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.

October 14, 2015

Dumb Logic – Don’t Fall for It

At a recent presentation I was told that more money is being spent on mobile advertising than on PC advertising. No source was given so I cannot verify the truth of that statement. Then again, it doesn’t matter.

The presenter was using that info to tell an audience of small businesses that since the big boys are spending on mobile, we should, too. “They know what they’re doing.”

Yeah, right. (See “New Coke”, see “Creepy Burger King Guy”, see whatever company that had all the monkeys, see pretty much 75% of all Super Bowl commercials…)

If your advertising salesperson or consultant or agency ever tells you to do something because all the major giant retailers are doing it, you need to fire them immediately.

YOU’RE NOT A MAJOR CHAIN

First, you don’t have the budget of those big boys. They spend money like no tomorrow hoping something will catch fire. They spend money in every medium out there. They are not discriminate in their spending. They chase every new opportunity like it is a Leprechaun with a pot of gold. They throw time and effort and resources at each one (and still get a lot of it wrong). You don’t have the same resources.

Second, what works for them isn’t necessarily the right thing for you and vice versa. Take the Mobile App for one. One of the most popular things to do with mobile is send your customers a coupon. We’ve already discussed the dangers of coupons. Even more bewildering to me is the coupon that gets sent after they have entered your store. Really? If they’ve already entered your store, you don’t need more marketing. You won. A coupon at that moment is simply you paying someone else to give away more of your margin. Once the customer is in the store, you wow them with your well-trained sales team.

YOU CAN STILL WIN AT MARKETING

Don’t take your cue from major chain retailers. Take your cue from your best customers. Chances are they aren’t in your store because of coupons and discounts and deals and silly ads that made them laugh. They are in your store because of the relationship you’ve fostered. They are in your store because of the fun they have when they visit. They are in your store because you make them feel like they belong.

You still need to do marketing. You just have to do it the right way for you. This will help…

Go to the Free Resources page on my website.
Start at the top of the column titled “Improve Your Marketing”.
Download each PDF (they’re FREE).
Read them.
Write down your questions.
Email me your questions.

I’ll help you either through this blog or directly by email to get your marketing on track in a way that will work for you.

-Phil Wrzesinski
www.PhilsForum.com

PS You don’t see a cost attached to my offer up above. There isn’t one. That isn’t to say that we won’t enter some kind of consulting agreement down the road (if you really need that kind of hand-holding). But answering your questions and helping you get on the right track is always free.

PPS Why FREE? Why do I give away so much stuff? Simple. I want you to succeed. Period. I don’t want barriers between you and your success. I am not doing this for my own gain. I’m doing it for yours. Is there some hidden ulterior motive? Yes. I like to do presentations for groups of retailers. I charge money for those. The more you use and share my stuff, the more likely your organization will want to hire me to speak. But most importantly, for anyone to hire me, first you have to succeed.

October 13, 2015

How to Make Networking Events Actually Pay Off

I was speaking about the power of networking to a group of baby product sellers. One of them pointed out that he had never seen a pregnant person at a networking event.

That pretty much sums up what most people get wrong about networking.

Raise your hand if you know someone who is pregnant…

That’s a lot of hands and a lot of people to whom he could have spoken and gotten results.

A BUYER IN A SEA OF SELLERS

A friend of mine was doing a keynote address prior to a networking event. He asked everyone who was hoping to sell something that night to raise their hands. Every hand in the room went up immediately.

He then asked who was there to buy… crickets…

He then delivered the most powerful message, “The first one of you who switches sides and becomes a ‘buyer’ will have the most successful evening.”

Anyone who has ever told you networking is a waste of time made this mistake. He or she went to an event hoping to find an end user and make a sale. Networking is about making connections, not making sales.

The first person who becomes a buyer instead of a seller is the one who will have the fullest dance card and make the most meaningful connections.

MAKING CONNECTIONS THAT COUNT

When I attend a networking event, my goal is to meet two new people and truly understand what they do. One of the best networkers I know keeps a stack of blank cards on her desk. Every morning she takes out the business cards she farmed at the previous night’s event and sends each person a handwritten card acknowledging their meeting.

Once I make a connection, I scour my own contacts to see if there is someone I know who might need their services. If I can refer someone to them, it solidifies the connection. It also creates a sense of reciprocity and they will look for a chance to send someone my way.

