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Payroll is Not Just a Line on Your Profit & Loss

My dad was a journalist. Got his degree from University of Michigan in 1965 and started writing for the Jackson Citizen Patriot newspaper right out of college.

He worked for his future father-in-law at Toy House all through high school and college to pay for that degree and even worked part time around his journalism job to help pay for the expenses of having a new family.

There is a legendary story about how he got his start at Toy House when my grandfather gave him a 40% raise to lure him away from another job at age sixteen.

Four years after college my dad got another job offer, this time to move to New York and write for Newsweek. Once again my grandfather made my dad a substantial counter-offer 33% higher than the Newsweek offer to stay and work full time at Toy House.

1974 – 25th Birthday of Toy House
My dad and grandpa are in the white shirts on the left. My sister and I are in the clown costumes in the middle.

Now some might say my grandmother was behind this offer. She didn’t want to see her grandchildren (my sister and me) leave town. But my grandfather knew a good employee when he saw one. He always told me …

“You can never overpay for great help.”

Talking about Sears these last few days has struck a nerve. Along with the comments here, I’ve received emails with stories of families with long ties to Sears.

One long-time reader of this blog told me how his grandfather who worked for Sears for 33 years talked about how they changed their employee stock options program in the 1980’s. He speculates that started some of their “well-trained staff” attrition. 

Wikipedia tells of how Sears changed their hourly pay structure in 1992 that ended up cutting pay for several employees. This followed on the heels of Walmart and Kmart surpassing Sears in total retail sales in 1990 and preceded by a year the demise of their catalog. Coincidence?

Circuit City did the same thing in March 2007, cutting starting hourly pay and laying off 3,400 higher-paid employees. Less than two years later they liquidated.

In both cases the C-Suites were only looking at payroll as an expense to be cut instead of an asset to invest in.

You can treat your employees as an expense instead of an asset and get away with it. Amazon has done that for years. Even their new round of raises was offset by a cut in bonuses and other benefits (and was politically motivated to decrease the chance of Bernie Sanders getting the Stop BEZOS Bill passed).

It only works, however, if you didn’t treat your employees like assets first.

I may be biased but I think my grandfather had it right. How you treat your employees affects how they treat your customers which affects your bottom line.

Go find some people to overpay.

-Phil Wrzesinski
www.PhilsForum.com

PS I wish I could have paid my employees better. I wish I could have offered them better benefits. Since I couldn’t, I did other things to help them out like grant all their time-off requests, work with the schedule to make sure they got the hours they wanted, feed them every now and then, train them, treat them with respect, give them responsibility, pay a stipend toward their continuing education, celebrate their birthdays and achievements, and bring in a masseuse during the Christmas holidays. Even when you don’t have the budget there are things you can do to make your staff feel appreciated.

Two Forks in the Road for Sears

In 1988 Walmart opened their first Supercenter in Washington, Missouri. The Supercenter concept heralded Walmart’s entry into the highly-competitive, low-profit, huge cash flow, repeat-traffic driver grocery business.

Two years later Walmart surpassed Sears in total sales to become the largest retailer in America.

By 2004 Walmart was capturing one out of every four dollars spent on groceries and remains the biggest player in the grocery industry.

Walmart ad in Vogue Magazine

In May 2005 Walmart did something completely unexpected. They ran a full-page ad of their new fashion launch in Vogue Magazine. Yes, Walmart and Vogue. No, it wasn’t a designer pajama line to wear when you visited a Walmart. Walmart wanted to do to fashion what it had done with grocery.

There was only one problem. Fashion isn’t a commodity like groceries. One year later Walmart reported declining sales for the first time (at a time when most retailers and the economy were booming). By 2007 they scrapped their foray into fashion and went back to what they did best—sell mass-produced items at cheap prices. When the economy tanked in 2008, Walmart found itself back on top with sales growth and cash flow.

I tell you this story in our discussion of the lessons from Sears filing bankruptcy (part 1 and part 2because it illustrates what can happen when a company tries to diversify the right way and the wrong way. Walmart’s model is built on selling cheap goods cheaper than anyone else.

Their foray into groceries made sense. Fashion, not so much. When Walmart began selling groceries it vaulted them to the top of the retail mountain. When they got away from what they did best, it caused them to falter.

Sears made the same mistake in the 1980’s and never recovered.

Sears made its living in the same style as Walmart—selling lower-priced items. One difference, however, was that Sears sold “value” more than price. The well-trained staff* would talk you out of the most and least-expensive versions of their appliances by showing you the “value” you got from buying something in-between with a lot of bells and whistles.

