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Be the Best at One Thing

Quick, name the second place person in the MVP balloting. Any sport. Bet you can’t unless it was your favorite player who got snubbed.

When they give out the awards at the end of a sports season, the big winners are always the leader in at least one category. In fact, the short list of potential MVP’s always starts with the leader in each category.

Being pretty good in everything doesn’t get the same attention as being the best in one thing. It applies in sports and it applies in retail.

If you want attention for your business, you have to be the runaway category leader in one category. You have to be so far out in front that your competitors have already resigned themselves to a fight for second place. You have to be not the first but the only company that comes to mind in that category.

When you do that, you will get all the attention you desire deserve.

How do you figure out which category you should own?

  1. Make a list of everything you do better than your competition.
  2. For everything on that list, write down all the competitors who at least try to own that category.
  3. Figure out which category has the least amount of competition. (In other words, the one you own the most)
  4. Figure out how to do it even better than you already do. (In other words, widen the gap).

Spend all your time and energy growing your lead. You’ll win all the awards (customers) you deserve desire.

-Phil Wrzesinski
www.PhilsForum.com

PS After you focus on your best trait, shore up your worst trait – the one that drives customers away. But always, always, always in that order. Best first. Worst second. No one remembers second place or an average business.

Listening Your Way to Better Sales

“The fool speaks, the wise [business]man listens.” -African Proverb

Here is one tip to increase your business this year. Are you listening?

Be a better listener.

What your customer is saying is extremely important. Over-the-top important. It is the center of her universe and the whole reason she is in your store trying to give you money.

But she won’t give you that money if she doesn’t think you’re listening.

Be a better listener.

“It is better to listen in order to understand than to listen in order to reply.” -Anonymous

Here is a simple little game that I did with my staff to help them focus on listening…

Have your staff pair up in twos. Have the first person tell the second person what he or she likes most about working for your store. The person listening must repeat back what the first person said. If the second person gets it right, then the second person can share what he or she likes most about working for your store with the first person repeating it back. Then each pair must stand and tell the entire group why the other person likes working here so much.

The repeating it back is the key. To be able to do that, you have to listen to understand, not simply listen to reply. The goal for each staff member is to repeat back every question or important comment the customer makes this month. The more they do it, the more they get into the habit of doing it.

Repeating back to the customer what she just said might seem annoying, but it actually serves three distinct purposes.

  • It helps to clarify the customer’s concerns and make sure you got it right.
  • It gives you an extra moment to think about your response
  • It helps the customer trust that you are paying attention, are in the moment, and have her best interests at heart.

It is a simple acknowledgment that goes a long way in building the long-term relationship you want with your customers. Now, repeat this all back to me. (Paraphrase if you’d like. That is perfectly acceptable.)

-Phil Wrzesinski
www.PhilsForum.com

PS There is another benefit to the training I did with my staff. I had each staff member verbalize why they like working for me. Then it was verbalized two more times, reinforcing it even more. Plus, by verbalizing it to the entire group, everyone got reinforcement for why this is such a great place to work. Oh, and if someone cannot come up with a good reason for why they like working with you – fire them!

Setting Yourself Apart From the Pack

I read a fascinating book called Built to Sell by John Warrillow. The book is a business parable about a guy who owns an advertising agency and wants to sell it. His mentor shows him how to transform his business to make it salable.

Most retailers would dismiss the book because on the surface it doesn’t seem to apply. The first step is to limit your focus to only that which you do better and more profitable than anyone else so that you can create a turnkey operation. That doesn’t translate well to indie retail.

But there is a lesson hid inside there that we all can use.

Maybe you cannot change your product mix to become the leader of the pack, but you certainly can change your services. In fact, you can change them so radically that you become a category of one (another good business book worth reading).

Simply decide which customer subset you want to cater to, and then cater to them at the exclusion of all others.

Roy H. Williams calls this “choose who to lose”.

