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Author: Phil Wrzesinski

I Went to Harvard

Well… umm… I went to Harvard yesterday… while I was in Boston visiting another toy store owner.

I thought about applying to Harvard when I was in high school.  I had the grades.  I had the test scores.  I had the extracurriculars.  I only needed to take three more tests and I could apply.  Problem was, I knew that even if I got in, I wasn’t going to go there.  I had already been accepted to the University of Michigan, which meant I had season tickets for football.  Plus, I didn’t want to take any more tests.

But it sure would have been nice to say…

“Yeah, I turned Harvard down.”

Today, however, those same grades and test scores and extracurriculars probably wouldn’t even get me into the first cut in the application process.  The stakes have gotten higher.  The bar has been raised. What I did in the early 80’s isn’t enough in 2012.

The same is true of your business.

The stakes are higher.  The bar is raised.  Your customer service has to be amazing and unexpected.  Your product knowledge has to be over the top and relevant.  Your inventory control has to be fine-tuned and adaptable.  Your marketing has to be refreshing and memorable.

What you used to do isn’t good enough anymore. 

I was thinking all of this while walking around the Harvard campus knowing that I was smart enough to go there 28 years ago. But I better get smarter if I want to be able to compete with those kids today.  Being smart back then isn’t enough in 2012.

What are you doing to get smarter?

-Phil Wrzesinski
www.PhilsForum.com

PS  The one thing I do have over that kid back in 1984 is that I am a much better student today than I was back then.  I had the grades to get in to Harvard, but I’m not sure I had the study habits to stay there.  Now I’m trying to learn everywhere I go.  And I promise to share what I learn with you right here on this blog and in the Freebies section of my website.  Maybe we can all get into Harvard some day.

Magnetic Love and Hate

Take two magnets and push them together.  See how well they connect.  If they are strong enough, one can actually attract the other one to it.

Now turn one magnet around.  See how it pushes the other magnet away?

Magnets are governed by universal laws of physics.  The stronger the magnet’s ability to attract, the more it will also repel.  Your advertising works the same way.

You cannot attract everyone.  It is impossible to be everything to everyone.  So focus on those you wish to attract the most (hint: like the magnet, it is those who are already aligned with your way of doing business), knowing full well that the stronger you try to attract them, the more you will repel others (who weren’t aligned with your way of business in the first place.)

Your goal should be to have an ample supply of people who love your advertising and hate it.  No middle ground.  The opposite of love isn’t hate, it is indifference.  And the worst thing your ads can stir up would be indifference.  If they do, you’ve just wasted your money.

-Phil Wrzesinski
www.PhilsForum.com

PS  Yeah, I learned that from the Wizard.  Have you signed up for his free Monday Morning Memo?  It is the first email I read every Monday morning.

Advertising Versus Public Relations

I may be different because I look at Advertising and Marketing and Public Relations as just similar types of the same product – exposure of your business to the public.  You can add Location to that mix, too.  You can even add Customer Service.  All five serve the same purpose.  They just do it a different way.  Some companies have completely different departments to carry out each function, often without one knowing what the other is doing.

They are not entities to themselves, just tools you use to promote your business, promote your message.  I found this joke on the website AJokeADay.com that pretty well sums it up. (You’ll notice that the message is quite clear;-)

You see a gorgeous girl at a party.
You go up to her and say, “I am very rich. Marry me!”

That’s Direct Marketing.

You’re at a party with a bunch of friends and see a gorgeous girl.
One of your friends goes up to her and pointing at you and says,
“He’s very rich. Marry him.”

That’s Advertising.

You see a gorgeous girl at a party.
You go up to her and get her telephone number.
The next day you call and say, “Hi, I’m very rich. Marry me.”

That’s Telemarketing.

You’re at a party and see a gorgeous girl.
You get up and straighten your tie; you walk up to her and pour
her a drink.
You open the door for her; pick up her bag after she drops it,
offer her a ride, and then say,
“By the way, I’m very rich. Will you marry me?”

That’s Public Relations.

You’re at a party and see a gorgeous girl.
She walks up to you and says, “You are very rich.”

That’s Brand Recognition.

You see a gorgeous girl at a party.
You go up to her and say, “I’m rich. Marry me”
She gives you a nice hard slap on your face.

That’s Customer Feedback!!!!

