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Category: Building Business

Deep Versus Wide

In just about everything you do, you have a choice. Go Deep or go Wide.

In business that could mean a number of things…

  • Stock a few things Deeply or stock a Wide assortment.
  • Try to create Deep relationships with a few special customers or shallow relationships with as Wide a group as possible.
  • Advertise Deeply in one media or spread yourself thinly across a Wide variety of venues.

Obviously, the best choice is to do both. But it is rare that any independent business has the resources to go Deep and Wide at the same time.

So with limited resources which is better? Deep or Wide?

This is the question that came up last Monday at the Jackson Retail Success Academy. One of our panelists was asked about advertising and what he felt was most effective. He said mixing up the media, doing a little in a lot of areas worked best for him. At which point every head turned towards me.

Two weeks earlier I instructed the same group of students to go Deep with their advertising, not to mix it up too much. Pick one media, I told them, and do it to the best of your budget and ability.

Every eye was now staring at me to see what I had to say.

And here’s what I said…

Nothing.

First, I did not want to discount what a fellow local business person whom I respect had just said. Second, I already had my say on the matter. Third, it wasn’t the time or place since we were supposed to be talking Inventory Management at the time. And finally, none of the students in that group had the kind of advertising budget this retailer had.

But the question still begged to be answered. Is mixing up the media a viable option or is it better to focus on one media done right?

Okay, I cheated. I phrased the question with a serious slant. I used the words, “done right”.

You see, the key to successful advertising is not how much you do or where you do it so much as how well you do it. Do you have a powerful message? Do you craft that message to speak directly to the heart of your audience? Do you pound that message over and over and over until the customers are thinking of nothing else other than you?

When I talk about Deep in advertising, I’m talking connection. How deeply do you connect with your audience? How well do you move their who-gives-a-crap meter? If you can do that in more than one media, good for you. Some businesses don’t have the money. Most don’t know how to craft the right message.

Your customers are your business relationships. The deeper the relationship, the more business you’ll do. And that starts with a deep and long lasting connection through your ads. If you’re dabbling in a little radio here, a little TV there, with a little newsprint on the side, how can you make any lasting impressions? How can you stay with it long enough to move the meter?

With all due respect to my fellow retailer, mixed media is rarely the answer. While he runs a successful business, Roy Williams, who taught me about going Deep, has turned other businesses in his category into rock stars (for those who know, pun intended).

Would you like to learn to go Deep? Join me for an hour on Wednesday, May 20th at 7:30am. I’ll be holding court at Jackson Coffee Company upstairs in their conference room doing a presentation that will change the way you advertise for good (or better).

-Phil

Watch What You Say

1:06 pm Saturday, April 18th, phone in my right hand listening to the ring tone. Calling a downtown restaurant known for good lunches in the sleepy city of Jackson where on a Saturday half of downtown shutters the doors before the sun hits it’s zenith. They answer…

“Hello, {Restaurant Name}”

“Hi, how late are you open?”

“One o’clock…” (big pause)

“Oh, you just closed?”

(Exasperated) “No, one o’clock AM!”

Geez, sorry for asking…

First impressions go a long way. Unfortunately many first impressions are made by wrong assumptions. The person on the other end of the line assumed that everyone knew they were open at night and therefore assumed that “one o’clock” could only mean “one am”.

Imagine if I had called at 12:30 pm. I might have assumed that “one o’clock” meant “in thirty minutes”. And they would have lost any chance at my business that night.

Simple little misunderstandings caused by assumptions that lead to lousy first impressions. If you want to make an assumption, assume that every caller is a first time caller to your business and knows little to nothing about you. How would you treat that caller differently?

Exactly! You’d give them more precise and useful information and avoid embarrassing and potentially costly misunderstandings.

Put a little time into your next staff training to evaluate faulty assumptions you might make when you answer the phone. Use this story to illustrate the point. It may be the least expensive best training you’ll use this year.

-Phil

PS Full disclosure: It was my mom who made the call. She almost hung up at hearing “one-o’clock”. Although she and her friends are going there tonight, her first impression will be a lasting one, and they’re going to have to work really hard to overcome one seemingly innocuous answer and win her over.

