Category: Sales

August 21, 2017

What to Do the First Time It Happens

Every July for our Summer Fun Sale we would mark down thousands of old, slow-selling, discontinued merchandise to ridiculously low prices to move out that merchandise, generate some cash, and get ready for the upcoming holiday season. With close to a million dollars in inventory, the process was quite tedious and time consuming. Every single sale price had to be manually entered into our Point-Of-Sale system.

Sometimes we missed one (or three).

The staff was instructed to carefully watch prices as they scanned items at checkout to make sure they were coming up at the sale price, and to make changes immediately whenever a mistake was found. If it didn’t ring up right the first time, it was quickly corrected and the customer sent on her happy way.

$Image result for bad retail sale signs$ Yet every single one of us can recall a time in our own lives as customers when something didn’t ring up right and you didn’t go on your happy way.

You get to the register expecting a certain price and it rings up higher. You say something to the cashier. His first response is to tell you that he doesn’t know about the sale or that he can only go by what the computer tells him. His second response is to look you straight in the eye and tell you he doesn’t trust you by phoning for someone else to go check the display. His third response is to tell you that “they” didn’t put the right signs on the display and that the item you had didn’t qualify for that discount/coupon/special deal. Yes, blame it on the faceless “they.” His fourth response is to get a manager who goes through the first three responses all over again before deciding to either give you the discount the signs says you should get or hide behind corporate speak to not give you the discount.

Either way you walk out of the store feeling like a loser.

Do you want your customers walking out of the store feeling like a loser? Of course not. Chicken dinners for everyone!!

Here’s how you do it when you have a pricing mistake.

“Oh my gosh! I am so sorry. Let me go verify what the price is supposed to be.”

Say all that. Apologize. Go check the price (the above is a safe statement that doesn’t accuse them of lying). Then, regardless of the outcome, give that person the price they expected with another round of apologies for the confusion.

It doesn’t matter if someone did the signage wrong and that item is not supposed to be on sale. It doesn’t matter if the customer was confused because the signage wasn’t clear enough. It doesn’t matter if the customer interpreted the sign to mean something you didn’t intend it to mean. The first time a customer perceives something different than what you intended, you give them what they thought they were going to get. Then you go fix the signs and displays and prices so that there won’t be any more confusion.

Always give the first customer the benefit of the doubt. It doesn’t cost you that much in the long run because you keep the customer happy. Plus, you learn quickly how others might perceive your sales or signs, and you fix the problem before anyone else gets upset.

“I’m really sorry about this. Those weren’t supposed to be included in the 25% off sale, but that’s our fault for not putting the signs up correctly. I’ll give you the 25% off on this item. Will that be okay?”

You’re going to make mistakes. Own up to them. Pay for them. Make the customer happy. Then go correct the mistake. That’s the key to winning customers’ hearts.

-Phil Wrzesinski
www.PhilsForum.com

PS Even when the customer interpreted the sign wrong, you should still take some of the blame. Make sure your signs, sales, specials are bullet-proof by making them as clear and detailed as possible so that there is little chance of confusion.

PPS Every now and then you get the customer trying to cheat the system. They find an error like improper signage and load up their cart with everything on the shelf. That’s the exception to the above rule. You just better hope it was honest confusion about the sign, otherwise they might have a leg to stand on.

PPPS When you pay for your mistakes, not only do you make the customers happy, you build a level of trust. Your customers will be more likely to take you at your word when you take financial responsibility for your errors.

August 2, 2017

Busting a Scheduling Myth

There is a scheduling myth I have heard for many years, and although on the surface it seems to make sense, I don’t think it is in the best long-term interest of your store. The myth is that you should schedule your best sales people for your peak hours and your worst sales people for your off hours. Let me tell you where the flaw is in this thinking.