NETWORKING SUCCESS

Follow this simple plan and you’ll grow your network by leaps and bounds:

Meet two people and meet them well. Meet too many and you don’t have the time to get to know them enough to recommend them to your contacts.
Ask more than you answer. The best way to get to know people is to ask and listen. Only talk about yourself when directly asked.
Send a handwritten card the following day to the people you meet.
Refer someone to them for their services.

Growing your network raises awareness of your business. Growing your network gets you referral business. Growing your network helps you find new resources for your business. Growing your network introduces you to people who can help you grow personally and professionally.

Networking is a powerful tool for your business when you do it right. Now you know how to do it right. Put this in your retail toolbox right now.

-Phil Wrzesinski
www.PhilsForum.com

PS I’m not good at handwritten cards, but I am a sucker when I get one. My immediate reaction is to think of the person who sent it as someone with their act together, with whom I hope to do business. That’s the reaction you’ll get when you force yourself into this habit.

PPS When I quit trying to be a seller, I also found I have a lot more fun at networking events. Everyone wants to talk to me. Everyone wants to meet with me. Plus, I meet a lot of interesting and fascinating people. It is amazing what a difference listening instead of talking can make.

October 12, 2015

You Aren’t as Well Known as You Think

Back in 2005 we hired a Statistics Class at a local university to do a study for us. They determined how to get a random sample size that would accurately reflect Jackson County and then called people to ask them one simple task…

“Name all the places you can think of in Jackson County that sell toys.”

The students would write down every store mentioned. Then they would say, “You mentioned…” and repeat the list back to the person. They would then ask, “Can you think of any more?” and repeat this until the person had thought of everyone.

Here are the results of how often the top six stores were mentioned.

Toys R Us 84.1%
Meijer 82.3%
Wal-Mart 69.5%
Toy House 64.8%
K-Mart 59.1%
Target 45.2%

Interesting that 35% of the population of Jackson County could not think of us even though we had been here 56 years at the time of the survey.

More interesting was that Wal-Mart had only just opened a few months before this survey was done. Was that 69.5% too high or too low seeing that they had just received about four months of wall-to-wall news coverage prior to opening?

Even more interesting was that less than half of our population thought of Target as a place that sold toys even though Target, nationally, is only behind Wal-Mart and Toys R Us in overall toy sales.

Most interesting of all was that not one single store broke the 90% (even with the 4% margin of error).

NOT EVERYONE KNOWS YOU’RE THERE

One takeaway from all this is the reminder that you have to keep marketing and advertising your business. You are not the Field of Dreams. People will not come. Mainly because they don’t even know you’re there.

35% of my hometown did not know that an award-winning store with one of the largest selection of toys in America was located right downtown in a brightly colored building for over 50 years.

YOU CAN’T REACH EVERYONE

Another takeaway is that no matter how hard you try, there will still be people who haven’t heard of you.

35% of my hometown could not name the toy store that runs radio ads every day, gets mentioned on TV every day, makes monthly appearances on radio and TV, is all over social media, and gets coverage in the local newspaper all the time.

35% of my hometown could not name the toy store whose logo is on the shirt of the guy who attends networking events, teaches classes at the local hospital and even wears his colors on his jacket all winter long.

Heck, even 15% couldn’t name Toys R Us despite them spending billions on advertising.

You could sum it up simply as…

Always be farming for more customers
Not every seed planted will sprout

-Phil Wrzesinski
www.PhilsForum.com

PS This post took a turn after I started it. It was supposed to be about the importance of Networking, especially as a low-cost marketing method. I’ll get to that soon enough. In the meantime, download my FREE eBook Main Street Marketing on a Shoestring Budget for six other ways you can get the word out about your business at little or no cost.

PPS The cool thing about the survey was that I quickly knew what the people of Jackson thought when they needed to buy toys. I knew where I stood and where everyone else in the market stood, too. That is some powerful information.

October 9, 2015

Buying Too Much or Buying Too Little for the Holidays

Let’s face the truth. Forecasting for your busy season is the single hardest decision you make if you are an independent retailer. As much as we all would like our purchasing to be just right, every year we seem to buy either too much or too little.

Since you’re likely to err on one side or the other, you ought to look at those options more closely and base your strategy on which option will work better for you. (For this post we will look at Christmas, but you can extrapolate that to spring and summer-based businesses just as easily.)

