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Moms, Mobile Phones, and the Transactional Customer

I have been bombarded with companies selling me on the merits and benefits of Mobile Marketing. The main focus is sending out texts with coupons and deals to people in the vicinity. Some of these companies are offering me packages less than $20/week. Others want me to commit to thousands a month. They have the statistics that show they will bring me gold.

“Lies, damned lies, and statistics.” -Mark Twain

Kids Today magazine just had an article this month with even more statistics on mobile that I found quite enlightening and worth exploring deeper.

Here is the first statistic from the article:

“According to the latest data from comStore, overall mobile purchasing accounted for 11% of e-commerce spending in 2013.”

E-commerce spending, depending on your source, is anywhere from 3% to 10% of all retail purchases, so mobile purchasing is anywhere from 0.3% to 1.1% of all retail purchases. Before you drop a load of your advertising budget on mobile, keep that in mind. Shopping on their phone is an incredibly small percentage of all retail sales.

But what about coupons they get on their phones and then bring into the store?

Here is the second statistic:

“Nine out of ten moms take notice of advertisements on their smartphones. One-quarter clicked to get a coupon after receiving a mobile ad and 15% of moms clicked on the ad to go to the website.”

In other words, almost all of the moms saw the ads, but 75% of the moms did not take the bait, 85% of the moms were not enticed to go to the website. Now, don’t get me wrong. Twenty-five percent is still a pretty good click-thru rate. But remember who is clicking – the Transactional Customer – the mom who believes she is the expert on the product and knows more about it than you do. These moms are loyal to one thing only – the deal. They have no loyalty to your store and only buy from you when you have a sale.

But aren’t all moms all about the price?

Here is the third statistic:

“More than half the moms, 53%, say coupons are appealing in a mobile ad; while 23% want a deal that is located nearby.”

Once again proof that roughly half the population in any category, including the technologically savvy new moms, is interested in the deal (Transactional Customers) and the other half is more interested in the trust factors (Relational Customers).

When you plot out your strategy, decide which customer you want to attract and proceed accordingly. While your competitors go after that 53%, remember that there is a lot of business to be done with the 47% who don’t find coupons on their phones appealing.

-Phil Wrzesinski
www.PhilsForum.com

PS Don’t think of me as anti-technology. Smartphones are here to stay. You need a website and it needs to be optimized for mobile. You need social media as one part of your relationship-building portfolio with your customer base – and many moms are using their smartphones as their primary tool for social media. You also need to be smart about where and how you spend your money. Your most loyal customers are not loyal because of your coupons, they are loyal because they trust you. Before you buy a mobile marketing plan, make sure you’ve put enough effort into building that trust and that the mobile plan reinforces that trust, not undermines it.

The Perfect Sale

I was just at Bob & Sue Negen’s Whizbang Training Retail Success Summit and Bob talked about trying to achieve the Perfect Sale.

There are two Perfect Sales out there. From your point of view and from the customer’s point of view.

From your point of view…
You sold them everything you possibly could, including a bunch of old merchandise you were dying to get rid of, all at full price, with tons of add-ons, and plenty of extra features and warranties.

From the customer’s point of view…
She got everything she needed at a fair price. She won’t have to make any extra trips. She stayed within reason of her budget and has absolutely zero buyers’ remorse. She is thrilled with everything she purchased. She can’t wait to tell her friends.

When the two are one and the same – you’ve hit the grand slam of retail sales. But when you have to sacrifice one for the other, you can probably guess which one is better for you in the long run.

As Bob reminded us… Always, always, always go for the Perfect Sale from the customer’s point of view. Always. Period. Every. Single. Time.

Are we clear?

Grand slams are nice, but the goal of this game is to be able to keep playing. Perfectly happy customers keep you in the game for a very long time.

-Phil Wrzesinski
www.PhilsForum.com

PS I talk to my staff about completing the sale. You never want a customer to go home and then realize she needs one more item to make the other stuff she bought work. Chances are she won’t go back to you for that item, and she might never come back if you weren’t smart enough to make sure she had everything she needed in the first place.

