Category: Building Business

September 11, 2017

Retail is More Like Football

I am a Detroit Lions fan. There, I said it. That’s the first step to healing, right? I got to watch my Lions play yesterday. Owning a toy store was probably the best thing for this Detroit Lions fan. I never got too invested in their season because I knew I’d be too busy on Sundays in November and December to pay attention to the team. The let down each year wasn’t as bad because of that.

Last year’s record-setting eight come-from-behind-in-the-fourth-quarter victories was quite exciting, followed by another season-ending debacle all too familiar to die-hard Lions fans. Lots of people want to blame the coach. Others want to blame the now highest paid player in the league, quarterback Matthew Stafford. Some want to blame the organization as a whole. I’m in the latter category.

Although teamwork is important in all of the major team sports, it is at its highest in football. A great goalie in hockey or a mega-star in basketball can change the tide in those respective sports. Baseball is a team sport built almost exclusively around individual actions and talent. But football is truly about eleven guys doing their prescribed job in sync with each other. And even that isn’t enough.

Success in football only happens when the entire organization is in sync and performing at peak. Success happens when the front office brings in the right kind of talent and personality to fit the values of the coaching staff. Success happens when the scouts figure out the best schemes to combat the opponent’s tendencies that also fit with the talent available. Success happens when the coaches are able to teach the players the right schemes and the players are able to execute those schemes.

Individual talent is important, but not the only thing. The Lions had Barry Sanders, arguably the best running back in the history of the game, and still managed to miss the playoffs almost every year.

Retail is far closer to football than the other sports. To be successful you have to have a game plan that not only fits the talent on your team, but also takes into account the talent and tendencies of your competitors. To be successful you need more than just a mega-star, you need a team working together. You might have the best salesperson on the planet, but all her hard work can be undone by an unskilled cashier or dirty restroom. She might not even get to use her skills if your website fails to deliver or the person answering your phones hasn’t been trained.

You can limp through retail with a bunch of mediocre 8-8 seasons, and even earn a living doing it. For some, that is enough. For those of you reading this blog, that isn’t enough. You want to taste the champagne.

So let me ask you …

Are you putting in the same kind of effort a football team puts into the scouting of new talent?
Are you studying your competition to help you create game plans for how you will beat them?
Are you hiring coaches (managers) who can teach your game plan to your team?
Are you evaluating your game plan on a regular basis?
Are you evaluating your talent and their ability to execute your game plan on a regular basis?

All football teams do this. The ones that do it best win divisions, win playoff games, win Super Bowls. Your competitors are doing this. When people talk about working “on” your business instead of “in” your business, those bullet points are the place for you to start.

Huddle up. Your season is upon you.

-Phil Wrzesinski
www.PhilsForum.com

PS In the coming weeks I will give you concrete actions you can do for all five of those bullet points. In the meantime, start figuring out what you need to do to give you more time on than in. You’re going to need it (and it will definitely pay off).

September 1, 2017

A Fresh Set of Eyes Sees What You’re Missing

Get in a circle of store owners and say the words “Mystery Shopper” and watch the eyes begin to roll. We all hate them or, if that’s too strong a word, think quite low of them.

The problem? Mystery shoppers tend to only take a snapshot of a single moment in your store with no regards to what is going on around them. They evaluate your entire operation based on one interaction, one done-under-false-pretenses-just-to-see-how-you-react interaction at the most inopportune time with the least talented member of your team.

Not fair.

The biggest problem with the Mystery Shopper concept is that most business owners are quick to dismiss the findings as being only a snapshot in time and not a true reflection of your business.

Then again, a new customer walking through your doors will only get a snapshot of a single moment in your store with no regards to what is going on around them. The only difference is that this customer won’t offer you any feedback to help you improve.

You need a fresh set of eyes. You need someone else to help you see the flaws that have blended into the landscape. You need someone to:

Look at the appearance of the store from the front. Is it clean? Is it inviting?
Walk through the door and give you an honest first impression. Does it smell funny? Is it inviting?
Look at the little details like signage and order and cleanliness and lighting and decor. Does the store look or feel worn and dated? Does the store feel dark and dirty or bright and happy? Do the signs even apply anymore? Does the merchandising draw you in?
Get a first impression of the staff. Are they welcoming or huddled for safety and comfort?