Read more: http://www.ajokeaday.com/Clasificacion.asp?ID=13&Pagina=3#ixzz21qTE0vQO

-Phil Wrzesinski
www.Philsforum.com

PS If you are unsure of the purpose of your Advertising, Marketing, Public Relations, Location, and Customer Service… they all serve to let people know your Core Values.

Return on Investment

In June 2011 we launched a generous Birthday Club.  We offered our customers a $10 gift certificate on their birthday and a chance to ring the Birthday Bell – a thirty-two pound brass bell hanging on a pole in the middle of our store.

We were looking for three things from this promotion.  Traffic, Smiles, and Word of Mouth.

Traffic
Prior to the launch of the Birthday Club we had been in a traffic decline due to the economics of this region and severe decline in youth population in our area (almost 10% drop in children under 18 since 2000).  Since the Birthday Club we have had five months with increased traffic, even as our population base continues to decline.  

Smiles
We take a picture of each kid after ringing the bell.  The current month gets posted on the wall.  The previous months are cataloged in a posterboard-sized book that customers are always looking through.  Those smiles are evident.  Some of the most telling smiles, though, are the comments on my Facebook page.  We asked how the Birthday Club was doing and had a dozen comments in a couple minutes all raving about it.

Word of Mouth
Some of that is happening right now on Facebook.  Some of that is happening as people take pictures with their own cameras and send them to loved ones and friends.  Some of that is happening when people talk about their plans… “Oh. we’re going to the Toy House today to spend our Birthday Gift Certificate.”

So far so good.

But at What Cost? 
So far year-to-date we have redeemed over 53% of the coupons we sent out.  The average ticket has been much higher than projected.  Our profit margin on those sales even after the costs of printing/mailing/redeeming the gift certificate is 32% compared to 48% on non-birthday gift certificate sales.  

So the big question is… Is the 16%  in lost revenue on those sales worth it?  

The Birthday Club generates Traffic, Smiles, and Word-of-Mouth, oh yeah, and Sales.  Would a 16% off coupon generate the same?   

Yeah, some might say there is a better way for me to spend those dollars to increase my sales.  And they would be right… if sales were the goal.  

The most important element for me is the long-term investment in the Smiles. 

Since I am in toys, my customer base is always shifting.  The kids shopping today will take a short break until they have kids of their own.  The parents shopping today will take a short break until they become grandparents.  The Birthday Club is one way I invest in their return, first by giving them an incentive to return even in the “non-toy” years and second, by creating long-lasting memories that will bring them back when the time is right (and still generate that WOM as they talk about me to their friends, even when they aren’t in a buying phase.)

-Phil Wrzesinski
www.PhilsForum.com

PS  The key to any promotion is to know exactly what you hope to accomplish.  Then measure your results based on your goal.  That is the only way to really know the Return on Investment of any advertising campaign.  The best method I have for determining your goal for anything is to finish the following statement…
“This will be a success if…”

Do We Need a Law for This?

There is a bill before the State Senate in Michigan called the Family Education Leave Act that allows employees up to 10 hours of unpaid time off each year to attend school functions without retribution from the employer.

My first thought was… Really?  We need a law for that?
Let’s start with this simple premise… 
Your business is only as good as the employees in it.  
Can we agree on that?  Therefore, to make your business better, you need better employees.  You can do that one of two ways.
  1. Hire better people
  2. Train your people better
Obviously, even if you do the first, you will still need to do the second to reach your maximum potential.
Wanna know a secret that makes #2 easier?
Treat your people better.
The better you treat your staff – the more you praise them, appreciate them, recognize that they have a life outside of work – the better and harder they will work for you.  That is simple human nature.  
My employees know that I will bend over backwards to make sure they can attend school events, sporting events, and other milestone moments in their children’s lives.  In return, my employees also bend over backwards to cover for each other, and make sure my business is running smoothly.  
We don’t need a law, we need better employers.  Be one of those better employers.  It is good for your business.
-Phil Wrzesinski
PS  Some people cannot be trained better no matter how hard you try.  Fire them and go back to #1.  Sometimes, however, it isn’t the training or the person that is at fault, it is the culture.  You determine the culture by who you hire and how you treat them.  

What You DID Build

There is a lot of furor over President Obama’s statement,

“If you’ve got a business, you didn’t build that.  Somebody else made that happen.”

