way.

That’s okay.

It is impossible for you to foresee that much of the future to meet every challenge perfectly prepared, knowing what will happen before it happens. (If you had that skill, you likely wouldn’t be reading my blog.)

With that said, you still need to plan your itinerary. You still need to plot out where you are today and where you want to be at the end of the year. You still need to put down a plan for how you will get from Point A to Point B. Without a plan, I can promise you won’t get anywhere close to Point B.

A skilled retailer will plan the following:

  • Marketing: What events, what advertisements, what other ways will you draw traffic to your store? At the same time, how will you measure new, unforeseen opportunities as they come along? What will you need to see to jump at an opportunity or take a risk with your advertising and marketing?
  • Staff Training: What skills do you want your staff to learn and strengthen in 2018? At the same time, how will you deal with the sudden change should you lose a key employee or two along the way?
  • Customer Service: Where are the holes in the service you provide and how will you raise the bar for 2018? At the same time, how will you spot new opportunities to surprise and delight customers in the future as their bar of expectation rises as well?
  • Inventory Management: How will you raise margins and turn ratios (to increase cash flow) while keeping prices attractive and keeping enough inventory on the shelf to maintain sales levels? At the same time, how will you respond to fads? What criteria will you use to jump in whole hog when something is going hot (or jump out quickly when something has died?)

 

A skilled retailer like a skilled trip leader knows that the goal is to start the year out on the right foot and make it to the finish line intact. What happens in between will never match the plan, but if you’re prepared, will be a helluva lot of fun.

-Phil Wrzesinski
www.PhilsForum.com

PS Those four categories will be the main focus of this blog for 2018. My goal for the New Year is to prepare you to see the opportunities, the detours, the 90-degree turns, the obstacles, and the dead-ends for what they are so that you can navigate through them or around them. Sound good?

Not Everyone Is Expecting the Same Thing

A couple weeks ago I did a Customer Service workshop with the staff of Kingman Museum. In a workshop for a single entity I get to do some different things than I do in a presentation to a large and varied group, including focusing in on different elements of customer service that will truly make a difference for the types of customers you’ll see.

As you know …

Customer Service is a measure of how well you meet your customers’ expectations.

The minimum bar is simply to give the customer exactly what she expected. Anything less and she’ll tear you to shreds on Facebook or Yelp or in the hallway outside the MOPS meeting. Anything more, however, and she’ll sing your praises to the mountain top.

It is a fine line between failing and winning. Worse yet, the line is constantly shifting because not every customer is expecting the same thing.

In the planetarium at Kingman Museum. You should check it out.

Our first exercise, therefore, was to figure out the different personas that visit the museum. We came up with eight basic personas; The Member, The Young Family, The Homeschooler, The Field Trip, The Tourist, The Senior Citizen, The Passer-By, and The Donor. We then described the general characteristics of each persona, listing them on pieces of easel paper taped around the room.

Then, as we looked at all the interaction points the staff has with the visitor, we talked about how the expectations differ based on the personas. For instance, Tourists are looking for a far different experience than Homeschoolers. Senior Citizens want to see what is very new (because they are frequent visitors) and very old (for nostalgia’s sake). Young Families want activities to keep the wiggles at bay. The Donor wants to see where the money went.

First, by knowing these personas and the different expectations they might have, we were able to create different ways to exceed their expectations.

Second, we spent a lot of time on the importance of communication. It is through the relationship-building process that you learn which persona best fits their needs, and also what personal expectations they might have, so that you can apply those surprising moments.

This is a simple exercise you should do with your staff.

  • Start by describing the different types of customers. Give them each a name.
  • List the characteristics that define each persona.
  • Brainstorm questions you can ask (or answers you can look for) to help you identify each persona.
  • List the expectations each persona might have, especially how they differ from the other personas.
  • Think of what it will take to surprise and delight each persona.

Only when you know the different types of customers and what they expect from your store can you truly meet and exceed their expectations on a regular basis. Giving a group of kids on a Field Trip a list of your favorite nearby local restaurants is not nearly as delightful as it is when you give it to the Tourist.