Sears also made its living by having stores near urban centers, but also a catalog to serve the less-represented rural areas.

This recipe put them on top of the world.

COMPETITION

While Sears had made a living selling to rural markets through their catalog, Walmart was quickly encroaching their territory with actual stores. Walmart went after the rural markets that didn’t have the retail glut of the urban locations, the same rural markets where the Sears catalog was most popular.

Walmart also used its growing power with vendors to bully them into better pricing to undercut the competition and define the sales in terms of “price”, not “value.”

Whether through hubris or ignorance, Sears ignored this threat and instead focused on diversifying their portfolio.

CORE VALUES

Back in 1930 Sears had launched Allstate Insurance, a value-based insurance company. The success of that led Sears to get into three other industries in the 1980’s—financial planning (Dean Witter), real estate (Coldwell Banker), and credit (Discover Card). 

Like Walmart and grocery, Sears and insurance was a fit. Insurance is a product people have to buy but want to buy it affordably (value). Like Walmart and fashion, financial planning and real estate were not a good fit for Sears because they aren’t sold the same way. Sears was sinking valuable time and resources into ventures that weren’t consistent with their Core Values or their primary business model.

Sears divested themselves of those entities in the 1990’s but by then the damage was done.

Walmart and Kmart surpassed Sears in sales in 1990. Walmart had redefined the lower-priced goods market, begun the serious race to the bottom, and infiltrated the rural neighborhoods where the Sears Catalog had been the lifesaver for so many families.

MAIL-ORDER BUSINESS

In 1993 Sears discontinued the catalog. The catalog business had shifted dramatically in the 1980’s because of the fanatical growth of retail stores in America. Why order it from a catalog when you can pop into a nearby store and get it today? The glut of retail, the cost of shipping, and the 7-10 business days shipping time was enough to kill the commodity catalog shopping that was the Sears catalog.

The only catalogs making it were for specialized companies selling specialized goods not found in stores (LL Bean, Eddie Bauer, REI, Signals, Orvis, etc.).

Then along came Amazon.

In 1994 Amazon launched their site. While there were a small handful of people who recognized the power of the Internet and what it could become (my buddy, Hans, actually pitched Borders Bookstore on the idea of selling online before Amazon launched and was laughed out of the room), I’ll forgive Sears for not seeing the potential.

Kinda …

Sears already had the mail-order business infrastructure set up. Sears already had the cataloging of hundreds of thousands of items done. Sears already had enough stores around the country at that time to set up a BOPIS system that even Amazon can’t yet match. Sears was part of a joint venture with IBM called Prodigy, so it was even involved in the Internet in its infancy!

This isn’t to say that Amazon wouldn’t have eventually cleaned their clock through better data, better customer-centric focus, and better operations, but just imagine if instead of trying to diversify, Sears was instead looking at new ways to do what they already did, only better and with the full use of the newest and latest technologies?

The lesson in all of this is simple.

First, understand fully and clearly who you are and what you do.

Second, don’t let anyone else do it better than you.

Sears let Walmart and Amazon do Sears better than Sears while Sears was busy trying to be someone else. Because of their size, it is a slow, painful death, but the choices that led to the bankruptcy were made in the 1980’s and 1990’s when Sears chose the wrong forks in the road and stayed on those paths too long.

-Phil Wrzesinski
www.PhilsForum.com

PS *I don’t know when it happened, probably in the 1980’s, but at some point Sears got away from their “well-trained staff.” Whether it was a cut in money for training programs, a shift in management away from training as a whole, a cut in payroll, or simply a belief that sales-training didn’t matter (a common thought in the 1980’s when everyone was selling at a high clip), Sears lost this competitive edge it held over the competition, especially Walmart.

PPS I did this exercise a couple times with my staff, but it was a question I asked of myself several times a year. “If I was going to open a store to compete with Toy House, what would I do?” When you ask and answer this question, you find the weaknesses in your model that can be exploited. You find where your competitive advantage is thinnest. Not only does this question help you find where competition could hurt you and shore those areas up before the competition strikes, it helps you constantly explore options for doing what you do better.

Lessons From Sears – Retail is Always Changing

“Phil, you know this store is going to put you out of business, right?”

My grandfather heard that first in 1962 when Shoppers Fair, a discount department store chain, opened in Jackson. We heard it when Westwood Mall opened in the 1970’s with a Circus World store (eventually becoming a KB Toys). We heard it in the 1980’s when Meijer opened their second store on the east end of town and Kmart opened a new store on the west end of town. We heard it in 1990 when Target came to town. We heard it in 1993 when Toys R Us opened.