In November 1991 I moved to San Diego, CA. I immediately got two jobs there. One was teaching Outdoor Education for the Orange County School District at Camp Edwards near Big Bear Lake. The other was selling sporting goods for Cal Stores – a ten-store chain of sporting goods and apparel stores in San Diego County (since bought out by Big 5 Sporting Goods).

I spent Monday morning through Friday morning in the mountains above San Bernardino teaching kids about geology and ecology. I spent Saturday and Sunday selling tennis rackets and weight sets.

At Cal Stores we were paid on commission. Each week they would post the top selling people across the chain in sales per hour. I was usually #2 for the entire chain, right behind the guy who sold all the ski packages. I wasn’t #2 because of my selling skills, but because I had the two best shifts—Saturday and Sunday. I didn’t have any mundane Mondays to drag my average down.

In the above myth, I would always get the peak times and best shifts because my numbers were top notch. And I would hold onto those shifts because those shifts would keep my numbers higher than the Tuesday and Wednesday slackers. It would self-perpetuate. I would stay on top and feel no need to improve. Plus it would drag down the morale of everyone not getting the prime times.

Do you see the flaw now?

Smart managers understand the importance of having top levels of sales and service at peak times, but they also look for ways to raise the level of all the staff so that everyone can perform at peak and off-peak. They look for ways to pair top sales people with learners to help both become better (the former by teaching, the latter by being with the former). They split up the hours, knowing that sometimes you need the busy hours for the learners to hone their skills, and sometimes you need the slower hours to know if your top sales people are truly good or just lucky.

Smart managers realize that raising the bar for everyone helps the business far more in the long run than just maximizing the peak hours. They realize that a properly trained staff maximizes sales at all hours (and there are some big sales you can do during the perceived off-hours.)

Smart managers realize when everyone performs at a high level they have more flexibility for scheduling around vacations and special requests for time off. They have more staff available for special events. They have more trust that the staff will perform no matter the situation.

If you have a few top performing sales people and a few that need some work, don’t just throw all the prime rib at the top people and leave the scraps for everyone else. Give them all a taste of the good stuff and teach them all how to rock your customers’ worlds every day of the week.

That’s what the smart managers do.

-Phil Wrzesinski
www.PhilsForum.com

PS I wasn’t a great salesperson back then. I was just lucky with my shifts. Fortunately I was (and still am) a competitive guy who is always looking for ways to improve. Not every salesperson thinks that way. Smart managers find ways to help everyone improve and raise the overall bar for the store.

PPS No, not everyone will perform at the same level. Your goal, however, is to help each person on your team get to the next level no matter where he or she is right now.

July 31, 2017

A New Twist to Back-to-School Shopping

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

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

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

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

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

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

-Phil Wrzesinski
www.PhilsForum.com

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

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

April 25, 2017

An Article Every Retailer Must Read

If you are a retailer, you need to read this article about Amazon’s new brick & mortar store in Chicago. It will be one of the scariest and most eye-opening articles you read this year. Go ahead. I will wait.

Amazon, who is already cleaning our clocks online, is doing in their stores what some of us have only dreamed of doing and others haven’t even thought of doing. Amazon is bypassing the biggest headache most retailers face – getting your staff up to speed on product knowledge. How? By using signs.

Every single book in their store has a sign with reviews, ratings, and answers to the basic questions your customers would ask. Plus they have signs recommending similar titles, signs giving you data and information to help you make a purchase.

Rick Segal, famed retail consultant and speaker, once told me that signs increase sales of a product by 47%. He didn’t back that up with any proof, but it wasn’t a hard number to grasp. Just think about who would prefer a sign over a salesperson…

…every man and half the women.

Men like signs. We like signs because we speak vertically. Did what I say make you think higher of me or lower of me? Given the choice, most men would rather read a sign and figure things out on their own than ask questions and admit that they don’t know something. (Ladies, now you know why we don’t like to stop and ask for directions – just give us a map.)

Introverts like signs. Introverts aren’t shy. They just like their interactions with others to be meaningful and useful. Signs give them information to formulate the right questions before they have to interact with the salespeople.

