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All Advertising Works (And All Advertising Doesn’t)

“Who are you trying to reach?”

That’s pretty much the opening salvo in every advertising salesperson’s repertoire. Give them your answer and voila! “That’s exactly our listeners/viewers/readers!” Then they show you some study that “proves” their advertising works.

Westwood One, a major radio company with stations across the US, commissioned a study to show the ROI of radio advertising. Of course the results were quite promising. Are you surprised that a study by a radio company would show that radio advertising works?

“The only statistics you can trust are those you falsified yourself.” -Winston Churchill

My Yellow Pages salesperson showed me a similar result that when asked where they would go to search for a new business, 87% of the people surveyed said, “The Yellow Pages.” Granted, this was when the Internet was still in its infancy. But it was still false because it asked the question, “What would you do?” instead of, “What did you do?”

Here is the funny thing about advertising …

The advertising salespeople are asking you a question to which you invariably give the wrong answer, yet their response is still accurate.

“Who are you trying to reach?” The right answer is …

People who share my Core Values and believe what I believe.

“That’s exactly our listeners/viewers/readers!”

Of course, all the other media reach those people, too. They also reach a bunch of people who don’t share your Core Values or believe what you believe. You need to target your message, not your media choice, to reach the “right” people.

Roy H. Williams, aka The Wizard of Ads, says time and time again that he has never seen an ad campaign fail because it didn’t reach the right people, but he has seen many fail because they didn’t say the right thing.

Although your advertising salesperson doesn’t know he is asking the wrong question (or, frankly, an irrelevant one), that question is not what will derail the success of your advertising campaign. It is the second question he asks (or sometimes fails to ask) that is the real crux of the matter.

“What do you want to say?”

If you cannot answer that question, he’ll put together some template of an ad that sounds like everyone else’s ads and you’ll be lost in the shuffle, unremarkable and unremembered. (You should read Roy’s post on Template Advertising. Go ahead. I’ll wait.)

How you answer the second question is the biggest difference between a successful campaign and a waste of time and money. Every form of advertising works and every form of advertising doesn’t work. It is all in how you use them.

-Phil Wrzesinski

PS How you answer the second question isn’t the only difference between success and failure. Each media has its strengths and weaknesses. We’ll explore some of those in the coming days.

Reconciling Yes and No

Teddy Roosevelt said, “Whenever you are asked if you can do a job, tell ’em, ‘Certainly I can!’ Then get busy and find out how to do it.”

On the other hand, Steve Jobs said, “It’s only by saying ‘No’ that you can concentrate on the things that are really important.”

Yes and No – both valid answers!

Teddy wants you to take on any job you can. Steve wants you to only take on the important jobs.

Who is right?

Teddy is right when it comes to serving your customers. If a customer asks if you can do something for them that you have never done, you should seriously consider doing it. First, if the customer is asking, the customer must believe it is something you can do. Second, it meets and/or exceeds their expectations, which is the hallmark of WOW Customer Service. Third, it might just become the new calling card you need to set yourself apart from your competitors.

You should always be looking for new ways to take care of your customers.

Steve is right when it comes to advertising. It is easy to “dabble” in advertising, doing a little here and a little there, clinging to the false hope that the more different things you do, the more people you will reach to drive into your store. We mistakenly believe that advertising is simply a numbers game and the more people we reach, the more traffic we’ll get. Yes, it is a numbers game, but not all numbers are equal.

Roy H. Williams often asks the question, “Would you rather convince 100% of the people 10% of the way or 10% of the people 100% of the way? In advertising, both cost the same.” The goal of your advertising is to convince people to visit your store and shop with you. You don’t convince people if all you do is “dabble”. You simply annoy them. It takes time, frequency, and focus to convince the people you reach to finally decide to shop with you. You have to pick and choose your media carefully and then be in full in with that media. If you aren’t, you are wasting your ad budget.