Shoppers Fair Jackson, MI 1962

Shoppers Fair closed in 1974. KB Toys is gone. Kmart left when we did. Toys R Us left only a year after us. Montgomery Ward left Westwood Mall a couple decades ago. Younker’s is leaving Westwood Mall as I type.

Retail changes.

Jackson used to have a Woolworth store, a Field’s department store, a Jacobson’s department store, and an A&P grocery store—all defunct retailers now.

Retailers come and go. The retail landscape changes. Stores open and close.

We can look at Sears filing bankruptcy as just the natural evolution of retail. They had a good run, but now it is over.

In fact, I’ll go out on a limb right now and predict the eventual demise of Walmart. It might be fifty or one hundred years from now, but history shows us no retailer lasts forever.

The only problem with simply dismissing Sears as an eventuality is that Sears was once on top of the world, both figuratively as the largest retailer in America as recently as 1989, and literally when they opened their tower in Chicago in 1973. Their fall is far more educational to the independent retail world than Toys R Us and their debt problems caused by venture capitalists.

As a student of retail, I see two turning points for Sears starting their downward slide that incorporated the other five “lessons” I listed yesterday. One was in 1993 when they discontinued their catalog. We’ll talk about the other one tomorrow.

-Phil Wrzesinski
www.PhilsForum.com

PS There are several reasons why an independent retailer closes shop including retirement, illness, death, boredom, new opportunities, local market collapse, and competition. The big boys close for one reason and one reason only—Cash Flow. It is the decisions that lead to cash flow problems that I find most interesting.

RIP Sears

There is a group on Facebook for people who grew up in Jackson, MI. The posts are mostly, “Who remembers …?” so that former Jacksonians can reminisce about days long past. A recent post was about Toy House. A couple hundred people waxed nostalgic about visiting the original store in the 50’s and 60’s.

Several people mentioned the Catalog Sale, something my grandfather started early on.

The Catalog Sale was a two-weekend sale, once in October, once in November, where people brought in their catalogs and we matched the catalog price on any toy we had in stock. Our goal was to keep the sales in town.

The Sears Catalog

The most common catalog was the Sears Christmas Wishbook.

We ended the Catalog Sale in the early 1980’s when it turned out our prices were usually sharper than the catalogs at that time. The event was no longer a draw. By 1993 even Sears had stopped producing their catalog.

Times change. Retail shifts. Today Sears has filed bankruptcy.

Sears was Amazon before Amazon with their mail-order catalog business that allowed you to buy almost anything you could imagine from the comfort of your own home.

Sears was Walmart before Walmart when they dominated the retail landscape in the 1940’s and 50’s by offering a wide variety of merchandise at low prices. By 1969 Sears was the largest retailer in America with a larger market share of categories like home appliances than any retailer has ever had since. Four years later they completed construction on the tallest building in the world.

Sears also was a pioneer in retail, with legendary sales training, teaching their sales staff how to upsell and not sell from their own pocketbook. They were taught how to sell on features and benefits. They had their own credit card (which eventually became the Discover Card). They had their own insurance agency (which became AllState). 

Today they filed bankruptcy.

The easy blame is going to be Amazon and Walmart. Amazon out-Searsed Sears in the mail-order business. Walmart out-Searsed Sears in the commodity goods business.

Yet when was the last time you truly thought of Sears as a convenience-based place to buy goods? They dropped their catalog back in 1992, two years before Amazon launched.

And with well-known economy brands like Kenmore, Craftsman, and Diehard, tons of cash, and superior vendor relationships, Sears was well-positioned to destroy Walmart in the race to the bottom. Yet they dropped faster than a greased baton at the blind relays. 

So what happened?

The answer is quite simple. Sears got away from their competitive advantages and Core Values. Convenience and Commodity Brands were only two of them. The one I believe they truly missed was their sales training.

When was the last time you were blown away by the customer service at Sears?

Toys R Us got away from their Core Values in 1992 when Walmart surpassed them in total toy sales. Sears did the same thing over the years as they gave up the advantages that brought them to the table.

There are several (contradictory?) lessons in all of this.

  • Retail is always changing.
  • New competitors will try to beat you at your own game.
  • Stick to what you do best.
  • Don’t give up your advantages.
  • Adapt or die.
  • Stay true to your Values.

We’ll explore these concepts over the next few days and try to learn from their mistakes.

