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Book Excerpt: Most Ads Suck – Chapter 1

Foreword

Chapter 1 – Most Ads Suck

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

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

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

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

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

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

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

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

Maybe there are too many ads.

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

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

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

You want to shout it from the rooftop. You’ve solved the advertising equation. The first half, at least. You start thinking how fun it would be to meet with the advertising executives of every major company out there and tell them to quit spending all their money on Super Bowl ads and instead spend that money to make the rest of their ads better.

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

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

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

You’re about to start making a list of the worst offenders, the ones whose offices you’ll visit first to tell them about your new revelation, when it dawns on you. You know what they shouldn’t be doing.

But if they ask you how to make their ads more interesting and memorable and effective, you don’t know where to start.

Hmmm …

-Phil Wrzesinski
www.PhilsForum.com

PS Chapter 2 – It’s the Message, Not the Media

Book Excerpt: Most Ads Suck – The Foreword

Foreword

Who will use this book? Anyone who writes content to persuade including web content, ad copy, magazine articles, emails and newsletters, and even speeches. If you write to persuade, you’ll find this book relevant and useful. If you write to connect, you’ll find this book relevant and useful. If you write to spark change, you’ll find this book relevant and useful.

The character who leads you through this book is You. You’re like me in your curiosity and desire to learn. That’s why you’re reading this in the first place. You lead yourself through the first eight chapters discovering new ideas and revelations as you go. I will take over in Chapter 9 to show you how the principles you learn in this book apply to all different types of businesses, including yours.

You will still need to bring a few tools to the table to make this book work best for you. Most importantly, you have to know your Core Values. For the purpose of this book, you will have the values of Freedom, Curiosity, Diligence, and Education. You will use your own Curiosity to explore the concepts of how to make your advertising more effective. You will use Diligence to do the research you need to give yourself the tools (Education) to write your own content in your own words. That will give you the Freedom to succeed in your business without being led blindly down fruitless paths to more boring, useless, ineffective advertising. My own Core Values are Having Fun, Helping Others, Education, and Nostalgia. See if you can spot them throughout this book.

I first presented this information at the Jackson Retail Success Academy™ back in 2011. Fourteen frying pans later, it is an audience favorite because the applications are endless. You will find yourself using the principles in this book for far more than advertising. You’ll see the influence of this book in all your writings, presentations, sales calls, and trainings. I have a ten-minute TED-style talk centered around how Chapter 4 applies to all levels of communication.

I want you to share this book. I want you to dog-ear some pages, underline some passages, write your own notes in the margins. Then pass this book along to your friends in a similar position. I expect you to take exceptions to different principles based on your own experiences. That’s why I call them principles instead of rules. (And also because you’re the kind of person who hates the word “rules” and would immediately try to find ways to break them.)

I especially expect or even encourage you to find fault with many of the sample ads in the back of the book. That’s okay. As Roy H. Williams taught me many years ago, an advertisement is like a magnet. Its ability to attract is in exact proportion to its ability to repel. If you feel any emotion at all towards the ad samples, I will have done my job. If you really don’t like them, I challenge you to write better ones. Send them to me. I would love to read them.

-Phil Wrzesinski
www.PhilsForum.com

PS Tomorrow we begin with Chapter 1 – Most Ads Suck

Launching a New Book on Advertising

Three years ago, right after closing down Toy House, I wrote my fourth book titled, “Most Ads Suck (But Yours Won’t)”. It was going to be the second signature book to augment my speaking career. (My other two books were written for the toy industry and for expectant daddies.)

My plan was to print 1,000 copies like I had with my previous books, and sell them from my website and the back of the room after speaking gigs. I did that quite successfully with Hiring and the Potter’s Wheel.

Unfortunately, with the store closed and speaking gigs not coming in as quickly as I hoped, I only raised enough money to get the book edited, not printed. I kept saying to myself, “When I get the money, I’ll print it.” I’ve even had it listed on my website for almost three years waiting for that day.

I am tired of sitting on this book.

Since this book will more positively impact your bank account than mine, I am going to publish it as a PDF and do with it what I do with most of my best material …

I am going to give it away FREE!

Over the next few weeks I will publish each chapter right here in this blog. At the end I will upload the entire book as a 40-page PDF on the Free Resources page of my website.