For instance, you could decide you only want to cater to the uber-rich. You’ll probably want to change some of your product, but to truly capture that customer you’ll have to totally change your services. Hours by appointment only. Red carpet ready and waiting to be rolled. Soft sofas and chairs for seating. Food and drinks served. A personal shopper to bring the items to the customer. Private showings for her and her friends at her penthouse.

Or you might be a toy store that caters to the daddy crowd. That might mean beer and pizza and big-screen TV’s, pre-wrapped gifts, diaper changing service, plenty of activities to keep the kids occupied until the game is over.

Do something like that and instead of the kids clamoring to go to the toy store, dad will be suggesting it during breakfast.

While it is getting more and more difficult to separate yourself just on the products you carry, this age of self-serve checkouts leaves you a ton of room to separate yourself from the pack by the services you offer.

Who are you willing to lose to win the heart (and pocketbook) of someone else?

-Phil Wrzesinski
www.PhilsForum.com

PS We started with the bargain hunter. I don’t match prices or run coupons or special deals just to entice people in the door. Yes, we have a clearance sale to move out the dogs, but that’s it. We instead focus on customers looking for trust. There are plenty of them out there.

Is it a Business or Just a Job?

I work with a lot of smaller retailers – start-ups and indies who are just getting going in this crazy industry we’ve all chosen. Many of them get this one question wrong.

Did you start a business or just create a job?

Most people think they are starting a business, but in reality all they have done is create a job for themselves, often a low-paying job at that. Then when they go to sell the business, they can’t find any buyers.

Here are three questions you need to ask yourself to see whether your retail shop is truly a business or just a job.

Could the business run without you? More specifically, could you hire someone to do your job, or is the whole reason the business exists because you exist?

Do people come to your business because of what you offer or what your business offers? If the vast majority come because of you, you might have a job, not a business.

Do you pay yourself a salary? If you don’t then it isn’t even a job, it’s a hobby. If you do pay yourself a salary, is it a good one? Is it enough to hire someone else to do that job? If you said no, then you might have a job, not a business.

Do you show a profit? If you’re paying yourself a salary, that is a good thing. It means that you could potentially hire someone else to do that job, while you reap the profits – assuming there are some profits. Some owners will make the correct move of paying themselves a salary, but do so at the expense of showing a profit. Some will keep profits low on purpose to avoid taxes. There might be a number of reasons for not showing a profit. Amazon doesn’t seem to need to show a profit. As long as the cash keeps flowing they (and you) can usually keep doing your job. But an indie retailer without profits probably won’t be able to sustain that cash flow for too long. You and I don’t have the deep pocket investors Amazon has. If you’re paying yourself a salary in lieu of showing a profit, you might have a job, not a business.

Not that there is anything wrong with having a job, not a business. You can make a healthy living for many years that way. You might like the job of being boss (and you might be really good at it). You might like the salary you pay yourself for being boss in lieu of having your business show a profit. Those are good and valid points for you to keep doing what you do.

The only downside will be the exit strategy. Once you decide you no longer want your job, if you didn’t first turn it into a business, you’re going to have a hard time finding anyone who wants to buy it. No one “buys” jobs. They buy businesses. Without a business, all you have left to sell are your assets.

Neither concept is wrong, but not knowing the difference can be costly down the road.

-Phil Wrzesinski
www.PhilsForum.com

PS If you want to turn your job into a business, you need to think about three things.

  1. Could I hire and train someone to do my job?
  2. Do I pay well enough to hire someone competent to do my job?
  3. Is there enough profit and/or growth potential to keep the business making money?
When you can answer yes to all three, you have a business, not a job. You have something you could sell down the road. You are truly an entrepreneur. Heck, you could should hire someone to do your job right now and go start another business or two.

Top Ten Blogs from 2013

A lot of people thought these blogs were interesting enough to tell others about it. Just in case no one shared these with you, here are the top ten most shared blogs from 2013.