Amazon is winning that game in their brick & mortar store.

You can, too.

No, you don’t have the data that Amazon has to create the kind of signage they create. But you can create signs that explain benefits. You can create signs that compare and contrast. You can create signs that answer frequently asked questions. You can create signs that show testimonials and staff picks (and why the staff picked them).

Online is where customers go when they know exactly what they want. Brick & Mortar is for people who want to browse or have someone help them find something when they aren’t sure what they need. Signs help you take care of those customers when your sales people are busy. Signs help you take care of customers when your customers would rather not interact with your salespeople. Signs help you take care of customers when your salespeople aren’t fully trained on product knowledge. Signs sell.

Get a computer and printer up front. Create a template. Start printing. Signs can even be hand-written if the penmanship is good. (Turn this project over to your staff and it will even help them with their product knowledge.)

-Phil Wrzesinski
www.PhilsForum.com

PS If you did the math, you are thinking right now that 75% of the population prefers signs over salespeople, so why have any salespeople at all? First, understand that not everyone goes shopping. Since extroverts gain energy from being around people, they are more likely to be in-store shoppers than introverts. And there are multiple theories explaining why women tend to shop more than men. Therefore, it is highly likely that your store has more extroverted women in shopping right now than their percentage of the population would dictate. Second, relationships matter. Some customers don’t know the right questions to ask and need the guidance. Some customers have questions your signs couldn’t anticipate. Some customers don’t want items of mass appeal. Your salespeople are critical. So are your signs. Amazon got that second part right. Very right. You can, too.

PPS Your sales staff likes signs, too. Signs give your team confidence because they don’t have to remember facts. They can’t focus more on feelings, the relational side of sales.

February 19, 2017

Anticipating Your Customers’ Needs

I had the slot right after lunch. A lot of speakers hate that slot. People are tired after lunch, or they got an email that morning that required them to spend their lunch hour putting out a fire, or they have so much swirling around their brains from the morning sessions they can’t stay focused. You know what I mean. Siesta time.

The host took the microphone to introduce me, and as she had for the morning speakers, started with her obligatory blah blah blah, turn-off-your-phones, surveys-are-on-the-table, housekeeping announcement.

I could see heads already starting to nod off.

I switched on my microphone, put up my first slide of me in a super hero costume and said,

“Thank you, Margaret. Yes, I am Phil Wrzesinski and I am going to be your Super Hero today. First, since I know you just finished lunch, I am passing out dessert. Chocolates. Dark chocolates to be exact. The healthy kind. Full of antioxidants to get you going. Second, I have some housekeeping of my own. Go ahead and turn your phones back on. If I can’t keep your attention for the next hour, then frankly, I am not doing my job. And today I feel up to it. You’re going to learn some things today that you’ll want to share. Please do. Finally, go ahead and grab those surveys. Under the section about handouts go ahead and mark that a 5. I have complete notes of this workshop available for everyone right after I’m done. You might as well mark that first question a 5, too. We’re going to have fun. You ready?”

Do you see what I was doing? I was anticipating my audience’s needs before I even got on stage. I knew they would be a little groggy. I knew they needed something to pick them up. The chocolates served multiple purposes. It got them engaged right off the bat. They were opening packages, opening candies, passing them from table to table, doing something active. It woke them up, both from the small sugar fix and more importantly from the here-is-something-you-don’t-see-every-day-maybe-I-better-pay-attention opening of my talk.

The bravado in my speech was to transfer confidence to them that what I had to say was worthwhile. It also was a bet. I just bet them I could keep their attention enough to keep them off their phones. They were paying closer attention just to see if I could make good on that bet.

I knew the crowd would be restless, sluggish and unfocused. I anticipated that. Then I took steps specifically to help them change their mood to the mood I needed to sell my product. You can’t sell the unwilling. You also can’t sell the unprepared-to-buy. You have to get them in the right mood first. It doesn’t matter if you’re selling toys, pet supplies, floor tiling or ideas. If you don’t anticipate your customers’ needs and take care of those needs, you cannot build the relationship necessary to make the sale.