PPS There are some sure-fire ways to make sure your customer is perfectly happy with her purchases. Check out the Closing the Sale section of my FREE eBook Customer Service: From Weak to WOW!

Dollars Left on the Table

You have a front line staff. You pay them to work with the customers and sell your products. Sometimes they get it right and make more money for the business. Sometimes they leave dollars on the table.

All this year I have worked with my staff on how to raise the average ticket, how to get more from every sale. We reached the pinnacle of that training this past Monday as we talked about tips to close the sale and make it stick.

Then we played a game, something to reinforce everything we had been working on all year.

Every single bill on that table had a statement on the back that either started with “I Earned This Dollar…” or “I Left This Dollar on the Table…”

The staff took turns picking a dollar and reading it out loud to the rest of the team. If it was an Earned dollar they got to keep it, but if it was a Left dollar they had to put it back. We played until all the Earned dollars were gone. The fun part was when the staff started cheering all the Earned dollars and booing all the Left dollars.

Three days later, most of the staff have their Earned dollars still in their pocket with the statement still taped to the back. My office gal has hers pinned to the bulletin board above her desk.

You have to spell out the behavior you want and also the behavior you don’t want. There is power behind putting it all in writing and having the staff read it aloud to each other.

Phil Wrzesinski
www.PhilsForum.com

PS The first question from the staff after we finished the game was, “Can you post all the statements somewhere so that I can read them again?” Of course. If you would like to see the list, send me an email.

Features and Benefits Don’t Close the Sale

If you’re in sales, you’ve been taught Features and Benefits over and over. Show them the Feature and explain the Benefit they get from that feature.

It does this (feature)… so that you get this (benefit)…

Show them the F&B and you’ll close the sale… Or not.

Probably not.

As Bob Phibbs, aka The Retail Doc, shows in this video, all F&B does is keep the customer in Analytical mode, gathering data before making a decision. You have to get past that mode if you want to close the sale. You have to get the customer into the frame of mind where she already sees herself as having made the purchase, where she already envisions herself using the product.

Roy H. Williams, aka The Wizard of Ads, teaches us in his book Wizard of Ads that people only do that which they have already seen themselves doing in their own mind. 

Assumptive selling is one way to get the picture into the customer’s mind. Real estate agents use this all the time. “You said you like to entertain. Can you picture your friends sitting around the fireplace in this wonderful family room?”

A fellow baby store owner uses it in his sales pitch for convertible cribs. “Most people will buy two extra items to go with their crib – the toddler rail and the conversion kit. You’ll need the conversion kit down the road when you create the full size bed. The toddler rail is optional but offers some great peace of mind. Would you like to buy both right now or just the conversion kit?”

You see how they have given the customer a choice? Not a buy/don’t buy choice, but a buy-this-or-buy-that because we assume you’re going to buy at least one thing. Their close rate on those conversion kits is through the roof.

In both examples you have the customer already envisioning buying and using the product. You’ve gone beyond analysis and into wonder. The 60-second training is to teach your staff to simply ask, “How do you plan on using this?” Get them envisioning the product in use and you’re almost home.

Don’t get me wrong. F&B are great. You still need to know them. Chances are, however, in this digital age your customers already know all the F&B before they get to the store. Your real job is to get past the data gathering and into envisioning the product in their possession. Do that and you’ll close a lot more sales.

-Phil Wrzesinski
www.PhilsForum.com

PS Your conversion rate goes up if you have first built a solid rapport and relationship with the customer. I have been working on that with my staff this year. You can read more about it in the post The Sales Process Broken Down.

Getting Customers to Walk Those Last 20 Feet

“At the end of the day you’ll get nothing for nothing.” -Les Miserables

I’m on the planning committee for a new street festival that will happen this summer in downtown Jackson. It’s a big one. Artists, Musicians, Restaurateurs, Local Brewers and Wineries, a Color Run and more.