Whether you use traditional forms of advertising like print, radio, TV, or billboard, or you use digital approaches such as social media and email, the contents of this book will help you create the messages that get seen and heard, get remembered, and get acted upon.

If you write to persuade, this book is for you.

There is a Foreword. There are eight short Chapters teaching you six principles. There is one really long Chapter of Samples at the end to show you how to use those principles. (I might split that last chapter up over several posts. We’ll see how it goes.)

Check your inbox. We’ll start with the Foreword tomorrow and go from there.

-Phil Wrzesinski
www.PhilsForum.com

PS The back cover of the book was going to ask you these questions …

  • Have you ever gone to a Super Bowl Party just to watch the ads?
  • Have you ever wondered why you remember some ads (but not the companies who ran them)?
  • Have you ever run an ad based on a template the ad salesperson uses for all his clients?
  • Have you ever felt like John Wanamaker and didn’t know which ads weren’t working?
  • Do you write content to persuade?

This book is for you!

Great Video on Advertising During a Crisis

Last night, while hunkered down watching TV, I was amazed at how quickly some brands have reacted to the current situation and revised their ads. It was refreshing.

If you are doing any mass advertising (radio, TV, billboards, etc.), I’d like to suggest to you two things:

  1. Don’t stop or pullback your ads. The businesses who keep their name out there during downturns tend to be the ones who recover fastest when things get better.
  2. Do change your message. You need to be sensitive to what is happening around you.

Here is a great video from the Wizard of Ads on how to change that message during these times.

Hopefully you have the 18 minutes to spare. It will be worth your time.

Wishing you all the best!

-Phil Wrzesinski
www.PhilsForum.com

PS Some of the best innovations come out of crisis. Uber and Airbnb both spawned in the housing crisis of 2008-09. I am seeing several retailers become creative and innovative during these last few weeks. I hope to share some of their stories with you later.

Why Bud Light Had the Best Ad Last Sunday

Hi, my name is Phil and I’m a Detroit Lions fan. It was easy being a Lions fan when I was working retail. Every season we would buy into the hype, get all excited, and then somewhere down the line get our hopes dashed by catch that wasn’t a catch, the pass interference call that wasn’t called (sorry New Orleans, it happened to us first), or the simple ineptitude of a team that couldn’t keep the best running back ever motivated enough to keep playing. It was always something different, but something always happened.

The good years were when it happened before the annual Thanksgiving Day game. Then I could focus on retail.

The bad years were when it happened later and I would get the heart-crushing news from a customer while working a Sunday afternoon in the store.

As a lifelong Lions fan, we are granted the right to pick another NFL team to root for. As a University of Michigan graduate, I chose the New England Patriots and Tom Brady. Y’all can hate me for that, but you can’t argue the numbers.

I tell you this to let you know I had more than a passing interest in the game as well as the ads last Sunday. Some of you who tuned in just for the ads were likely sorely disappointed at both the game and the ads. I know the ads let me down more than ever.

Still from Bud Light’s 2019 Super Bowl ad

In fact, there was only one ad that truly stood out to me for being effective. It was the Bud Light Corn Syrup Delivery Ad where the king took a large barrel of corn syrup back to Miller Lite and Coors Light since Bud Light doesn’t use corn syrup and the other two do.

The ad wins for several reasons:

  • They made only one point. “We don’t use corn syrup but our competitors do.”
  • The humor was tied to the message. Humor is good in an ad because getting people to “feel” something is good. But too often the humor is gratuitous and doesn’t connect you to the true message. (The mint fox ad left a bad taste in my mouth both literally and figuratively and now I have no recollection what the ad was even about.)
  • They spoke to their tribe. The ad gave all the Bud Light drinkers one more reason to feel good about drinking Bud Light.
  • They got people to complain. Remember, your ad’s ability to attract is equal to its ability to repel. This ad repelled a lot of people including Miller Lite who felt compelled to take out a full page ad in the NY Times defending their use of corn syrup, and the corn growers of America who also complained. Those two actions alone testify to the power of that ad.

You can debate all you want about whether using corn syrup is good, bad, or indifferent. Bud Light recognized a clear difference between its ingredients and its competitors’ ingredients and found a fun, funny, and pointed way to get that message across.