Both are right when it comes to inventory. You need to follow Steve’s advice and make sure you first stock your store with the most important items. When cash flow is tight, focus on the must-haves. Focus on the items that customers come in asking for by name. Make sure you have plenty of the requested items and you’ll make the sales you need to keep the cash flowing. You also need to keep looking for new products and new opportunities. Unless you’re strictly in the commodities business, customers want to see what is new and fresh. If you don’t have new and fresh, you are boring your customers and eventually they won’t bother coming back.

After the must-haves, the second most important inventory spending should be on the brand-new. It keeps your store fresh, keeps your staff energized, keeps your customers returning.

Sometimes you have to follow President Roosevelt. Sometimes you have to follow Mr. Jobs. Knowing when to say Yes and when to say No is the key to your success.

Perhaps Neils Bohr said it best when he said, “The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth.”

-Phil Wrzesinski

PS I used both quotes in presentations lately and it struck me how profound, yet at odds, they both seem to be. I also have found myself using both quotes in my own life. I have been asked to do a lot of new things lately. I have said Yes to creating several new presentations, different from the homerun talks I do. I’ve also said No to some opportunities because they didn’t push forward my main industries of speaking, writing, and consulting. I think knowing when to say No is truly an art, one in which I am still the amateur, but I am learning. How about you?

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.


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.


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

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

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.

This is How You Get Word of Mouth Pro-Level

If you’ve ever been to my Suggested Topics page, you will notice that my Breakout Session about Word-of-Mouth says I will teach you “four simple, yet effective ways to generate word-of-mouth and get people to brag about your business to others.”

If you have ever been to one of these presentations, you know that I give you a fifth bonus way to get people to talk about your business. That bonus way is through your advertising. When you create ads that people want to see and hear, they talk about them. That’s the goal at every Super Bowl. All these advertisers want is for you to be talking about their ad Monday morning.

There is more to it than that, though. To truly generate word-of-mouth that helps your business, the talk has to be about how great your business is, or how important it is for people to visit you, not just about how creative or funny you are.

We got that kind of word-of-mouth with our Men’s Bathroom Ad.

The script was this …

I couldn’t believe it. They were taking customers into the men’s bathroom. Yes, my staff was taking men and women, young and old, into our men’s bathroom. And they were coming out laughing, smiling, oh yeah, and buying, too. I guess when you have a product this good, you just have to show it off however… and wherever… you can. The men’s bathroom… Gotta love it! Toy House in downtown Jackson. We’re here to make you smile.

I ran this ad twice a day Monday-Friday for the month of August in 2008. The day it began the deejays starting talking about it on the air wondering what was going on in the men’s bathroom. By day two the deejays on the stations where the ad WASN’T airing were talking about it. By day three the local TV station was talking about it. Everyone was speculating about what was in the men’s bathroom and people were coming in droves to ask about it, see the product, oh yeah, and buy it, too. In March 2009—seven months after the ad had aired!—I had a customer walk into the store asking about the men’s bathroom because it was what dominated conversation at Christmas dinner at the adult table.

Image result for morris jenkins bobby
Bobby from the Morris-Jenkins TV Ad Campaign

Here is another example of how an ad can generate powerful word-of-mouth courtesy of Roy H. Williams. Roy designed an ad campaign for a heating & cooling company featuring Mr. Jenkins, the owner, and Bobby, one of his drivers. The ad campaign has run for 6 years. “Bobby” has become a Charlotte, NC icon. But the actor who plays Bobby in the commercials is moving to California. The company ran one last ad featuring Bobby where Mr. Jenkins gives Bobby $100,000 to go pursue his dream in Hollywood.

The local TV news ran a story on that ad. Let me repeat that … The local TV news in a major market ran a story about a fictional character in an advertisement for a local heating and cooling company. You cannot buy that kind of advertising.

(Or maybe you can, if you have the guts to first run amazing ad campaigns that people want to see and hear.)

First read Roy’s MondayMorningMemo about the ad campaign and why it worked so well.