Some of the merchants on the streets that will be closed are concerned. I hear comments like…
“These events never draw me any traffic.”
“All these events do is close me down to my regular traffic.”
“Too many street closures and I’ll have to close, too.”

Five thousand people walking past your shop and you can’t do any business?!?

When you ask those who are complaining what they did to get those people the last 20 feet from street through door, the usual response is a blank stare.

Street closures for construction suck! Street closures for fairs and events can be a windfall… if you recognize that it is your job to get the customers from the street through your door.

If you do nothing, you’ll get nothing.

You have to do something.
You have to do something special.
You have to do something that will move the needle for someone who came down to look at classic cars or taste local cuisine or peruse amazing art.
You have to do something that gets their attention, makes them notice you, be interested in you, desire your products and services, and make the purchase.

You can’t reach them through radio or TV or email. They are 20 feet away. Right here right now. You have to go out and get them. You have to do something so amazingly wonderful that they drag their friends through the door with them.

That last statement could apply any time of the year. If you’re not getting the traffic you think you should be getting, whatever you’re doing to try to attract customers is pretty close to nothing in their minds. Time to up your game.

-Phil Wrzesinski
www.PhilsForum.com

PS One simple clue into what not to do to get them that last 20 feet… People at street fairs – especially ones involving art and food – spend like drunken sailors. You won’t win them over with a sale or special price or discount nearly as much as you will by offering them something that matches their world view. They are already over-paying for food and drinks at these events. Entice them with something impulsive and fun and in line with their (your) Core Values. They are ready to overspend. Don’t disappoint them.

Brick and Mortar Retail is Alive and Kicking!

According to a report from EMarketer, retail sales last year were a whopping $4.53 Trillion. Yes, with a T!

E-commerce was $264 Billion of that. That’s 5.8%. Oh, and M-commerce – you know, those mobile apps that are the new hot thing you need to have that are going to eat the computer’s lunch? M-commerce was only 0.9% of the total.

E-commerce and M-commerce continue to grow. And $264 Billion is a lot of cabbage. But contrary to what you hear, brick and mortar retail is certainly not dead. Over 90% is still being spent on the ground.

What are you doing to capture your share of that market?

-Phil Wrzesinski
www.PhilsForum.com

PS I have heard from other sources that the e-commerce number is higher when you account for only goods and services that are bought in typical retail stores. I don’t know the methodology EMarketer uses to determine their numbers, whether home sales or gasoline is included in the overall sales total. Since they are a company that caters to the e-commerce crowd, however, I’m going with their number. Even so, if e-commerce is truly 10-12% of retail as some claim, that means 88% is still done on the ground.

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.

Don’t Marry Your Inventory

Yes, you bought it. But not for the long term. Your inventory is more like a one-night stand. Love it and leave it. Love it and sell it. Love it and let it go.

Today I am kicking a lot of my inventory to the curb. The Just for Fun Sale starts at 9:30am. Products that I loved were not loved quite so much by my customers. That’s okay. We marked them down and are going to find them all good homes.

Most of this stuff has been here less than 18 months, some less than a year, some came in just last fall. If I ordered a case of six of something and could only sell two during the busy holiday rush, those other four pieces left behind aren’t going to sell without some help.

Before we got a POS system, I would hear the wedding bells of buyers telling me, “That’s a must-have, Phil. We need to stock up on those.” After the POS showed we only sold 1 of the 24 pieces on hand over the past two years, the wedding vows would be echoing, “But I love this item. It just needs time to sell.” Or I would hear the classic toast of, “I can’t afford to mark this down…”

Don’t marry your inventory. Love it and let it go.

Makes it easier when you count your inventory, too. Missing a few items? Shoplifters got some goodies? Do the math. How much is missing? If your shrinkage is less than 1% of your sales, you’re doing pretty darn good. Years ago the National Retail Federation stated that annual shrinkage is around 3%, with employee theft being the biggest part of that, followed by customer theft and employee errors (either at the cashwrap or at the receiving end).