Are You Open-to-Buy? Inventory Management is one of the most difficult and costly things to do in retail. Do it right and your cash flow and profits soar. Do it wrong and no matter what else you got right, you’re still out of business.

Sit in the Hot Seat for a Bit if You Want to Improve I made Ernie sit in the hot seat to find out how we could improve his business. We looked at each interaction, one-by-one, until we found the breakdown in customer service. Do the same for your business and you’ll know what to focus on for 2014.

Two Types of Customers (and Other Generalities) Everyone likes to have things broken down into simple lists and digestible analogies. This post does that for you.

Everything I Possibly Can Simple message: The best retailers are the best because they keep learning new ways to be better.

Great Minds Discuss Ideas My shortest blog of the year – based on a great quote by Eleanor Roosevelt.

I Did Some Showrooming Showrooming is a big deal that is hurting brick & mortar retailers all over the country. The real problem isn’t the smartphone or Amazon. The real problem is our own ability to close the sale.

I Tore Up My Office Yesterday If you want different results, you have to do something different. (I think this got a lot of love because everyone wanted to see my messy office.)

Peeing Before the Race The dog that does its business before the race will run the fastest. The business that does its business before the season will be the most successful.

Anatomy of a Staff Meetting – Play Value I’m on a crusade to make staff meetings more fun and memorable. Who’s with me?

The Mortar Between Your Bricks Bricks are the products you sell. Mortar is everything else. You need good bricks to build a good business. You need strong mortar if you want that business to last.

May the lessons of 2013 bring you great successes in 2014!

-Phil Wrzesinski
www.PhilsForum.com

PS If you want more, here are the Top Ten Blog Posts of 2012.

Give Your Business a Physical – Track These Numbers, Too

There are many different metrics you need to measure to determine the health of your business. Two of the biggest are Profits and Cash Flow. If both of those are good, your business is probably doing well.

But that doesn’t mean you don’t look at other numbers, too. That would be the equivalent of a doctor checking your temp and blood pressure and determining you are completely healthy without looking at anything else.

Here are some other numbers you should track to keep a check on the pulse of your business.

Traffic – Number of transactions you had this year compared to last year. Did that number go up or down? If it went down, why? 
  • Did your location get worse? 
  • Was there a change in the types and numbers of stores around you? 
  • Was there a drop in population? 
  • Did you cut back your offerings and categories significantly?
If your traffic was down, but none of these other factors were negative, you have a hole in your Customer Service (repeat and referral business) and/or Advertising (first-timer business). You need to find that leak and fix it fast.

Average Transaction – Take your total sales and divide by # of transactions. Compare to last year. If this number went down, why? 
  • Did you carry fewer high-ticket items? 
  • Did you add more low-ticket impulse items that people might run in and grab? 
  • Did you do anything to attract more youth? 
If none of those factors were in play but your average ticket went down, you have a hole in your staff’s ability to sell. You need to fix that fast.

Market Share – This is a little harder to calculate, but an incredibly valuable piece of information that can pinpoint problems – even if you had a great year on paper!
  1. Find the national sales figure for your industry. 
  2. Divide that by the population of the United States to determine sales per person. 
  3. Multiply that times the population of your trade area to determine the market potential for your area.
  4. Divide your total sales by that market potential to find your percentage or share of the market.
  5. Compare it to last year’s number.
You can have an awesome year with solid sales growth and decent profits and cash flow, but still be in potential trouble if your market share is slipping. If all your growth was fueled by huge growth in your market, but you aren’t holding onto your share of that market, then you are ripe for being picked off by a better competitor entering your market. You need to figure out why your share is decreasing and fix that problem now.

You can also have a lousy year with declining sales and profits, but mostly fueled by a change in the market. Maybe your industry is in decline (smaller sales per person). Maybe your trade area is shrinking. But if your market share is growing, then your big issue is determining whether to cut expenses and inventory and hope the market comes back or move to a new market.