Here is a simple exercise for you and your staff to do. Answer the question, “What does my customer need the moment she walks through the door to get in the right mood for shopping?”

If it is cold and snowy, she made need a place to take off her coat and boots. If you are off the beaten path and you get customers from a long drive, she may need to use the bathroom. If you are downtown or in a mall where she has been shopping other stores, she may need a place to put her packages. If it is early morning, she may need a shot of caffeine. (Heck, that could work late in the afternoon, too.) Solve that need and your customers will be ready to buy what you’re selling.

-Phil Wrzesinski
www.PhilsForum.com

PS Getting my audience to fill out the survey in advance, while bribing them with dark chocolates, not only got me a higher score on the survey, but more importantly gave them more time after the talk to come up to me to do the real buying. I was speaking to group of downtown development directors. None of them were there looking for speakers, but out of the 60 groups represented I got a dozen opportunities to speak because I made them more open to buy.

PPS Sure your product has to be good. At the end of the day it is always about the product. But no matter how good your product, if you don’t get people in the mood to buy, they won’t be buyers.

October 28, 2015

You Don’t Make it Up in Volume

(Warning: this post contains math. Proceed with caution.)

“We lose a dollar on each one we sell, but we make it up in volume.”

Yeah, we all know that isn’t right, but there is a mistaken belief that if you lower your prices, you can easily make up the lower margins through higher volume.

Let me show you why that doesn’t necessarily work.

First, we have to make an assumption together. Your business has fixed costs that do not change as your sales change (utilities, rent, etc), and your business has variable costs that go up as you do more volume (credit card fees, payroll, freight, advertising, etc).

Agreed? Good.

DOING THE MATH

Here is some simple math…

You have an item you purchase for $10 and sell for $20. Let’s say you sold 24 of this item last year. That gives you a gross profit of $240 (24 units x $10 in profit per unit = $240 gross profit).

But you have the grand idea to lower the price 10% to $18, figuring you’ll make it up in volume.

To get the same $240 in gross profit, you now need to sell 30 units (30 x $8 = $240). That’s a 25% increase in units sold. With more units sold, however, your variable costs will go up. Maybe it is advertising because you had to spend more to get the word out about your lower price. Maybe it is extra sales people needed to help boost sales. Maybe it is more credit card transaction fees.

Realistically, just selling 25% more units won’t even break even because of the rise in variable costs. You’ll probably need closer to 30% more in units sold to cover your 10% discount.

Do you think 10% Off is enough to sell that many more units?

GOING LOWER

Okay, maybe 10% isn’t enough to move the needle. Let’s go 20% Off and sell them for $16!

Here’s the math…

40 units x $6 = $240. Yes, you now need to sell 67% more units just to get the same gross profit! More than likely, as your variable costs go up, you’ll probably need to sell about 70-75% more units to truly break even.

How about 30% Off?

60 units x $4 = $240. If you go to 30% Off, you better be able to sell 250-300% more units to make it up in volume.

That is a lot of extra traffic you’re going to need to draw, and a lot of staff you’re going to need to handle those sales.

GOING HIGHER

When you do the math, making it up in volume isn’t the answer. But ask yourself this question…

If I raise my prices a little, how many sales might I lose?

A 10% price increase could handle a 17% drop in units sold and make you the same amount of gross profit.

See? Those math classes in high school can pay off!

-Phil Wrzesinski
www.PhilsForum.com

PS Yes, you can raise your prices. With the way insurance premiums, taxes, utilities and other expenses keep rising, you have to find ways to make more money just to stay in business. But just a straight increase across the board isn’t the strategy. Download my FREE eBook Pricing for Profit in the Free Resources section to see smart ways to raise your prices (that won’t cost you a single unit sold).