What to Change, What to Keep the Same

Johnny’s Toys, a fixture of the Cincinnati toy market for decades is dropping out of the toy business. Their flagship store in Covington, KY, just across the river from Cinci is converting the sales floor into more space for birthday parties and events that they host in the back of their store, an area called Otterville. They’re keeping their electric train business, but cutting out the toys and baby products.

I had a chance to visit Johnny’s a few years ago. Johnny’s has been one of few remaining giant independents like us carrying a wide variety of toys, hobby & baby products. In the electric train world Johnny’s is legendary. While we have a nice train display, ours is only one fourth the size of theirs. A full 24×8 feet of trains, track, bridges, crossings, landscape and wide-eyed children.

It was awesome!

I just wish the rest of the store had been as exciting.

Talking to a sales rep, together we lamented their getting out of toys. But then he added, “Phil, you’ve been far more proactive in your business, staying current on products, marketing, etc. I’m not really surprised they’re doing this.”

Proactive? Staying Current? Aren’t those minimums for running a business? I mean, we’re not talking advanced retail. Shouldn’t every business be staying current? Unfortunately, it is too easy to fall into the trap of believing that what worked before will work again.

The real skill in retailing is figuring out what to keep the same and what to change. Isn’t that the real skill in all business?

What do you hold fast, what do you let go? What do you never change, what do you constantly change? Where do you stay old-fashioned, where do you modernize? Principle questions being asked by businesses of all shapes and sizes all across the world.

I have an answer to those questions and I think the answer applies to every type of business.

What do you keep the same? Your Core Values! The principles that guided you when you began your business. The traits that define you and your business. David Freeman calls this your Character Diamond. It is the three to five traits that consistently identify you and guide every decision you make. Because these traits are inherent in both you and your business, they never change. In fact, they should be the rock upon which everything else is built.

What do you change? Everything else!

The key is to know what are your Core Values, to know your Character Diamond. Once you identify these traits, change becomes easy. Just ask yourself if the change you are looking to make is consistent with your Character. If yes, make the change. And make changes, you should.

You need to be current on products and trends, changing to meet the needs of your customer base. You need to know marketing and accounting principles and the changes happening in those worlds so that you perform at your best in both categories. You need to be on top of the best hiring and training practices so that your staff regularly exceeds your customers’ changing expectations. Yes, you need to change everything else. But you already know that.

Do you know your Character Diamond? Join me on Wednesday, May 20th at Jackson Coffee Company for the Midtown Morning Breakfast and I’ll help you identify the Core Values that are the foundation of your path to greatness. We’ll get started at 7:30am with a free continental breakfast and some of the most valuable information you’ll learn all year.

And as a bonus, I’ll show you how to use your Character Diamond to attract new customers and new business in ways you never imagined.

It will take a little over an hour of your time, but I promise it will be worth every minute.

-Phil

PS The May 20th event is actually Part 2 of my How Ads Work presentation. I’m doing Part 1 on Wed., April 15th same time same place. Hopefully you’ll join me for both.

Ambassadors Among Us

The wristband was teal and marked with the date March 24, 2009. It was my ticket on the ferry that would take me 8.5 miles from Fernandina Beach, FL through the Amelia River, Cumberland Sound and St. Mary’s River to the quaint little town of St. Mary’s, GA. No wristband and I was swimming back.

The wristband was also a signal to the people of St. Mary’s that I was a visitor in their midst. A signal that I had paid money to visit them and see what their town had to offer.

And from the moment my family stepped on shore, the signal was being read loud and clear. Strangers on the street welcomed us to town. One person in a city uniform showed us a baby owl nest in a nearby tree. Another out walking his dog suggested restaurants and other attractions. Every shopkeeper offered a nugget or two of history and a favorite spot to eat. And when we strolled into the visitors center to see about upcoming tours, they decided right there on the spot to do a private tour just for the six of us plus the dog.

