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Flowers For My Lady

Another man gave flowers to my wife. Should I be angry? Jealous? Should I hunt him down? Threaten him?

I wanted to send him a thank you note.

The perp who gave my wife flowers runs the body shop across the street. Al Mackey of Mackey’s Body Shop. And no, he’s not a perp. He’s a smart businessman. He knows something about customer service.

Body shop work is not high on the list of things on which we want to spend our money. No one thinks to themselves, “Wow, maybe Thursday I’ll go body shop shopping.” Nope, a trip to the body shop means something or someone caused a dent or scratch in your car and you’ve got to shell out money to get it fixed or make a claim on your insurance which means you’ll still be paying for it over the next three years in higher premiums.

Al knows this. Al knows that no one is really happy to see him, especially when the bill is due. And he knows that a little kindness and a little TLC goes a long way in easing the pain. My wife handed him a check for $2350 and he handed her a bouquet of flowers. Guess what she was talking about all day?

For the price of a bouquet of flowers, a mere pittance in a $2000 plus transaction, Al bought my wife’s loyalty, or at least a huge chunk of word-of-mouth and positive feelings.

And for that I applaud him as a master of Customer Service and Marketing. He identified a way to win a customer’s heart in an uncomfortable transaction and earn some word-of-mouth advertising on the side.

Thanks Al! It’s a great lesson for every business. Make the most uncomfortable transactions pleasantly memorable. Do that and I can guarantee it will get people talking about you.

By the way, did anyone notice how Customer Service and Marketing are so closely linked? Me, too.

-Phil

The Third Mistake

The boss says,”Cut your spending.” The acountant says, “You’ve got to cut spending.” The board says, “Reign in the spending.”

But as you pour over your expenses, they all seem necessary. Utilities? Yep, gotta keep the heat on. Insurance? Don’t want to be caught with our pants down. Selling Supplies? Can’t sell without supplies. Payroll? Don’t want to be like Circuit City. Advertising? Advertising? Yeah, advertising… everyone says advertising doesn’t work any more anyway. Let’s cut advertising.

Wait!

Before you make the first cut, you better know what you are doing. Cutting money out of the ad budget must be done with the skill of a diamond cutter. One wrong move and you’ll cut off your business at the knees.

You have to know how your ads work for you, how they grow your business, how they attract new customers and keep old ones, how they influence the decision-making process of your potential clients. You have to know where your ads are most effective and where they are wasting time and money. You have to evaluate each and every component of your ad budget before dropping the axe. And then, only drop it sparingly.

Advertising is your lifeline in a down economy. It is also your ticket to the top of the hill. Way too many businesses in an economy like this take the easy road and cut huge chunks out of their ad budgets without truly evaluating why their ads work or don’t work. They say things like, “I tried radio for 4 weeks and it didn’t work, so I’ll cut all radio ads.” Or they muse, “That newspaper ad did nothing for business, so I’ll cut all newsprint ads from the budget.”

I know, because I used to have those kinds of thoughts, too. It was always the media’s fault my ads didn’t work, never the fault of the ad I designed, never the fault of making wrong assumptions about how my ad should work within the medium.

But once you begin to understand first how each medium is designed to work and then how to design ads that work well within the medium of your choice, you will find your business getting a better return on your advertising investment.

And when you choose to continue advertising while all your competitors cut back, you’ll find your return ever greater. The cold stark truth is that no matter the economy, business is still being done. The beauty and danger of doing business in such times, however, is that customers are more fickle, less loyal to their usual shopping patterns. To the stores who disregard this behavior and cut back their advertising and customer service, these customers are turning their backs and looking for someplace new that is willing to serve their needs.

The businesses still advertising, still investing in their employees, are in position to win the hearts of these customers. Yes, even in tough times, some stores thrive. And I can guarantee you they all have one thing in common. They didn’t cut back on their marketing. They just learned how to do it smarter and more effectively to win the customers other stores are neglecting.

Would you like to learn how to market your business better?

As part of the Midtown Morning Breakfast, I’m going to present two workshops in April and May on How Ads Work.