May 11, 2015

How to Get Customers to Fall in Love With Your Products

Dr. Ross Honeywill says there are two types of customers – NEO’s and Traditionals. Traditionals are all about the Price. NEO’s, however, care more about Design, Authenticity, and Provenance than Price. Get the NEO to fall in love with the product and you’ll make the sale.

Roy H. Williams says there are two types of customers – Relational and Transactional. Transactional customers are all about the Price. Relational Customers, however, are looking for someone they can Trust who will lead them to the right products they can fall in love with.

The Diffusion of Innovation says there is a big chasm between the Early Adopters and the Early Majority. The Early Majority want the tried and true commodities that have a proven track record. They will go wherever they can find the best deal. The Early Adopters love the new and unique and have to have the latest, greatest, regardless of price.

You can discuss the nuance between the three theories until the end of the earth and never fully reconcile them into one theory.

Or you can pull out the one thing all three agree on and run with it all the way to the bank.

The money is in getting your customers to fall in love with your products and your store.

FALLING IN LOVE

Remember falling in love? You don’t analyze it. You don’t weigh out pros and cons. You don’t look at the features and benefits.

You draw smiley faces. You doodle his name on the worksheet you were supposed to turn in. You imagine what it will be like to be together. You visualize walking hand in hand. You picture the two of you on a date, at the park, in the movie theater. You see the future of you with this other person.

Bob Phibbs says that customers who are shopping are in a different mode than customers who are buying. Customers who are shopping are in analytical mode. They are gathering info, measuring and weighing options. Customers who are buying, however, have to get out of that mode and into wonder and love. They have to see themselves already owning and using the product.

In other words, they have to fall in love with the idea of owning the product.

You have been wrongly taught for years that your job is to give your customers information. Features and benefits, features and benefits, features and benefits. In today’s online world, they already have most of the information they need before they set foot in the store. Your real job is to get them out of analyzing the product and into visualizing already owning the product.

You can do that two ways…

Ask Visualization Questions:

How do you see yourself using this product?
What are your plans for this product?
How will this look in your home?
Where do you see yourself using this?
What is your ultimate goal for this item?

Use Assumptive Statements and Questions:

Most everyone who buys one of these gets a second as a backup. Do you want to get two today or just the one?
Would you like me to giftwrap these items while you finish shopping for the rest of the list?
You’re going to be really happy with your choice of that product.
When you get this home, to make sure you get the full use out of it, be sure to…

Before you start thinking those sound snarky or sneaky or gimmicky, remember that your customer came into your store looking to solve a problem or fill a need. Your job, therefore, is to help her solve a problem or fill a need. If you leave her in analytical mode, you won’t solve her problem or fill her need. She’ll leave in search of more information and most likely have someone else solve her problem or fill her need.

If you make her fall in love with the product, you’ll make the sale, whether she is a NEO, a Relational Customer, an Early Adopter, or any other label you want to give her.

-Phil Wrzesinski
www.PhilsForum.com

PS You still need to know all the information. In part, so that if she has faulty information, you can correct it. In part, because she may need one or two more pieces of information to help her visualize the product properly. In part, so that she will trust you as the expert.

February 3, 2015

We Trust the Non-Sellers More

Late night infomercials have done more to harm the trust relationship between retailers and customers than almost anything else out there.

You’ve seen the shows where the person claims to be the expert on something, but you have a hard time believing them because they are also trying to sell you something. You doubt the veracity of their claims. You question their motive. No matter how much of an expert they prove to be, you just don’t trust them.

Yet, one of the Currencies that buy Credibility is the Time & Energy you invest in educating your customer base and showing off your expertise.

So how do you invest your Time & Energy in a way that builds trust instead of breaking it down?

BEFORE THE SALE – DROP THE SALES PITCH

The key to educating your customer base in a way that builds trust is to remove any sales pitch from the process. The sales pitch is what undermines trust, so drop it.

