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Author: Phil Wrzesinski

Phil Wrzesinski is the National Sales Manager of HABA USA toy company, a Former Top-Level, Award-Winning Retailer, a Thought-Provoking Speaker, a Prolific Author, a 10-Handicap Golfer, an Entertaining Singer/Songwriter, and a Klutz Kid who enjoys anything to do with the water (including drinking it fermented with hops and barley), anything to do with helping local independent businesses thrive, and anything that puts a smile on peoples' faces.

Three Stats to Tell You All You Need to Know

I went to a presentation last night. As you know, I am all about continual learning. Education is one of my Core Values. This presentation was at TechTown Detroit, a small business incubator that helps launch tech and retail businesses. Mary Aviles of Connect 4 Insight put on the presentation. Mary is also the Director of Strategic Development for Tech Town.

The presentation was “Designing the Customer Experience.” (I’m sure you can guess why that piqued my interest.) The goal was to give these start-up and pop-up retailers some ideas to help them be ready for the holidays.

Mary gave out three stats I want to share here. (Note: I was not able to get the source from her on these stats but I know she did her research.)

STAT #1

24% of all Amazon Sales are from customers who went to a brick & mortar store first.

What does this mean? Nearly one-fourth of all of Amazon’s business is from customers who were disappointed by their in-store experience. Nearly one-fourth came from customers who chose to go to a store first but didn’t get their needs or expectations met.

In other words, customers are choosing brick & mortar, but our lack of selection or lack of service or super high price is driving them online.

STAT #2

40% of customers change their minds in the store because of the in-store experience. 

What does this mean? The in-store experience affects a large number of sales both to the good and to the bad (some of those 40% are more inclined to buy, some are less).

In other words, almost half of your customers are going to make their final buying decision based not on the product or the price but on your ability to offer them a quality shopping experience (or not).

STAT #3

80% of customers report that they would be willing to pay up to 25% more for an item because of a quality experience in the store.

What does this mean? Experience actually outweighs price. Four out of five customers say experience combined with the desire to own the item right away can get them to pull the trigger, even if the price is a little higher than online.

In other words, you can win over a lot of customers with your in-store experience, even if your prices are a little higher than the Internet.

The bottom line to all of these stats is this …

The in-store experience you are providing has more of an effect on your sales than pretty much everything else you do.

If it isn’t your number one focus, you might want to change your gaze.

The good news is that you still have time to schedule The Ultimate Selling Workshop for your team prior to this holiday season. Mary has the stats to convince you why you need to improve the customer’s experience. I have the nuts and bolts of exactly how to do that. Call me.

-Phil Wrzesinski
www.PhilsForum.com

PS You have four days to lock in the special fall savings offer of only $2,000 for The Ultimate Selling Workshop. At 12:01am October 1st the price goes up to $3,500 (or more depending on time and travel). It is still a steal at the regular price. We already did the math. I’m offering the incentive price to get you to book now so you can have your best holiday season ever.

PPS If you are a retailer in Detroit or considering starting a retail business in Detroit, TechTown has amazing resources and programs, and a dedicated, smart, caring staff. You should check them out.

How Fast Do You Solve Her Problem?

You call a number. You get a recording, a menu of options. You listen to all the options before pressing two. Another menu. This time you press one. Now a recording offers you yet a third menu. You select three and a recorded voice comes on to say, “Please hold while I try that extension.”

Twenty minutes of horrible music and a voice interrupting every so often to say, “Please stay on the line and the next available representative will help you,” you finally get a live person on the other end of the phone. You explain your problem patiently only to hear …

“Hold on while I transfer you to someone who can help you.”

Aaaarrrrrrgggggghhhhhhhhh!!!!

Another fifteen minutes or so later you get someone equally unhelpful. You’re ready to hang up except you now have over forty minutes invested in this call. Your frustration levels are through the roof. Your anxiety is peaking. You’re about to rip someone’s head off if you don’t eventually get satisfaction.

We’ve all had that experience. Many of us have experienced it more times than we care to count.

Then we walk into a retailer with what we believe to be a simple problem, find a clerk to help us, explain our problem, and hear …

“Hold on while I find someone who can help you.”

We immediately go back to the frustrations and anxiety of all the other times this has happened to us.

Sure, you’re not a phone tree with endless menus and unhelpful people. Sure, you solve the problem with the second person she sees. Sure, your customer doesn’t have to wait thirty minutes like she did on the phone with that other company.

None of that matters. You still caused your customer to feel all those negative emotions first.

This is why the best stores empower the first person who greets a customer to be able to solve all of her problems and take care of all of her needs.

The customer walking through your door with a problem is already worked up. She brings with her the baggage of every forty-minute phone tree fiasco. She brings with her all the frustrations and anxieties of all the interactions with untrained, useless “salespeople.” She’s loaded for bear and ready for a fight.

Then you spring the, “Hold on while I find someone,” phrase on her.

When she explodes on you, it isn’t really you. You’re just the straw on the camel’s back. But those feelings she has are now associated with you whether you like it or not.

