Author: Phil Wrzesinski

December 6, 2011

Two Ways to Look at the Amazon Deal

Amazon announced it is offering up to a $5 incentive for someone to walk out of a brick & mortar retailer this Saturday and shop online.

Facebook and blogs are lighting up on this topic.

Retailers are obviously outraged by Amazon’s blatant attempt to use their stores as free showrooms.

Before you get your panties in a bind, however, here are two different ways to look at this…

IT DOESN’T REALLY MATTER

Statistics show that about 35% of the US population uses a smart phone. And only a quarter of those people use it for primary browsing purposes.

So now we are down to only 8.75% of the population are likely to use their mobile phone for this purpose. Now figure out how many of those have that Amazon price check app. Let’s be generous and say that 80% of those people have the app. Now we are down to 7% of the population.

It has been shown before that only about half the population are price shoppers, which gets us down to 3.5%. Then figure out your share of the market. 5%? 10%?

Assuming you are rocking it in your market and have 10% market share, then you can expect about 0.35% of your customers to be using such an app.

But wait, you say. Many of your customers are early adopters. They make up a higher percentage of the smart phone owners. Yes, but at the same time, a larger percentage of your customers are not price shoppers. So it is a wash.

Bottom line? Do the math and you will see that about 1 out of every 225 customers in your store this Saturday will take advantage of this offer.

KILL ‘EM WITH KINDNESS

And when that customer does pull out her phone and zap an item, you get a unique opportunity. You get the chance to show her how wonderful and helpful your store is.

As long as you approach it the right way.

She is zapping for information. Not just price but also product specs and reviews. You can win her over by also being a knowledgeable font of information.

Help her understand if the item is right for her needs by asking important questions like, “What are you hoping this item will do for you? What problem are you trying to solve?”

Embrace the information she finds online. Ask her to share what she reads. Quite often you will find that the information is either faulty or useless. Then you have the opportunity to engage with her and steer her straight.

It is all about winning the customer’s trust. You do that by being friendly, honest and open. You do that by acknowledging the downside to a product. You do that by showing the upside, too, the benefits of shopping with you and keeping your purchases local. You do that by understanding the customer is a person with needs and fears just like you. Find out what is her fear and you know how to build her trust.

Heck, you don’t need to wait for them to use a smart phone app before you do all that.

Just saying…

-Phil Wrzesinski
www.PhilsForum.com

PS If you feel the need, you can always play the Amazon-doesn’t-care-about-the-local-community card. Just ask your customers how much Amazon contributed to the fire and police departments in your town. But the best approach is to not worry at all. Just do what you do so well that your customers want to support you.

December 3, 2011

Statistics Falsified for Your Benefit

I love December!

The statistical anomalies are so much fun.

Most businesses look at their sales in comparison to last year. And most businesses compare Thursdays to Thursdays, Fridays to Fridays, etc. This comparison works great right up until December 1st.

As you know, you only get 24 days in December prior to Christmas. Those 24 days are extremely important. So you might be tempted to compare December 1st to December 1st for this month to see how you are doing instead of Thursday to Thursday.

Just to show you how misleading those numbers might be…

If I compare day to day for Thursday 12/1 and Friday 12/2 to the correlating Thursday & Friday from last year (12/2/10 and 12/3/10), my sales are down 21%.

But if I compare those same days this year to 12/1 and 12/2 from last year, we are up 11%.

Being an optimist, I’m going with up. Two days down, twenty-two to go.

Keep smiling and keep making memories. Those are the numbers that really count.

-Phil Wrzesinski
www.PhilsForum.com

PS No, there really isn’t a lesson in this post, unless you want to take away from it that the most important thing is to keep a positive spin on everything this time of year. There will be time to evaluate how you really did when the season is over.

December 2, 2011

Should You Still be Ordering?

My dad always said…

“There are 24 days in December before Christmas EVERY year. Make the most of those days because they are the days that count the most.”

With that said, you only have a couple days left to check your inventory to make sure you have what you need to make the most of those days.

To borrow another cliche, strike while the iron is hot.

As much as you might be needed on the sales floor this weekend, take some time to check your inventory for fast movers and hot products. Make a list of the top ten items you are seeing fly off the shelf. Prioritize that list and start emailing/calling your reps right away. Get those hot movers on order and back on your shelves as soon as possible.

Don’t worry about making great terms, worry about getting the products that will make your customers smile. That is your goal this time of year.

Should you still be ordering? Yes! Get the hot stuff in now. Don’t worry about the rest.

-Phil Wrzesinski
www.PhilsForum.com

PS The goal all year long should be to make your customers smile, but this time of year, with the increase in customers, it becomes twice as critical. Make your customers smile now and you will smile in January.

November 30, 2011

Black Friday – Good News or Spin?

The reports in the media for Black Friday have a lot of good things to say.

Sales up 7%
Traffic up 5%
More buyers, more sales, economy must be good.