The first one will be April 15th from 7:30am to 8:45am at Jackson Coffee Company. In this class we’ll explore how the different mediums work and how to use them most effectively. We’ll also look at the absolute best formula for calculating your ad budget that doesn’t overextend your resources. And we’ll demystify the 4 biggest myths of advertising.

The second class will be May 20th, same time, same place. In this workshop I’ll show you how to identify the true essence of your brand and make it work harder for you. Plus, we’ll discuss different techniques to make your marketing more impactful and memorable in ways that move customers toward your business.

Before you make a classic mistake and slash your marketing just to cut expenses, learn how to make the most of what you do spend. You’re bottom line depends on it.

Will you join me?

-Phil

Are You Riding the Mommy Tsunami?

There is a tidal wave of babies being born. A group large enough to rival the heralded Baby Boomers. And the moms having these babies are the most educated, wealthiest, most connected group of moms in history.

They have a name for this group – The Mommy Tsunami.

When the Baby Boomers had their kids it was called the Echo Boom. Other names like Gen X and Gen Y have been used to describe the echo boom. Whatever you choose to call them, this group is now having babies.

But with one difference.

This group is waiting until later in life to have kids. This new mom is typically about 30 years old, college educated, and has invested a few years in her career before stepping out to start a family.

She has the power of the Internet in her purse, a camera on her phone, and an account with YouTube.

She grew up in an over-saturated advertising market so she is cynical to all forms of marketing. She ignores the hype. She pooh-poohs the over-the-top claims. She calls out anything that she knows is a fake. She doesn’t bite when you say “biggest sale ever!!” because she knows you’ve got another sale lined up two weeks later. She knows what the fine print says. She knows that no matter what you say, everything has a downside.

And if you cross her, she’ll have a video on YouTube within the hour and ten thousand of her closest friends will see it by nightfall. She’ll destroy you with the power of a tidal wave.

Yet, the Mommy Tsunami has more dollars to spend than any group of moms in history.

How do you reach this powerful, cynical, knowledgeable consumer?

The answer is quite simple – honesty.

Product knowledge used to be your advantage. But with the Internet at her fingertips she probably knows almost as much as you do about what you sell. You can’t trick her into thinking this is the only option out there. She knows what the competitors have. She researched it last night in her pajamas. She knows what features every product in the category offers, and has probably read a half dozen reviews to know which features actually work.

Now she needs someone to put that knowledge into context to show her how each feature fits into her life (or doesn’t fit). She needs someone willing to be up front about the downside she knows is inherent in everything. She needs someone to tell her which features will actually benefit her in her lifestyle and which ones the company threw on just to jack up the price. She needs a salesperson to show her the benefits and the shortcomings.

Total, unabashed, show-all-the-blemishes honesty.

She needs someone willing to listen to and fulfill her needs, not shoehorn her into something that suits your needs. She is thrilled when you tell her why not to buy something. She is thrilled when you go out of your way to get what she wants instead of just what you have. She is thrilled when she knows you are looking out for her best interest. She is thrilled, mainly because it happens so rarely.

She knows that businesses lie. Every great offer comes with a fast-talking disclaimer. Everything is “subject to change” and never in her favor. Every great price has a hidden fee. In this ever-increasing self-serve world, everything is a take-it-or-leave-it proposition. And too many times she is leaving it.

Honesty means sometimes saying, “I don’t know,” followed by, “Let me find out.” Honesty means sometimes saying, “I can’t help you here,” followed by, “But let me call someone who can.” Honesty means being transparent in your ads, your products, your sales pitch, and your closing. Honesty means being transparent in all of your business practices, in what you stand for, in what you believe.

The Mommy Tsunami has the power of a Tidal Wave and can crush you just as fast. But just ask one of those crazy big wave surfers in Hawaii. They’ll tell you the thrill of riding the wave just once outweighs the risk every time.

Happy Surfing!

-Phil

Keeping Fit the Triathlon Way

Jeff Beagle talked me into doing a triathlon a few years ago without saying a thing.