-Phil Wrzesinski
www.PhilsForum.com

PS It is never a good day when a legacy retailer such as Sears files bankruptcy. If we don’t learn from their mistakes, though, then we’re likely to make the same ones ourselves. As I’ve always said, Retail is not Rocket Science. Rocket Science is actually math for which you can solve all the variables. Retail has variables and equations that never fully resolve. The lessons, though, are fascinating.

Why Signs Increase Sales

Whether you agree with them or not, I have found a lot of value in personality tests such as Myers-Briggs. They have helped me understand my own choices in life and also helped me understand why we don’t all see eye-to-eye on everything. It also helps that I had an expert on these types of tests explain to me exactly what they show and their shortcomings.

One thing he taught me was a new definition and understanding of the terms. For instance, I always believed Extrovert meant outgoing and Introvert meant shy. They don’t.

Extrovert and Introvert are just two different ways we energize ourselves and recharge our battery. They have nothing to do with shyness. Extroverts (like me) get our energy from interacting with others. We seek out crowds, groups, hanging with friends, because it picks us up. Introverts, on the other hand, get their energy from being alone. They can be every bit as engaging and fun-loving and outgoing as anyone else, but that exhausts their energy. They need alone-time to recharge their batteries.

Introverts aren’t shy, they are just cautious with whom they will expend their energy.

Before I learned this I would have been surprised to find out that, like the population as a whole, half of my staff identified as Introverts. This helped me understand why certain people liked solitary jobs more than others.

I also learned why signs are such an important element of your merchandising displays.

Great use of signs in a Game Dept

SIGNS INCREASE SALES

Rick Segel told a group of baby store owners once that signs increase sales by 43%. He never told us where that statistic came from or why, but he encouraged us to put up more signs on our displays.

Now, with my new understanding of Introverts, I started to see why. Introverts would rather read a sign or read the side of the box to get basic info than spend their energy interacting with a salesperson. It isn’t that they won’t interact, but they want to know as much as possible before asking their questions. They want to formulate the right question so that they don’t have to ask too many questions.

There is another group of shoppers who also prefer signs over salespeople. I belong to that group. Men.

Men communicate differently than women. Men speak vertically. Did what I say make you think higher of me or lower of me? That’s the reason why we won’t stop to ask for directions. We don’t want to admit we don’t know. That is also why we don’t actively seek out a salesperson unless we know exactly the item we want.

If we’re looking for the Makita XT269M 18V Cordless Drill, that’s one thing. But if we’re just going in to look at cordless drills, not knowing exactly which one we want, we’re not looking for a salesperson because we don’t want to be asked a question we don’t know or show off our total lack of knowledge on the subject.

Men want signs to educate us before we have to interact with someone so that we don’t look foolish or stupid.

I’m an Extroverted Man who is not afraid to admit when I don’t know something. Yet, I get this mentality fully. I can see how signs can make a difference.

With most of the men and most of the Introverts preferring signs before salespeople, now Rick’s 43% starts to make sense. Armed with that knowledge the most important elements of a good sign are:

  • Answers to the most frequently asked questions about this item
  • Benefits of owning this item
  • Price

Want to create a sign that sells? Ask you staff what are the two most common questions asked about the product and what are the two most beneficial reasons for owning the product. Put those answers on your sign and you’ll see your sales rise with the sign.

-Phil Wrzesinski
www.PhilsForum.com

PS Before you rip me about how biased, inaccurate, wrong, or even dangerous these personality tests are, understand that I am not using them to label people but to give you some insight into differing human behavior. Introvert and Extrovert are tendencies and preferences. In reality the majority of us are often a little of both with a tendency to lean one way or the other. Likewise, not all men are afraid to ask directions. These generalizations about our tendencies and preferences, however, give you an understanding how to adjust your business in a way that best suits your customers.

PPS My free eBook Merchandising Made Easy (pdf download) is on the Free Resources Page under the heading “Improve Your Money” because it is part of Inventory Management, but it fits equally well with Customer Service and your customer’s shopping experience. Think of Merchandising as a tool you have that sets you apart from your competitors. It is one of your competitive advantages over the Internet.

Solving the Merchandising Equation

My dad had a super power. It was merchandising. He could take 400 square feet of product and fit it into 280 square feet of space with room left over. And it would look amazingly good! I think he would be a master at Tetris if he ever gets a handle on using a computer or video game console.

He didn’t need a plan-o-gram. It wouldn’t have worked in a store like ours anyway. The stock was always changing and always in need of rearranging. He could just look at the boxes, visualize it, and make it work.

I used to always say, “My dad is spatial.”

The Groovy Girl aisle

The challenge to our merchandising was our long aisles of shelves. We were closer to a grocery store in design than a boutique store. But unlike a grocery store where you might start at one end and snake your way up and down each aisle until your basket was full and your list complete, in our store we had to create visual pictures to draw people into each aisle.