There is one more thing Bud Light did right …

They told a story.

No matter what the year, the ads that get talked about the most all have one thing in common. They tell a story. Stories sell because stories make us feel (speak to the heart) and stories are easier to remember.

One of my sales reps for HABA USA emailed me to talk about the “story” for selling HABA this year. She knows that the better the story, the more products she will sell.

The lesson here is that when you can tell a story that makes people feel something while also getting across the one point you want people to remember, your ad is going to be more effective. Yes, you’ll get haters and complainers. Consider them a badge of honor that your ad was strong enough to get them to react.

I want to leave you with one more resource on storytelling. I ran across the following TEDx talk and was blown away. I highly encourage you set aside 17 minutes to watch it.

-Phil Wrzesinski
www.PhilsForum.com

PS Just because an ad doesn’t make you compelled to take action doesn’t mean it wasn’t an effective ad. The story just wasn’t for you. The smart advertisers have figured out they don’t need to convince masses to grow. They need to convince niches. Target your stories and your message to a very narrow audience and convince that group incredibly well. You’ll be surprised how much more effective your advertising becomes.

Your First Point of Contact

I remember the email clearly. Hit me like a ton of bricks. “Why aren’t you open later for the holidays?”

We were open later for the holidays. It just didn’t say so on our Google profile. Nor did it say so on Facebook. Nor did it say so on our own web page.

I had changed the sign on the door and the answering machine. Fifteen years ago that would have been enough. Today that’s the kiss of death.

If your website, Google Profile, and Facebook Pages aren’t all up-to-date with accurate information, you’re killing sales before they even happen.

It isn’t a generational thing, either. I’m 52 and I use Google Maps on my phone to check a store’s hours all the time. I use it to find their web page, too.

If your web page isn’t optimized for mobile, not only will Google bury you in the SEO game, these old eyes won’t even bother to look around. Unless I’ve already decided I want to visit you, I’m moving on to option #2.

After getting that email and missing out on a potential big sale because of it, I added “Change Hours Online” to my Thanksgiving Eve and Christmas Eve checklists. (You don’t have a “changing of the season” checklist? Dude, we need to talk.) 

I also started looking at those three online sources more critically.

  • Are they easy to navigate?
  • Are they answering the questions people who stumble upon them are asking?
  • Are they accurate?
  • Are they written for the customer, not some corporate lingo or legalese mumbo-jumbo?

Those sources are your customer’s first point of contact. It is the first impression people get of your business. It is the first point at which they judge your ability to solve their problems and take care of their needs.

They are either your worst or your best salespeople. 

They either build or destroy the trust you are trying to win from your customers. Yet far too often we neglect to look at them in that way.

I gave you Five Rules of Websites last April. Take those same rules and apply them to your Google Profile and your Facebook Page. Your digital profile is more important than ever before. Don’t let it kill sales before they happen.

(For those of you who don’t like to click links, the rules are:

  1. You don’t have to have eCommerce on your website to be successful.
  2. Every single page must have a clear and distinct purpose.
  3. Your website is your silent salesperson. Make it your best.
  4. Your hours, phone number, and address have to be prominent and easy to find.
  5. It has to be compatible for mobile platforms.

For an explanation of each rule, click and read. It will be worth it.)

-Phil Wrzesinski
www.PhilsForum.com

PS If you have special circumstances for your hours such as certain times by appointment only, make sure those are clear as well. You actually do sometimes get a second chance to make a first impression, but it is incredibly hard to overcome the first first impression.

PPS The sixth rule is simply – Make sure your Core Values are evident on every page.

Self-Diagnosis Tool #5 – Marketing & Advertising

My favorite class segment in the Jackson Retail Success Academy was always the Marketing and Advertising Segment. One portion of that segment was dedicated to Media, Myths, and Money. We would discuss all the various forms of media and how/when to use them properly. We also discussed several myths about advertising. One of the biggest myths was this …

Advertising will fix your business.

No it won’t.

If your customer service sucks, advertising will only draw in more people to find that out and tell their friends to beware.

If your product selection sucks, advertising will only find you more disappointed and empty-handed customers.

If your market isn’t big enough to support your business, advertising will only drain your coffers faster, and hasten your demise.