It doesn’t have to be that way. You can empower your front line staff to solve her problem by teaching them this simple three-statement approach:

  1. “I’m so sorry you have this problem …”
  2. “Let me see if I have this straight …” (explain the problem back to her as your heard it and ask for clarification)
  3. “What would you like us to do?”

Always apologize. Notice that the apology doesn’t necessarily imply guilt or fault. The apology simply acknowledges that she has a problem and sets her at ease.

Then repeat back her problem to show that you were listening. Sometimes just being heard is all a customer really needs. It also gives you a chance for clarification to understand the problem better and time to think about how you would want to solve the problem.

The last phrase is the kicker. Great Customer Service is when you meet a customer’s expectations. The best way to know what she expects is to ask. And since an unhappy customer is your worst enemy because of the negative reviews and bad word-of-mouth, it is vital you know exactly what she wants.

Once she tells you what she wants, the best thing to do is give her that … and a little more.

More often than not, when you first put the customer at ease and show her you are listening to her problem, by the time you ask her what she wants she will ask for less than you were likely prepared to give. Even if she does ask for a lot, instruct your staff to give it to her. It is worth it in the long run because of how it makes your customer feel.

“People will forget what you said. People will forget what you did. But people will never forget how you made them feel.” -Maya Angelou

Empower and train all of your staff to handle all of the problems immediately and you will control how your customers feels. Speed does matter. (Plus, if your staff are handling all the problems, you’ll have fewer interruptions throughout the day to get your work done. Win-win!)

-Phil Wrzesinski
www.PhilsForum.com

PS Every now and then a customer will make an outrageous request. It is still worth it to meet that request the first time. If she becomes a repeat problem then you have the right to adjust what you do for her. But since these requests will be so few and far between, they won’t cost you nearly as much as you think. Plus, since you’ll be better managing the way customers feel about you, you’ll have more happy customers than ever before. Instead of worrying about the cost, think of it as an “advertising” expense where you are buying positive word-of-mouth (or at the very least buying the lack of bad word-of-mouth), and the fact you just made a customer’s day. Those are two benefits that will help any business.

Vacations – Do You Take Them? (Why You Should)

Before I started working full time at Toy House, the staff used to dread when my parents would go on vacation. It seemed that every time they returned they fired a key employee. They only took a couple weeks off each year, one in the spring and one in the summer, but their return usually meant someone was on the chopping block.

If you’re a small business owner, you might already be saying to yourself, “That’s why I won’t go on vacation. When the cat is away, the mice will play.” Although mice playing was the cause of a couple of those firings, more often than not it was the chance to get a break, to think critically about the business, and to have a fresh perspective that caused most of the terminations.

Those breaks were critical to their success.

No, they didn’t stop thinking about the business while they were away. No business owner is ever fully “off the clock.” But they found ways to relax and enjoy themselves. The key was the surroundings.

By taking a vacation they got away from the day-to-day grind, the fires constantly needing their attention, and the phone calls, customers, and other interruptions that consume most of the day. Those breaks allowed them to spend some time thinking more about the big picture of the store.

YOU NEED A VACATION

Owning your own business is supposed to be fun. It usually is. Yeah, there are headaches. Yeah, there are long hours. Yeah, you have to wear too many hats, several of which you’ve never been properly trained to wear. Yeah, you rarely ever get chunks of time to accomplish the bigger goals.

If you never take a break, however, you’ll eventually feel like the business is a ball and chain holding you captive.

A vacation gives you a chance to recharge your batteries. That, alone, is worth its weight in gold. It also gives you that freedom to think the big thoughts, to look at your business from outside the bottle, to decide if you have the right people in the right seats on the bus.

HOW TO TAKE A VACATION

How do you take a vacation when there is only you and a handful of part-timers? How do you take it when you don’t have someone you trust to handle the money? How do you take it when you’re worried about the mice playing?

SYSTEMS

One way to help your employees handle things in your absence is to give them a system to follow. Spell it out. Do step A, B, and C in that order. Systems help you have consistency. Systems give you checks and balances so that you can quickly find errors and correct them. Systems also make training easier.

GO-TO PERSON

You don’t have to have a “manager” for you to leave the store, but you do need a go-to person, someone to make the final decision on any matter that should arise. You can even assign two go-to people, one to handle any customer issues such as complaints or questions about returns, and one to handle other issues such as problems with shipments or receiving.

Remember that not everything has to be handled right away. Requests for donations can be left behind until you return. So can advertising opportunities and sales reps. Be clear about what you want them to handle and what you want them to hold for your return.

Your biggest issue with your go-to people will be trust. If you know your business’s Core Values and have hired people who share those values, then you can always remind them to stick to the values and follow the mission of the store. While they won’t always do exactly what you would do, if it is consistent with your values, then it will be just fine in the end. I always left on vacation with this one goal for the team—make the customers smile!

ASSIGNMENTS

There are certain tasks you might do that need to be done in your absence such as receiving merchandise, stocking shelves, or cleaning the store. Assign those responsibilities to your team. Give each person one area to be in charge. Then hold that person accountable for getting that particular task done. (Note: this is if you don’t already have a manager in place to handle and assign these tasks.)

