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We All Get Distracted

I haven’t written in almost a month. I got distracted. It happens.

This blog isn’t my first job. Technically it ranks around four or five or maybe six. I have my family and Toy House up there at the top. I have my Daddy Class at the local hospital. I have my paid gigs like the Jackson Retail Success Academy and other workshops and seminars (I’m writing this from a hotel room the night before I talk to a group of pet store owners).

Sometimes things don’t get done.

This is not an excuse, other than to remind you that it can happen to any of us. The best thing you can do when it happens is apologize, pick up the pieces, and get started again.

I’m sorry for not writing more. But I’m back now with a better focus. I’m working on some great new concepts for the remainder of this year including a new website and a more tools you can use right away to make your retail business more successful. And yes, I am still devoted to giving you free content. Look for some new Freebies by the end of April.

Thanks for your patience.

-Phil Wrzesinski
www.PhilsForum.com

PS Yes, I will finish the segments on Trust I started back in January. I believe that trust is more important today than it has ever been. Trust is why your customer will believe her sister-in-law’s uneducated guesses to be more reliable than your thirty years of experience with the products.

A Journey of a Thousand Miles…

We all know the proverb… A journey of a thousand miles begins with a single step.

We all know January is the month of making resolutions and getting started on that first single step.

I’ll throw another favorite saying out at you… Success is a journey, not a destination.

Maybe your journey really is one thousand miles. Maybe your journey only feels like one thousand miles. Maybe your journey has no end point, but is the purpose in the first place. The reality of that single step, however, can never be underestimated.

I took a step six years ago to launch Phil’s Forum Publishing, LLC and start writing this blog. At first I was lucky to get 6 people to read each post. Sometime last month, however, (while I was busy running the toy store instead of blogging, ironically) I reached one million views. It wasn’t a goal necessarily, but it sure is a cool milestone, that upon reflection, reminds me how far I have journeyed the past 6+ years.

You just have to take that first step.

-Phil Wrzesinski
www.PhilsForum.com

PS I apologize for not writing much the last couple months. I have many steps to take this year to make up for it and hope you are ready to journey along with me.

Launching a New Website – The Jackson Retail Success Academy

Back in February 2008, the newly hired director of The Enterprise Group, Scott Fleming, invited all the alphabet groups in town to a meeting to discuss how we were supporting existing retailers in Jackson.

The DDA, SCMW, SBTDC, JLF, EDC, JCCC and MA were all there. I was there. Everyone but Scott himself who got called away at the last minute.

The question of the day was, “What is your agency doing to help indie retailers survive and stay in business?”

After seven people said, “Absolutely nothing,” an idea was born – the Jackson Retail Success Academy (JRSA). Less than two months later we launched our first series of classes.

I was the only retailer sitting at that table that morning, so I was asked to come up with a curriculum (a healthy dose of customer service, marketing & advertising, inventory management, financials, and hiring & training). Ten businesses signed up for that inaugural class.

Over the next several years, we tweaked the class schedule to make it work better for the attendees. We had start-ups attend. We had new owners taking over old businesses attend. We had non-retail businesses who wanted the customer service, marketing and hiring segments attend. We had business coaches who wanted to learn new techniques for teaching attend. We had restaurants, online retailers, and home-based retailers attend.

The cool thing is that JRSA is still around and still getting better. The class schedule is shorter (from an original 10-week program down to 5 weeks now), but the content is better, tighter, and more focused.

A retailer who takes this class will have amazing tools they can use to fix almost any kind of retail problem.

Finally, a website with all the details is up.

www.JacksonRetailSuccessAcademy.com

Just like the class, the site is constantly being tweaked and will continue to get better. The retailers in Jackson ready to take their businesses to the next level are already checking it out and signing up for the next class starting in January.

What are you doing to grow your business?

-Phil Wrzesinski
www.PhilsForum.com
www.JacksonRetailSuccessAcademy.com

PS If driving to Jackson five times is out of the question, but you still want to grow, I have a Road Show version of JRSA I can bring to your town. You only need to convince five businesses to sign up and find a place to hold the classes and I’ll do all the rest.

Anatomy of a Promotion That Pays

What if I told you that you could market your business to 6,000 customers and instead of costing you a penny, you would actually get paid $328 to do it?

What if I told you that you would also get valuable market data from that promotion?

What if I told you that you would be praised mightily for the campaign?


Here is what we did… (shout out to Bob Negen of Whizbang Training for this idea)

I contacted the local public school district and asked permission to send each of their 6,000 students a $5.00 Gift Certificate. They said yes and sent us a breakdown of how many students in each school. I mocked up the gift certificates as postcards and had them printed locally for $278.