That is why, of all the Diagnosis Tools, this one is last.

Abandoned Boat on the Pond by the House

Think of your business like a boat. Your Core Values are the hull and body of the boat. Your Market Potential is the size of the body of water. Customer Service is the engine or sail of the boat. Inventory is the tiller or wheel that controls your direction. Advertising is the wind in the sails or the fuel in the engine. Would you fill up the tank if you knew you had a leak, didn’t have a working tiller, or had an engine not working? Of course not.

You need to make sure your boat is rock solid and ready to go before you launch. (Check out Tool #1 Core Values, Tool #2 Market Potential, Tool #3 Customer Service, and Tool #4 Inventory Management if you think your boat has even the tiniest of leaks.)

Advertising will not fix your business, it will only speed up what was going to happen anyway. If your boat is leaking, advertising will just sink you faster.

DEFINE THE TERMS

First, let’s understand the difference between “Marketing” and “Advertising”. Marketing is everything you do to attract customers to your store. Advertising is a subset of Marketing. It is the paid marketing you do through a form of media.

MARKETING

Marketing includes your building, your signage, your front door, the “Open” sign on your building, the events, activities, and classes you hold inside and outside your building, the networking you do by joining clubs and being involved in your community, the free publicity you garner, etc.

One of the first steps in this self-diagnosis is to list all of the ways outside of Advertising that you are Marketing your store. For some ideas of different things you can do, check out the FREE eBook Main Street Marketing on a Shoestring Budget.

You should have a healthy list of ways you are marketing your business outside the realm of traditional advertising. Fortunately most of these ways cost more time than money. If you don’t have enough customers—the whole reason you’re marketing your business—then you should have the time.

Once you have that list, see which Core Values are evident in each activity. All of your Marketing efforts must be aligned with your Core Values to be most effective. If there is anything you are doing that doesn’t speak to your values, change it or drop it for something else.

ADVERTISING

The next thing to do is to look at your paid advertising through the same lens as your other Marketing efforts. Pull out all of the ads you ran last year. Look closely at the message you sent. Ask yourself these six questions …

  • Does it look or sound like an ad? Chances are good that it does. Did you know our brains are hard-wired to ignore advertising? Maybe you should create something that doesn’t look or sound like an ad to keep from being ignored.
  • Does it tell a story? Stories are more interesting, get people to pay attention, and are more memorable than facts and figures. Your ad needs to tell a story if you want it to work best.
  • Does it make only one point? The person seeing or hearing your ad will only remember one point at best, so only give her only one point to remember.
  • Does it speak to the heart? Emotions always trump logic. Always. What emotion does your ad invoke?
  • Does it speak to your tribe? Does it align with your Core Values? If you want to attract better customers, speak more directly to those people who share your values and ignore everyone else.
  • Does it make your customer the star? Ads about you will be ignored. Ads about your customer and what you can do to help her will gain her attention.

The message is more important than the media. Here is another big myth in Advertising …

You must reach the right people.

Nope, nope, nope, nope, nope. You can reach all the right people but if you don’t say the right thing, all is for naught. Also, everyone you reach is potentially the right person because even if they aren’t your customer, they know someone who is your customer.

It isn’t who you reach that matters. It is what you say to the people you reach.

Get the message right and everything else will follow.

(Note: to help you choose the right media for your business, go to the Advertising Media Reference Guide and check out your options.)

BUDGET

The last thing to check is your budget. How much should you spend on Marketing? Notice how I said Marketing, not Advertising? Part of your Marketing is your location. If you spend a lot in rent to be in a high-traffic area, you don’t have to advertise as much as the guy under the bridge on the wrong side of the tracks. The Cinnabon store at the airport doesn’t spend a penny on Advertising. He just bought a fan to blow that cinnamony goodness out into the terminal. That’s his Marketing Budget.

There are many formulas for calculating a budget. The one I like best came from Roy H. Williams, aka The Wizard of Ads. He suggests you take 10-12% of your Gross Sales as your “Total Exposure” budget. Then multiply that by your Percent Markup (this is different than Profit Margin – the formula looks like this Percent Markup = (Gross Sales – COGS)/COGS) to adjust for your pricing and profit. Then subtract your rent from that number to find out what you should spend on Advertising.