-Phil Wrzesinski
www.PhilsForum.com

PS Some of you are already ahead of me in figuring out that these personas also play a role in your marketing and advertising. When creating new advertisements, pick one persona and write directly to that person. It won’t be as effective for the other personas, but it will move the needle for her in ways you never imagined.

PPS Rome wasn’t built in a day. This is a great exercise to work on over the course of several meetings. Start with simply identifying the different personas and what makes them unique. At the next meeting you can start to talk about their expectations and how you identify them. What you will find between those two meetings is that at the second meeting they may have a sharper definition for each persona. That means they were observing. Praise them for that. By the third meeting, however, you should be working on ways to surprise and delight.

PPPS If the veterinarian staff had done this exercise with the simple personas of Cat Person and Dog Person, they would have been OMG instead of WTF.

PPPPS Go to Kingman Museum and see how they are doing. The museum is really cool with a ton of stuff packed into an architecturally cool building. Plus, they have a planetarium! (Be gentle. This is the first time they have looked at Customer Service as a thing, let alone as a different thing for different people.)

More Advertising vs Better Customer Service

Today I spoke to the Marshall Area Economic Development Authority (MAEDA) about Raising the Bar on Customer Service. This is one of my favorite talks because it is filled with ideas you can use right away to start making a difference for your customers and raising the level of their delight to the point that your customers start talking about you.

Isn’t that the true goal of any business—to give your customer such an amazing experience that she can’t wait to tell someone, can’t wait to come back, can’t wait to bring her friends with her?

If that isn’t your Customer Service goal, it should be. It is the only goal that is sustainable long term.

This is me helping Kingman Museum “Raise the Bar”

I spoke to this same group last May about Making Your Ads More Effective, the presentation based on my newest book coming out (soon!) That is another of my favorite topics because it shakes to the core any mistaken beliefs you might have had about advertising, and teaches you how to get people to notice your ads, remember your ads, and act on your ads.

Advertising and Customer Service are two areas where you can stand out the most compared to your competition. But when resources are limited, which should get the majority of your focus?

The dream for any retailer is to have exclusive, high-demand product that no one else sells. You have that and all you have to do is run an ad and start printing money. Unfortunately, the Internet killed that dream for the vast majority of retail. It is highly likely that you won’t have an exclusive on your merchandise ever again, and you likely won’t have the best price in town (not that you should ever want to be the lowest price in town).

The second dream for any retailer is the falsehood perpetuated by the movie Field of Dreams.

If you build it, they won’t come.

You have to build it, talk about it (advertising), and make it spectacular (customer service).

  1. Build it
  2. Talk about it
  3. Make it spectacular

That’s the order the customers see.

But for you, the order should really be …

  1. Build it
  2. Make it spectacular
  3. Talk about it

When you think in those terms, that third element—the talking about it—could be done by you, or better yet, by your customers.

  1. Build it
  2. Make it spectacular
  3. Get your customers to talk about it

Before you spend another dime on advertising, spend the next dime on training your team.

Spend the next dime on figuring out new ways to surprise and delight your customers. The best businesses are fueled by a high level of repeat and referral customers. Repeat business comes from great customer service. Referrals come from surprisingly delightful WOW customer service. Once you have that, then you can spend some money telling the world what you built. Then they will come.

-Phil Wrzesinski
www.PhilsForum.com

PS Yes it is the slower way to build your business, but it is also the stronger way to build it because the customers you win are much more loyal than the customers you buy. Right now you have the advantage of the larger crowds of shoppers for the holiday season to win more customers. Don’t miss this opportunity. You could also think about it in reverse. What happens if you spend a lot of money to attract large crowds before you make it spectacular? They won’t be back, but your advertising money will be down the drain. You’ll have to spend more money to attract more first-timers.

PPS Yes, I do one-on-one business coaching to help you find where you can raise the bar on your customer service. Yes, I do presentations to large groups of businesses like the wonderful crowd today. Yes, I do half-day and full-day workshops that not only talk about the broader picture, but also include in-depth ways to find and train the kind of staff that can consistently offer the experiences that people talk about to their friends. Give me a call or send me an email. Scott Fleming, the MAEDA director said, “I was sad to see your last slide. I really didn’t want this presentation to end.”