A fresh set of eyes can identify the subtle turn-offs you stopped seeing years ago. A fresh set of eyes can show you what you look like at your worst, which is far more important than what you look like at your best.

Before listing my house I had a few fresh sets of eyes look it over. We found a door that needed painting. We found a roof area that needed cleaning. We found some rooms that needed re-decorating. We found an outlet cover that was broken. We found paint peeling on the outdoor furniture. We found a mess of cobwebs in the light at the end of the driveway. We found bushes and tree branches and vines that needed trimming. We found a tree that needed to be cut down. We found thirty two cans of paint that needed to be removed.

Individually those are all minor in the grand scheme of life. Collectively, however, they create a perception different from the one I want the people looking at my house to feel. It took more than one fresh set of eyes to find it all.

Get a few friends, preferably ones who do not regularly shop in your store (I know you have them—we all have them). Give them a list of things you want them to notice (the above list is a good start). Then invite them all over to your house for pizza and beer and sharing. You’ll be amazed at what they see, and if you’re honest enough to listen to them without getting defensive, you’ll make sure the “worst” experience anyone has in your store is better than the best at your competitors.

-Phil Wrzesinski
www.PhilsForum.com

PS Don’t think you aren’t blind to seeing things right under your nose. We all are. When I closed Toy House, we found almost $10,000 worth of “missing” merchandise that had been written out of stock over the years. Most of it was in places we looked almost every day. We found signs that should have been taken down years ago. Get some fresh eyes in your store now before the holiday rush starts creeping up on you. That’s worth a few pizzas and beer, right?

August 16, 2017

Two Ears and One Mouth

George Whalin was the last guy you wanted sitting next to you on an airplane. George was a retail consultant and public speaker (and one of my inspirations). George loved retail. A vacation to him meant a trip to The Grand Bazaar in Turkey followed by a trip to their local mall to contrast the old with the new.

When George sat next to you on an airplane, he peppered you with questions. “What’s your favorite place to shop and why?”

That was the question he asked every flight into Michigan that got Bronner’s and Toy House included in his book Retail Superstars: Inside the 25 Best Independent Stores in America. When he heard the same answers over and over he knew those places must be special.

“The questions you ask are more important than the things you could ever say.” -Tom Freese

“You can tell whether a man is clever by his answers. You can tell whether a man is wise by his questions.” -Naguib Mahfouz

“Successful people ask better questions, and as a result, they get better answers.” -Anthony Robbins

“Seek first to understand, then to be understood.” -Stephen R. Covey

One of the most important lessons George taught me was that every customer has a different need to fill. Every customer comes through the door for a reason uniquely their own. Our job as salespeople is simply to find out that reason. You don’t do that by talking. You do that by listening.

“No man ever listened himself out of a job.” -Calvin Coolidge

“Most people think ‘selling’ is the same as ‘talking.’ But the most effective salespeople know that listening is the most important part of your job.” -Roy Bartell

George got to the top of his craft not because of what he said, but because of what he learned and the relationships he made. He knew how to ask the right questions and listen to the answers. He was fascinated by you. If you ever did sit next to George on an airplane, you probably still would consider him a friend.

“You can make more friends in two months by being interested in them than you can in two years by making them interested in you.” -Dale Carnegie

Ask and listen. Your customers want to tell you why they are here.

-Phil Wrzesinski
wwwPhilsForum.com

PS I got all of the quotes for today’s post from a new book called Fired Up! Selling. It is the best quote book I have ever seen. (Disclaimer, I was one of over 1000 judges that got to help select the quotes for the book so I might be biased, but with that many business people choosing the quotes, you know the quotes are going to resonate. No, that is not an affiliate link. Just me telling you this book is cool and will make a great gift for someone you know. Shop local.)

August 15, 2017

Breaking Down Our Phone Greeting

“Thank you for calling the Toy House. How can I help you?”

That was the greeting I trained my staff to use every time they answered the phone. Twelve words in a specific order for specific reasons. Let’s break it down …

“Thank you for calling …”

We were a toy store. Imagine who might be calling a toy store. A mom? Sure. A mom with kids running around playing at her feet? Likely. A mom trying to juggle two or three things at once? Ding, ding, ding. Half of her focus is on something other than the phone.