I likened merchandising to a trying to solve a complex equation with several variables. We were trying to accomplish all of these goals at once with each aisle:

  • Organize everything by Category
  • Organize everything by Brand
  • Organize everything by size and color
  • Organize everything by price
  • Eliminate any wasted space or gaps between products
  • Make the first four feet of an aisle visually compelling and inviting
  • Make sure the bottom shelf products were visible and easy to read
  • Put the most profitable items at eye-level
  • Put some kind of visual break in the middle of the aisle to draw you into the aisle (either through color or shelf positions)

My dad could do all those things instinctively. I had to teach myself this skill through trial and error, through understanding why each of those bullet points was important so that when compromises needed to be made, I knew where to make them.

Morris Hite taught me something that always helped.

“Advertising moves people toward goods. Merchandising moves goods toward people.”

First and foremost your merchandising needs to be eye-catching.

You need to get the customer interested in wanting to see more. You need displays that “pop” and draw the eyes their way. Because of the design of our store with our long aisles, I focused on the first four feet of an aisle (the only part you can see while walking down a main aisle) and the visual break in the center. The rest fell into place after that.

Endcaps, tables, and free-standing displays are a whole different set of challenges. Along with being visually compelling and neatly organized, these need to tell a story. It takes a different set of skills and talents to make powerful displays that tell a story.

I never acquired that skill. I was more in the category of, “I’ll know it when I see it.” Fortunately I had some people on my team with a better eye than mine. I turned them loose on endcaps and free-standing displays.

Not everyone on your team will be skilled at merchandising. Some can learn. Others won’t. Cultivate the good ones, the ones with an eye for design and storytelling. Turn them loose on your store.

For everyone else, teach them to Stock, Straighten, and Dust.

  • Stock: pull all items from backstock out to the floor and make sure there is an ample amount of each on display.
  • Straighten: put items back where they belong and pull them to the front edge of the shelf
  • Dust: (yeah, this needs no explanation)

While bargain hunters (transactional customers) are willing to dig through heaping messes of products to find the best deals, your Relational Customers will lose trust if your store is a hot mess. You’ll lose sales when your customers (or even your sales staff) cannot easily find what they need.

There is an art to properly merchandising your store. There is also a science. Paco Underhill, in his book Why We Buy, outlines the science quite clearly. I read that book six times in the year I spent working on plans to completely remodel the store. It is worth reading (again).

By the way, normally I start a topic by discussing the “why.” Today I started with the “what.” Tomorrow I’ll tell you why those first four feet and the visual break in the center are so critical. Stay tuned.

-Phil Wrzesinski
www.PhilsForum.com

PS I hate stores that are a hot mess. I won’t go in them. My mom is the same way. She gets physically ill in messy stores and won’t go back no matter how good the deal. But we both love stores where the merchandising style could be called “whimsy.” Surprise and delight us. You’ll win. (By the way, we aren’t alone. There are many shoppers exactly like us.)

PPS Yes, there is a FREE eBook on the Free Resources page called Merchandising Made Easy. You should check it out.

Vacations – Do You Take Them? (Why You Should)

Before I started working full time at Toy House, the staff used to dread when my parents would go on vacation. It seemed that every time they returned they fired a key employee. They only took a couple weeks off each year, one in the spring and one in the summer, but their return usually meant someone was on the chopping block.

If you’re a small business owner, you might already be saying to yourself, “That’s why I won’t go on vacation. When the cat is away, the mice will play.” Although mice playing was the cause of a couple of those firings, more often than not it was the chance to get a break, to think critically about the business, and to have a fresh perspective that caused most of the terminations.

Those breaks were critical to their success.

No, they didn’t stop thinking about the business while they were away. No business owner is ever fully “off the clock.” But they found ways to relax and enjoy themselves. The key was the surroundings.

By taking a vacation they got away from the day-to-day grind, the fires constantly needing their attention, and the phone calls, customers, and other interruptions that consume most of the day. Those breaks allowed them to spend some time thinking more about the big picture of the store.

YOU NEED A VACATION

Owning your own business is supposed to be fun. It usually is. Yeah, there are headaches. Yeah, there are long hours. Yeah, you have to wear too many hats, several of which you’ve never been properly trained to wear. Yeah, you rarely ever get chunks of time to accomplish the bigger goals.

If you never take a break, however, you’ll eventually feel like the business is a ball and chain holding you captive.