BUYING TOO MUCH

Buying too much for December means you have more products but less cash in January.

The Upside: You had plenty of inventory to maximize your holiday sales. Your shelves are still stocked. You don’t look like you’re going out of business. You’re better prepared to capture the post-holiday-have-to-use-my-gift-card crowd and delight them with your merchandise. You’re better prepared to increase average ticket and items per transaction because you have more product to up-sell and add-on.

The Downside: Your cash is sitting on the shelves tied up in the products you couldn’t move. You’re less capable of taking advantage of any post-season deals or early buys. You can potentially get behind on your bills and dig a hole that is really hard to get out of during the slower months of the year, which puts you into a downward cash flow spiral for the rest of the next year.

When to Choose This Strategy: When your cash flow is already strong, you should lean towards over-buying. The potential for maximizing sales (and profits) during your busiest season should be your main focus for this strategy. (A 10% increase in December sales is far more beneficial than a 10% increase in January.) If you have a strong birthday gift business or a strong gift card business, there is a lot to be said for having plenty of products in stock in January, too.

BUYING TOO LITTLE

Buying too little is fraught with peril. But if the cash flow isn’t there, then buyer beware.

The Upside: Cash. Maybe not the maximum cash you hoped to get from holiday sales, but at least there is cash in the bank instead of bills to be paid. Good cash flow will keep you in business far longer than strong profits (see Amazon). One method for improving cash flow is tightening up the inventory. If you can manage expenses to match lower sales, you can maximize your cash. Then you can use that cash to take advantage of any post-holiday deals or early buys to restock your store (potentially with new and fresh merchandise).

The Downside: You miss out on some holiday sales. Your store looks barren post-holiday. People wonder if you’re going out of business. Perception can be damning. If you’re spending most of the holiday season saying, “No, we don’t have that,” you are training customers to go elsewhere. If your store looks empty on January 2nd, you might lose some customers then, too.

When to Choose This Strategy: When your cash flow is extremely tight. The downsides here can be crippling, but so can a lack of cash. If your cash situation is not good, employ this strategy to get to a better place. Then focus on controlling expenses and inventory to improve that cash flow for next year. If you choose this strategy year after year, you could be doing long-term damage to your brand, setting yourself up as the store that doesn’t have it.

A LITTLE OF BOTH

As much as we would like to always buy it just right, that rarely happens. Unforeseen circumstances cause us to miss the mark most every year. If you’re still not sure which way to lean, here are ways to do both…

Too Much: Buy too much of the “Must-Haves” – the items people ask for by name that sell all year long. Buy too much of the best post-season sellers. Identify which items you do best with after the holidays. Look at price-points and categories. You need products for those gift-card holders.

Too Little: Buy too little of seasonal products. Better to run out than be stuck. Yeah you might lose a sale or two, but better to have cash and not product on stuff you know you won’t sell in January. Buy too little of the marginal categories. No one is eating buckets full of caviar every day. But they are buying bread and milk and eggs (French Toast?) all year long. Buy too little of the big-ticket items. Big Splash items are great for Christmas, but rarely sell as well outside of the season. If you need to trim the budget, that’s a good place to start.

You’re going to miss the mark on your buying. That’s the only given. Which direction you err, however, is up to you. Choose wisely.

-Phil Wrzesinski
www.PhilsForum.com

PS Yes, I use a lot of tools for forecasting including previous sales history, industry trends, data from peers, suggestions from reps, gut feel, etc. Unfortunately, every market is hyper-local and only you will truly know what will be hot in your market. Make your best guess and do as Roy H. Williams says… “Pull the trigger and ride the bullet.”

PPS Get off the weatherman’s back. Chances are you are wrong with your forecasts as often as he or she is. But just like the weatherman, keep updating and adjusting every time you get new data.

October 7, 2015

Changing Your Thinking on Coupons

I’m not a fan of coupons. There. I said it.

If you’ve downloaded my free eBook Main Street Marketing on a Shoestring Budget, you know I prefer giving away gift certificates with no strings attached – instead of coupons – to attract new customers.

I also fear that using coupons too much trains your customers to wait for the next coupon before they shop.

Lastly, I believe coupons are more geared toward the Transactional Customer than the Relational Customer (the latter whom should be your primary target in your advertising and marketing).

With all that said, coupons done right can be a valuable part of your tool box.