Some of the areas to assign:

  • Opening/Closing
  • Receiving Merchandise
  • Stocking Shelves
  • Cleaning Inside and Out (especially the bathroom)
  • Counting Money/Making Deposits

Assignments not only help ensure things get done, they give your staff the chance to show off what they can do. Some of your team will step up in your absence and truly shine. They have been chomping at the bit for more responsibility and more to do. When you return from vacation, make sure you recognize and reward those people. I sometimes gave my key people time-and-a-half when they had to step it up. We called it “battle pay.”

Others might not step it up. They might shrivel at the daunting task before them. They might make excuses. They might become the mice you dread. At least now you know who they are and whether you want to keep them on the team.

Your vacation helps you separate the mice from the (wo)men.

If you are wondering whether you can afford to take a vacation or not, I will tell you that the benefits of taking a vacation are so great that you do your business a disservice by not taking one.

  • It recharges your batteries
  • It helps you see your business more clearly
  • It helps you see who is ready to step it up to the next level on your team (and who needs to go)
  • It pushes you to put the systems into place that you know you need anyway
  • It teaches you how to delegate
  • It removes the ball-and-chain

Like paying yourself a salary, this is something else all the owners of professional businesses do, too.

-Phil Wrzesinski
www.PhilsForum.com

PS You don’t have to go on a two-week African Safari to get those benefits. If you’re scared about it, start with a long weekend or two. Take a Thursday and Friday off to make it a four-day jaunt. More of the back office business stuff happens Monday-Wednesday anyway. Just get far enough away that you won’t feel compelled to “pop in for a quick visit to check on things.”

PPS When you get back, there will be fires to put out. There will be situations to evaluate. There will be things left undone. You’ll put those fires out, evaluate the situations, and get everything done fairly quickly, in part because your batteries are recharged, and also because you just learned how to delegate.

When you evaluate your team and how they did, if they tried their best but it wasn’t how you would have handled it, give them the A for effort. Say something like, “I truly appreciate your effort in handling this. Good job. Next time, however, you should try doing this …” Think of it as a teachable moment that will make your next vacation even better.

Give Them a Title

There are two series of books that have influenced my business life directly. One is a series of five books I first read as a child and have re-read several times since, until the books are barely holding together. I have read them twice to my own sons and am now reading the first book to a friend’s son. The second is a trilogy that came to me as a gift and I have talked about in this blog quite often.

This blog is about that first series of books. (You can follow the link in the previous paragraph to read about the trilogy.)

The Chronicles of Prydain Book #1

I don’t think Lloyd Alexander was thinking about business lessons in 1964 when he wrote The Book of Three, the first in his five-book children’s series The Chronicles of Prydain. Having read the entire series more times than I have fingers, however, I keep finding lessons on every page.

The opening chapter of the first book introduces us to the lead character, Taran of Caer Dallben. We don’t know much about him other than he helps tend a garden and take care of an oracular pig, but he wants to be a big hero. He wants a title to go with his name, so Coll, his mentor, gives him one … Taran, Assistant Pig Keeper.

For the first three books, he is known as Taran, Assistant Pig Keeper. (In book #4 he becomes Taran Wanderer. This book was the light bulb idea that sparked my book Hiring and the Potter’s Wheel: Turning Your Staff Into a Work of Art.) Although he desired to be a warrior of noble blood, mostly what he wanted was to be something, anything, to simply have a title and purpose.

Your staff have that desire, too. They HATE wearing a name badge that says “Trainee” because they know it means customers don’t trust them or treat them with respect. They want a title, preferably one that sounds important, that gives them some respect.

I see this as a creative opportunity.

While not everyone can be a store or department manager, you can make them managers of specific things like:

  • Manager of Smiles
  • Manager of Problem Solving
  • Manager of Question Answering
  • Manager of Greetings and Salutations
  • Manager of Product Knowledge
  • Manager of Finding Lost Products
  • Manager of Sunshine
  • Manager of Giving Customers an Experience They Will Never Forget That They Will Have to Tell All Their Friends About and Drag those Friends to the Store on Their Next Visit

Okay, maybe that last one won’t fit on a name tag, but you get the idea.

The point is that a title gives an air of respect. A title like the ones above also gives a fresh air of cheer, sets a customer at ease, and lets the customer know this person is (hopefully) trained to help. Most importantly, the title gives your employee a sense of importance, a purpose, and even a goal to aspire to.

One other benefit is that when you make a big deal out of giving your employee a title, especially when it is something cool and fun and even personal with layers of meaning, it shows that person that you care.

The more you care for your staff, the more they will take care of your customers.

Yeah, I got all that from a children’s book.

“Take inspiration from wherever you find it, no matter how ridiculous.” -Roy H. Williams, aka The Wizard of Ads (yeah, that other series of books)

Decorate your staff by giving them fun, meaningful titles and watch how they grow into those roles.

-Phil Wrzesinski
www.PhilsForum.com

PS The more personal and fun you make the title, the more benefits you will see. Your employees will work harder and your customers will be quicker to trust them with just this simple little act. It is the little things that make a difference.

PPS Get rid of your assistant managers (the titles, not the people). Make everyone a manager of something, even if it is simply a “Shift Manager.” The word “Manager” says authority. “Assistant” says “not yet good enough.” Make them all good enough to solve the customer’s problem and take care of her every need, and give them the title to declare it.