A vacation gives you a chance to recharge your batteries. That, alone, is worth its weight in gold. It also gives you that freedom to think the big thoughts, to look at your business from outside the bottle, to decide if you have the right people in the right seats on the bus.

HOW TO TAKE A VACATION

How do you take a vacation when there is only you and a handful of part-timers? How do you take it when you don’t have someone you trust to handle the money? How do you take it when you’re worried about the mice playing?

SYSTEMS

One way to help your employees handle things in your absence is to give them a system to follow. Spell it out. Do step A, B, and C in that order. Systems help you have consistency. Systems give you checks and balances so that you can quickly find errors and correct them. Systems also make training easier.

GO-TO PERSON

You don’t have to have a “manager” for you to leave the store, but you do need a go-to person, someone to make the final decision on any matter that should arise. You can even assign two go-to people, one to handle any customer issues such as complaints or questions about returns, and one to handle other issues such as problems with shipments or receiving.

Remember that not everything has to be handled right away. Requests for donations can be left behind until you return. So can advertising opportunities and sales reps. Be clear about what you want them to handle and what you want them to hold for your return.

Your biggest issue with your go-to people will be trust. If you know your business’s Core Values and have hired people who share those values, then you can always remind them to stick to the values and follow the mission of the store. While they won’t always do exactly what you would do, if it is consistent with your values, then it will be just fine in the end. I always left on vacation with this one goal for the team—make the customers smile!

ASSIGNMENTS

There are certain tasks you might do that need to be done in your absence such as receiving merchandise, stocking shelves, or cleaning the store. Assign those responsibilities to your team. Give each person one area to be in charge. Then hold that person accountable for getting that particular task done. (Note: this is if you don’t already have a manager in place to handle and assign these tasks.)

Some of the areas to assign:

  • Opening/Closing
  • Receiving Merchandise
  • Stocking Shelves
  • Cleaning Inside and Out (especially the bathroom)
  • Counting Money/Making Deposits

Assignments not only help ensure things get done, they give your staff the chance to show off what they can do. Some of your team will step up in your absence and truly shine. They have been chomping at the bit for more responsibility and more to do. When you return from vacation, make sure you recognize and reward those people. I sometimes gave my key people time-and-a-half when they had to step it up. We called it “battle pay.”

Others might not step it up. They might shrivel at the daunting task before them. They might make excuses. They might become the mice you dread. At least now you know who they are and whether you want to keep them on the team.

Your vacation helps you separate the mice from the (wo)men.

If you are wondering whether you can afford to take a vacation or not, I will tell you that the benefits of taking a vacation are so great that you do your business a disservice by not taking one.

  • It recharges your batteries
  • It helps you see your business more clearly
  • It helps you see who is ready to step it up to the next level on your team (and who needs to go)
  • It pushes you to put the systems into place that you know you need anyway
  • It teaches you how to delegate
  • It removes the ball-and-chain

Like paying yourself a salary, this is something else all the owners of professional businesses do, too.

-Phil Wrzesinski
www.PhilsForum.com

PS You don’t have to go on a two-week African Safari to get those benefits. If you’re scared about it, start with a long weekend or two. Take a Thursday and Friday off to make it a four-day jaunt. More of the back office business stuff happens Monday-Wednesday anyway. Just get far enough away that you won’t feel compelled to “pop in for a quick visit to check on things.”

PPS When you get back, there will be fires to put out. There will be situations to evaluate. There will be things left undone. You’ll put those fires out, evaluate the situations, and get everything done fairly quickly, in part because your batteries are recharged, and also because you just learned how to delegate.

When you evaluate your team and how they did, if they tried their best but it wasn’t how you would have handled it, give them the A for effort. Say something like, “I truly appreciate your effort in handling this. Good job. Next time, however, you should try doing this …” Think of it as a teachable moment that will make your next vacation even better.

Give Them a Title

There are two series of books that have influenced my business life directly. One is a series of five books I first read as a child and have re-read several times since, until the books are barely holding together. I have read them twice to my own sons and am now reading the first book to a friend’s son. The second is a trilogy that came to me as a gift and I have talked about in this blog quite often.

This blog is about that first series of books. (You can follow the link in the previous paragraph to read about the trilogy.)

The Chronicles of Prydain Book #1

I don’t think Lloyd Alexander was thinking about business lessons in 1964 when he wrote The Book of Three, the first in his five-book children’s series The Chronicles of Prydain. Having read the entire series more times than I have fingers, however, I keep finding lessons on every page.

