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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.

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
www.PhilsForum.com

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
www.PhilsForum.com

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
www.PhilsForum.com

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
www.PhilsForum.com

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
www.PhilsForum.com

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
www.PhilsForum.com

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!

The Value Equation

As customers, we are often quick to ask the question, “How much does it cost?” That’s what we want to know. Get to the bottom line. Why? Why do we go so quick to the price? The answer – The Value Equation.

The Value Equation is this … Does the Perceived Worth of an item equal its Actual Price?

We beg for the price because we are always at least subconsciously calculating Perceived Worth on everything we see. We’ve been doing it our whole adult lives. We do it shopping for groceries. We do it shopping for tools. We do it shopping for clothes. As we walk the store we attach a Perceived Worth to everything we see. (If we don’t want it, the PW is zero. If we might want it, we attached a price to it and check to see if we are right.) 

When the Perceived Worth equals the Actual Price, we put the item in our cart.

The surprise is often in finding our Perceived Worth is far higher than the Actual Price. The first question we usually ask when that happens is, “What’s wrong with it?” or, “Is this marked down?” Sometimes we think to ourselves, “Wow, it must not be as good as I thought it would be.” Before we buy the product, we have to answer those questions satisfactorily.

That’s why it is easy to under-price yourself to bankruptcy (or at least leave serious dollars on the table.)

The other problem is when your Perceived Worth is much lower than the Actual Price. You either totally dismiss the product as being “out of my range” or you wonder what you missed in your evaluation of the product.

Take, for example, the SPOTLIGHT ON MARKETING & ADVERTISING class I am offering. I have to find that sweet spot of a price that fits what you believe a class like this should be worth.

I start by taking cues from what other similar programs charge. For instance, Bob Negen’s Whizbang Training two-day Retail Success Summit this summer is currently $997.  My buddy Tim Miles just announced a one-day workshop with Roy H. Williams, himself, for $1250. (By the way, I highly recommend both programs, and, no, I don’t get any kickbacks from these links.)

My workshop is $250* for a half-day —similar to Bob’s price for two days. Some of you will look at the price and see that it is about what you’d expect to pay for other, similar types of training. Some of you will look at the price and ask, “Where’s the value? What do I get in return?”

So I also look at the benefits you will get from the program. For instance, in this four-hour program you get:

  • Eight ways to market your business with little or no money at all
  • How to get free publicity from the media
  • How to craft a message that gets noticed, remembered, and acted upon – three things that are incredibly hard to accomplish in today’s fractured, over-saturated media world
  • How best to use the media of your choice (and tips on how to choose the best media for your business)
  • Four ways to generate more Word-of-Mouth advertising than you ever thought possible
  • One year of advertising support including help with your message, your campaign, your media buys, or wherever you have questions or need advice.
  • Half-rate discounted tuition for any future programs I offer through Jackson Retail Success Academy™.

Some of you will still balk at the price. That’s okay. I know I won’t convince everyone.

Some of you will think that seems like a pretty fair trade for $250 and four hours of your time.  You’ll sign up now for the class on Tuesday, June 20th.

Others will wonder why the price is so low for all that you get. Most of you in that frame of mind have either been to one of my programs before or live in a city where prices for stuff like this are just a bit higher than they are in Jackson. Remember, Helping Others is one of my Core Values.

-Phil Wrzesinski
www.PhilsForum.com

*PS If your business or you personally have taken one of my workshops through the Jackson Retail Success Academy™, you qualify for the Half-Price Alumni rate of $125.

PPS Why the half-price tuition for JRSA™ alumni? I believe strongly in continuing education. Now that I make my living speaking and writing, I am reading more blogs and books on speaking and writing, and I am attending workshops to learn all I can in those fields. I want to encourage anyone who takes one of my workshops to come back for refreshers or other programs, or maybe send a staff member to learn more. Plus, you’re always looking for a better deal. You know these classes are worth it at almost any price. Half-price just makes you feel good.

Most Ads Suck Book Excerpt – Chapter 1

Here is Chapter One of my new book MOST ADS SUCK (But Yours Won’t). You can pre-order the book here.

(If you didn’t read the Foreword already, you can find it here.)