How to Learn From the Best

Yesterday, I buried this little gem in the post. Let’s take it out and polish it a bit.

“If your store isn’t the store everyone points to in town for having the best customer service, your service isn’t good enough. Yet.”

There is always that one business everyone believes is the best retailer in town. Several years ago, when I did a full-day workshop on Customer Service in Manistee, MI, a sleepy little Lake Michigan town with a year round population of around 6,000 people and summer visitors measured in the hundreds of thousands, I found their best retailer.

I came into town a day early to check out the shops. I braced myself against the sleet and snow on that cold, wet, wintery March day and made the rounds. The shops were open, but mostly empty. It was off-season, and not the best day to be out on the streets. One store, however—Snyder’s Shoes—was hopping. They had several customers in the store when I entered, but the staff still made a point of greeting me. Even in a sleet storm it was obvious who was the king of retail in town.

Snyder’s Shoes, Manistee, MI

The next day, as the attendees were filing in, I got the confirmation as I overheard one person say, “What is Snyder’s doing here? They’re already the best retailer in town.”

At the end of the day, however, when he was asked what strategies he hoped to implement from the day-long training session, Dan, the co-owner of Snyder’s said, “Every single one I possibly can.”

I feel for the other retailers in Manistee. They aren’t being measured against their competitors. They are being measured against Snyder’s.

Customers don’t measure you against your competitors. They measure you against every retail experience they’ve ever had.

So how do you compete against that? How do you raise your bar that high?

You have to do your homework. Ask your staff to name the stores they think offer the best customer service in town, then plan a road trip to visit them. Watch how those stores interact with their customers. Look for the differences between what they do and what you do.

Visit all the stores your staff named. You can do it in groups or pairs. Take notes. Ask these questions …

  • What do they do better than us?
  • What do they do different than us?
  • What do we do better than them?

The first question shows you what you need to tweak or improve. We all have things we need to tweak or improve. Getting a list by comparing to what other stores do is far better than just trying to brainstorm it yourself.

The second question shows you where you are different. Sometimes different is good, sometimes it isn’t. You have to decide, based on your core values, if you want to change things or highlight the difference.

The third question is your calling card. This is the area where you’re winning in the minds of your customers. If there isn’t anything you are doing better, you have serious work to do. If there is something you’re doing better, find out how to do it BEST. Raise the bar so high no one will be able to match it.

Now is a good time to take this road trip. You have time to visit stores before you get too busy. You have time to implement those changes before the holiday season hits. You have time to tweak your advertising message, your promotions, and your marketing to highlight your strengths and differences.

Two more questions you might also want to ask …

  • What do they do that we can’t?
  • What do they do that we won’t?

The first shows your limitations. The second is your biggest differentiating factor. Both answers give you power and show you where you stand not only in the retail landscape, but also in the eyes of your customers.

“Knowledge is power.” -Sir France is Bacon.

-Phil Wrzesinski
www.PhilsForum.com

PS Note: If you ask your staff who is best and they don’t immediately say, “We are!” then you know you have some serious work to do. If they say they are the best, ask them who is second best and go visit those stores.

PPS One more thing you still have time to do … Hire me to do The Ultimate Selling Workshop with your team. You’ll transform your team to the point that when they say, “We are!” you and your customers will nod in agreement.

Change Your Viewpoint to See Your Business Better

I was sitting in a conference center in Louisville, Kentucky for a presentation by Rick Segel in May 2009.

Rick asked the crowd, “Raise your hand if your product selection sucks, if you just don’t have the goods people want.” No hands went up.

Rick then said, “Raise your hand if your store has lousy customer service, if you’re treating customers poorly.” Again, no hands went up.

One more time Rick said, “Raise your hands if you are gouging the heck out of your customers with your prices.”

Since two surveys I had done showed customers already believed that about us, I raised my hand. “Ooh, me! I do!” Rick tossed me a free copy of one of his books and said thanks for being honest.

The point Rick was trying to make was …

Every business thinks they have Great Selection, Great Service, and Great Prices.

Most of us are wrong. We have either wrongly convinced ourselves of our greatness or justified away our flaws. We think, “If only more people would come through the door they would see how great we are.”

The truth is …

If you were truly Great, more people would come through your door.

Our problem is one of perception. We see the business through our own perception, from inside the bottle. Our customers have a completely different frame of reference. We compare ourselves to our mass market competitors and say, “See? We are soooo much better than them.”

Our customers compare us to every store they’ve ever visited and say with a sigh, “I wish [your store] was more like [my favorite store].”

If you want to find your blind spots, you have to look at things differently. You have to look at your business from your customers’ perspectives.

PRODUCT SELECTION

To improve your product selection, create a “No List”. This is a list of all the items customers come in asking for that you have to say, “No, I’m sorry we don’t. Can I show you an alternative?” (By the way, that or “Can I suggest a store that would have that item.” are the only two acceptable answers when you don’t have a certain product.)