The opening chapter of the first book introduces us to the lead character, Taran of Caer Dallben. We don’t know much about him other than he helps tend a garden and take care of an oracular pig, but he wants to be a big hero. He wants a title to go with his name, so Coll, his mentor, gives him one … Taran, Assistant Pig Keeper.

For the first three books, he is known as Taran, Assistant Pig Keeper. (In book #4 he becomes Taran Wanderer. This book was the light bulb idea that sparked my book Hiring and the Potter’s Wheel: Turning Your Staff Into a Work of Art.) Although he desired to be a warrior of noble blood, mostly what he wanted was to be something, anything, to simply have a title and purpose.

Your staff have that desire, too. They HATE wearing a name badge that says “Trainee” because they know it means customers don’t trust them or treat them with respect. They want a title, preferably one that sounds important, that gives them some respect.

I see this as a creative opportunity.

While not everyone can be a store or department manager, you can make them managers of specific things like:

  • Manager of Smiles
  • Manager of Problem Solving
  • Manager of Question Answering
  • Manager of Greetings and Salutations
  • Manager of Product Knowledge
  • Manager of Finding Lost Products
  • Manager of Sunshine
  • Manager of Giving Customers an Experience They Will Never Forget That They Will Have to Tell All Their Friends About and Drag those Friends to the Store on Their Next Visit

Okay, maybe that last one won’t fit on a name tag, but you get the idea.

The point is that a title gives an air of respect. A title like the ones above also gives a fresh air of cheer, sets a customer at ease, and lets the customer know this person is (hopefully) trained to help. Most importantly, the title gives your employee a sense of importance, a purpose, and even a goal to aspire to.

One other benefit is that when you make a big deal out of giving your employee a title, especially when it is something cool and fun and even personal with layers of meaning, it shows that person that you care.

The more you care for your staff, the more they will take care of your customers.

Yeah, I got all that from a children’s book.

“Take inspiration from wherever you find it, no matter how ridiculous.” -Roy H. Williams, aka The Wizard of Ads (yeah, that other series of books)

Decorate your staff by giving them fun, meaningful titles and watch how they grow into those roles.

-Phil Wrzesinski
www.PhilsForum.com

PS The more personal and fun you make the title, the more benefits you will see. Your employees will work harder and your customers will be quicker to trust them with just this simple little act. It is the little things that make a difference.

PPS Get rid of your assistant managers (the titles, not the people). Make everyone a manager of something, even if it is simply a “Shift Manager.” The word “Manager” says authority. “Assistant” says “not yet good enough.” Make them all good enough to solve the customer’s problem and take care of her every need, and give them the title to declare it.

How to Learn From the Best

Yesterday, I buried this little gem in the post. Let’s take it out and polish it a bit.

“If your store isn’t the store everyone points to in town for having the best customer service, your service isn’t good enough. Yet.”

There is always that one business everyone believes is the best retailer in town. Several years ago, when I did a full-day workshop on Customer Service in Manistee, MI, a sleepy little Lake Michigan town with a year round population of around 6,000 people and summer visitors measured in the hundreds of thousands, I found their best retailer.

I came into town a day early to check out the shops. I braced myself against the sleet and snow on that cold, wet, wintery March day and made the rounds. The shops were open, but mostly empty. It was off-season, and not the best day to be out on the streets. One store, however—Snyder’s Shoes—was hopping. They had several customers in the store when I entered, but the staff still made a point of greeting me. Even in a sleet storm it was obvious who was the king of retail in town.

Snyder’s Shoes, Manistee, MI

The next day, as the attendees were filing in, I got the confirmation as I overheard one person say, “What is Snyder’s doing here? They’re already the best retailer in town.”

At the end of the day, however, when he was asked what strategies he hoped to implement from the day-long training session, Dan, the co-owner of Snyder’s said, “Every single one I possibly can.”

I feel for the other retailers in Manistee. They aren’t being measured against their competitors. They are being measured against Snyder’s.

Customers don’t measure you against your competitors. They measure you against every retail experience they’ve ever had.

So how do you compete against that? How do you raise your bar that high?

You have to do your homework. Ask your staff to name the stores they think offer the best customer service in town, then plan a road trip to visit them. Watch how those stores interact with their customers. Look for the differences between what they do and what you do.

Visit all the stores your staff named. You can do it in groups or pairs. Take notes. Ask these questions …

  • What do they do better than us?
  • What do they do different than us?
  • What do we do better than them?

The first question shows you what you need to tweak or improve. We all have things we need to tweak or improve. Getting a list by comparing to what other stores do is far better than just trying to brainstorm it yourself.

The second question shows you where you are different. Sometimes different is good, sometimes it isn’t. You have to decide, based on your core values, if you want to change things or highlight the difference.