I pulled out my wallet expecting to pay the premium to load the family onto their 8-person golf cart for our own private tour only to find that because of my wristband I got the friends and family rate. $26 later we had the lady running the center giving us a history of St. Mary’s that you wouldn’t find in a book, plus a tour of all the restaurants that were dog-friendly.

Other than an incredible history, St. Mary’s didn’t offer much. A few B&B’s, some nice restaurants, a couple of quaint shops (one of our ferry mates came to buy her prom dress there), and a beautiful tree-lined avenue make up this southern-most Georgian port.

But I will remember it as one of the friendliest towns I have ever visited. I tipped the tour guide, the ferry driver, and the waitress more than I imagined for making me and my family feel so special.

Obviously, someone got the message. And they spread the message to the entire town. Visitors should feel welcome.

Does your town make visitors feel welcome? Does your business make visitors feel welcome? Does your staff have a list of restaurants they recommend? A list of hotspots to visit? A list of favorite things to do or see? A little bit of history?

Does your community have any type of ambassador training to teach all locals how to welcome the visitors, the ones who paid to come see you? If not, you should start one. If St. Mary’s, GA can do it, so can you.

-Phil

Do You Have It In Stock?

Took the kids to Florida. The pool was heated. Parker brought his swim fins. Ian’s didn’t fit.

No problem, we’ll be in Florida on the ocean. We’ll have no trouble finding Ian a new pair. Right?

A couple of stores that we thought might have fins failed to produce. Plenty of goggles and masks, but no fins. That’s okay; we had an ace in the hole. A huge swimwear store was right up the road. We were sure they would have what we wanted.

Oops.

According to the kid behind the counter, swim fins weren’t due in for another week. “It wasn’t season,” he explained.

Being in the toy industry with both summer and winter items, I understand the concept of seasonal stock. I just don’t buy into it. If you want to buy a sled from me in July, I can sell you a sled. I may not have the biggest selection, but I will have a sled.

My son, however, doesn’t yet get this concept. Needless to say, he was heartbroken.

So ask yourself this… How many customers are you sending away heartbroken because you didn’t have something in stock during what you consider to be off-season?

Perception is reality, and although you may think it is off-season, you never know when a customer might believe it is in-season. Is there a corner of your store that doesn’t move much merchandise where you could put a small display of off-season stuff? Or a corner of your stock room?

Imagine Ian’s reaction if the kid at the counter said, “Hold on,” and ran into the stock room and produced a set of swim fins.

Heartbroken or Happy?

Which do you want your customers to be?

Phil

PS Six stores later we found some swim fins. SIX STORES LATER

What Are They Talking About?

When people talk about your business what are they saying? Do you know? More importantly, are people even talking about your business?

Have you given them something to talk about?

Roy H. Williams, aka Wizard of Ads, mentioned three ways at a recent conference to help you get WOM (word-of-mouth) from your customers.

First, you could choose to be over-the-top excellent in Design. Your store layout, merchandising, decorating, facade and mood could be so unique and outstanding that people talk about it for days and weeks afterward. Have you ever seen the Ferris Wheel at the Times Square Toys R Us? That’s over-the-top Design. Does your business have a cool and unique characteristic? Do you flaunt it? I saw a program on the Travel Channel of the 20 coolest public bathrooms. It was totally intriguing. My grandfather always had the idea of building a carousel on the front of the store with half the ride inside, half outside. Kids could get on the carousel and enter the store that way. Imagine what kind of WOM that would generate (and yes, I’m still considering it).

Second, you could choose to have over-the-top excellent Performance by your staff. I’m not talking about “excellent customer service”. Everyone says they have that. And, frankly, customers aren’t impressed by people who are just friendly & knowledgeable. They expect that. In fact, the only WOM you get from excellent customer service is when you don’t supply it. And that’s WOM you could do without.

What I’m talking about is a performance so rare that it’s exciting, extraordinary and unique. Customer service that is so over-the-top it becomes an experience. And it has to be an every day, all the time experience. If you’ve ever been to Pike’s Place Fish Market you know what I’m talking about – and what customers are talking about. The throwing of fish, the yelling, laughing, playing, the customer involvement. What can you do every day to make your customer’s experience more memorable?