By using an opening phrase like, “Thank you for calling …” before saying the words “Toy House”, we give her a chance to regain her focus. In that split second she recognizes that someone has answered, that someone is a male voice, that someone is speaking English. By the time we get to the words she most needs to hear to know she called the right place—“Toy House”—she has dialed her focus into our voice.

Have you ever called someplace and they said the store name so fast you weren’t sure you called the right place? That doesn’t happen with this script. You give your customer time to focus on the call so that she hears the name of the store clearly.

The other thing this phrase corrects is the employee so in a hurry to answer the phone that he is saying the store name before the receiver even gets to his mouth.

Also, we begin with the words “Thank you.” There is no better greeting for a retailer. They didn’t have to call you. They could go online. They could go elsewhere. They called you. Be grateful. Say thanks.

“How can I help you?”

This is a question that indicates you are ready for the customer to begin talking and you are ready to listen. I have called stores where they simply say the store name and then shut up. There is usually an awkward silence at that point. Not only is this question polite, but it makes the conversation go much more smoothly. Plus, it reinforces in your own staff the importance of listening.

Notice that I don’t instruct my staff to give out their name at this point. There is a reason behind that. The initial person answering the phone is rarely the person answering the question. As you remember from the previous post, the four questions most commonly asked are:

Can I speak to (a person or the manager)?
Can I speak to (a department)?
Do you have (a product)?
How late are you open?

The customer is likely to remember only one name and usually it is the first name they hear. If the customer asks for a department or has a specific question, the person that greets them at that time is instructed to give out his or her name. “You have reached the baby department. This is Phil. How can I help you?”

This way the customer is only given one name to remember, the name of the person who gave her the greatest help and the name she would need to remember if she called back.

At the end of the day, a customer calling your store wants three things.

To know that she called the right store
To be treated with respect
To get the information she needs

When you train your staff on these little details, your chances for meeting the customer’s expectations go up exponentially.

-Phil Wrzesinski
www.PhilsForum.com

PS You don’t have to use the same script I used. The most important thing is that you have a script and train the little details like answering the phone with whatever greeting makes most sense for you. Just don’t leave it to chance or happenstance. When you don’t train your staff on these little details your chances for failing your customers go up exponentially, too.

July 31, 2017

A New Twist to Back-to-School Shopping

Back-to-School shopping has become a huge event with big deals and sales to lure in all those parents and children to buy new clothes, school supplies, and anything else they might want (I once saw a “Back-to-School Sale” sign on an end-cap filled with wine!)

No matter what kind of retail you’re in, you can capitalize on the BTS craze, too—but to a different crowd. You need to get a hold of your teachers.

When we closed Toy House last December we started pulling all the old display racks, spinners, free-standing shelving units, etc. and put them out for sale. It was amazing to see how fast they got snatched up. It was also somewhat surprising to see that almost all of them ended up in a classroom.

I had teachers buying them. I had teachers sending in their spouses to buy them. I had teachers texting teachers about them. I had teachers coming in asking if I had any more of what their fellow teachers had bought.

You have old racks and displays cluttering your limited warehouse space. Don’t throw them out. Take some pictures and send out an email. Have a BTS Fixtures Sale just for your teachers. Not only do you get rid of clutter and make some money, you also make a classroom teacher happy by helping her organize her cluttered classroom. Plus, by getting rid of the old fixtures, you make your store look fresh and new. It’s a win-win-win!

FYI—teachers are setting up their classrooms right now. You need to jump on this idea right away.

-Phil Wrzesinski
www.PhilsForum.com

PS Don’t think for one second that you don’t have teachers as customers. Don’t think for one nanosecond that your regular customers don’t know a whole bunch of teachers. They’ll spread the word fast enough if you let them know soon enough.

PPS We had most of our fixtures priced between $25-$50. Thirty dollars seemed to be the sweet spot. Since you likely got most of those fixtures for free, think of it as found money. And don’t ever think, “no customer would buy that piece of junk.” One person’s junk is another person’s treasure. We sold a lot of racks I never expected to sell.

July 27, 2017

The Scary Truth of Averages

“Have you ever noticed that everyone wants to be normal but no one wants to be average?” -Roy H. Williams

Did you hear the one about the statistician that drowned in a river with an average depth of three feet?