Make sure your Profit and Cash Flow are good. Those are immediate life threatening problems for your business. If those are good, it buys you time to check/fix the other problems.

Give your business a full physical. An ounce of prevention is worth a pound of cure.

-Phil Wrzesinski
PS Be honest in your evaluations. Even if there are circumstances beyond your control, there are always circumstances you can control and improve while you ride out the storm.

Many Happy Returns

Returns are one simple way to set your store above the rest in terms of customer delight. The more you can do to make a customer happy while making a return, the better.

Here is what I reminded my staff regarding returns…

MANY HAPPY RETURNS

Actually, we hope we have very few returns, but we do know we will have some returns. I want all of them to be as happy as possibly. Here are some ways to make them Happy Returns.

Yes, we will take it back! Don’t worry about the customer’s motive, whether it is opened/damaged/re-sellable, etc. First and foremost make the customer happy by saying yes. Some items we can re-package to sell. Some we will get credit from the company. Some we can steal parts from to fix others. Some we can use as demos. Some we can donate to places that take used toys.

Yes, we will refund your money! If you have a receipt. Otherwise we will gladly give you a store credit good on anything at any time. This is one area where you might get someone demanding money back even without a receipt. If they are being really pushy about it, just give them cash back and send them on their Merry Way. (Get them out of the store as soon as possible.)

Apologize! Someone is bound to come in saying we ruined their Christmas because we sold them an obviously used/broken toy. Well, no, we didn’t. Not on purpose. But that doesn’t matter. Apologize. Say, “I’m really sorry that happened. What would you like us to do to fix this?”

Fix it! This can be tough. We might be out of what they need. It might be a part that needs to be ordered. But do whatever is in your power to fix it.

If we have the item in stock—swap it out for them, parts or the whole thing, whichever is easier.

If we do not have the item, you can offer to order replacement parts. Often we can order them directly through the company and have them shipped to the customer. You can check online or on the phone while the customer is right there.

If we cannot order the part or replace the product, offer them a store credit or a refund. But most of all apologize.

Remember this order…

  1. Make the customer happy.
  2. Tell me later what you did.

-Phil Wrzesinski
www.PhilsForum.com

PS You might not make everyone happy. There are always unreasonable people and just plain rude people. If you have tried your best and nothing seems to be working, do whatever it takes to get them and their negativity out of the store as fast as possible before they infect anyone else. Take the loss if necessary. Handle it with professionalism, kindness and respect regardless of how they treat you. Remember that other customers are watching and judging you and your character. Show them what you got!

You’ve Ruined My Christmas!

“You’ve ruined my Christmas!”

We’ve all heard it. You can’t be a retailer with 4th quarter traffic without hearing that a few times. The problem is that we often let that statement ruin our own Christmas.

Why do we give it so much weight?

Why do we let one customer ruin our day, ruin our holiday, ruin our year? Chances are we weren’t even the responsible party.

Most often that statement is said when the customer had an unreal expectation of what you could provide. Or maybe your vendor let you down. Or maybe the customer was just bat-sh#t crazy. Or maybe you did make a mistake, but because your steps to rectify the mistake weren’t perfect, you ruined their Christmas.

Why let that get you down?

Unless you’re a real f#@k-up, you probably only hear this once every few years. And you’re a stand-up person, so you made it right to the best of your powers. Yet you can still remember the day that mom screamed at you in front of six other customers. The hairs on the back of your neck go up every time you see a brunette in a fur coat just like hers. It colors your whole perception of the season.

Why don’t we instead focus on the people for whom we made their Christmas?

Go count how many transactions you had between Thanksgiving and Christmas last year. Subtract from that all the ruinous statements. Now multiply the remaining number times ten. That’s how many Christmases you made last year. (Remember that people are in your shop not just for one person, plus, if you made their Christmas, you made the Christmas of those around them.)