For many businesses, however, that leaves a budget close to zero as rent is often 10-12% of your budget.

I will tell you to push that upper limit to 15% of Gross Sales, but only if you can find that money without taking it out of Payroll. If push comes to shove, Great Customer Service is always more important than Advertising. It is what drives your boat. You don’t need as much wind to push you across the lake if you have the right sails.

-Phil Wrzesinski
www.PhilsForum.com

PS There you go … Five tools for evaluating your business to see where you need to improve as you sail into the next year. Take a critical look at all five in the proper order and you’ll find your silver bullet for success. If you don’t think you can be those critical eyes because you are too busy trying to drive the boat yourself, call me. I’ll come do an analysis of your boat using all the criteria in these five Tools and show you where the boat needs work.

The Thirty Questions to Find Your “Silver Bullet”

I got suckered in once. Long before the phrase “fake news” came into existence, back in the days when Norton and MacAfee were the only names in anti-virus protection, my computer started slowing down.

Then up popped an ad for a free diagnostic test of my computer, guaranteed to clean it up and take it to speeds the factory settings never could. I downloaded it and immediately all these warnings came flashing on the screen telling me I was infected and needed to download this fancy, official-sounding fix right away before I lost critical data.

Yeah, you can probably guess the rest.

I took the computer to a local shop who cleaned several viruses and Trojans off the hard drive and got me back to my normal, plodding, limited-by-my-service-provider-not-my-computer speeds.

We’re all looking for that quick-fix, aren’t we? That guaranteed, take-you-to-the-next-level tool that will transform your business? That’s why scams like that computer virus one worked so well. We all keep thinking there is that one silver bullet we’re missing that will make all our ills go away.

Here is where I’m supposed to tell you there isn’t a silver bullet. Eat less and exercise more, right?

The truth is there is a silver bullet. And a bronze one. And a gold one. And a titanium-plated, platinum-infused, diamond-encrusted, gold-leafed, emerald-cut, space-aged aluminum, time-released-capsule one.

The problem is that every business needs a different bullet. In retail there is no one-size-fits-all bullet.

You might be struggling with cash flow while your neighbor down the street needs help with a better marketing message. The store on the next block has a customer service problem, while the store across the street is in a market with too many competitors.

What retailers really need is a good diagnostic tool to help you identify the true problem(s). Unfortunately your business isn’t like an automobile where you can plug it in and see what’s wrong.

You can hire a consultant, but unless they have a background in understanding independent retail, they might not be able to diagnose your true problem either. You can try to do it yourself (I gave you a few Measuring Cups to use in an earlier post), but it is often hard to read the label from inside the bottle.

Since I am the DIY guy of retail, though, I want to show you the approach I would take to diagnose where your business needs work so that maybe you can find the demon holding you back. If you were to hire me, I would look at your business in this order …

  1. Core Values – Is your business aligned with your Values? If not, how and where can we change things?
  2. Market Potential – Where do you stand in your market? Who are your competitors? What is your share of the market? Is it shrinking or growing? What local factors influence your market presence?
  3. Customer Service – How much of your business is Repeat and Referral? How much training do your front line people have? What skills do they have? How well do they greet, meet, and interact with customers? How are their “closing” skills? What services do you provide? Do your services lean customer-friendly or business-friendly? Do you meet and exceed expectations?
  4. Inventory Management – How is your cash flow? What is your Profit Margin, Turn Ratio, Accounts-Payable-to-Inventory Ratio, Cash-to-Current Ratio, etc? What are the “must-haves” and how was your stock position on those items last year? Where is the fat that needs to be trimmed from the inventory? What systems do you use to keep from over-buying?
  5. Marketing & Advertising – What is your Marketing Message? Is it consistent across all platforms (including the in-store experience)? How can we make that message more powerful and effective? Where are you spending your marketing money? Are there cheaper, better alternatives for reaching the people you want to reach? Are there collaborations that make sense? Are you harnessing all the free publicity available to you?

Notice the order of things. Most businesses come to me saying they need help with their Marketing because they aren’t getting the traffic they want. Yet sometimes the problem is their business isn’t aligned with their values so they aren’t attracting the right types of customers. sometimes the problem is there aren’t enough customers in their market to sustain their business. Sometimes the problem is their service is so bad, those who do visit are telling friends to stay away.