When we got the GC’s from the printer we bundled them in bundles of 30 and made a bag for each school. I delivered them a week ago Wednesday to the main offices. They distributed the GC’s to the schools the following day.

The GC’s had only this disclaimer: “For Student Use Only. One Per Student. Expires 11/15/14”

Here is where it pays…

We are expecting a 10% return on the gift certificates. That’s 600 GC’s we expect to be used between now and 11/15. In the first couple days alone we already had 60 returned and not all the schools had distributed them! The average ticket so far has exceeded $12.00.

So let’s do the math…

600 x $12.00 = $7,200.00 in sales

Minus Cost of the GC’s  (600 x $5 = $3,000.00)
Minus Cost of the Products  ($3,600.00 – 50% of the retail price)
Minus the Cost of the Printing ($278)

7200 – 3000 = 4200
4200 – 3600 = 600
600 – 278 = $322

Here is the bonus…

Not only did we get the word out to 6,000 students (and their parents) about Toy House, but we will get 600 of them (and their parents) into the store right before the prime part of the holiday season where we will entice them with product displays, events, and wish lists for them to fill out and get them back for Christmas shopping.

Not only did we get the word out to 6,000 students, but we also will get 600 purchases to tell us what kinds of impulse items are popular with today’s kids.

Not only did we get the word out to 6,000 students, but I have received tons of praise from parents and teachers for our generosity.

Not only did we get the word out to 6,000 students but I have had friends and customers ask me what is going on that has kept our parking lot so full the last few days.

Here is the kicker…

There are some people who will tell me that I have the math all wrong, that I sold $7200 worth of stuff and only made $322 dollars. Those people are looking at the gift certificate as the be-all, end-all of the promotion. The customer came in once, spent a little money, and left. Promo done. They missed the whole purpose of the campaign, which is to earn top-of-mind awareness by getting them in the store right before the time we really want them in the store. I am banking on my staff’s incredible customer relations skills to earn their repeat business whether they spent $1.62 (our smallest transaction with the GC to date) or $58.02 (our largest).

Frankly, the $7200 in sales, while nice, is just a drop in the bucket. The real value is in getting the word out, getting them in to look around, getting them to buy into our generosity, and getting an idea of what is attracting their attention once they are in the store. The fact that I get paid $322 to get all of that is the icing on the cake.

Do you have any promotions planned that pay you to do them?

-Phil Wrzesinski
www.PhilsForum.com

PS If you sell stuff for adults, is there a major employer or three that you could contact about giving away gift certificates to their staff? Colleges, hospitals and city governments employ a lot more people than you might imagine.

Lose the Battle to Win the War

We all have those unreasonable customers. Ones that want to bring an item back months after they bought it, not in resell-able condition. Ones that demand money back without a receipt or they will flame you on Yelp. Ones that want you to do something that your stated policies say you don’t clearly do.

You could take a page from Best Buy and fire those customers. You could be like the Soup Nazi on The Seinfeld Show – no soup for you!!

Here is another approach I want you to consider.

Kill ’em with kindness. Break your policy and do what they ask. Bend the rules and give them what they want. Do it with a HUGE smile on your face, sincerity in your heart, and genuine concern for their needs.

“I’m really sorry that item didn’t work out for you. Yes, I can see why your husband would cut it in half. We’d be happy to take it back. Would you like to pick something else out? Maybe I can offer a couple suggestions of items that might work better? No? Okay, here is a refund. Let me know if there is anything we can do to help you out in the future.”

It might sting a little bit. You might lose some money on that particular transaction. But don’t be penny-wise and pound-foolish.

When you kill these customers with kindness, a few things could happen.

They might not notice and continue to be a thorn in your side.
But your other customers noticed. They didn’t get the whole story of what was going on with the customer. They didn’t see how unreasonable she was. But they did see how you reacted. They saw how you took incredible care of the customer. They saw how you had the customer’s back. They noticed how you were calm and friendly and respectful and helpful and caring.

They might become one of your best customers ever. 
I could regale you with many tales of unhappy customers we have turned into mega profit machines because we bent the rules a little. Heck, you can regale me with many of the same stories. In fact, retail is the only place I have actually seen true alchemy – turning lead weight into gold.

At a time when we are all screaming about how to draw more traffic, maybe firing our current customers isn’t always the best tactic.

As one anonymously brilliant person said… Your customers will get better when you do.