Revel in those Christmases you made. Celebrate the Thank You’s. Exalt the I Love You Guys. Dance with the You Made My Day’s.

There are a lot more of those. Give them the weight they deserve. Pat yourself and your staff on the back. You all deserve that.

-Phil Wrzesinski
www.PhilsForum.com

PS This goes doubly for the staff. They are going to make mistakes. You really can ruin your staff’s Christmas if you don’t handle those mistakes properly. I remind all my staff that I expect them to make mistakes, just not the same one twice, so when they make a mistake, I say to them with a smile, “Good, you got that mistake out of the way. What are we going to learn from it?”

Mandatory Breaks – This Means You, Too!

It is easy this time of year to work long hours without break. Easy. But not good.

Your staff needs to have scheduled breaks to keep them fresh. They don’t have the driving passion you do to refuel them when they hit the wall. They need breaks they can see coming. I’m not talking about okay-there-is-a-lull-go-take-a-break-quick kinds of breaks. I’m talking about, you go to lunch at 1pm and return at 2pm kind of breaks.

We have an employee lounge, a couch, table & chairs, etc where they can go. There is a fridge and microwave. But we also encourage them to leave the store. Take a break. Get away.

It does wonders for their sanity. They need that break so that when they are on the floor, they have the energy to give their all. Plus, if you schedule those breaks for them, they know you are looking out for you and they’ll work even harder for you when they are on.

You need to take a break, too.

Maybe yours won’t be as scheduled. But you need more than a go-hide-in-the-office-and-pretend-to-do-paperwork break. You need to leave for 45 minutes or an hour or more. You need to go to a restaurant and sit down and eat something healthy. You need to go home, change your socks, sit and play with the dog. You need to get a moment just for yourself.

No break for the elves and they get cranky. No break for you, and you and the elves get cranky. Cranky elves and cranky store owners are not maximizing sales.

Take a break. I give you full permission.

-Phil Wrzesinski
www.PhilsForum.com

PS The store won’t crumble if you’re not there for an hour. Trust me.

Corporate-Speak and Fifty-Cent Words

This was in a blog I follow…

“In the next three years, retail will reinvent itself as omni-channel leaders reach for customer relationship, relevancy, and reciprocity. A new replacement cycle of enterprise, planning, and commerce systems will anchor complex companywide business transformation for immersive experience and commerce. Quick-to-market leaders will improve same-shopper sales — fast becoming the most significant leading indicator of future performance,” said Robert Parker, IDC Retail, Energy and Manufacturing Group VP and GM. “We expect renewed investment in the narrower but transformative capabilities of PLM and sourcing, marketing and advertising, and big data and analytics.”

Let me translate that for you…

“In the next three years there will be a lot of upheaval and change in retail. Those who change the fastest and most in-line with the customers will do the best.”

You can apply that to any 3-year period you want. It’s true today. It will be true tomorrow.

Two lessons from that paragraph:

First, the more things change, the more they stay the same. You will always need to be adapting your store to meet the needs of your customers. You can take that to the bank (and if you adapt properly, you will take it to the bank!)

Second, never use big, fancy words when simpler words will do. Sure, you can show off your knowledge and prove what a big shot you are, but we don’t care about that. Use simple words. Make your ideas and thoughts understandable by the masses. Especially when you work with your customers. They often don’t know the terminology you and I use every day, and they don’t like being made to feel stupid. When I read the first paragraph up above I was immediately turned off – and I know what some of those words actually mean! I still had to read it three times before figuring out what they were trying to say.

Make your customers feel smart by keeping your words simple.

-Phil Wrzesinski
www.PhilsForum.com

PS This is especially important with your male shoppers. Guys communicate vertically – did what I say make you think higher of me or lower of me? They will walk out of any store that makes them feel stupid. And since these next two weeks are the male shoppers’ turn to shine, you need to maximize them to maximize your sales.