Then watch the news story. (Get your tissues out.)

Are your ads getting this kind of love?

-Phil Wrzesinski

PS We watch television and movies for the characters first and then the storyline. If the characters are interesting, we’ll forgive a weak storyline. David Freeman explains that the difference between interesting characters and boring ones is in their Core Values. When they have three to five character traits or values that are consistent throughout the movie, we relate to them. If they have less, we are bored. If they aren’t consistent, we don’t connect. The same is true with your brand. Your brand is the three to five core values you have as a business. The more consistently you show those values—including in your advertising—the more people will relate with you.

Other Uses for Market Share Knowledge

The first time I was truly introduced to the idea of calculating my market share was from Roy H. William’s second book Secret Formulas of the Wizard of Ads. It was 2003 and I was trying to learn all I could about marketing and advertising. My math was rudimentary. I didn’t adjust for local economy or youth population. Simply raw numbers. I came up with our market share at about 12%.

At first I was a little disappointed. Roy teaches that the gold standard for any business is 30% market share. That’s a big number. Despite its dominance, even Walmart only has 25% of the grocery market. The optimist in me, however, said 12% was a good starting point and now I had a goal to shoot for. I had just read an article (which 14 years later I cannot find—go figure) that said only 9% of the general public was inclined to shop at local indie stores in the first place. I was already 3 points above that number.

I never did reach 30%, but I did have some other revelations about my Market Share number.

Image result for upward trend free clipartFirst, after going back and adjusting my market size for economy and youth population, our 12% was really closer to 16%. It stayed in that neighborhood until a Walmart Supercenter opened in 2005. We dropped into the 14-15% neighborhood and stayed there until Amazon became a serious player in the toy industry around 2010-2011. We stayed around 12.5% for the next several years until we closed. Even though you can beat a big guy head-to-head, the more big guys in town, the more businesses taking a piece out of the same pie.

Second, that original 12% number got me thinking. A full eighty-eight percent of the market were NOT currently shopping with me. That’s almost 9 out of 10 people. When you look at it that way, it changes your perspective on a lot of things.

In terms of marketing and advertising I realized I didn’t need to reach the entire market to grow my business. If I could just convince 1 more person out of 20 people to shop with me I would have growth beyond my wildest dreams. I really only needed to convince about 2 more people out of 100 to shop with me to have double digit growth. If you only are trying to sway two people out of a hundred you might say something totally different than if you’re trying to sway fifty out of a hundred. With two you can say something direct and personal to a small audience that gets right to the heart of the matter. Trying to reach fifty, you say something generic and non-offensive hoping other forces will come into play to swing them to your side.

In terms of product selection I realized I didn’t have to be all things to all people. I could pick and choose the products I wanted based on my beliefs in the products and how they benefited my customers. Not only does that help with the buying decisions, it helped us stay true to our core values in terms of what we sold and why.

Speaking of Core Values, we didn’t have to be someone we were not.

Meg Cabot said it best when she said, “You’re not a hundred dollar bill. Not everyone is going to like you.” We didn’t have to be liked by everyone. Sixteen percent is a pretty low approval rating. Yet it was higher than any other single store in our market.

Knowledge is power (France is bacon). Knowing your market share might be the piece of knowledge that finally liberates the way you think about your place in the market and the risks you can now safely take with your business.

-Phil Wrzesinski

PS Let me first admit that 16% is actually pretty high for an indie retailer. Many of you might do the math and find yourself in the 3-5% range, especially if you have other indie retailers fighting for the 9% that skews shop local. But before I pat myself on the back, you should know that in the early 1980’s we were at that mythical 30% gold standard and then some. Of course that was before Jackson got Walmart, Target, Toys R Us, Sam’s Club, a second Meijer, a new KMart, and a whole slew of other big chains in town (without a population growth to match), and well before Al Gore invented the Internet. We were the large store that was here first. That’s what gave us much of our edge. But even if you do find yourself in the 3-5% range, if the market is big enough, you can do a lot of business with only 3-5% of your market. Plus, when you only have to convince 1 more person out of 100 to get 33% growth, advertising becomes a whole lot more fun.