-Phil Wrzesinski
www.PhilsForum.com

PS Never let short-term profits get in the way of your long-term goals. This strategy may “lose” you a battle or two, but you’ll win the war. Yes, it requires patience. Yes, it requires eating a little crow (but crow sprinkled with a helping of cold hard cash can be rather tasty sometimes). Yes, there will be customers who make you duck into your office for a few minutes. Yes, they got more than they deserved. Isn’t than the hallmark of incredible over-the-top customer service?

Putting Amazon and eCommerce Into Perspective

It is about that time of year when you start hearing all the news about Amazon and Wal-Mart and low prices and discounts and the death of mom & pop shop retailers.

Yeah, Amazon is huge. In 2013, they did $75.4 billion in sales. That was 28.6% of all US eCommerce!

But it was only 2.5% of all retail. In fact, if you take gasoline and groceries out of the mix, eCommerce only accounted for 8.8% of all retail dollars last year.  (see references below)

Think about that for a moment. All the hype about Amazon and the Internet, yet over 9 out of every 10 dollars spent in retail were spent in a brick & mortar store. Brick & mortar is so far from dead, that any report you hear otherwise should be discounted immediately.

Yeah, Wal-Mart is huge, too. Almost four times bigger than Amazon. In 2013, they did $279 billion in sales in the US. That was 9.2% of all retail – more than all of eCommerce!

But once again, that shows you there is still plenty of room for you to do business. Add up Wal-Mart and all of eCommerce and you still have 82% of the retail dollars going somewhere else. That’s almost $2.5 trillion dollars going somewhere else.

That somewhere else ought to be you and me. If we quit worrying so much about Amazon and Wal-Mart and the demise of the mom & pops and start focusing on making ourselves better, it will.

-Phil Wrzesinski
www.PhilsForum.com

PS I used two sources for the numbers you see above. The first source here from emarketer.com claims that all retail was $4.5 trillion. But I felt that number was inflated by things like gasoline purchases and other non-eCommerce retail, so I also used the numbers from the US Census here to get a true product purchase number just over $3 trillion.

PPS And the number from Amazon is their total sales, not just US sales, so their percentage of the US market may be a little bit lower.

Two Strategies for Independent Retailers

I’m reading a fascinating book called The Man Who Wore Mismatched Socks about an indie brewing company in England fighting against the big corporate brewery who is trying to buy out and destroy all the competition.

Sound familiar?

In the book, the current head of the indie brewery says something profound…

“As you get bigger, you get more average.” -Archibald Gack

How many times have we seen that the biggest company in our industry is really making quite average products? (Put your shoes back on. You don’t need to count them all.)

Contrast that statement with this one said by a customer in an indie retailer.

“They must be the best because you see them everywhere.” -unknown customer

Customer perception is since a product is everywhere it must be the best. The reality is more often than not, the products sold everywhere are really quite average. There is better stuff out there.

This begs two questions…

  1. Do you differentiate yourself by not carrying the most popular item in the category, thus flying in the face of customer perception?
  2. Do you carry the popular items to draw the traffic and then try to upsell to the better items?

Both strategies can work, but they each work with a different crowd.

Use the first if you only want to go after the innovators and early adopters, the people who only want the best. They are a small market, but they pay top dollar to be first or to have the best. You can make a lot of money off of them as long as you stay at the top of the market and as long as you continually advertise your cutting edge expertise.

Use the second if you want to go for the early and late majority. They are a much larger crowd, but they have more options to find what they want. And usually what they want has been commoditized so your margins on the everywhere items will be smaller and your profit will be based on your ability to upsell.

The markets are different for each of these strategies. Know which one you’re in so that you’ll know who you’re trying to attract.

-Phil Wrzesinski
www.PhilsForum.com

PS You can trying being in both categories. Unfortunately, the message usually gets lost in advertising. When you advertise the popular items, you lose the innovator crowd. When you advertise the innovative items, you lose the popular crowd. That’s why it is better to pick one and do it better than anyone else.

Reinvention as a Strategy

I was out in Las Vegas last week for a trade show. I hadn’t really been on the strip in a few years. Things had changed.

The casinos were still there, still filled with blinking lights and maze-like aisles of machines. The fancy restaurants still stood guard on the edges of the gambling areas. The shows still crowded the walkways with ticket-goers waiting for something special.

But there were three changes I noticed.

  1. Every casino had empty gaming tables. Not just one or two that they chose not to open, but whole pits of empty tables.
  2. Every casino had a burger joint. Not just some food court burger to grab on the go, but gourmet burgers. Expensive compared to the McDonald’s experience, but a bargain compared to the $59 bone-in rib-eye. 
  3. Every casino had a Night Club. Loud dance music pounded the casino walls, almost drowning out the cacophony of digital music from the slot machines. Oh sure, some casinos had clubs before, but that wasn’t where the party was. The party was wherever someone got hot on a craps table or roulette wheel.