The third, and most intriguing way Roy described was Generosity. What are you giving your customers to make them talk about you? A jeweler who replaces watch batteries for free, a restaurant who gives out free desserts to dinner guests, a hotel that has free curling irons, cell phone chargers, or web connections. Those are just some examples of generosity. But here’s the clincher. To get WOM from your generosity you have to do it, but not advertise it.

Imagine you go out to eat and see a sumptuous dessert menu on the table. You know you want one, but aren’t sure if you want to fork over the dough for an extra you don’t need. But then your waiter says, “How about a dessert tonight? It’s on me.” How could you resist? And won’t you be talking about that meal to your friends? Pretty soon, you’ll be saying, “Hey, let’s go to so-and-so’s. The last three times I was there the waiter gave us a free dessert.”

For the cost of some flour and sugar, a restaurant that does this could buy a lot of WOM, and a lot of loyalty. (And that flour & sugar could probably already be fixed into the cost of the meal.)

Word of Mouth is the best form of advertising – always has been, always will be. But you have to give someone something to talk about. Start looking at your Design, Performance and Generosity and see if you can find something worth a conversation. Then maximize it to the extreme and watch the talk begin.

-Phil

When You Don’t Know What You Don’t Know

I just got back from Grand Rapids. As a favor, Jackson Radio Works invited me to join them for the Great Lakes Broadcasting Conference to see Roy H. Williams, aka the Wizard of Ads, do a 3-hour presentation on how radio broadcasters can turn around the Michigan economy.

Whenever I see Roy, it rocks my world and gets my juices flowing. He makes his points more clearly and in a more convincing way than any speaker I have had the pleasure to see. Unfortunately, he made so many points in those three hours that I am having a hard time wrapping my brain around all of them.

The one thing I learned is how much I don’t know what I don’t know.

When you are aware of what you don’t know, you get to choose whether or not to learn it. The problem, of course, is when you don’t know what you don’t know. Then you don’t know what to learn. When I see speakers like Roy, I realize I have that problem. I don’t know what I don’t know.

Do you have that problem, too?

So I thought of some simple solutions.

Attend classes and trainings. If you’re a retailer, the Jackson Retail Success Academy is a good start. Also look at your industry to see if there are any conferences with speakers. The American Specialty Toy Retailers Association (ASTRA) hosts a great conference every spring. Maybe your industry has a similar event? At every training, class or seminar you learn something new, something you probably didn’t know you didn’t know.

Attend events with speakers and presentations. Here in Jackson we have events like the Economic Luncheons of the Greater Jackson Chamber of Commerce and the Midtown Morning Breakfast, among other events that have speakers of interest. Because each speaker brings a different perspective to light, you are almost guaranteed to learn something you didn’t know you didn’t know.

Pick the brains of your peers and contemporaries. Have lunch sessions with these people and choose topics of discussion that you publicize before you meet. Have each member of your lunch bunch pick a topic of discussion. They may bring up a topic completely foreign to you. Ta da! Something you didn’t know you didn’t know.

Actually, it’s quite easy to learn stuff you don’t know you don’t know. You just have to be willing to learn.

Your business decisions are only as strong as the info you have. When you don’t know something, your business suffers. When you don’t know what you don’t know, your business suffers more. What are you wiliing to learn?

-Phil

What Are You Going to Do Now?

The headline in the Jackson Citizen Patriot was about another manufacturer closing doors here in Jackson. I haven’t been doing the math, but add those 206 jobs to the layoffs and closures already announced and it paints a bleak picture.

Our county administrator spoke on the Bart Hawley Show that despite the “goverment estimates” that say our county population is growing or at least staying constant, there are signs that Jackson County is shrinking. The home foreclosures, the homes for sale versus the homes being bought, and the vast availability of rental units says people are moving out, looking for work wherever they can find it, just not here.

So my wife turned to me and asked, “What are you going to do now?”

It’s a valid question. How do you keep your business afloat when your population base is shrinking?