What the Kids Are Learning

Last night my son wanted to read to me a paper he had written for Eleventh Grade Honors English. The paper was a review of an essay they had read. In Ian’s paper he had to show examples of the different styles of persuasion the author had used in his essay.

The more Ian read, the more interested I became. In Eleventh Grade Honors English they teach three different types of persuasive writing:

  • Emotional Connection
  • Empathy
  • Sympathy

It seems that most advertisers have forgotten what they learned in 11th grade.

Listen to the radio today. Tell me how many local businesses try to make an emotional connection with you. Heck, watch TV and tell me how many national retailers are trying to make an emotional connection with you. That first answer is probably zero, and the second answer isn’t much higher.

Instead they try to entertain you and/or give you facts, thinking that will persuade you.

Have you ever heard or seen an advertisement that made you say, “Wow, this company totally gets me!”?

Yet, what would it mean to your business if your advertising connected with people that way? Empathy is the ability to not only understand your customer, but also show that you feel the same way she feels. Do your advertisements show that? If not, they likely aren’t persuasive enough.

Even if all you can do is show that you understand how people feel and can help them get through that feeling (sympathy), you have a chance to move the needle.

Anything short of that and you won’t accomplish what advertising is supposed to do. You won’t persuade anyone. They are teaching this in 11th grade. Maybe we all need a refresher course.

-Phil Wrzesinski
www.PhilsForum.com

PS Writing emotional ads that connect is not easy, nor does it feel normal—mainly because it doesn’t sound like everyone else out there. Then again, do you want to sound like everyone else out there? Do you want to persuade? This ad was our sole Christmas ad in 2005 and it lead to our best Christmas season ever. We ran it again in 2007 and smashed all previous records. (Note that it doesn’t give our hours, our location, our services, or anything really pertinent.)

He left Detroit 9am Christmas Eve.  Some store somewhere had to have the one toy his sweet little six-year old wanted.  Six stores…seven hours later, he stood, travel-weary, across the counter from me.  “I suppose you don’t have any Simon games either.”  As I handed over the last of our Simon games he smiled and said, “God Bless You!”  Believe me, He already has.  Merry Christmas from the Toy House in Downtown Jackson. We’re here to make you smile.

Here is another ad that moved the needle …

Squealing rubber, crunching metal, breaking glass. Sheila’s baby daughter, Livvy, was in the back seat. The next day she called to thank me for installing the car seat that saved Livvy’s life. This is Phil Wrzesinski from the Toy House. Since that day my staff and I have installed over two thousand car seats to keep kids like Livvy safe and give parents and grandparents peace of mind. It’s just something we believe in. I guess you can call that the Toy House Way.

Online Advertising: What They Say, What You Get

I have a bad habit. I like to play games in my iPad right before going to bed. I know I’m not supposed to have screen time before bed, but it settles me down and helps me clear my mind. My favorite game to play is Free Cell. It is a form of solitaire and extremely addicting. I’m on level 408. It takes about ten wins to get to the next level, so you can get an idea how often I play.

I’m also kinda stingy. It’s already expensive enough that I use my iPad primarily for playing Free Cell and as my alarm clock. I refuse to pay to have ad-free game play while playing Free Cell. So between every game I wait for the ad to pop up and then close it as soon as I can. Usually it is just an ad for another game they think I would like. Every now and then I get some annoying video ads—reason #1 why I keep the volume off.

Last night I got something new. I got a local ad. It was for one of our candidates for Mayor. Nice shot of him smiling at the camera and talking about something. (I had the volume off so I don’t know what he said, but I’ve seen his campaign material and known him long enough to have an idea.)

Here’s the problem …

I got his ad between every game I played last night. Every. Single. Game. I played about three-and-a-half levels. Do the math.

Please vote!

Worse yet, I don’t live in the city. I don’t get to vote for or against him regardless of how many times his video played.

I will definitely ask him how much he spent on that ad. I want to know what they told him and sold him, because I doubt he got his actual money’s worth.

Therein lies the rub with online advertising. It is a numbers game, they tell you. It is a cheap way to reach a lot of people, they tell you. It reaches all the right people, they tell you. I’ve been pitched by online advertising salespeople many times before. I know the script.