In business, everyone wants to know the averages, the average cost of rent, the average sales per square foot, the average level of inventory, etc. Averages are interesting. They can be a nice benchmark, but they can also be misleading, and sometimes downright dangerous.

Take, for example, average inventory at cost (a number you should all be tracking). If you were an average toy store doing around $500,000 a year in sales, your average inventory at cost would be around $100,000. But if you are that same toy store, your Thanksgiving to Christmas sales will likely be around $200,000, or pretty much all of your inventory if you only had the average on hand. As nice as it would be to sell to the walls, so-to-speak, you know you can’t sell it all. You also know you need some inventory in January for birthdays and post-Christmas.

Just trying to keep your store at the average will kill your holiday sales. You’ll need a lot higher inventory to start the busy season and much lower inventory the rest of the year. Rarely will you ever have the “average” amount of inventory on hand.

Another problem with that average is that $100,000 worth of toys looks a whole lot different in a 2,200 square foot store than it does in a 1,100 square foot store.

The bigger the store, the more creative you may need to be with your merchandise to keep the store looking stocked and full. The smaller the store, the more creative you may need to be with your merchandise to fit it all in. Sometimes your store space dictates your inventory levels more than just sales or industry averages.

Averages are a nice starting point, but it is worth exploring all the reasons you might deviate from the average, and be okay with those reasons.

For instance, my payroll at Toy House was a significantly higher percentage of our expenses than the average toy store. But I could afford that because my rent was significantly lower. Our sales per square foot was extremely low compared to the average, but that was because we had wide aisles to allow for shopping carts, four cash registers lines, a large gift-wrapping area, and a stage with seating/playing area—in other words, a lot of square footage not used for showing merchandise. Our average ticket, thanks to shopping carts and toy demos however, was significantly higher. Each deviation from the norm was on purpose and with a purpose.

I do many talks about the financials of independent retailers. Whenever possible I try to use an average store for that industry. But I remind everyone in attendance that these numbers are average and they should be striving to be spectacular. If all your numbers are average, you haven’t found the place to stand out and make a name for yourself.

In retail, there isn’t a prize for being normal.

-Phil Wrzesinski
www.PhilsForum.com

PS The upside to averages is that they give you a quick check of the health of your business. If you have a number way off from the averages and you don’t know why, that might be a good place to focus your time and energies on changing. The downside is that you don’t ever want to be an average store. You are destined for greater than that.

PPS Rent per square foot and sales per square foot go hand in hand. You need to be selling at least 10x more per square foot than what you pay in rent (if your profit margin is around 50%). That’s a far better benchmark than average rent or average sales per square foot for your industry. Those averages tell you nothing.

July 20, 2017

Don’t Get Stuck in Irons

As I tell my sailors every morning, we cannot control the wind, but we can control the direction of our boat and the trim of our sails. Time and time again we talk about how sailboats cannot sail directly into the wind, only at angles to the wind. When your boat is pointing directly into the wind, it is called being in “irons” because you feel shackled and cannot move forward.

Young sailors learn quickly, however, that they have to turn the boat through irons to get from one angle to another to go upwind. To turn successfully, they have to fully commit to the turn. Make a gradual or wishy-washy turn and they risk getting stuck in a position where they cannot move forward.

In fact, one of the commands we shout during turning is, “Hard to the lee!” which means the helmsman must push the tiller hard to the leeward side of the boat to make the boat turn. We don’t say, “Easy to the lee,” or, “Gradually to the lee.” The command is “Hard!” Commit fully to the turn and do it hard and fast.

That lesson applies to your business as well. If you need to change your business—maybe change the way you are advertising, or change the way you are hiring, or change the way you are pricing, or change the way you service your customers—the best way to make that change is hard and fast. Commit fully to the change and get it done.

When sailboats turn fast, they do tip a little. Smart sailors are prepared for this and use it to their advantage to keep their boat speed up. When you make hard, fast changes, your business will tip a little. If you have prepared well for the change, you’ll be back up to speed quickly.

If you try to make a gradual change, however, you’ll get stuck halfway between the old way and the new way. You’ll give the employees and customers who hate change (no matter how necessary) more time to build up their defenses against it. You’ll be stuck in irons, unable to complete the change and move forward.