If a customer walks through your doors or calls you on the phone asking for a certain product it is because the customer perceives you to be the kind of store that would carry that product. If you’re constantly saying no and not showing the alternatives you would rather carry, you’re flying directly in the face of customer perception. If there are one or two products on that No List every week, you need to look into either carrying those products or the next best alternative to those products. Otherwise your product selection will not be considered “Great” in your customers’ eyes.

CUSTOMER SERVICE

What percentage of your business is repeat business? Make an educated guess. Your repeat business is a direct reflection of your Customer Service. If your Customer Service is Great, meaning you’ve met her every expectation, she will be back.

What percentage of your business is referral business, people who have never been in your store but came in because a friend told them (or better yet, dragged them in)? This is a direct reflection of how often you did more than a customer expected.

“Surprise is the foundation of delight. If you expected something to happen and it happened, there is no delight.” -Roy H. Williams

If all you do is meet expectations (Great Customer Service), you’ll get some repeat business. To get referral business, however, you have to raise the bar even higher. If you aren’t getting a lot of repeat and referral business, then you don’t have Great Customer Service in your customers’ eyes.

One last thing to consider … If your store isn’t the store everyone points to in town for having the best customer service, your service isn’t good enough, yet. (And if it is, then the bullseye is on your back so you better be doing something to keep raising the bar.)

PRICE

This is one area where you’ll have a hard time changing perception. When we did our surveys we were regularly considered “Over-Priced” and “Expensive” compared to Walmart, Toys R Us, Meijer, and Target. All four of those stores talk about low prices and saving money in every ad they run. There is a built-in perceptual bias that all indie stores are more expensive than their mass competitors. The interesting part of the survey for me was that we also owned the word “Value.” That’s when I knew my prices were okay. Yes we were Expensive because we carried more expensive items. But the customers saw the Value in those items.

Remember, too, that not everyone shops on Price. Make your prices competitive and sharp, but more importantly, hone up on the Product Selection and Customer Service elements, and people will see the value you offer.

Every store thinks they have Great Selection, Great Service, and Great Prices. Most stores are wrong. You can’t measure whether you have Great Selection, Great Service or Great Prices from any of your spreadsheets. You can’t see it from behind your cashwrap. You have to look at it from the customers’ eyes. That’s the only point of view that counts.

-Phil Wrzesinski
www.PhilsForum.com

PS You can win over some of the perceptual bias on Pricing. The blueprint is in the Free eBook Pricing for Profit. Most stores who have followed this pricing have reported back how customers perceive their pricing to be much more competitive. All of the stores who have followed this pricing have reported back increases in profit margin because of it. What do you have to lose?

PPS Even if you think your Customer Service is Great, ask yourself …

  • What would happen if your staff was better at building relationships with your customers?
  • What would happen if your staff was able to close more sales?
  • What would happen if your staff was able to increase the average sale?
  • What would happen if your staff learned to work together better as a team?

How would that change things for you?

One downside is that you would be busier. You’d have to write more orders (increasing your turn ratio and your cashflow). You’d have to look into hiring more people to handle the increased traffic. You might even have to consider a new location to expand your business. If you’re okay with those hassles, contact me to run The Ultimate Selling Workshop with your team.

The Fallacy of Foot Traffic

I was at Great Lakes Crossing Outlet Mall in Auburn Hills, MI the other day. It is one of the few malls I truly enjoy, partly because it has an aquarium (I have an oceanography degree), a LEGOLand (I used to sell toys for a living), and a Bass Pro Shop (I used to lead wilderness trips and still love to go camping). With Haggar, Levi, and Bose stores, and tons of seating in the walkways in front of the ladies clothing stores it is definitely a man-friendly mall.

The place was hopping. Whoever said malls are dead hasn’t been to this mall. The main aisles were jammed with people on a lazy Sunday afternoon in late August. It wasn’t a back-to-school crowd. It was just people out shopping and having a good time.

The food court was especially crowded. The line at Starbucks snaked all the way around their kiosk. Almost every restaurant in that food court had a line four or five people deep.

The key phrase there is “almost.”

Two restaurants in particular had no lines at all. As I sat eating my pizza, I watched both restaurants with interest. Three young girls approached one restaurant, stared at the menu, and walked away. A mom with a kid in a stroller stopped at the other restaurant and ordered her meal. In the time it took me to eat my pizza, that was the only paying customer at either of those two restaurants.

All the other restaurants had lines of people.

It wasn’t like these restaurants were serving fried crickets on a stick or something else not on the American palate. In a busy mall they weren’t getting the benefit of any of that foot traffic. Somehow, either through previous reputation, the signage in their restaurants, their pricing, their selection, or their attitude, they were idle—even with plenty of customers all around them.

All the foot traffic in the world won’t help you if there is a flaw somewhere in the business. It might hide the flaw for a little bit, but until you find and fix that flaw, you’ll never grow.

The reverse is also true. If you have a fabulous business, your location may hold you back a little, but not nearly as much as you think.

Schlenker’s Sandwich Shop
1104 E. Ganson St.
Jackson, MI 49201

One of my favorite burger joints has been in the same location since 1927. The road was a dirt road back then and the location is still well off the beaten path. The only foot traffic they get is the traffic they generate themselves. The restaurant is just a counter with limited seating. Yet the business is still going and growing after 91 years.