PPS It used to upset me that about half my friends were not regular shoppers at my store. My parents saw about that same percentage from their friends. Then it dawned on me … Fifty percent of my friends versus twelve percent of the general population. I was ahead of the game. I slept much better that night.

What Media Do You Own?

The one thing I hate about having my house for sale is all the stuff I have boxed up to make the house less cluttered. There are 9 boxes filled with my books sitting on shelves in the basement. Many of those books I have read more than once. A few of them I keep reading over and over.

If you ask me my favorite books, for fiction I’ll tell you The Chronicles of Prydain by Lloyd Alexander—a five book series published in the late 1960’s that I have read over a dozen times, including twice reading them out loud to my boys. You may recall that it was book #4 Taran Wanderer that gave me the lightbulb idea of hiring for character traits, not experience, thus leading to my first book Hiring and the Potter’s Wheel: Turning Your Staff Into a Work of Art.

Image result for wizard of ads trilogyFor non-fiction it is The Wizard of Ads Trilogy by Roy H. Williams. I have never read a book before or after that was as equally enjoyable to read as it was informative. Although not yet to a dozen, I have read all three books several times. In fact, last night I went and pulled book #2 Secret Formulas of the Wizard of Ads out of one of the boxes in the basement.

Yesterday I read an article with ten tips for marketing this holiday season and it had one tip I keep hearing over and over that I know Roy had refuted in the book. The tip was to make sure you are in as many channels as possible this season because otherwise you won’t reach all your potential customers.

Roy calls this one of the sacred cows of advertising in chapter 3 “Dead Cows Everywhere.”

Here are some things I want you to think about before you spread yourself too thin across multiple media.

  • You will never reach 100% of your market. No matter how many channels you choose, you can’t get to them all, so it is folly to even try.
  • You don’t have the time and resources to do every channel well. You don’t have the budget of Coca-Cola or the marketing team of Pizza Hut. At best you have a social media director and a handful of somewhat helpful sales reps running your advertising at your direction (while you juggle all those other hats like HR, CFO, CEO, firefighter, and bottle washer).
  • Advertising and marketing yourself in a channel poorly is not only a waste of time and money and resources, it could be detrimental because a poor first image is worse than no image at all.
  • If you were able to convince just 10% of the market to shop with you, your cash registers would sing like angels.

In one succinct chapter Roy points out that a customer who sees your billboard, hears your radio ad, and reads a social media post likely won’t make the connection between those three fragmented campaigns in a way that reinforces your brand. Our brains don’t work that way. They aren’t wired that way.

You are better off picking one or two channels where you can be truly effective and focus all your time and money and resources on those to the point that you own each media. Yes, own it! There is that one business in your town that owns billboards. You know who I’m talking about. There is another business that owns radio.

If you really want to be noticed and remembered, be the business that owns one of the media outlets. Win Facebook by being the one who posts the most shareworthy and memorable posts that engage and get customers to like, comment, and share. Own the radio by being the business whose ads are actually anticipated and talked about at water coolers when the new ad starts. (When people talk about your ad at the water cooler, then you know you’ve finally written a good one. I’ve had that happen several times. It should be your goal with every message.) Own the billboards by having the kind of posters that people tell their friends to drive by and see.

You likely don’t have the resources to do all that in every channel, so pick one. Own it.

The cool thing when you own a media is that not only do you get more bang for your buck (you become first in people’s brains because you get a bigger share of mind than what you actually spent), you also keep your competitors from being noticed in the same media. They fade into the background or they look boring and dull in comparison.