Better Marketing won’t fix those other problems or help the business.

If you want to run your own diagnostics, there are several hyperlinks to articles and blogs related to the thirty questions posed above.

If you want to hire me to run your diagnostics, I’m going through that list in that order until we find the first problem.

There is no single silver bullet to fix any and all retailers, but there is a bullet to slay the specific demon holding you back. I encourage you to run your diagnostics on your own to see if you can isolate your problem. When you do find it, send me an email and I’ll help you brainstorm several solutions to solve your problem on your own or with help.

There is a bullet for you, but it’s buried in the haystack next to the needle.

-Phil Wrzesinski
www.PhilsForum.com

PS I hired a consultant once. He compared my Turn Ratio to Walmart’s and told me my problem was inventory control and that I needed to go to “just-in-time” inventory where I had at most a one-week supply of inventory on hand. My dad hired a consultant. He compared our prices to Kmart and Toys R Us and said our prices were too high and then pitched a total revamp of our sales floor into a circus theme (not sure what that had to do with prices). If you’re going to hire someone, make sure they have extensive experience working with indie retailers. Make sure they have a list like this one, too, that spells out what they’re going to evaluate.

PPS Sorry for the mixed metaphor at the end. It sounded good in my head.

The Right Measuring Cups

When the recipe calls for 1 cup Vegetable Oil do you reach for a teaspoon? When it says 16 ounces Sour Cream do you grab a scale? Of course not. Sure, you can get close with those tools, but it won’t be as accurate nor as handy.

Yet we do that in retail all the time. We use the wrong tools to measure our business.

For instance, most businesses look at Sales Growth as a barometer of their business health. If sales went up, business is good. If sales went down, business is bad.

The problem with that tool is that it doesn’t take into account what happened in your local marketplace. If your sales went up 5% but your market grew by 10%, then your business is not on the right path. If your sales were down 2% but your market shrunk by 5%, you captured a larger share of your market.

You have to know how to calculate Market Share to truly know the health of your business.

RECIPE FOR MARKET SHARE

Market Share: your percentage of the Market Potential for your trade area. Calculate Market Potential by finding the Annual Sales for your entire industry, divide that by the population of the United States and multiply that answer times your own trade area population. Then adjust for income levels. The math looks like this …

  • Industry Sales = $20.2 billion
  • US Population = 325 million people
  • Your Trade Area = 150,000 people
  • US Average Household Income = $59,039
  • Your Area Household Income = $63,026 (6.75% higher than US average)

$20.2 billion / 325 million = $62.15/person

$62.15 x 150,000 = $9.3 million

$9.3 million x 1.0675 = $9.9 million Market Potential

(Note: that number can be adjusted again for one other factor dependent on your industry. For instance, if you’re in the toy industry you can adjust for the number of children in your area compared to the national average. If you’re in the boat industry, look for something along the lines of percentage of boat owners nationally and in your area.)

Figure out your percentage or share of that market and whether it is growing or shrinking. That will be a more accurate measurement than your top line sales.

CUSTOMER SERVICE MEASUREMENT

How do you measure something as abstract as Customer Service? One tool is Units Per Transaction (UPT). While several factors can influence this number including your merchandising skill of impulse items and whether the items you’re selling have more or less accessories than last year, the largest influence on this number is your sales force. Are they taking care of the customer properly? Are they completing the sale? Are they making the customer feel welcome, comfortable, and happy? Are they building trust?

The calculation for UPT is simple. Take the total units sold during the year and divide that by the number of transactions.

75,000 units sold / 22,000 transactions = 3.4 Units Per Transaction

If that number is going up, your team is doing their job.

Another measuring tool that is slightly harder to quantify, but equally effective in telling the true tale of your customer service is Repeat and Referral Business.

Repeat Business is a sign of Good Customer Service. Referral Business is a sign of WOW Customer Service. Your service was so good they had to bring their friends back with them. If you’re tracking transactions by name in your POS, you’ll know your Repeat Business. You can also ask when you enter someone new into your POS how they heard of you. If they say “from a friend” mark them as Referral.