DOING COUPONS THE RIGHT WAY

As I told you yesterday, the real key for coupons is to make them Rare and Special. Rare so that people jump on the deal when it happens and aren’t trained to wait for the next one to make their next purchase. Special so that the customer isn’t anticipating the next coupon and is more likely to act on the current one.

Rare and Special will increase your ROI because they will get more people to act on the current coupon. Your other big issue is delivery. How do you get those coupons into the right hands?

Newspaper Inserts – this is the preferred method of the big bog stores because they have the economy of scale for printing and delivering to get the best rates, and they don’t care who gets their coupons
Direct Mail – you can buy a list (and hope it is okay) or build your own. One takes money and has little return. One takes time but has a better return.
Postal Zip Codes – you can target zip codes instead of direct addresses for a little less per piece than direct mail
Email – easily the cheapest, easiest to share, but also most easily duplicated

Let’s look at that last one a little more closely…

KNOW YOUR GOAL

If your goal is to limit the coupon to “one per customer”, email can be tricky because it is easy for a customer to print out multiple copies and use them herself or give them to her friends. That’s the big question I always get about sending coupons via email. “But how will I track if a customer uses more than one?”

I always ask back, “Does it matter if a customer uses more than one?”

Your goal for any coupon should be to Drive Traffic and Increase Sales. That is what coupons do best. Where is the harm if a customer shares your coupon with others? Where is the harm if the customer makes multiple trips using multiple coupons? Don’t both of those Drive Traffic and Increase Sales?

If your goal is to Increase Profits, then a coupon isn’t your friend in the first place. Coupons won’t help your profit margin (I’ll show you the math later why “lower your price and make it up in volume” doesn’t really work), but they can increase your traffic and cash flow and give your sales staff the chance to increase average ticket sizes and items per transaction.

CHANGE YOUR THINKING

If you send out a coupon via email, you have to consider two things…

It will be shared
It will be printed/used multiple times

If your goal is to Drive Traffic and Increase Sales, sharing and printing multiple copies are both GOOD things. In fact you want to encourage that.

Encourage your email list peeps to share the coupon with as many people as they can. It increases your reach to people who might not yet know you and it gets your fans to promote your business for you. In fact, take it a step further and encourage social media sharing, too. Your goal should be to get the coupon to as many people as possible as cheaply as possible. That’s how to get the best ROI.

Encourage your email list peeps to use the coupon early and often, too. Every trip they make means another chance to deepen your relationship with them and turn them into fans. (If you sell a commodity item like food that people are buying weekly, simply put a tighter time limit on the coupon to keep the coupon Rare and Special). The reality is that you won’t get that many multiple trips. Unless your offer is incredibly compelling and you’re giving away half the store, the likelihood that a customer is going to shop your store twice in one week is fairly low to begin with.

Email is the cheapest way to deliver coupons. It also is one of the most powerful ways to get your fan base to help you reach more and more people. You just have to change your thinking from one of scarcity (“limit one per…”) to generosity (“use it early and often and share it with the world…”).

-Phil Wrzesinski
www.PhilsForum.com

PS My final tip is to keep the coupon as simple as possible with as few rules and exceptions as possible. The easier it is to use, the happier your customers will be.

October 6, 2015

Coupons Aren’t Bad (When They are Rare and Special)

Back in the 90’s we started a direct mail newsletter for Toy House. We sent out a mailing every other month.

Conventional Wisdom at the time said we needed to include a coupon with each mailing to help us “track the effectiveness” of the mailing. So we included a $20 off a $100 purchase coupon in each mailing.

Two things happened…

First, we never really were able to “track the effectiveness” of the newsletter, only the effectiveness of the coupon (which grew considerably in November, but waned in other months). It was hard to say whether the other articles were even read, let alone acted upon. In theory, we were told the coupon would mean that people would at least read the newsletter without throwing it away (although today I’m not sure if that was the case).

Second, we were training customers to save their big purchases until another coupon arrived. I would be showing a customer a new car seat and the first question was always, “When does your next coupon come out?”

Bed Bath and Beyond just announced that their coupon program was backfiring and causing them to lose profit as people just waited for the next coupon before they shopped. We learned that from sending out six a year. They send out one or more a week.

BEING RARE

We decided over a decade ago that sending out multiple coupons wasn’t the answer. We shifted the direct mail newsletter to email newsletters (no coupon) and shifted the coupon to a postcard mailed only in November. Our response to that direct mail piece doubled the ROI of any previous mailings because it was Rare and Special.