Yet here was a guy running for Mayor on a tight budget in a small city. He got that pitch and because he is a politician, not a business person, he fell for it. And for his money, he got his ad sent to one guy thirty-five times who doesn’t live in the city, can’t vote for him, and didn’t even have the volume on to hear what he had to say.

Imagine how many more people like me also were bombarded by his ad. If I would have had the volume on, I might have liked his pitch the first three or four times I heard it, but by version #35, I might have switched sides for the seventh time. Then again, I don’t get to vote tomorrow for or against him.

They tell you online advertising is cheap because it is targeted directly at the people you want to reach. False. He didn’t want to reach me.

They tell you online advertising is cheap because you can reach tons of people for a fraction of the price. False. You can’t control how many times the same person sees your ad, versus new people seeing your ad. Heck, last spring CNBC reported that 20% or $16.4 billion dollars of online advertising is wasted due to fraud, reaching fake people (probably with fake news).

They tell you online advertising is where the millennials are. False. Go ask your millennial friends how many times they have purposefully clicked an online ad. You don’t have to ask, because you already know.

Proctor & Gamble just cut $140 million from their online advertising budget because they realized how ineffective it was.

My buddy Tim Miles shared this link with me about the top ten problems with online advertising.

I’m telling you this now, because in the next few weeks you’re going to panic, just like every retailer does this time of year. You’re going to be afraid that you haven’t done enough to advertise your business. You’re going to get pitched by someone selling online advertising as cheap, targeted, and effective. You’ll be intrigued, partly because of your panic, partly because it is the shiny, new bauble in the advertising world. Then you’re going to spend like a drunk in Vegas on a gamble where the odds are not in your favor.

Think of this blog as your black coffee and aspirin to the rescue.

-Phil Wrzesinski
www.PhilsForum.com

PS Want to reach a bunch of targeted people online incredibly cheaply and effectively? Take pictures or quick videos of your products and say something completely memorable and shareworthy about the products. Post those daily (at the least) on all your social media platforms and share them on your own personal pages. You won’t reach everyone, but the more shareworthy you make it, the more people will share it with their friends, which is exactly what you want to happen. Best of all, it is free! (It is all about “shares” not “likes” so you have to say things people want to pass on.)

PPS Enjoy it while you can, however. Facebook is experimenting with a separate feed for friends and for business pages, which will bury your posts completely unless you pay FB. I’m following this and will report back when I know more.

Robots Replacing Workers

I’ve been following the minimum wage hike debate for years. As a store owner, minimum wage had a direct impact on our bottom line. I never wanted to pay minimum wage to my team because I never expected minimum work. Yet, in retail, there are only so many dollars to go around. Add more to the payroll and you have to subtract from somewhere else, or grow your business enough to cover the added expense.

One of the arguments often used by those opposed to minimum wage hikes is that it would lead to more automation. I can envision that reality in big corporate chains for two reasons. The first is that many retail corporations don’t do anything to train their employees to maximum effectiveness. The second is that these same corporations also don’t value their employees or expect anything out of them. (Does anyone see the vicious downward cycle in this thought process?)

Robot scanning shelves in a Walmart pharmacy
Picture from Walmart’s blog

The reality of automation is coming to a Walmart near you. Walmart is testing robots in select stores in Arkansas, California, and Pennsylvania to help scan and stock shelves.

Jeremy King, chief technology officer for Walmart U.S. and e-commerce, said that the robots were 50% more productive than their human counterparts but would not replace workers or impact worker headcount.

Are you buying that? Do you really think Walmart is going to invest in robots that are 50% more productive and still pay all the displaced workers at the same time?

Automation is coming to the big stores and it will have a huge effect on their bottom line. First, they get a tax break for investing in capital infrastructure. Second, they get to replace less-efficient employees with robots who have no restrictions on hours worked, overtime, vacation pay, healthcare, etc. That’s a win-win for them.

It can also be a win for you. The more they automate, the more you differentiate. Automation is designed to give a consistent, expected, reliable outcome. It isn’t designed to surprise and delight. (Then again, neither is an untrained team, like what the big corporations are using now.)