The ideal business has a majority of their customers as Repeat and Referral. The raw number of Repeat and Referral Customers should hopefully be growing and should be a larger percentage of your traffic. The larger, the better.

MARKETING AND ADVERTISING MEASUREMENT

Sure, you can run a coupon or a Call to Action in every ad to see how many people it drives to the store. But if you have been reading this blog or following the wisdom of people smarter than me like Roy H. Williams or Seth Godin, then you know that kind of advertisement leads to short term gain and long term pain.

One other way to measure the effectiveness of your advertising is from your Repeat and Referral Business. Add those two numbers together. The remainder of your traffic is your marketing-driven business.

Yes, some of that traffic is based purely on your location. Your location is part of your marketing. Your signs on your building are part of your marketing. Your parking situation is part of your marketing. Your advertising is also part of your marketing. If the raw numbers of people coming through your doors for the first time and not by Referral are growing, your marketing is working.

Which part of your marketing is working? That is a little bit harder to measure. As famed retailer John Wanamaker said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

At least you have a tool to see if it is working in general. (Check the Free Resources for Making Your Ads More Effective to figure out how to make all halves work.)

When you use the right measuring tool, you get a better result. That’s true for cooks, bakers, and small business owners. 

-Phil Wrzesinski
www.PhilsForum.com

PS Before you plan for 2019, you really need to know what happened in 2018. Even if your top line sales rocked the world and your bank account is fatter than usual, if your Market Share decreased or your Repeat and Referral Business fell off, you have important issues you need to address sooner rather than later. I’d love to help you address those issues.

Looking Back at the “Top” Ten Blog Posts From 2018

Somewhere around the first of the year a lot of writers like to publish their “Top Ten” list of most viewed posts from the previous year. Wouldn’t it be smarter to post the least-viewed posts, the ones most people missed? Give people a second-chance to read your wisdom. As it is, just because a post is the most-viewed doesn’t make it the best.

This year I’m going to give you a variety pack of posts from 2018 and why you should read them (again).

The post you didn’t miss: Yes, I have Heard About Toys R Us. This was the post with the most views last year. I made a prediction in the PS of that post that has turned out to be right. Go read the post to see what I predicted.

The post you missed: Few Things Go as Planned. This was the post with the fewest views. I wrote this at the beginning of the year to remind you to plan, but to also understand that things don’t always work out the way you plan them and that you have to be able to adjust on the fly. Ask yourself, “Did 2018 happen the way you planned?” I’m betting right now your answer is No. Go read this post.

The milestone you didn’t know about: Christmas Quick Tip #3 – Sign ‘Em Up Before Checkout. This was post #1000. To some people, those numbers are kinda cool. I didn’t make a big deal about it then because it was the busy holiday season and those posts were designed to be short and sweet. by the way, this isn’t just a Christmas time tip. It is a smart business practice.

My favorite post of 2018: Five Proven Recipes. In this post I give you Paul Harvey’s recipe for a backyard mosquito spray, an all-natural weed-killer that works (if you spray regularly), and simple, tech-free recipes for raising the bar on your Hiring, Advertising, and Customer Service. Sometimes the simple ways are the best.

The post that got the most social media interest: So You Got a Bad Review? This post had the most comments on social media and was the first post of mine that was “shared” on LinkedIn (a new feature they’ve added). Best of all, it had no negative reviews, lol. If you’ve had a negative review, you might want to read this.

The best question you will ask your staff all year: How to Learn From the Best. This was actually the second least viewed post, yet the most telling about where you stand in your local retail marketplace and what you need to work on the most. Ask your staff this question and listen to their replies.

The post I wished you had commented on: This “Free” is Really Free. The site stats counter tells me I get hundreds of downloads of the different Free Resources each year. I’d love to know how you’re using them and what success you might be seeing because of them. Go ahead and leave some comments there (or here).

That’s your lucky seven posts you should have read (and hopefully did). I’m going to leave three more links in the PS below for the adventurous souls among you to round out the “Top Ten”.

Happy New Year!

-Phil Wrzesinski
www.PhilsForum.com

PS I triple dog dare you …

How to Use Humor in Your Advertising the Right Way

Quit Making it So Hard for People to Buy From You

“Customer Service” is Dead