(Cover Art not final)

Chapter 1 – Most Ads Suck

“Every customer is the right customer. What you’re looking for is the right moment.” – Roy H. Williams

You’re in a room with friends, a plate of nachos in your hands. It’s the first Sunday in February. It’s a Super Bowl Party. Everyone is glued to the TV. Groans and high-fives and laughter fill the air. Some of your friends are second-guessing every move, every decision they see on the screen. Everyone is cheering for their favorite, even making excuses when it doesn’t go so well.

Then the game comes back on and you head to the bathroom and back to the kitchen to refill your nacho plate.

Once a year you watch the ads. One night out of three hundred and sixty-five you don’t fast forward or change the channel or—in many cases even care about the actual programming, just the ads in between.

You remember the good ones from years past. You remember how a few years ago the Budweiser Armed Forces in Airport commercial made you feel when everyone started clapping slowly, then faster until the whole airport was standing and applauding the soldiers walking through. You remember the kid looking you in the eyes and telling you he wanted to work in middle management even though you can’t recall which employment service did that ad and which one had the monkeys in the office.

You also remember groaning at some of the really bad ones, wondering how in the world that ad got approved for production, let alone a multi-million-dollar TV slot. You wish your own business was like one of these big companies with millions of dollars to waste on advertising knowing that in two weeks no one would remember and you would still have tens of millions to spend on the boring, crap ads everyone runs the rest of the year.

Why is that? Why, you wonder, do all these companies spend so much time, money and creativity on their Super Bowl ads only to run them once a year and leave you with the same tired sales-pitchy stuff the rest of the year? While you’re at it, you wonder why so many companies spend so much time, money and creativity only to miss the mark by a wide margin. Puppymonkeybaby? Really, Mountain Dew? That’s the best you could come up with?

Your friends tell you they’ve switched to satellite radio. Too many ads on regular radio, they say. Other friends tell you the greatest invention is the DVR or Netflix or Hulu. Don’t have to suffer through so many ads, they say. They do have a point. You seem to recall some study about how you are bombarded with over 5,000 advertising messages a day. You’re not sure if that number is right, but you do know that everywhere you turn there is another promotional message staring at you. Heck, every sub-segment of the Super Bowl was “brought to you by …” some auto/food/beer/insurance/drug company.

Maybe there are too many ads.

But there you are on the first Sunday in February, ignoring the brought-to-you-by announcements and even the game itself, and instead comparing notes with your friends on which ads were the funniest, the most moving, the most memorable.

Suddenly it dawns on you. The real problem with advertising isn’t that there are too many ads. The real problem is that most ads suck. If they were more creative or funny like the ones you saw tonight, you’d pay attention. If they were entertaining, you wouldn’t be switching channels. If they touched your heart, you might actually take action.

You think you’ve figured it out. You think you’ve figured out what famed retailer John Wanamaker couldn’t when he famously said, “Half of my ad budget is wasted. The problem is I don’t know which half.” It’s the half with the lousy, looks-like-everyone-else, boring, stupid ads.

You want to shout it from the rooftop. You’ve solved the advertising equation. The first half, at least.

You start thinking how fun it would be to meet with the advertising executives of every major company out there and tell them to quit spending all their money on Super Bowl ads and instead spend that money to make the rest of their ads better.

Then you wonder. “Wait, do I have it all wrong? Is it really that simple? That these multi-billion-dollar companies with their multi-million-dollar advertising budgets and their multi-million-dollar advertising firms with all their fancy metrics just don’t get it?”

Yes, you do have it right. Yes, you instinctively understand what many ad agencies and major national corporations don’t. You get it because you’re the consumer. You know what works on you and what doesn’t. You know what gets you to tune in and tune out.

You’re also smart enough to realize that some ads just aren’t speaking to you. You still appreciate clever writing, creative copy, and smart messages. If they’re entertaining enough, you’ll tolerate ads written for someone other than you. But your internal filter shuts everything down as soon as it looks, sounds, or smells like the plethora of phony, deceiving, too-good-to-be-true ads out there.

You’re about to start making a list of the worst offenders, the ones whose offices you’ll visit first to tell them about your new revelation, when it dawns on you. You know what they shouldn’t be doing. But if they ask you how to make their ads more interesting and memorable and effective, you don’t know where to start.

Hmmm …

-Phil Wrzesinski
www.PhilsForum.com

PS Thank you for those who have already supported the campaign to get this book printed. There are some amazing perks available for those of you who wish to contribute including one perk where I will create two ads for you (no matter what platform you are using).