Our payroll at Toy House was not only a higher percentage than any of our competitors, it was higher than most independent toy stores. Why?

Amazing customer service from a well-trained staff is the best, most effective form of advertising and marketing you could ever conceive.

What’s more powerful? Me telling you on the radio to shop at Toy House or your best friend telling you why she likes shopping at Toy House? What’s more persuasive? Me on a billboard on your drive home or your co-worker saying you should visit Toy House?

You don’t have the resources to invest in robots like Walmart does. But you do have the resources to invest in training for your staff. You do have the resources to pay your staff more (and expect more out of them in return). You do have the resources to make your customers’ experiences so wonderful they have to tell their friends. Call it your advertising budget if you want. But put your money into your staff. That’s where your ROI will be highest.

Investing in your team will always beat automation and minimum wage hikes. Always.

-Phil Wrzesinski
www.PhilsForum.com

PS Not sure how to raise the bar on your customer service to the point that people talk? Here are two free resources from my website:

Use those as a starting point for crafting your own training program.

If you need more, I can suggest a few good people to come in and work with you and your staff, including one guy who used to run a pretty cool toy store with a huge payroll.

Sleds, Stories, and Certain Death

My favorite sled is heading into its nineteenth year of service. I got it the year Parker was born. It is an ugly orange plastic sled with no fancy features. It isn’t eye-catching or sleek in design. It isn’t decked out with racing stripes or shiny vinyl that makes you think it will fly down the hill at supersonic speeds. There is nothing about this sled that would make you choose it over all the other fancy ones on the shelves.

Yet it still remains my favorite because it is still the fastest sled on the hill. It still travels farther faster than any of those other sleds. Oh, and it will hold me and two boys with ease (even now in their teenage years!)

When the boys were just five and two I took them to Michigan’s number one rated sledding hill—The Cascades. There are two sides to the hill. The north side is steeper and dominated by the older kids. The south side is gentler—as long as you take the long path toward the playground equipment. Take a left turn toward the east and you hit some bumps and trees and have a shorter trip toward the road.

Most sleds don’t have to worry about the road. It is too far away.

The fastest, ugliest sled on Michigan’s best sledding hill!

My sled is not most sleds.

Have you ever watched a trainwreck about to happen, knowing there was nothing you could do to stop it? The whole world slows, just like in the movies. I had that happen this fateful day.

I put both boys in the sled and gave them a push toward the playground. Then I watched with horror as the sled veered left toward the trees. It was just then I realized the boys were too young and inexperienced to know to flip the sled over and bail out before you hit a tree. They were also moving too fast for me to be able to yell anything they could hear. I momentarily thought about running after them. That was fruitless. They were already entering the bumps and careening toward the pines.

I took my first breath as they missed the opening row of trees. I held my breath as they zoomed past those pines on their way to the road.

The road at the bottom of the hill makes a curve, sweeping around a concrete embankment. Although the posted speed limit is 20 mph, many cars take that blind corner at 30 or 35. I could only pray no cars were coming as the boys hurtled onward across the small parking lot toward the road. No one would see that ugly orange sled with two young kids until it was too late.

My stomach dropped another foot. My heart leapt up into my throat. Time … Stood … Still …

I was already trying to figure out what I would say to their mom about how I killed our boys.

The sled finally lost momentum just as they reached the curb. The snow plows had made a small embankment on the curve, and I watched terrified as the boys went up that embankment and teetered on the edge for eternity before sliding safely backwards away from the road.

I let out the breath I had been holding and dropped to my knees. The boys came rushing back up the hill. “Do it again! Do it again!”

It is the ugliest sled on the hill, and just as expensive as its more sleek rivals. I’ve been using that exact same sled for 19 years and wouldn’t change it for the world.

You would never pick this sled off the shelf amongst its prettier rivals. But when you want the fastest, farthest ride on Michigan’s top-rated sledding hill, there are none that will beat it.

-Phil Wrzesinski
www.PhilsForum.com

PS This post is about Word-of-Mouth. We’ve been talking about WOM all week. You have heard that Stories Sell. Stories sell for several reasons.