But as we all know, statistics can be misleading. For instance, Black Friday used to be from 4am to 12pm – eight hours long. Now it starts at midnight or even earlier.

The Mall of America opened at midnight instead of 5am and had a 5% increase in traffic. A 71% increase in hours (from 7 hours to 12 hours) for a 5% increase in traffic. Toys R Us, Wal-Mart and Target are all touting record days, a few percentage points higher than last year. And all three of them were open anywhere from 50% to 114% more hours.

That means at least 50% more payroll, more security, more electricity than usual, all for a 7% increase in low-margin sales. Really?

Yes, really.

What you and I, as independent retailers, fail to realize is that Black Friday for the major retailers is not about traffic, sales or profits. It is all about winning the media.

Think about it.

Is it ever a good strategy to piss off your employees by making them give up a major holiday? Is it ever a good strategy to force your customers to wait in long lines for hours fighting crowds and surly employees only to get shut out because that store only got 12 items and you were number thirteen? Is it ever a good strategy to run an event that makes people pepper spray other people in your store, have fist fights in your aisles, and attract muggers to your parking lot?

No…

…Unless your goal is to get as much FREE publicity as possible.

Go back and look at the newspapers for one week prior to Thanksgiving and see how much press was given to the deals and the hours. Then grab the papers from last weekend and see how much press was given to the events of Black Friday. Who was pictured? Who was talked about? Who got the story?

Those are the winners. And that’s what Black Friday has become. A media grab. Every big retail chain wants to be New Hampshire and Iowa. What they pay in extra payroll, extra security, lost profit margin is more than made up by what they get – national media coverage.

So brace yourself. As far as the big box stores are concerned, Black “Thursday” was a rousing success. The media said so.

At least that is my spin on it:-)

-Phil Wrzesinski
www.PhilsForum.com

PS What does that mean for independents? Time to start planning for Small Business Saturday. Most of the independent retailers to whom I spoke over the weekend had better Saturdays than Fridays. We were one of those. Only the second time that has happened in the last 42 years. But I believe it will become the new norm for us. And frankly, I am okay with that. Gives me room for one more piece of pie Thursday.

November 11, 2011

How Much You Care

Just to finish up the subject of motivating your employees…

We have all heard the phrase… The customer doesn’t care how much you know until she knows how much you care.

Same can be said of your staff.

You should care how they are doing. You should ask what you can do to make their job better. You should know what is going on in their lives.

I was talking to someone whose boss did not acknowledge her when her father-in-law died. Do you think she’s going to the mat for him? Would you?

Care for them and they will take care of your business.

-Phil Wrzesinski
www.PhilsForum.com

PS At the very least you better celebrate their birthdays. Think about it like this. They are going to celebrate it with or without you. Better the former than the latter.

November 10, 2011

Almost As Hard As You

So your employees won’t work as hard as you. But you can get them to collectively come pretty close.

We have all seen the sign that says “The floggings will continue until morale improves.” Apparently Amazon still works under that philosophy (Read this article about the shocking conditions at an Amazon warehouse).

And Amazon also has extremely high staff turnover. As do most companies that treat their employees like cogs in a machine instead of like people.

Yet employee turnover is one of the most costly mistakes you can make. It takes time and money to train an employee. It takes experience for them to become great. You cannot afford to be training someone new every few months.

So the first step is to make great decisions on who you hire. I’ve clearly outlined how to do that in my book, Hiring and the Potter’s Wheel: Turning Your Staff Into a Work of Art.

The second step involves motivation.

Daniel H. Pink, in his book Drive, talks about how people are motivated. The old carrot and stick method – do this and you’ll get a reward – doesn’t work any more. People want more than that.

The two most important things that motivate workers is to know that the work they are doing is valued and that it is making a difference.

You can show that to your staff easily by doing these simple things.

Constantly praise them for what they do right. We love to hear what we did right more than hearing what we did wrong. Sure, you need to correct the mistakes, but heap the praise for what they do right and they will do more of that.

Invest in their training. You show them they are valued when you constantly help them to grow and improve.

Teach them why. With every step of the training, with every task you ask them to do, if they can see the bigger picture of how this project fits into everything else, they will be more motivated to do the project well.

Have goals bigger than yourself. Align your store values with something that helps your community, whether a charitable cause or a general improvement of the quality of life and your staff will be motivated to work harder.

We want to know our contributions make a difference. Help your staff see the difference your company makes, and they will make a difference for your company.

I have 15 year-round employees. They have an average of over 10 years employment with me. They know the difference we make in the community. They know the importance of even the simplest tasks. They know when they have done a good job. And they know the next Staff Meeting will be fun, informative, and worth their while.

-Phil Wrzesinski
www.PhilsForum.com

PS One more thing… If you make your employees get up at 3am Black Friday or the day after Christmas to work for you, you get what you deserve. They are people. They have families and lives. Let them enjoy as much of the holidays as they can.

November 9, 2011

As Hard As You

“If only I can get my staff to work as hard as me, it will be a great season.”