I know when I first read it, it made my blood boil.  Then I stopped, took a deep breath and went looking for the complete quote to see how it had to have been taken out of context.  Did you, too?  The next thing I did was look for all the usual rants and raves from all sides.  Predictable.

I think the best take on the whole matter was written by The Washington Examiner’s Senior Editorial Writer Philip Klein (great first name).  Enough said on that issue.

Instead of my own rants on the subject, I have two other thoughts.

First, we can argue until the cows come home about what he actually meant.  And that won’t accomplish a single thing.  Arguing won’t build a road or a business.  Businesses have to be built by someone who is willing to quit arguing and start doing.  You cannot argue or complain yourself to success. You should also get all the help you can. There are resources out there for you.  I like to remember what Harry S. Truman said,

“It is amazing what you can accomplish if you do not care who gets the credit.”.

So go out there and build.  Build what you can.  Build with your heart.  Build with your mind.  Build with passion.  Be proud of what you build.  Be amazed.  Be humble.  Yes, you took all the risks and did all the heavy lifting, and you got some help along the way.  As Sir Isaac Newton reminds us,

“If I have seen farther than others, it is because I am standing on the shoulders of giants.”

Second, although passion drove you to build your business, control your passion enough to let wisdom and patience guide you as well.  When a customer or sales rep or vendor (or President) says something that makes your blood boil, stop, take a deep breath and try to see the other side of the story.  You cannot control what other people say, only how you respond to them.

The one thing we all can build is goodwill towards others.  Build goodwill with your customers.  Build goodwill with your employees.  Build goodwill with your vendors.  You don’t need anyone’s help to do that. And no one can ever take that away.

-Phil Wrzesinski
www.PhilsForum.com

PS  Hopefully you got that this post was more about how to deal with an unhappy, unruly, or unreasonable customer than it was about politics.

Thanks! It Works!

I have been teaching a class for new and expectant fathers through our local hospital for the past ten years.  Twice a month I sit these daddies-to-be around a table and teach them how to change a diaper, swaddle a baby, and take care of the mother.  Our two-hour time together is one of my favorite moments each month.

Today I got a Thank You Card in the mail from one of the dads along with a birth announcement.  It totally made my day.  In the card he told me which tip he found to be the most helpful (it was about keeping more than one diaper bag packed and being responsible for packing them daily, so that his wife could leave the house multiple times.)  It was easily my favorite moment of the day.

In fact, it changed the entire outlook of my day.  And today was a heck of a day.  Mistakes on the cash registers, money shortages, a visit from the police (no, I didn’t do anything wrong), employee issues, scheduling conflicts.  All that faded into the background because of this one note.

Yes, thank you cards can be that powerful.  Which reminds me that I need to write more of them.

I need to thank my top customers, my big spenders.  And I should also thank some of the medium spenders and see if I can turn them into big spenders.

I need to thank my best sales reps and let them know how much I appreciate the time they put into working with me.  They work long hours, spend a lot of time on the road, and have to put up with a lot of crap. Yet the best ones still have my best interests at heart.

I need to thank my vendors.  After all, without them I don’t have the largest selection of toys under one roof. They are not my suppliers, they are my partners.  Some of them bend over backwards to help me, sending samples for display and prizes for giveaways.  They deserve to be appreciated for inventing and producing the great toys that make me money.

If I can feel this good about getting a thank you in the mail, imagine how good your customers will feel about you when you write them a personal, hand-written note.  Imagine how much more your reps will want to help your account when you acknowledge all the hard work they do.  Imagine how pleasantly surprised your supplier will be when he receives a thank you in the mail. Yes, he will look at your account more favorably.

Frankly, I will admit that I am bad at writing these kinds of notes.  But today was a stark reminder to me how powerful they can be and why I need to write more.  And now I’ve reminded you, too.  If I could just find a pen…

-Phil Wrzesinski
www.PhilsForum.com

PS  A friend of mine keeps a stack of blank note cards and envelopes on her desk.  She starts out every morning by writing notes and getting them in the mail.  She says not only does it help her stay on top of the thank you’s she needs to write, it also puts her in a good mood to start the day by being grateful to all those who have helped her.  (I also imagine her desk is a lot less cluttered than mine – but it is a worthy goal to aspire.)