I remember going to Vegas in the days of the $1.99 steak dinners and $5 buffets. I remember going to Vegas when rooms were so cheap, they were almost paying you to stay. But times changed and Vegas reinvented itself into a high-priced, upscale city with Broadway shows, hundred-dollar meals, and $25-minimum tables.

Vegas is doing it again.

Gambling is down, but traffic is strong, so they are finding new ways to get the customers’ money. Everyone wants to party, but not everyone wants to play, so night clubs and mid-priced restaurants are on the rise. I saw one casino where they had removed a whole section of gaming tables to put in “outside seating” for the night club. You could enjoy the music, drink and talk with your friends, and even watch the remaining gamblers.

The lesson here is simple…

If you aren’t getting the customers’ money the way you used to, reinvent yourself and give your customers what they want now, not what they wanted a few years ago. The smartest, most successful companies are already doing it.

-Phil Wrzesinski
www.PhilsForum.com

PS I know some of you are going to say that Vegas has always had night clubs. You’re right. but they were an after-thought behind Shows, Restaurants and Gaming in all the promotions. Now they are front and center. Now they are taking over gaming areas. Now they are top-billed on the marquee. You gotta admit that is new.

What You Have in Common with Disney

I spent last week at Walt Disney World. As with any theme park, there are always upgrades being done. But instead of just “pardon the dust” signs, Disney plastered their walls with Walt-isms. I snapped this picture of one while chasing my boys to the next ride…

“We keep moving forward, opening up new doors and doing new things… and curiosity keeps leading us down new paths.” -Walt Disney

Then Roy Williams, aka The Wizard of Ads, hit me with this Monday Morning Memo (if you haven’t subscribed to this free email yet, you are missing out big time!!).

To sum up Roy’s Memo… 93% of successful companies have been successful because of their ability to improvise and adapt. 

Keep moving forward.
Keep opening up new doors.
Keep doing new things.
Keep going down new paths.

It works for Disney. It works for 93% of all successful companies. It will work for you.

-Phil Wrzesinski
www.PhilsForum.com

PS I have many thoughts, stories and ideas from my trip that I will be sharing over the next few days. Forgive me if I gush too much. Walt is one of my heroes. You’ll definitely like the stories.

What are You Doing to Reach the Influencers

McDonald’s spent millions advertising the Happy Meal to children. Yet, who ultimately controls what a child eats? The parent, of course. Yet, McDonald’s made billions from the Happy Meal by advertising to the strongest influencer.

There is a bra store near me that specializes in custom-fitted and hard-to-find sizes of bras. They advertise on the local ESPN sports/talk radio station. Yes, a bra store on a sports/talk station. And they’re making a killing by saying, “Hey guys, tired of hearing your wife complain about her bra not fitting?”

Later this fall I am going to give out about seven thousand $5.00 gift cards to the students of one of our school districts. In a couple weeks I am going to wine and dine and bribe their teachers through a Teachers’ Night Out private party at our store with food & drinks, prizes, fun activities and incredible incentives for attending. I want to make sure that when the teachers hand out these gift cards that we get a great return on our investment.

Too many retailer make the mistake of thinking they have to focus all their efforts only on the person who might buy or use their product. The most powerful push someone gets to shop at your store usually comes from someone other than you. It seems counter-intuitive, but sometimes your best advertising and marketing needs to be directed at a non-customer.

If you can convince the influencer of the benefits of your business, they will convince the end user of your benefits.

There are two advantages to this approach.

First, since you are advertising to an indirect target, they are going to be more surprised (which is a good thing) and interested in your ad. It won’t come off as such a sales pitch. The bra ladies weren’t trying to sell a product, just to offer a solution to a common problem heard by married men all over the planet.

Second, the influencer has far more power to affect the actions of your intended customer than you do. Word of mouth from a friend always trumps advertising by a company. Let the friends and family and influencers do all the heavy lifting for you.

Yeah, it’s risky. All advertising is risky. At least this one has a pretty good track record (or why else would people be trying to ban the Happy Meal toys?)

-Phil Wrzesinski
www.PhilsForum.com

PS To do this you just have to do two things. First figure out who is that non-customer that has the power to influence your shopper. Is it a parent, a child, a spouse, a friend, an authority figure? Second, figure out a message that will resonate with that person. It is powerful and it works.