Jeff is a personal trainer who had a client larger than me that he was training for the Clarklake Triathlon, a 0.5 mile swim, 14 mile bike, 4 mile run event. I figured if that guy could do it, so could I, even though I hadn’t run 4 miles collectively in the past 8 years.

I love to swim. I like biking. But running is my Achilles Heel figuratively and literally.

In the two months prior to the event I swam daily, biked a few times a week and ran when I could. Sure enough, on the day of the event I finished 17th… …in the swim portion. Overall I came in 396th out of 400 who completed the race. I was dead last in the 4 mile run. Two little old ladies watching the race passed me with their lawn chairs in hand I was so slow.

But I finished.

Talking to Beagle afterwards about training for the following year, he gave me great advice. “Phil, I know swimming is your favorite, but put the swimming away and spend all your energy on running. A 10% improvement in your running will have far greater impact than a 10% improvement on your swim.”

How true, how true.

Business owners can learn a lesson from this.

Like a triathlon, we have three elements of our business in which we must perform: Product, Finances, and Marketing. The best businesses are strong in all three. Most businesses are strong in only one or two. And most business owners are only good at one or two, and usually only passionate about one of those three. Thus we spend our time and energy on our passion, improving only slightly, instead of focusing on the weakest, least fun aspect where the most room for improvement lies.

As you make your plans for 2009, do your business a favor. Evaluate which part of your business needs the most help. (Here’s a hint. It’s probably the part you like the least.) Then put all of your focus on improving that area.

A 10% improvement in my swim would have moved me up to 394th. A 10% improvement in the run gets me to 356th.

If marketing is your weakness, sign up for Roy William’s Monday Morning Memo and go to the bookstore and buy his “Wizard of Ads” trilogy. You’ll learn more about advertising than you can imagine and a few things that will help your business in other ways, too.

If finances are your weakness, set up an appointment with your accountant (get one if you don’t have one already) and start going over the numbers. You can’t manage what you don’t measure and you can’t measure what you don’t know. Have your accountant teach you or hire a business financial coach. A good coach will pay for himself or herself many ways over.

Chances are, the product is your passion. That’s how most people get into business. You know your products. You know what’s selling. But do your employees? Is your training program getting the results you want? Also, do you have a good inventory management system? Do you have a solid Open to Buy program that keeps your inventory in line and cash flow moving?

Think like a triathlete. Work on your weakness. That’s where the big results take place.

The following year I moved up to 367th. Time to work on the bike:-)

-Phil

One Thousand Dollars Back!

Do you know any retailers who would like $1000? (Better yet, do you know any that wouldn’t?)

The Jackson Retail Success Academy (JRSA) is looking for retailers who want to earn $1000 by taking ten three-hour classes to make their stores better, stronger and more successful

JRSA is looking for retailers willing to learn tips and practices that will help them better manage their inventory, their finances and their cash flow, making them more profitable.

JRSA is looking for retailers willing to learn marketing tips, practices and ideas that will drive the right kind of traffic into their stores and increase their fan base.

JRSA is looking for retailers willing to learn about solid hiring practices and training tips to raise their customer service to a level that creates raving fans that talk about their store to everyone they know.

Do you know a retailer who wants to improve in marketing, customer service and profitability?

Yes, it will take some work – 30 hours to be exact – ten Mondays from 6 to 9 pm. Yes, it will cost some money – $750 to be exact – payable prior to the first class.

But look at the bennies…

First, there is 30 hours of top-level classroom instruction on topics like financial statements, inventory management, cash flow, marketing & advertising, hiring & training, customer service and a whole lot more. This alone is worth $6000 (top level consultants earn $200/hour or more).

Plus, there are actual cash-back benefits.

JRSA Graduates get:

  • $250 in reimbursements for joining a trade organization or attending an industry trade show
  • $400 in reimbursements for advertising expenses
  • A one-year membership in the Greater Jackson Chamber of Commerce ($300 value)
  • A one-year membership in the Midtown Association of Jackson ($50 value)

Add it up and it’s $1000 back to any retailer who signs up and attends the Jackson Retail Success Academy.

Oh yeah, and a pretty good chance you’ll learn something new to make you a whole lot more money on top of that.

The next class starts Monday, March 16th.