  • Stories are interesting and get people engaged.
  • Stories are emotional
  • Stories are memorable
  • Stories are shareworthy

When you tell stories about your products, people remember and relate to those products—whether they need the product or not. That last part is the key. They remember that product when they run into someone else who needs that product. Then they tell that person about the product for you. I could have told you about how the plastic on this sled is twice as thick as the other sleds of its type making it more rigid, which gives it speed, and makes it more durable. But you might not remember that. You will, however, remember the story of the two young boys hurtling to their death because the sled was too fast.

I told this story on Facebook years ago for Toy House back when I had about 1500 fans. The story got shared a dozen times and reached over 5000 people. When you tell shareworthy stories, your fans spread the word for you. You have stories to tell about your products, your vendors, your founding. Share the funny, scary, and touching stories and you will see your word-of-mouth advertising go up dramatically.

PPS This is what Facebook, Instagram, and other social media are best suited for. Go tell your stories.

What is Your $800 Dress?

Sandy was a friend of my parents. He ran a dress store in Jackson for several years. I was an impressionable teenager when he spoke these words, but they have stuck with me for over three decades.

“If you want to sell a $500 dress, you have to show an $800 dress.” -Sandy Pelham

32,000-piece Jigsaw Puzzle!

In my 24 years full time at Toy House I always tried to have an $800 dress somewhere on the floor. We once had a $1,500 round crib with canopy at a time when the average cribs we were selling were about $250 each. More recently we had a 32,000-piece jigsaw puzzle that was over six feet tall and 18 feet wide when finished. It came in a giant box that weighed 42 pounds and even had its own handcart!

We never expected to sell these items. We used them in the same way Sandy did to sell lesser items. It worked! It always works because it works on many different levels.

Yes, the obvious level is that the really expensive item makes everything else look more affordable.

The more important level, however, is the talk value of the item.

A $1,5000 crib isn’t necessarily that special. A $1,500 round crib with a canopy and $1,200 worth of fancy bedding is something you have to drag your friends over to see. A $300 jigsaw puzzle isn’t that impressive. A jigsaw puzzle that comes with its own handcart to move the forty-two pound box up to the register is something you have to drag you friends over to see.

Years ago I was doing a workshop in a small, tourist town along Lake Michigan. I met a jewelry store owner there who was concerned how her traffic had fallen off. She used to be the “it” store on their little downtown strip. People would stop by in droves to see the $34,000 diamond ring she inherited when she bought the store. She had a special chair where women could sit to try on that ring. Thirty-four thousand dollars might not seem like a lot if you live in a big city, but in this sleepy little lake town, that was worth dragging your friends over to see.

Much to the store owner’s delight, she sold the ring one afternoon. I asked her if she had replaced the ring.

“No”

“When did your traffic and sales start to decline?”

“After we sold the ring.”

“Do you see the connection?”

The ring, like our round cribs and ginormous jigsaw puzzle, was the attraction, was the draw, was the WOW factor that people had to drag their friends over to see. The ring was her $800 dress. I told her that her advertising budget for the year better be around $34,000 (well, okay, maybe a little less taking into account her markup, but you get the idea.)

Do you have a product in your store people are dragging their friends over to see? If not, you should get one. Not only will you eventually sell it (we sold 12 of those round cribs and 3 puzzles), it will pay for itself in word-of-mouth advertising and drawing traffic many times over.

What is your $800 dress?

-Phil Wrzesinski
www.PhilsForum.com

PS It doesn’t necessarily have to be something you can sell. We once had a giant Tripp Trapp chair scaled to make an adult feel like he was two years old. People dragged their friends over to see it and it helped us sell hundreds of the regular Tripp Trapp chairs. It just has to have that WOW factor that makes people want to show their friends. My favorite thing I loved to overhear in the store was, “Come over here. You have to see this!”

PPS The one downside people often worry about when putting something incredibly expensive on the sales floor is the “image” it might give customers that your store is the expensive store. Get over yourself. First, customers already believe you are the expensive store because your store isn’t named Walmart, so don’t disappoint them. Second, it is more likely they will think of you as the fun store because you know how to surprise and delight them with products they couldn’t even imagine. Put it in your advertising budget instead of COGS if you want to justify the expense. Just make sure it has the WOW factor for your market.