You cannot control the economy, but you can control the direction your business is facing and how you operate it. When it comes time to make a change, pick a direction and go there hard and fast.

-Phil Wrzesinski
www.PhilsForum.com

PS Change is not easy. Even in sailing I teach my kids to first commit hard to one direction and don’t change directions until necessary. We also plan our changes well in advance. Take all the time you need to plan your change so that when you start the change, you can make it hard and fast. The better you plan, the more smoothly it will happen. I spent most of 2005 and part of 2006 planning a new layout for our store. We were able to move every single product and every single shelving unit in a 30,000 sq ft store including the location of our six cash registers in just three days. In other words … Plan Slow and Change Fast. That’s how you keep a sailboat and a business humming along.

PPS Sometimes the wind changes directions and you find your boat stuck in irons without warning. The faster you notice, the easier it is to adjust your boat and get unstuck. Sometimes the economy or the industry or the traffic changes. The faster you notice, the easier it is to adjust your business and get unstuck.

July 12, 2017

Jack of All, Master of None

I bought a multi-tool the other day. Since I no longer have my own bike shop to fix up my bikes I bought a multi-tool designed specifically for fixing bikes. It even included spoke wrenches. Eighteen tools in one little package. I got my first chance to use it a couple days ago. You can probably guess what happened. Like most multi-tools, it did a competent job (except for the spoke wrenches that failed miserably), but it wasn’t all that easy to use. Having the individual tools for each job would have been a whole lot better. It leads me to ask this question …

My bike multi-tool. Love the wrenches and options, hate the spoke wrenches.

Is it better to be a Jack-of-all-trades-Master-of-none, or incredibly amazing at one skill?

If you’re an indie retail store owner, you’re probably going with Jack. You wear many hats. You have to know your Products well enough to be a competent buyer. You have to understand Retail Math to get your books balanced, keep your inventory in check, and keep the cash flowing. You have to know something about Marketing and Advertising and Public Relations to keep attracting new people. You have to know Human Resources so that you can hire and train a staff to help you run the store. You have to understand insurance and leasing laws and tax rules. You have to know how to manage people, products, and crises.

In fact, you’re so busy playing the role of Jack, you have a hard time getting really good at any single element of it.

That’s the life of an indie retailer. At least that’s what many indie retailers believe. But let’s look at the big picture.

If you play the role of Jack and do everything mildly competent, what do you have? A mildly competent retail store. If, however, you hired someone fantastic at one element, while you were mildly competent at the rest, how would your business look differently? How would that change if you found several people, each with a specific skill you lacked?

Sure, it is a risk to hire someone else and turn over parts of your baby, your business, to that person. At the same time, it is the only way to grow past mildly competent (and that’s assuming you are mildly competent at all elements of running a store).

Sure, it is an expense to hire someone else to do a job your’re already doing. At the same time, if they are truly a Master, they will more than pay for themselves by taking your store to the next level. Plus, they will free you up to spend more time getting better at the things you do.

Jack can get the job done, but only a Master will get you to the next level.

Here’s my challenge to all of you multi-tool Jack retailers out there. Go find a spoke wrench that works incredibly well at truing a wheel. Go find a socket wrench, too. And maybe a fantastic screw driver with a solid head and a perfect grip. Hire someone better than you to do jobs you’re only mildly competent at doing. Then take your free time to become a master at the stuff you’re already pretty good at doing.

Not only will your store grow leaps and bounds, you’ll have a lot more fun running it.

-Phil Wrzesinski
www.PhilsForum.com

PS I’ve been a Jack most of my life. It is hard to accept that you aren’t great at everything and that more often than not, you are better off getting help from someone better. Fortunately you do not need a twelve-step plan to break free of this Jack habit. Just two steps will do.

Pick one of your job duties or requirements that you either hate doing, or recognize that you aren’t that great at doing.
Hire someone else that is incredible at doing that particular job or duty and let them do it.

It pays more than it costs.

PPS The key phrase in all of this is “someone better than you” at that particular skill or job. Next post I’ll talk about how to find that person.

July 6, 2017

Some Things Change, Some Things Shouldn’t

I saved one item from the Toy House when we closed. One item that had endured the entire 67 years of our existence. One item that had served one single purpose, unchanging, for the store’s entire life. It was the metal box we used to hold our layaway cards. If you ever had a layaway at Toy House, your name was on a card in that box.