Just last week new owners took over. Yes it was a viable enough business to sell (something very few restaurants can say). The big change the new owners are planning? They are thinking about adding a drive-thru to handle all the takeout traffic.

My point is that too often we think, “If only I had a better location with more traffic …” or “If only I could find that silver bullet in my advertising that would draw more traffic …”

Neither of those thoughts is the true path to success. I predict those restaurants at Great Lakes Crossing will be replaced by next summer. They had all the traffic they could stand but weren’t able to convert it into customers.

I also predict that when Schlenker’s builds their drive-thru it will be filled with cars every day without them having to spend a dime on advertising.

If you have ever heard yourself saying, “If only we had more foot traffic …” the better question to ask is …

“What do I need to do to make my business better so that people want to come here?”

You are a destination store. When you act like one, you’ll draw all the traffic you need without any silver bullets or malls to do it for you.

-Phil Wrzesinski
www.PhilsForum.com

PS Even with a steady, solid, faithful customer base and a burger that was rated the seventh best in the entire state of Michigan, the other change the new owners of Schlenker’s are making is to switch suppliers to a higher grade and quality of the ground sirloin that makes their burgers so good. They have all the traffic they can handle, yet even they are answering that one question above. Are you?

A Few Truths on Advertising

I received the following question via email …

“… based on your blog today, when is there ever a good enough ROI to justify advertising?”

I understand the confusion. I did a math equation yesterday that showed how a $400 ad buy might not get the desired results for a company expecting to do $60,000 in December sales. You could draw a conclusion between the ratios of $400 and $60,000 and determine that any ad buy over that ratio would be worthless.

That wasn’t the point.

The real point of yesterday’s post was to get you to ask the question, “Is this the best place to spend that $400?” When you ask that question your possible answers include:

  • Yes, it is. Go for it.
  • No it isn’t. I get a better return elsewhere.

The math was also about spending an extra $400 more so than spending $400 of your already budgeted money.

Here are some Truths about Advertising that might clarify some of the questions.

TRUTH #1

Marketing and Advertising are necessary expenses of running your business. You have to be doing something to get the word out about you. The key is to find the best, most effective ways to reach your audience and convince them to shop with you. The reality for most small businesses, especially indie retailers, is the budget isn’t big enough to do major media buys like the big brands. It isn’t to say that they aren’t effective for small businesses. If you have the budget, radio and billboard have fairly strong ROIs for most markets. But since most stores don’t have that budget, one of my most requested presentations is Main Street Marketing on a Shoestring Budget. (Follow that link and you’ll learn some ways to market yourself that won’t cost an arm and a leg.)

TRUTH #2

Marketing and Advertising will not fix your business. Drawing traffic won’t help your business if the model is flawed. It won’t help your business if the math is wrong. It won’t help your business if your service isn’t up to par with expectations. In fact, all advertising can really do is speed up the process of what is bound to happen. If your model is good and your staff consistently meet and beat customer expectations, advertising will help you grow. If your business model is flawed, your selection is lousy, or your service stinks, advertising will only speed up your demise.

In other words, you have to first shore up your financial strategy, your product selection strategy, and your levels of service before you should spend a penny on advertising. Otherwise you might be heading more quickly down the wrong path.

TRUTH #3

Customer Service is a form of Advertising. Poor customer service will kill your business. Good customer service is actually a neutral. Good customer service is when you meet expectations. You do that and you get a thank you at best. End of transaction. But when you go above and beyond the customer’s expectations your service is a game-changer. It turns your customers into fans and gets them to advertise for you. We call it Word-of-Mouth.

Yes, you can “buy” word-of-mouth. One way you buy it is by spending more time and energy training yourself and your staff better ways to serve your customers. (For other ways to buy Word-of-Mouth, check out this Free eBook Generating Word of Mouth.)

TRUTH #4

Price and Promotion Advertising become less effective over time. The companies that always seem to be offering sales always seem to be upping their game with those sales. Why? We get easily bored with their promotions.

Ten percent off? Yawn.
No payment for thirty days? Zzzzzzzz.

One window company is currently offering a “Buy one window, get the second window 30% off!” promotion. Why don’t they just say “Fifteen percent off all our windows!”? Because thirty is greater than fifteen and they hope you’re either lazy or bad at math. If you’re running Price and Promotion ads you need to keep upping the ante or people will get bored.

Price and Promotion ads also end their effectiveness when the promotion ends. Same with seasonal ads.

TRUTH #5

Branding Advertising increases in effectiveness the longer you run the ads. Unlike promotional ads, branding campaigns are built for the long run. They aren’t as flashy out of the gate, but like the steady drip, drip, drip of a river can eventually carve out the Grand Canyon, a long-term branding campaign can help you create a following that lasts for years. You just have to have the patience to let it work.

Branding campaigns also keep working long after the ads have stopped running because the brand message sticks in the mind. I haven’t run a radio ad in over 20 months, but still people tell me about their favorite ads, especially the one about The Men’s Bathroom (that only aired way back in August 2008!) They also know my slogan, “We’re here to make you smile.” They heard it for over ten years.