BEING SPECIAL

Even with that shift to a once-a-year coupon, we have seen our annual mailing become less and less effective over the years. Although it is Rare, it is no longer Special. It is a foregone conclusion.

Until this year.

We’ll be doing a different type of coupon this year for two reasons.

First, we need to make it Special again.
Second, we want to shift away from the expenses of direct mail, so it will be an email coupon.

We have already begun marketing to our customers the importance of being signed up to get our emails. We have already begun prepping them that something new is going to happen this year. We have already begun the buzz and excitement as our customers are wondering what will happen.

You can use coupons in your marketing tool box. Just remember that to be most effective, they have to be both Rare and Special.

-Phil Wrzesinski
www.PhilsForum.com

PS I’ll tell you how we are going to manage an email coupon in an upcoming post. Make sure you and your fellow store owners have signed up to get this blog in your inbox.

October 5, 2015

The Need to Keep Raising the Bar

Bed Bath and Beyond just announced that their coupon strategy is backfiring and that their profits are hurting because everyone is waiting for the coupon to do their shopping.

Umm… yeah. When you send the coupon out every week and never enforce the exclusions or expiration date, you pretty much send out the message that everything in the store is always 20% off. Anyone paying full price in that store is either lazy or an idiot.

What used to be special is now considered the norm.

BBB faces a dilemma. They either have to drop the coupon program and wean customers off the 20% discount (a daunting and dangerous task), or raise the bar on the coupon program to make it special again.

They said in the article, “Bed Bath and Beyond says it plans to draw in more customers through marketing.”

Okay, but how? A bigger, deeper coupon every so often? (further eroding profits) or something else?

THE LESSON

If you are doing something special for your customers, eventually it goes from special to expected and the marketing pull from it will taper off. If it is a discount, that discount will have to grow over time to remain equally effective.

If you consistently go above and beyond your customers’ expectations, eventually they will come to expect it, meaning you’ll have to raise the bar even farther.

As you choose your marketing strategy, remember that the special things you do today will become the norm tomorrow. Make sure you have room to raise the bar when the effects start tapering off.

-Phil Wrzesinski
www.PhilsForum.com

PS Surprise and Delight are the best tools for attracting new customers because you’ll never run out of new and fun and inexpensive ways to surprise and delight your customers. Check out these two Free Resources to get some ideas of things you can do to raise the bar and attract more customers – Generating Word of Mouth and Customer Service: From Weak to WOW!. I doubt either of these will be strategies employed by BBB (although they should).

October 2, 2015

From Your Customer’s Point of View

Legend has it the day before Disney Land opened, Walt and crew arrived to do a walk-through. Upon entering the gates, Walt immediately kneeled down at the front of the park. His entourage was curious as he begged them to kneel with him. Once everyone was kneeling, he explained that this was the height of the customer he was most concerned about pleasing and he wanted to see the park from their perspective.

Do you look at your business from your customer’s point of view?

I took a trip last weekend to the Upper Peninsula in Michigan. Took my son to see Michigan Technological University and my family to see Pictured Rocks National Lakeshore. I snapped this picture of one of the lookout platforms.

Viewing window for little visitors at the lookout platform for Miner’s Castle at Pictured Rocks National Lakeshore

See the window built into the wall of the platform? They got this one right. This family-friendly park made sure the entire family had a view of Miner’s Castle and Lake Superior. No dangerous lifting of young children over the safety of the wall. No little ones complaining that they couldn’t see. No unhappy faces feeling forgotten or ignored.

Little things like that window make a huge difference in how someone views and remembers their experience.

Walt knew this. He built his park and empire by looking at how his best, most important customers would experience it. He made sure the people he wanted to impress the most would be impressed. He looked at everything through their eyes.

Have you done the same?

Have you asked these questions?

Who are my best customers?
What is their minimum expectation when they visit my store?
How can I design my store and its policies to make their experience even better?
How can I surprise and delight them even more?

I’ll bet Walt asked these questions. You should, too.

-Phil Wrzesinski
www.PhilsForum.com

PS One easy way to do this is to look at every single interaction your customer has with your store and ask just these two questions…

What does the customer expect to happen here?
What can I do that will surprise and delight them here?

It is a perspective that changes everything (for the better).