The third question is your calling card. This is the area where you’re winning in the minds of your customers. If there isn’t anything you are doing better, you have serious work to do. If there is something you’re doing better, find out how to do it BEST. Raise the bar so high no one will be able to match it.

Now is a good time to take this road trip. You have time to visit stores before you get too busy. You have time to implement those changes before the holiday season hits. You have time to tweak your advertising message, your promotions, and your marketing to highlight your strengths and differences.

Two more questions you might also want to ask …

  • What do they do that we can’t?
  • What do they do that we won’t?

The first shows your limitations. The second is your biggest differentiating factor. Both answers give you power and show you where you stand not only in the retail landscape, but also in the eyes of your customers.

“Knowledge is power.” -Sir France is Bacon.

-Phil Wrzesinski
www.PhilsForum.com

PS Note: If you ask your staff who is best and they don’t immediately say, “We are!” then you know you have some serious work to do. If they say they are the best, ask them who is second best and go visit those stores.

PPS One more thing you still have time to do … Hire me to do The Ultimate Selling Workshop with your team. You’ll transform your team to the point that when they say, “We are!” you and your customers will nod in agreement.

The Fallacy of Foot Traffic

I was at Great Lakes Crossing Outlet Mall in Auburn Hills, MI the other day. It is one of the few malls I truly enjoy, partly because it has an aquarium (I have an oceanography degree), a LEGOLand (I used to sell toys for a living), and a Bass Pro Shop (I used to lead wilderness trips and still love to go camping). With Haggar, Levi, and Bose stores, and tons of seating in the walkways in front of the ladies clothing stores it is definitely a man-friendly mall.

The place was hopping. Whoever said malls are dead hasn’t been to this mall. The main aisles were jammed with people on a lazy Sunday afternoon in late August. It wasn’t a back-to-school crowd. It was just people out shopping and having a good time.

The food court was especially crowded. The line at Starbucks snaked all the way around their kiosk. Almost every restaurant in that food court had a line four or five people deep.

The key phrase there is “almost.”

Two restaurants in particular had no lines at all. As I sat eating my pizza, I watched both restaurants with interest. Three young girls approached one restaurant, stared at the menu, and walked away. A mom with a kid in a stroller stopped at the other restaurant and ordered her meal. In the time it took me to eat my pizza, that was the only paying customer at either of those two restaurants.

All the other restaurants had lines of people.

It wasn’t like these restaurants were serving fried crickets on a stick or something else not on the American palate. In a busy mall they weren’t getting the benefit of any of that foot traffic. Somehow, either through previous reputation, the signage in their restaurants, their pricing, their selection, or their attitude, they were idle—even with plenty of customers all around them.

All the foot traffic in the world won’t help you if there is a flaw somewhere in the business. It might hide the flaw for a little bit, but until you find and fix that flaw, you’ll never grow.

The reverse is also true. If you have a fabulous business, your location may hold you back a little, but not nearly as much as you think.

Schlenker’s Sandwich Shop
1104 E. Ganson St.
Jackson, MI 49201

One of my favorite burger joints has been in the same location since 1927. The road was a dirt road back then and the location is still well off the beaten path. The only foot traffic they get is the traffic they generate themselves. The restaurant is just a counter with limited seating. Yet the business is still going and growing after 91 years.

Just last week new owners took over. Yes it was a viable enough business to sell (something very few restaurants can say). The big change the new owners are planning? They are thinking about adding a drive-thru to handle all the takeout traffic.

My point is that too often we think, “If only I had a better location with more traffic …” or “If only I could find that silver bullet in my advertising that would draw more traffic …”

Neither of those thoughts is the true path to success. I predict those restaurants at Great Lakes Crossing will be replaced by next summer. They had all the traffic they could stand but weren’t able to convert it into customers.

I also predict that when Schlenker’s builds their drive-thru it will be filled with cars every day without them having to spend a dime on advertising.

If you have ever heard yourself saying, “If only we had more foot traffic …” the better question to ask is …

“What do I need to do to make my business better so that people want to come here?”

You are a destination store. When you act like one, you’ll draw all the traffic you need without any silver bullets or malls to do it for you.

-Phil Wrzesinski
www.PhilsForum.com

PS Even with a steady, solid, faithful customer base and a burger that was rated the seventh best in the entire state of Michigan, the other change the new owners of Schlenker’s are making is to switch suppliers to a higher grade and quality of the ground sirloin that makes their burgers so good. They have all the traffic they can handle, yet even they are answering that one question above. Are you?