The methods for advertising will change (anyone remember Yellow Pages?) but these truths will not. Yesterday’s post was speaking directly to Truths #2 and #3.

If you only have a limited amount of money to spend, the first place to spend it is on raising the bar of your Customer Service.

-Phil Wrzesinski
www.PhilsForum.com

PS Wanna know if you’re in the race to the bottom or the race to the top? If all of your events, promotions, and advertising revolve around some sort of sale or discount, you’re racing to the bottom. As Seth Godin asks, “What if you win the race to the bottom? Worse yet, what if you finish second?” If you spend as much money training your staff as you spend on advertising (and all that advertising is about your brand) and all of your events are about customer engagement and education, you’re in a race to the top.

Is it the Best Place to Spend Your Money?

“It’s only $400. What have you got to lose?”

If you’ve ever run a small business you’ve heard that question before, usually spoken by an advertising sales rep trying to sell you on some new marketing fad, or maybe an add-on to a package you’ve already bought. You fall for it, too. I know I did, several times.

You fall for it like I did for one of three reasons:

  • You didn’t have a marketing plan
  • You didn’t have a goal, or expected outcome you knew you wanted from your marketing plan
  • You didn’t do the ROI and truly answer that question
Close up of a pen and blank check

What have you got to lose? For starters, the $400 check you just wrote. Secondly, the chance to spend that $400 more wisely. The better question to ask is …

“Is this the best place to spend that money?”

When you have a plan, you have a better idea of where you want to spend your money, how that money will be used, what you hope to accomplish, and how you’ll measure the results. You’ll also have a budget that you’re checking regularly so that you’ll know if you even have that $400 to spend in the first place. When I started budgeting, I had set amounts to spend in certain places where I knew I would get the best bang for my buck. I also had some flexible money for opportunity buys.

When you have a goal or expected outcome, you have another measuring tool. When I finally got smart about my budget, the question I would always ask before spending that flex fund was, “Would this money be better spent on this new thing or just added to the money I’ve allocated elsewhere?”

The ROI is the hardest question to answer. One truth about marketing, advertising and even sales training is that there isn’t a simple plug-and-chug equation that says if you spend X your results will be Y. Anyone who tells you otherwise has a good ROI—for him, not necessarily you. At best you have generalizations based on previous experiences, trial-and-error, and hope. Yet being able to figure out the ROI, even in the most general sense, is the only way to really know what you have to lose.

DOING THE MATH

I’m going to do a math problem to give you an idea of how to calculate ROI. To do it, I will be using some basic assumptions. You can adjust your numbers accordingly.

  • Traffic = 200 people/day
  • Conversion rate = 20% (40 people/day)
  • Average Ticket = $50
  • Sales for 30 selling days = $60,000 (40 people x $50 x 30 days)
  • Profit Margin = 50% ($30,000 on that $60,000 in sales)

If we do the math backwards, it might look like this: I need to do $60,800 in sales just to break even on the $400 I’m going to spend. Realistically, though, to make it worthwhile, I’d like to make back at least an extra $400, so I need to do $61,600 to get any kind of return worthwhile. Therefore, at $50/per ticket, I now need an extra 32 paying customers over the 30 days. Since my conversion rate is only 20%, however, I need to attract an extra 160 customers over the month just to break even. So the real question becomes, “Will this $400 attract an extra 5-6 people a day or more (3%)?” Considering one of the most highly measured advertising models—direct mail—has only a 1-2% expected return, that might be asking a lot of any marketing effort, especially something new and untested.

Remember, too, that the effects of this advertising will likely end with the season. If it isn’t already in your budget, being able to do the math like this can save you from losing a lot.

You can play around with this basic formula to find out all kinds of cool things. For instance, if your Profit Margin was 52% instead of 50%, you’d have an extra $1,200 in your pocket. (To find out how to increase your profit margin through a better pricing strategy, download the FREE eBook Pricing for Profit.)

What if you raised your conversion rate from 20% to 22%? (By the way, that’s converting 4 out of the 160 people that didn’t convert before.) Now, instead of 40 people a day, you have 44 paying customers. Over 30 days that equals $66,000 in sales, or an extra $3,000 in profit.

What if you also raised the average ticket just 2% to $51? Now you have 44 people x $51 x 30 days = $67,320 in sales, or $3,660 in extra profit.

Wait. Did I just show you the ROI for The Ultimate Selling Workshop? Maybe I should add in a few other benefits.

Unlike most advertising that ends when the season ends, Sales Training keeps creating results long after the season ends. Your staff will learn new skills that they will use the rest of their lives. You’ll see your culture change for the better as your staff focuses more on relationship-building, not only with your customers, but with each other. They’ll also be more intrinsically motivated because you’ll be offering them Mastery and Purpose, two of the three elements (along with Autonomy) that Daniel H. Pink, in his book DRIVE, says motivates people to do their best.

Better Sales Training also leads to happier, more satisfied customers which leads to more Repeat business as your happy customers want to come back more often and Referral business as those happy customers tell all their friends about you. Yes, you can actually “buy” word-of-mouth by teaching your team to be better at selling. It is the gift that keeps on giving.