The cards changed over the years. We updated them with different logos. We went to duplicate paper when our printers changed. We added services to our layaway program. We even made a major point-of-sale software provider change the way their programming did layaway so that it matched our level of service.

The layaway program changed, but the box remained the same.

Any business that has been around ten or more years knows how drastically business can change. For most retailers, your product changes every year, sometimes several times a year. Your marketing changes as your market changes. Employees come and go. Customers come and go.

But change is scary. That is why we cling to the known. We hold onto what we remember. We defend the status quo. We use marketing that worked before even if it isn’t working now. We sell products long past their peak. We hold onto employees long past their usefulness.

The layaway box reminds me of one simple truth. When something you are doing is no longer productive, you need to change it. The box did its job quietly, efficiently, and unassuming. The layaway program, however, went through many changes to accommodate the needs of the customers.

Here is your summary of what should change in your store …

Never Change: Your Core Values, Putting Your Customer First

Don’t Change Now: Anything that is productive and efficient

Change Now: Everything else

Change doesn’t have to be major. Sometimes you just need a little tweak here or there to raise the productivity and efficiency of a program or policy or employee. Paint a wall. Try a new product line. Change the terms of a policy. Move a display or two. Upgrade the phone system. Reprint signs. Reword your phone message. Add a new training program.

Notice also that I didn’t say eliminate. Just like you, your customers like what is familiar and comfortable. Make your changes simple, customer-centric, and obviously better for everyone. It will still feel familiar and comfortable, only better and more productive. As credit cards became more common, our layaway program became less used. We tweaked it to fit the needs of those who still loved it, without getting rid of it entirely.

-Phil Wrzesinski
www.PhilsForum.com

PS The accompanying photo was taken in 1957 at the original store on First Street. That is my grandfather, Phil Conley, who founded Toy House. The layaway box is in the foreground and pretty full. Grandpa taught me a lot about Core Values and Putting Your Customer First.

PPS I don’t know what I am going to do with that box quite yet. I’m open to suggestions.

June 30, 2017

Give Them What They Want

Tonight I’m doing a repeat performance of last week’s Campfire Sing-Along at The Poison Frog Brewery. Last week I brought songbooks with the lyrics to forty-three songs from the likes of John Denver, The Eagles, Dobie Gray, Indigo Girls, Peter, Paul & Mary, The Beatles, Garth Brooks, and more. The evening went like this … Pick a song you want to sing and I’ll play it while we all sing it. Seemed simple enough, right?

June 23, 2017 behind The Poison Frog Brewery

Immediately people started asking for songs not on the list. They weren’t bad requests. I love Otis Redding’s “(Sittin’ On) The Dock of the Bay”. But they weren’t songs on the list or in the songbook with all the words. Still, people asked.

You know me. I’m all about making the customer happy. I’ve added a few of those requested songs to the list for tonight. I’ve added a few more songs as well.

What does that have to do with retail?

Every single retailer in America thinks they have a great selection of products just as much as I thought I had a great selection of songs. But there are products your customers come in asking for by name that you don’t have. There could be a good reason why you don’t have those products. Maybe you can’t get them. Maybe you don’t like the profit margins. Maybe you consider those products inferior to what you carry.

Keep in mind, however, if a customer stops in and asks if you have something, that means the customer thought of you as a place that would sell that product.

If your customers are constantly asking for certain items, maybe you need to reconsider carrying them. Or at the very least have a far better answer than either, “No,” or “We can’t get them.” If you keep saying, “No,” they will stop coming in and asking.

If it is something you either can’t get or simply don’t want to get because there is a better alternative, you could say, “No we don’t but can I show you something similar (better)?”

If it something you don’t carry and have never really thought about carrying, you could reply, “No we don’t. I’ll have to look into carrying that. Thanks for the suggestion.”

If a customer is asking, the customer thinks of you as a place that would have it. Wouldn’t it be great if you could say, “Yes we do,” more often than, “No we don’t,”?

-Phil Wrzesinski
www.PhilsForum.com

PS My stock reply to requests not in the songbook is simply, “I’ll have to learn that for next time.” Usually I’m looking it up the very next day. If they think I can play it, I don’t want to disappoint them. Any time you can avoid saying “No” is a good time.