In the same chapter, Roy kills another sacred cow called Gross Rating Points. Reaching 100% of the market 10 times is the same as reaching 10% of the market 100 times in terms of cost. Yet convincing 100% of the market 10% of the way is not the same as convincing 10% of the market 100% of the way. When you spread yourself over many channels, you face the risk of convincing 100% of the people only 10% of the way. When you own the media, you have a far better chance of convincing the people you reach to shop with you.

There are a lot of great marketing tips out there. Spreading yourself too thin across too many channels is NOT one of them.

If you can’t own a media channel, put your resources where you can. That is what will get the angels to sing.

-Phil Wrzesinski

PS It isn’t just how much you spend, it is what you say. Spend enough and speak boldly. Say something surprising and powerful. There are two coffee shops in my town that both use billboards with equal frequency, but one has a far more creative team creating fun and memorable (and sometimes controversial) boards. Ask anyone in town which coffee shop is the one on all the billboards and 90% will name the guy with all the fun boards. You tell me who owns that media?

PPS Here are some of the radio ads I used to try to own that media.

How Social Media Advertising Might Be Hurting Your Business

As a speaker I am constantly submitting my talks to conferences in an attempt to get hired. I am also looking at their websites to see what kinds of talks they hosted at their last conference. Time and time again they have speakers talking about how to advertise on social media. Rarely does anyone have talks anymore on how to use radio or build a website or craft an email (even though statistics show email is more effective than social media).

Then today I ran across this little three-minute audio from NPR. Go ahead and listen to it. I’ll wait …

Image result for social media advertisingIt is something I have been saying from the very beginning of the social media craze.

(For those of you unable to click and listen, the gist of the report is about a study done in China. Although promotional ads on social media have a short-term immediate effect of a small boost in sales, they have a long-term effect of driving away followers.)

Roy H. Williams, aka The Wizard of Ads, taught me this back in 2005 and I’ve tested it time and time again and found it to be true. There are two types of customers for every industry—those who believe they are the expert and are shopping on price and those who know they are not the expert and are looking for an expert they can trust.

The former are called Transactional Customers. They look at every purchase as a single transaction with no relation to previous purchases. They believe they are the expert. They know exactly what they want. They will check many different places to find the best price. They are driven by the fear of paying too much. Once they make the purchase, they brag to everyone about what a great shopper they are, but have no loyalty to the store.

The latter are called Relational Customers. They look at each purchase as one in a series of purchases. They do not believe they know all the answers. They are looking for an expert they trust who will steer them to the right item. Their fear is buying the wrong item. While they do not brag much about their purchase, they do love to brag about their store and once they find the person/store they trust, they are highly loyal to that person/store.

The split is pretty much 50/50 in any category (slightly more Transactional in commodity categories like grocery or during economic downturns, slightly more Relational in bespoke categories such as fashion). But since Transactional Customers are more prone to shop around, it feels like more people are “price” shoppers than really are.

When it comes to advertising, promotional ads and discounts are Pavlov’s Bell to Transactional Customers. They love to hear about sales and discounts and promos. At the same time they are fingernails on the chalkboard to Relational Customers. Since RC’s are looking for trust, those same promotional ads not only don’t foster trust, they turn the RC’s off and destroy trust.

Social Media is about building relationships. Social Media is for your fans. Social Media is all about the RC’s. Yeah, you might see a small bump in sales. We are all both TC and RC as consumers, depending on the product. When you run your ad, you find the TC’s in your crowd for that particular product. But at what risk? Run those promos all the time and you drive away the RC’s social media is best at helping you reach.

Here’s my two-minute presentation on Social Media …

Use it to build Trust. Ask questions. Listen to feedback. Post useful information. Answer all questions asked of you. Respond quickly, politely, thoroughly (even the trolls). Build trust. Share information from other sources. Stay true to your Core Values. Write interesting content. Post pictures and videos of your products in use. Build trust. Be honest about the downside. Talk about benefits of the product. Relate to the way people use your stuff. Help your customers picture already owning your product. Post daily with something of value. Post shareworthy stuff. Build trust.