Here’s one last nugget for you to chew on …

If your customer service is substandard—and let’s face it, a lot more stores have lower levels of service than they’re willing to admit—then just increasing traffic through advertising will only help speed up your demise as more and more people will talk about you in a negative way. Shore up your Customer Service first. Teach your staff how to build relationships, how to surprise and delight, how to convert more of your traffic into paying customers, and how to make your customers happier. Then you’ll have all the money you need to attract more people through the door.

The ROI is there.

-Phil Wrzesinski
www.PhilsForum.com

PS If your business is going to do $60,000 or more this December, The Ultimate Selling Workshop is a really good deal for you. In fact, the higher your traffic count, the better the investment becomes. I’ve shown you how this pays for itself and then some with just a modest growth of 2-2.5% in conversions and average ticket. Now do that math over the whole year to see the true benefit.

PPS Yes, you can download the FREE eBooks on Selling that I’ve posted and you can read my blogs to do this yourself. You’ll save the $2,000 you would have spent on me. You’ll instead spend it on time and energy planning your own trainings and extrapolating all those idea to your industry. Or you can hire me and not only will I do all that work for you, there is something about bringing in an outside expert that gets your staff fired up even more. They might love you, but they’ve heard you speak before. I know when I brought in new people to my meetings the staff perked up and listened even better. The introductory price ends at midnight September 30th. Let’s make this your best December ever and kick start 2019 all at once.

Price is the Default – Change Your Settings

Do you feel beat up over price? Does the business news turn your stomach into knots as you read about department stores like Younker’s going out of business and Sears and Macy’s doing another round of closures? Does it make you cringe every time you hear that Dollar General has opened a new store? Do you want to curl up in the fetal position every time Amazon has a Prime Day?

The retail economists look at all that news and keep coming to the same conclusion …

Price drives all retail.

They are missing the true picture. Price is not the driver.

In the absence of everything else, Price is the Default.

At 3:01am EDST Apple opened up pre-orders of their new lineup of iPhones they introduced two days earlier. These phones cost more than the computer I use to write this blog. Yet the early adopters were up and ordering their new phones at full retail prices.

Apple gets what so many retailer do not. There are tons of customers out there willing to shop for some reason other than price. The reason they don’t is that too many stores have given up on giving them something else.

I just read a report that department stores, long mired in a slump, are spending more on television ads this coming fall. It also talked about their other strategies to turn their ships around that included supply chain and inventory management improvements.

Nowhere in the article did it say anything about investing in employees and employee training. Nowhere were the words (albeit overused) Customer Service, Customer Experience, or Sales Training. Nowhere was there a discussion of spending more to surprise and delight customers. The article went on to say that modest growth based on the already growing consumer spending in the US was about the best they could hope for.

Do you know why the traditional department stores are struggling? They have cut their staff and their training back so far that they are just over-priced versions of their competitors. Target, TJ Maxx, Marshall’s, and other stores like them now have pretty much all the same stuff with the exact same levels of non-existent service as the traditional department stores, but at lower prices.

According to the same article about their TV spending, the only department store mentioned that has a chance of truly thriving is Nordstrom’s. Yeah, the only store still focused on customer service.

There was a survey done by National Retailer Federation during the Great Recession. When asked what would drive people’s decisions where to shop, 41% said “deals and discounts” and another 12% said “everyday low pricing.” That only adds up to 53% of the population. Another 47%—almost half—said something other than price would drive them during a time where money was tight.

Today’s economy isn’t that tight. Although price has become default for more and more customers—mainly because of the lack of service out there—there are still well over 40% of the population that would choose a store for reasons other than price … if they were given that option.

That’s why I am pushing The Ultimate Selling Workshop so hard this fall. You could spend the $2,000 on advertising and maybe drive in a few more shoppers this season, especially if your prices are sharp enough. Or you could up the game of your sales staff, increase average tickets, increase loyalty (without just giving bounceback coupons or discounts), increase word-of-mouth advertising, increase repeat business, and increase referral business not only this season, but going forward into 2019.

Your holiday ads end with the holidays but Sales Training is the gift that keeps on giving.

Millennials are more open to shopping local than any generation before them. They also shop completely differently than any generation before them. Reaching them through advertising and marketing is only half the problem. You also have to know how to sell to them. You’ll learn how in The Ultimate Selling Workshop.

Don’t be a Default retailer. Change your settings to Surprise and Delight. There are a lot of customers who would choose you if given the chance. Call or email me today.

-Phil Wrzesinski
www.PhilsForum.com

PS Last year over 100 million people went to Toys R Us even though Walmart had consistently lower prices and Amazon had a much larger selection. Those 100 million customers went for some other reason. If they can draw that kind of business by offering a better “experience,” you have the opportunity to draw some amazing crowds, considering I am sure you can offer an even better experience than any chain store out there. (By the way, just for clarification, Toys R Us went under because of heavy debt load caused by their greedy venture capitalist owners borrowing money for themselves against the company. They were profitable, but not profitable enough to pay the massive interest on their debt.)

PPS If you aren’t convinced yet of the Value of The Ultimate Selling Workshop, next week we’ll do the math.