Have you said this? Heard it? Thought it?

You are not alone. Every small business owner has the dream of hiring hard working employees that do the work so you don’t have to. They do the heavy lifting, you count the money.

Here is the reality check. Your staff will never work as hard as you do. Why?

They aren’t the owner. They don’t have a stake in the business other than a job. And they can get another one of those.

Oh, some might work that hard. You might get one or two workaholics so dedicated to your success that they work their tails off for you. But they will be the exception to the rule. Collectively your staff will probably work at about 60-70% of the level of dedication and efficiency you put forth. That is just human nature. Plus, if they were any better they would be running their own store.

The first most important point to take away is this. The more you slack off, the more your staff will do the same. If you are only giving 90%, their efforts will go down, too.

Yeah, sucks to be you.

But then again, it really doesn’t. You get to control the level of effort your staff puts out. It starts with the model you put forth. Raise your own bar. Show how you are striving to get better and improve. Model the kind of behavior and effort you want through your own actions and your staff will fall in line.

Monkey see, monkey do.

-Phil Wrzesinski
www.PhilsForum.com

PS There are some other ways to get your staff to perform almost as hard as you. Most importantly, treat them as human beings. I’ll tell you more in the next post.

November 3, 2011

The Purpose of Your Advertising

One of the best lessons Roy H. Williams, aka The Wizard of Ads, taught me was to look at where I get my traffic. Ask yourself these two questions:

How much of my business is repeat business?

How much of my business is referral business?

The remaining is the business you got from your location and your advertisements (which by now you know are one and the same – location is one of the greatest forms of advertising.)

The typical independent retailer gets most of his or her business from Repeats and Referrals. The best way to get more of that is through your customer service. WOW your customers and they will come back and bring their friends with them.

Yet much of the advertising we do is geared towards preaching to the choir, trying to get our regulars to come back. It is much cheaper to service them extremely well than to spend a lot of money advertising to them. If you feel you need to reach out to them, use Facebook and email. They are better (cheaper) for speaking to your regulars because they are one-to-one and personal.

The bulk of your advertising, however, should be focused on getting new customers. Farming. Planting seeds that will bring you a new bumper crop to harvest in the future.

Take a good look at your marketing efforts and see how much is geared towards Repeat and Referrals and how much is farming for new customers.

Take those dollars spent on the R& R and bump up your level of service. Then spend the rest on farming. You will reap the benefits.

-Phil Wrzesinski
www.PhilsForum.com

PS Not sure what to say in your farming? Start by downloading my free eBook Understanding Your Brand. The people most likely to shop with you are the people who share your values. Once you identify clearly what you value most, you’ll be able to reach the like-minded customers.

PPS I’m going back to see the Wizard in February. Want your world rocked? Join me.

November 2, 2011

Educating the Customer

Most independent retailers fully understand the impact of a customer coming into your store, browsing all the aisles, asking questions, getting information, then walking out and buying the item online.

We know how that action, beyond killing your own business, is also eroding the local workforce, the local tax base, and the local economy. We know how our own communities are struggling to make ends meet, how police & fire departments are being gutted, how budgets for schools and education are being slashed.

We know how tough it is to pay your sales people to be a showroom for some out-of-town, faceless Internet site. It demoralizes the staff to do all that work and not get the sale. And they know that without the sale you won’t be able to pay them for much longer.

We get all that.

The customer doesn’t.

There are only two reasons for this. The customer doesn’t know or the customer doesn’t care.

The Customer Doesn’t Know
One way we have failed our customers is by not letting them know the positive impact they make on our community when they shop with us. We have not educated them that they are supporting jobs in their neighborhood, they are supporting the tax base that pays for their protection and their education and they are making the community stronger when they shop local.

The best way to educate our customers is one at a time. Thank each and every customer who chooses to shop with you for making a positive impact in your community. Engage each customer with a positive message about how together you are making your town a better place to live.

If you choose to post any messages, either on your website, Facebook, in your advertisements, or in the store, make sure they are positive about all you (and they) can do to make the quality of life in your area better.

The Customer Doesn’t Care
But do remember that the message, no matter how positive, will not resonate with everyone. Most of your customers are too absorbed in their own worries and cares to even give a single thought to the impact of their decisions. Don’t lose sleep over them.

Just remember to always keep your message positive. A positive message may not change the mind of these customers, but a negative one will make them feel bad about your store – something you never want to do.

Most retailers get it. Most customers do not. We have a lot of work to do. Just keep it positive.

-Phil Wrzesinski
www.PhilsForum.com

PS One way to make the message positive… “Thank You for Shopping Local. Today you made our city a better place to live.” At its best, it will get customers to engage you in conversation. If nothing else, it will make them feel good about shopping with you. And that is always a good thing.

PPS But if you use that phrase, you better back it up. Pay your staff more than your competitors. Give more to your local non-profits. And get involved in your community. It is a two-way street after all.