Tell your retail friends about this offer and have them contact Susan Franck (susan@gjcc.org) at the Greater Jackson Chamber of Commerce (517) 782-8221 to sign up.

-Phil

PS JRSA is a collaboration of Greater Jackson Chamber of Commerce, Jackson Local First, Midtown Association of Jackson, The Enterprise Group, The Small Business Technology Development Center, and the Jackson DDA

Big Yellow Taxi

“They paved paradise and put up a parking lot…”

There are some songs that no matter who covers them, no matter where I am at the time, no matter what’s on my mind, I stop and listen.

“Big Yellow Taxi” by Joni Mitchell is one of those songs. From Joni’s lilting voice to Amy Grant’s smooth vocals, to the Counting Crow’s more gravelly sound, I just love listening to that song.

I’ve tried to play it myself but could never do it justice.

It is one of those songs that transcends generations, too. The line in the refrain is all too familiar. Sing along with me…

“Don’t it always seem to go, that you don’t know what you’ve got til it’s gone…”

Okay, a little off key, but the point is made. Many times we don’t know what we’ve got until we no longer have it. I had two moments like that recently.

While reading a trade magazine I came across a reference of a new book on branding. The book was right up my alley. I checked it out online and found multiple sites selling it. I was about to order it online but my Buy Local button kicked in. So I started to shoot an email over to Nomad Bookhouse to see if they had it before realizing they were gone, closed. I miss them.

At the same time, my wife and boys were visiting Fun 4 All Kids, a big inflatable playground where we have celebrated both boy’s birthdays. It was their last visit. As you read this, F4AK has closed.

One of our friends made the comment, “If I had known they were in trouble, maybe I would have stopped by more often.”

I heard the same things said about Nomad.

The point I want to make is this…

What are we waiting for? If there is a store, restaurant, or hangout that you particularly like, what are you doing to ensure it’s success? If there is a business you would hate to see go away, have you told your friends about it? Have you touted their virtues, sung their praises, shouted their benefits to the world?

Seth Godin, one of my favorite bloggers, said that we too often keep our favorite stores to ourselves, maybe fearful that if too many people know about it, it won’t be special anymore. (Read his blog on the subject here http://sethgodin.typepad.com/seths_blog/2008/11/dont-know-what.html) But how special are they if they’re gone?

In today’s economic climate, when traditional advertising is less and less effective, the one tried and true, always works, form of advertising is word-of-mouth.

Don’t let any more of your favorite places go away. Start talking about them now before they’re in trouble. As my friend, Bridget can attest, the outpouring of wonderful sentiments was incredible when she announced the closing of Nomad. Just think what might have happened if that outpouring of sentiment happened three or six months earlier, and not just to her but to everyone you know?

Make it your New Years Resolution to sing the praises of your favorite stores ten times more this year than last. You might be surprised how much impact and influence you can have.

Happy New Year!

-Phil

The Toy House IQ

If you’ve been following the recent conversation, you’re probably already guessing IQ doesn’t refer to Intelligence Quotient. And thank God for that. When people use the word smart around me it usually includes alec after it.

But in being transparent about how we do our advertising, today is a great day to discuss one more term in Roy William’s Advertising Performance Equation – SoV x IQ x PEF x MPo = Sales.

From before we learned SoV=Share of Voice=Your ad budget and PEF=Personal Experience Factor=How well you exceed customer expectations.

IQ stands for Impact Quotient or how memorable or attention-getting your ad might be. The more memorable, the higher the IQ.

To better understand, answer this question… Where were you when you first heard about the Twin Towers?

You remember the exact moment, who told you, how you reacted. That is off-the-chart high IQ. Sorry, but your ads will never have that high of an IQ.

Now answer this question… What companies’ ads have you heard or seen today that really stood out, that made you pay attention?

Don’t worry if you’re struggling to think of one advertiser today that stood out. Most ads have a very low IQ.

Why?

Because we are conditioned to tune out all advertisements. We are bombarded with thousands and thousands of advertising pitches daily. It’s like aiming a fire hose at a teacup. We can’t possibly absorb them all so our brain learns to filter. If it isn’t relevant, we don’t see it or hear it.