If you want to run an ad on social media, run an ad for your event. Events have deadlines which creates excitement. Events are attractive to both RC’s and TC’s because events imply relationship-building (interacting in a fun way with the brand) and promotions (some kind of discount). You can get the bump without driving people away.

I get it. Social Media is sexy. It is new. It is hip. Everyone is on their phones and online. That’s cool. Just be sure no matter what media you use that you play to that media’s strength.

Now if you ever want to talk about some less sexy things proven to move the needle like radio or websites or crafting an email …

-Phil Wrzesinski

PS In case it wasn’t clear above, TC’s are price-sensitive, only buy what is discounted, and have no loyalty to your store. RC’s are not as price-sensitive and have tremendous loyalty to your store (if you build that trust). The stronger you market yourself to one of these types, the less attractive you become to the other. Pick one and go after them strongly, because half-ass marketing to both is an even quicker way to fail.

PPS RC’s care about price, too. Just not in the same way as TC’s. You can’t gouge the heck out of an RC just because of the relationship. When they find out you’ve been gouging them, you will have destroyed all trust and lost them forever.

The Scary Truth of Averages

“Have you ever noticed that everyone wants to be normal but no one wants to be average?” -Roy H. Williams

Did you hear the one about the statistician that drowned in a river with an average depth of three feet?

Image result for averagesIn business, everyone wants to know the averages, the average cost of rent, the average sales per square foot, the average level of inventory, etc. Averages are interesting. They can be a nice benchmark, but they can also be misleading, and sometimes downright dangerous.

Take, for example, average inventory at cost (a number you should all be tracking). If you were an average toy store doing around $500,000 a year in sales, your average inventory at cost would be around $100,000. But if you are that same toy store, your Thanksgiving to Christmas sales will likely be around $200,000, or pretty much all of your inventory if you only had the average on hand. As nice as it would be to sell to the walls, so-to-speak, you know you can’t sell it all. You also know you need some inventory in January for birthdays and post-Christmas.

Just trying to keep your store at the average will kill your holiday sales. You’ll need a lot higher inventory to start the busy season and much lower inventory the rest of the year. Rarely will you ever have the “average” amount of inventory on hand.

Another problem with that average is that $100,000 worth of toys looks a whole lot different in a 2,200 square foot store than it does in a 1,100 square foot store.

The bigger the store, the more creative you may need to be with your merchandise to keep the store looking stocked and full. The smaller the store, the more creative you may need to be with your merchandise to fit it all in. Sometimes your store space dictates your inventory levels more than just sales or industry averages.

Averages are a nice starting point, but it is worth exploring all the reasons you might deviate from the average, and be okay with those reasons.

For instance, my payroll at Toy House was a significantly higher percentage of our expenses than the average toy store. But I could afford that because my rent was significantly lower. Our sales per square foot was extremely low compared to the average, but that was because we had wide aisles to allow for shopping carts, four cash registers lines, a large gift-wrapping area, and a stage with seating/playing area—in other words, a lot of square footage not used for showing merchandise. Our average ticket, thanks to shopping carts and toy demos however, was significantly higher. Each deviation from the norm was on purpose and with a purpose.

I do many talks about the financials of independent retailers. Whenever possible I try to use an average store for that industry. But I remind everyone in attendance that these numbers are average and they should be striving to be spectacular. If all your numbers are average, you haven’t found the place to stand out and make a name for yourself.

In retail, there isn’t a prize for being normal.

-Phil Wrzesinski

PS The upside to averages is that they give you a quick check of the health of your business. If you have a number way off from the averages and you don’t know why, that might be a good place to focus your time and energies on changing. The downside is that you don’t ever want to be an average store. You are destined for greater than that.

PPS Rent per square foot and sales per square foot go hand in hand. You need to be selling at least 10x more per square foot than what you pay in rent (if your profit margin is around 50%). That’s a far better benchmark than average rent or average sales per square foot for your industry. Those averages tell you nothing.