In Tom Wanek’s book, he mentions the REI website that is chock full of educational articles. Those articles are extremely useful and helpful to anyone thinking about camping and outdoor recreation. More importantly, they don’t try to sell you on one brand or another. They give you suggestions about the types of products you need, but stop short of pushing any particular product.

They have shown the customer that they are willing to invest their time and energy to make sure you know everything you need to know – even if they don’t get the sale! That’s the sacrifice they will make to build trust.

We do similar types of classes here – purely informational. Whether it is about toys or baby products, I take the approach of teaching the customers everything they need to know to make smarter choices without telling them what to choose. Yes, they can take that information and go shop elsewhere with confidence. At the same time, because I am building trust, I am winning them over to shop with me. I am training them to look at toys or baby products the same way I look at those items.

I know my customers are going to go to other stores. I know my customers are going to go online. I also know that at the end of the day they are going to buy from the store they trust the most. By dropping the sales pitch, I win the sale.

AFTER THE SALE – SERVICE THE CUSTOMER

Apple has a different approach. They invest their Time & Energy after the sale. They call it the Genius Bar. The Genius Bar tells customers…

“We understand our products have a learning curve. We so strongly believe you will enjoy our products that we will invest the Time and Energy to make sure you know how to use them properly.”

The power of Apple’s approach is that their willingness to help you out after the fact gives you trust and confidence in the purchase, and they reinforce the purchase decision by making sure you use the product to the best of its abilities, which creates loyalty.

You are an expert on your products and your industry. You can build trust by investing the Time & Energy to share that expertise with your customer base. Just drop the sales pitch. We trust the non-sellers more.

-Phil Wrzesinski
www.PhilsForum.com

PS The Internet has changed one thing about information – the expectation that information should be free. The gatekeepers of information are gone, replaced by a flood of information greater than anything Noah ever faced. With so much information out there, the information that is most trusted is the information that isn’t trying to sell you anything. Make sure your company is the source of that information and you’ll garner enough trust to not have to make a sales pitch at all.

September 23, 2014

Two Specialty Retail Truths

If you’ve been a specialty retailer for several years you know these two things will happen every year. Every. Single. Year.

A vendor who used to be exclusively sold only in specialty stores will start selling to a big box category killer (like Home Depot, Office Depot, Barnes & Noble, Toys R Us) or a major discounter (like Target, K-Mart or Wal-Mart.)
A product you sell will be advertised nationally and sold somewhere (online, in a discount club store or flash site) below cost.

Write these down, my friends. They will happen. So far, they have happened every single year this century and will happen every single year for the foreseeable future.

Now you know. Now there is no reason to go postal when it happens. You saw it coming.

Yeah, it gets emotional. We indie retailer are a passionate bunch and hurts when we get betrayed. But the smart retailers are not only expecting it, they are dealing with it in a cold-hearted, calculating manner deciding whether to cut and run or ride out the storm based on sales and profits, not emotions and surprise.

CUT AND RUN

Cut and run when the vendor sells out completely and gives all their product and support to the big guys.

Cut and run when the product gets turned into a commodity sold everywhere, while you are trying to be the cutting edge leader in your field.

Cut and run when the traffic it brings in because of its popularity no longer justifies the lost margins.

Cut and run when you have another company offering you the same items but with better terms.

RIDE IT OUT

Ride it out when the product still sells at the price you set.

Ride it out when it is just a small sample, and you’re carrying the whole shooting match. You’ll get referrals and eventually the big box will move on. Cherry-picked lines don’t often last long in the chains.

Ride it out when your model is built on selling the most popular items, but with better service and experience than your competitors.

Vendors make decisions based on numbers. You should, too. Especially since you saw it coming.

-Phil Wrzesinski
www.PhilsForum.com

PS Sure, sometimes it hurts your bottom line. Sometimes it helps. You can focus on the negative, which is usually out of your control, or focus on what you can do. I find that the latter usually helps keep me fired up and moving forward.