Don’t Marry Your Inventory

I had a buyer who insisted that he had to keep 24 pieces of a particular item in stock.  It was a “must have” item, he told me time and time again.  Fortunately, we have a POS system that tracks the sales of these “must haves”.  In the previous 18 months he had sold exactly one.

I define “must haves” as items people come in asking for by name.  If your customer walks through the front door and says, “Where is…?”, that is a must have.  If you bought 24 of an item and 18 months later you still have 23, that is a must go.

The problem we often run into is two-fold.  First, we believe strongly in the products we buy.  If we didn’t we wouldn’t (shouldn’t?) buy them in the first place.  Second, we don’t like to admit our mistakes.  So we end up marrying our inventory, sticking with them far longer than we should, hoping things will work out.

Don’t marry your inventory.  Instead think of your relationship with your inventory as more of a foster parent trying to find each item its forever home.  Your inventory is supposed to leave you – the quicker, the better!  Your inventory needs to move on, create new relationships.  Your job is to help it go.  Some of your inventory is so good at meeting new people that it goes easily and often.  Some takes time (and discounting).

So accept that you will make buying mistakes.  We all do.  Accept that your inventory is not your partner.  Change the relationship dynamic and do what you have to do to move it out.  Pack the bags and smile every time you place your inventory in a new home.  The good news is that there will always be more inventory to replace the ones you sent away.

-Phil Wrzesinski
www.PhilsForum.com

PS  Not sure if you have married your inventory?  Check out my e-Book Inventory Management (free download) and do a little math to see if your inventory levels are where they should be.

PPS  How long should you hold onto something before you discount it?  It depends on the type of product you carry and the type of retailer you are. I have retail friends who give a product 30 days to prove their worth.  I know other retailers who give it one quarter or season.  I like to give my toys one Christmas to find their forever home on their own before I step in to help.  It all depends on the product and type of store.

It’s Good for Morale, Too!

Do you have a way for your customers to tell you what they think?  Most of them won’t say it to your face.  Only a small handful will pick up the phone and call.  A few will post it on Facebook.  But wouldn’t it be better to capture their joy and excitement of visiting your store at the moment it happens?

Not only does a Guest Book like this allow your customers to sing your praises at the moment they are feeling overjoyed by their visit, it gives you some incredible feedback.  There are clues hidden in the messages they write.  (If no one praises you at all, that’s a really big clue that they aren’t having the kind of fun they should be having.)

One of the benefits most people miss is that when a customer takes the time to write something down, it helps her brain store that thought more permanently.  Therefore, she will think more highly of you just from the simple act of writing it down, and she will be more likely to sing your praises to others because the memory is so much stronger.

Plus, your staff gets a big boost when they read the flowery praises you are most likely to get.  It reinforces all you have been teaching them about the power of WOW Customer Service.  It gets them fired up to continue raising the bar.

My staff will sometimes call me out of the office just to read what another customer wrote.

Set up a Guest Book in your store.  See how it increase both your word-of-mouth referrals and the morale of your staff.

-Phil Wrzesinski
www.PhilsForum.com

PS  And those aren’t even the best things said about us in our book!

Do This Math – Now!

Do this math.  It is easy.  If you have a POS system worth a damn, it is really easy.

On the first of every month run a report that shows you your total Inventory at Cost that you have on hand.  Write it down.  Put it in a spreadsheet.  Just collect that number Every. Single. Month.

It comes in handy when you want to know whether you are getting the proper return on the money you spend on inventory, whether your inventory is too high or low, how your inventory (and hence cash flow) fluctuates, and when you need to think about having a sale.

Most POS systems don’t actually track this number over time, only what you have on hand today.  So on the first of the month, after you say “Rabbit”, find out your Inventory at Cost.

-Phil Wrzesinski
www.PhilsForum.com

PS  How does that number come in handy?  To calculate your Turn Ratio and Gross Margin Return on Inventory, you need to know your Average Inventory at Cost (those 12 numbers added together and divided by 12).  I figure if I remind you now, you won’t have to do as much digging to get the numbers from the first 6 months of the year.

PPS  My 4th grade teacher taught us that if you say “Rabbit” as the first word out of your mouth at the start of the month, you will have good luck all month.  I’ve been doing it for over 30 years (who says you don’t remember what you learn in school?) and it works.