Painting the Picture on the Web

I had a lunch meeting earlier this week at one of my favorite restaurants—Mat’s Cafe. Mat makes the best pulled pork I have ever had. I have eaten there so much that there is even an off-menu item called “The Toy Man” (a plate of his award-winning pulled pork and mac & cheese). You order and pay at the counter and they bring your food right to your table. Sit there long enough and they might even bus your table when you’re done.

The only problem is that there are no signs telling you this. There is a big menu hanging over the counter, but after that, you’re on your own guessing what to do next. (Did you get a fork from the table over by the wall? Did you grab a cup and get your drink or pick one out of the cooler over on the other wall? Did you realize the menu was just a suggestion and that Mat and his team will pretty much make you anything they can with the ingredients on hand?)

Image result for mats cafe and catering jackson mi
(Zeke Jennings, MLive)

Fortunately for my lunch partners making their first visit to Mat’s, I was there to help them navigate. Also fortunately for Mat’s, the food is so damn good that you aren’t deterred by any barriers or confusion that can be off-putting for many people.

We are creatures of habit. We like to do things that are familiar more often than we like to do things that are different. Different is scary. Not knowing how to do something is scary. Not sure of the procedures is frustrating and scary and often enough to keep a new person from trying you out. Only a small percentage of the population prefers the unknown over the familiar.

Roy H. Williams once said, “People only do that which they have already seen themselves do in their own mind.” We like to visualize before we actually do. That is why new and different and unknown are so scary.

That is why gaining new customers is far more work than just keeping the old.

That is also why you need a phenomenal website that helps your customers visualize visiting your store and know all your quirky procedures before they have to take that risk.

In today’s market, your advertising may reach the masses, but your website is where many individuals go first to visit you. They want to see whether you are worth the time and effort to actually visit. They want to know what to expect. They want to feel like an insider before they even arrive. Does your website paint the right picture? Does your website show customers what a visit to your store looks and feels like? Does your website give customers knowledge they need to have the best possible experience in your store?

If I was Mat, I would have a big picture of the counter where you place your order and content that read …

Welcome to Mat’s!
Follow your nose up to the front counter where you’ll find a menu over your head of the delicious meals we will make for you. Although we’re well known for our pulled pork and mac & cheese (both award-winners in MLive’s contests for best foods in Michigan), we can make you whatever sounds scrumptious from the ingredients you see on the board. Place your order, grab your drink and utensils, and choose a seat (the best table is in the front window). We’ll bring you your food fresh and fast. 

You’ll notice how in one short paragraph I painted the picture of what will happen when you enter and when you order. That knowledge is power. I also was able to squeeze in the fact that their specialty is pulled pork and mac & cheese, they’ll customize anything you want, and they can get you in and out on your lunch hour.

Here is some counter intuitive advice … When you build your website, don’t look at other websites for what to do. Look instead at what actions you want your customer to take. Look instead at how you can get your customers to visualize visiting your store. Look instead at what questions your customers will have about you and how easily you can answer them.

Build the website that paints the picture your customers want to see, not the website that follows a template to look like every other website out there. Then your website will be an effective tool to drive new traffic through your door.

-Phil Wrzesinski

PS Once you’ve designed your website around your customer, make sure it does have the familiar elements like About Us, Contact Us, Our Products, Get Directions, etc. Build it around exactly what questions you expect a new customer to ask and what actions you want them to take. Don’t make them “go looking” for answers. They won’t.

PPS Building a website based on everyone else’s website is a common mistake most small businesses make in their advertising. In fact, most of their advertising, regardless of the medium ends up being a copy of someone else. Don’t fall into the trap of thinking “if everyone is doing it, it must be right.” Most businesses get advertising wrong. The best way to get it right is to first learn how advertising works. Attend the SPOTLIGHT ON MARKETING & ADVERTISING workshop coming up on Tuesday, June 20th and you’ll know what works and why. Sign up today!