You are going to be shoplifted. You are not immune to theft. Put in all the cameras and security measures you want. Won’t stop it completely. Wal-Mart has cameras and other security measures and still about $500,000 goes missing per store. It is just the cost of doing business. If that cost is less than 1%, then you’re doing things right. Don’t lament the loss.

Inventory is a means to an end. Its sole purpose is to move out the door one way or another and find its long-term lover, so that you can replace it and move on. That lover is not you. You are just the go-between, the rebound guy, the pimp.

Don’t marry your inventory. Go find it the love of its life – at whatever cost – and move on.

-Phil Wrzesinski
www.PhilsForum.com

PS Your end game is to get the customers to love the product more than you love it. Plain and simple. The most profitable way is better merchandising. Give the product good exposure on the shelf, a sign, a spotlight, or whatever it takes to make the product shine. But if that doesn’t work, dump it and move on. The sooner the better.

“No, We Don’t Have That”

In these final days, the most common phrase spoken by retail employees everywhere is…

“No, we don’t have that.” Or its cousin, “No, we’re out of stock.”

Make sure in tomorrow morning’s huddle that you remind you staff that there is a better response…

“Let me show you what I do have.”

Learn to say that instead.

Before you say no, lead the customer over to an alternative. Put the alternative in his hand. He doesn’t want to drive all over in these last couple days for something that might be hard to find. More often than not he will accept the alternative.

But only if you offer it!

-Phil Wrzesinski
www.PhilsForum.com

PS This works well in January, too. In fact, you should always use this approach. Positive beats negative in the retail game.

The Next Transaction

Do you know the real goal of each transaction? To earn the Next Transaction.

Unless you’re closing the store and selling off your inventory, you’re going to need that next transaction, and the one after that, and the one after that, and so on.

You always need one eye on the horizon, one eye fixed on how to earn that Next Transaction.

Last Saturday we had a huge event. LEGO Contest, Yo-Yo Competition, Toy Demos, Crafts, Scavenger Hunt, Cookies, Prizes, the whole works! We advertised heavily. We staffed heavily. We spent a lot of money to draw traffic and put on a lot of events to keep that traffic happy.

Did it translate into extra sales? A little. We had a slightly better than usual Saturday. Not enough to cover the extra expenses, but that wasn’t the point. The entire goal of the day was Wish Lists – pieces of paper that the kids took around the store and filled out with what they wanted Santa to bring them.

Since our competitors in town don’t stock the same items we stock, we wanted those kids to make out their lists with our toys. Every kid who went on a scavenger hunt to earn a cookie got a wish list. Every parent with one or more kids in tow got a wish list.

Our goal for the day was simple – focus on the Next Transaction.

  1. Give everyone something fun to do.
  2. Give everyone a Wish List to fill out.
  3. Treat them so well they can’t wait to come back.

It is a formula that serves us well.

There are a lot of businesses that put too much effort on maximizing this transaction – as if it will be their last. Make this one special for the customer. Delight her. Earn the chance to get another transaction.

If that isn’t enough to convince you, try this… Ask yourself these two questions:

  1. What percentage of my business is Repeat Business? (write that number down)
  2. What percentage of my business is Referral Business? (write that number down)

The remaining percentage is your advertising driven business – usually the smallest of the three numbers.

Put your energy into getting repeats and referrals and you’ll have all the Next Transactions you need.

-Phil Wrzesinski
www.PhilsForum.com

PS There are a lot of ways to earn the next transaction. Sometimes adding on and maximizing the current sale is how you earn another – especially if the add-ons are what is needed to “complete” the sale. Don’t ever let a customer walk out without everything they need. Sometimes you earn the next transaction because you didn’t get overly pushy. Sometimes you earn the next transaction because you planned it that way (like the wish lists). The best leaders are always looking beyond this transaction to the next one.

PPS Here is an email one mom sent me from our event that drives home the point…
“…and great event Saturday!   While I know you’re open minded and see the big picture, I wanted to let you know that your sales on days like that may not be all the sales you gain from the event.  I could barely manage the two kids let alone purchase anything, but I’ll be back this week to get everything.”