You can read an entire newspaper cover to cover and not remember a single ad because nothing was relevant to you. You can listen to an hour of radio and not remember a single company because they didn’t say anything important or relevant or interesting. In fact, as soon as they came on, you automatically tuned out.

But isn’t that the goal of advertising – to get people to notice you?

Unfortunately, too many companies don’t understand this. They produce lousy ads with low IQ that no one sees or hears. They are told by their ad sales reps that all they have to do is get their name out there and people will notice. Hey ad guys, haven’t you figured it out? We need something other than your name. We’re too busy to notice.

In the equation above, SoV x IQ is a sub-equation. SoV x IQ = Share of Mind, in other words, how much the consumer thinks of you compared to your competitor.

If you have a 10% SoV and run average ads, you have 10% of Share of Mind. If you have 10% SoV and run lousy, invisible ads, you might only get a 5% Share of Mind. Remember, SoV is linked to your ad budget. If your ads are lousy, you need to spend twice as much to get the same Share of your customer’s mind.

However, if you have high impact ads, you can gain a greater Share of your customer’s mind than your budget allows. That’s the power of IQ.

In the next post, I’ll explain how we try to gain your attention in our ads. In the meantime, you can listen for yourself. All of our radio ads are now posted on our website. Go to http://www.toyhouseonline.com/ and click on the Radio icon to hear all of our 2008 ads.

Have an impactful day!

-Phil

What in the World is SoV?

In the last post I mentioned Roy Williams’ Advertising Performance Equation – SoV x IQ x PEF x MPo = Sales.

We talked about how PEF stands for Personal Experience Factor. In this equation, to grow your business, a customer’s personal experience must exceed her expectations. That’s what creates loyalty and fandom, and is our staff-training goal every month.

Today “SoV” is the relevant part of the equation for me. Why? I just agreed to terms with Jackson Radio Works for running a year-long radio campaign next year.

Wait. Still confused?

Let me explain…

SoV stands for Share of Voice – in other words, how much of the advertising being done in your category is yours. Think of it as a percentage. If in your market and category there is $1 million being spent on advertising and you are spending $100,000 of it, then you have a 10% SoV.

So, by that definition, SoV is equal to your marketing budget as a percentage of the total ad money being spent. Therefore, the more you spend, the higher your SoV.

Most of you upon reading this are saying, “Great, Phil, but I don’t have any more money. What if I want a higher SoV and don’t have more money to spend? Can I increase my SoV other ways?”

Yes you can. I just did.

There are many ways to advertise – TV, Radio, Newsprint, Internet, Email, Yellow Pages, to name a few. How many of those media do you own? By that, I mean, are there any media that when people think of the media they think of you?

If you listen to radio in Jackson, you know the Toy House owns some of the stations. No other toy or baby product seller comes close to running the frequency that we do on those stations. Ask someone who is the toy store on the radio and they’ll tell you Toy House. We own it. That was our goal last year and will be our goal again this year.

I don’t have the budget that my competitors have. I don’t have the power of national advertising, printing on a mass scale, or the clout to demand huge rate savings from the media. But I do have an understanding about perception. While all the big chains compete with each other with their multiple inserts, none of them gaining a perceptual advantage, I’ve got the airwaves to myself, allowing Toy House to get a perceptively larger Share of Voice than what we are spending.

Think of it this way. Most people, when thinking of advertising think (in order), Newspaper, TV, Radio, Yellow Pages, and maybe Internet. If I perceptually own Radio, I perceptually have a 20% SoV. No, it’s not perfect math. Neither is the equation (I’ll get to that in another post). But it is an improvement over my actual percentage of the SoV (about 5-7%).

Are you daring enough to get more out of your advertising budget? Are you willing to go for it by owning a media no one in your market is using?

Wouldn’t it be better to have a nice quiet conversation alone with a client than to be part of the shouting and screaming that all your competitors are doing?

Of course it would.

-Phil

Setting the Bar Too High?