A shrinking population may be more challenging than new competition. With a new store entering the market you know their strengths and weaknesses and can exploit them to your advantage. But when the people are going, going, gone, what next?

The first answer is “expand your territory”. If you’re a neighborhood store, become a city-wide destination. If you’re a county-wide store, become a regional destination. Of course, that means you have to make some radical changes to your business model. You have to give people a reason to drive that much farther to see you.

That reason could be product. Is there something you sell on which you could corner the market? In today’s Internet world, that is hard to do – possible, but hard.

That reason could be service. Is there a service you offer that no one else offers? Is there a way to offer such over-the-top service that people call their friends to talk about it? Sure. It takes time and effort to get to that level. But it can be done.

That reason could be store design. Is there something remarkable about your store that makes people want to drive just to see it? I have never been to an Ikea store, but I hear so much about them that I’m compelled to eventually make the trip. In the toy industry, you can’t go to NYC without stops at FAO Schwarz and Times Square Toys R Us. Of course, store design on that level requires thousands, nay millions of dollars. And who has that to spend?

The second answer is to become more important to the community you currently serve. Are you involved in community groups? Serving on committees or boards? Not only do you gain in visibility for your store, you gain relationships with people and businesses that can help you through tough times. You also get your ear closer to the ground so that you hear and can respond faster to changing times.

A third answer to meeting the challenge of serving a shrinking population is to expand your offerings. Are there categories of products you haven’t offered that you could? Are there items customers request because they think you would carry it but you don’t? Grocery stores used to sell food. Now they sell everything from stamps to socks.

I’m not saying you should run out and invest in a whole bunch of inventory just because, but ask yourself if there is an area in which you could expand that would draw some traffic. Years ago, when Hughes & Hatcher went out of business, we applied for the right to carry Boy Scout and Girl Scout merchandise. The target audience was a perfect fit. And although profit margins are fixed quite low, the draw of the line more than makes up for the low profits.

To recap, here are three things to do in a shrinking market:

  1. Expand Your Geographical Reach – exclusive products, over-the-top services, or incredible merchandising that will bring ’em in from miles away
  2. Expand Your Involvement – Get involved in your community and network, network, network
  3. Expand Your Product Selection – Look for new product areas to serve your current customer base

Yeah, we’re trying to do all three.

-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

Optimism in Toyland

The toy industry shrank for the second year in a row. Sales nationally were down over 2% compared to 2007, which was down from 2006. The new Consumer Product Safety Improvement Act (CPSIA) has the whole industry in turmoil trying to figure out how to prove their already safe toys are still safe. Half of the factories in China that make toys have closed, causing toymakers to scramble to find capacity. The housing market, the credit market, the auto market are all in crisis. The media is calling this the worst economy since the Great Depression.

Yet the mood at the International Toy Fair just held in NYC was quietly confident. All of the retailers with whom I spoke had a decent 4th quarter and strong January. There were even a few newbies at Toy Fair with plans to open up new toy stores in this economy. Their friends must think they are nuts!

So what’s happening in Toyland that seems to make these businesses immune to the doom and gloom around us?

To a person, it was the knowledge that they control their own destiny. None of these businesses has conceded any control to the whims of Wall Street, to the lords of the layoffs, to the gods of government bailouts. They don’t bemoan the banks, throw missives at Mother Nature, or hunker down in a corner waiting for everything to blow over.

Every retailer with whom I spoke talked about how they were working hard to market their business, improve their efficiencies, and thrill their customers. Every retailer spoke about finding the best products, offering the most convenient services, getting the most out of every opportunity.

Yes, each and every toy store owner I saw at Toy Fair was optimistic that 2009 would be profitable – even more profitable than ’08, ’07 or ’06.

Maybe the optimism comes from selling toys for a living. Maybe it’s because the stores that didn’t feel optimistic didn’t go to Toy Fair.

Or maybe, just maybe, it’s because the stores who control what they can control and don’t worry about what they cannot, always seem to do better, regardless of the economy.

Are you one of those stores?

-Phil