One of my favorite lessons learned from the Wizard of Ads is the Advertising Performance Equation. This equation gives a quick lesson into the factors that influence how well your advertising works. The equation looks like this: SoV x IQ x PEF x MPo = Sales

I won’t go into details about the equation right now, but one of those factors has been weighing on my mind.

PEF stands for Personal Experience Factor. Roy Williams (the Wizard) teaches that your advertising creates an expectation of your store. And when a customer experiences your store it will have an effect on the power of your ads. If you do not meet the customer’s expectations, all future ads will be seen/heard with disdain and not work as well. If you exceed the expectations created by your advertising, your business will grow.

The goal, then, is to ALWAYS exceed the customers’ expectations.

This can be done two ways. Set a really low bar that is always easy to beat or set the bar higher and higher with each passing day.

As Stewart B. Johnson said, “Our business in life is not to get ahead of others, but to get ahead of ourselves – to break our own records, to outstrip our yesterday by our today.”

I’ve always believed that success for Toy House falls more into line with Mr. Johnson. We need to constantly be striving to be better. Not better than our competition, but better than we were yesterday.

But with that said, there is some validity to setting a really low expectation. We see this every year in political debates. Who “won” the debate is primarily based on who met or exceeded the expectations.

In advertising, some say that you should never brag about your customer service because you raise a really high bar of expectations that will be increasingly difficult to exceed.

I’m not sure I’m fully in that camp. Raising the bar of expectations attracts a lot of customers. Plus, it gives you incentive to train harder, to prepare more, to be more creative in ways that you can please customers.

So, I’m just gonna lay it all on the line. I believe my staff are some of the finest retail workers in the toy industry. They are informed, helpful and friendly, and will give you the best shopping experience you can find in Jackson.

There. I’ve said it. The bar has been raised. I double dog dare you to give us the chance to exceed those expectations.

-Phil

Turn off the TV!

There is a movement afoot to stop toy companies from advertising their toys directly to the kids. Many parents have written letters on behalf of the Campaign for a Commercial-Free Childhood to the leading toy manufacturers asking them to stop running ads aimed directly at children.

Unfortunately, I believe their efforts will be about as successful as asking McDonald’s to stop putting special sauce on the Big Mac.

Why do toy manufacturers market to children? Because it works! And it works well. TV-advertised toys outsell their less-marketed brethren by astonishing rates. Without TV advertising for toys, Wal-Mart, K-Mart, Target and Toys R Us would probably get out of the toy business. (Hey, maybe banning ads is not a bad thing at all). The big stores only want toys with quick turnover. That’s why most of the toys found in the national chains are either licensed with some TV or movie character or heavily advertised first on TV and then in their Sunday ads.

Of course, nowhere in that equation is there room for discussion on whether the toy is actually good or not. Nowhere in the math does any of those mass merchants consider things like play value, creativity, or imagination. Nope, the only question they have is, “How fast will this move?” And if it’s on TV, the answer is fast enough.

Now, I believe it is fair of parents to be concerned about how these toy companies market to children. But asking them to change is pointless. If you don’t want the fatty foods of McDonald’s you eat elsewhere. The same is true with toys. If you don’t want your children bombarded with toy ads, TURN OFF THE TV.

Yes, it’s that simple. Be the parent, take charge, and limit your child’s exposure.

Some people say that all those ads just help children learn to deal with the marketing realities of this world. I’m not fully in that camp. I do believe that there is a learning process, but I also believe that we, as parents, must control that learning process. We do that by controlling the exposure. We do that by setting limits. We do that by being proactive and explaining to our children how advertising works.

That’s what my family has done these past 60 years while running a toy store. In fact, growing up we were taught that most TV-advertised toys were bad toys. The good toys didn’t need TV ads to sell. My cousin took this lesson to heart so much that one Christmas he complained saying, “Santa screwed up. He brought me some bad TV toys.”

If you are tired of hearing your kids yell, scream, beg and plead for the latest, hottest toy, don’t write a letter to the company. Just turn off the TV and go find a toy store that specializes in non-advertised, fun-laden, high play value toys – a toy store like Toy House and Baby Too or any of the hundreds of independent specialty toy stores around the country.

-Phil