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New Statistics on Market Share

I just got back from presenting at the Michigan Downtown Conference in Bay City, MI. Robert Gibbs offered some new statistics on the breakdown of Retail Market Share worth passing along.

In 1955 the Central Business Districts of our cities had 90% of the Retail Market Share. Today the CBD’s have 2%.

The breakdown looks like this:

Power Retail Centers (think Wal-Mart plazas) 37%
Regional Shopping Centers (malls) 31%
Internet 9%
Living Centers (the new outdoor mall type places) 7%
Downtown CBD’s 2%

(I am guessing that the other 14% is in small strip malls and stand-alones that are spread out along the highways, rural areas and non-commercial districts of this fine country.)

That is a major shift in shopping habits. His solution for downtowns to reverse this trend is for downtowns to attract more chain retailers. The chains then become anchors that attract shoppers and raise the tide for all the shops. Unfortunately, that is not a reality for most small cities.

Especially after he told us the 50-50-50 rule for attracting chain stores. You have to have two of these three factors:

  • 50,000 people in the trade area (or more)
  • $50,000 average income (or higher)
  • 50,000 cars driving by daily (or more)

How does your community stack up? I am guessing that 95% of the cities in the US were eliminated immediately.

My solution is far simpler and works whether you’re in a bustling metropolis or quaint little town.

To gain back market share you need to be better than you were in marketing, better than you were in over-the-top incredible customer service, and better than you were in turning your customers into evangelists. Do that and the people will come. You don’t need a national chain store to draw you a crowd. Start your own crowd – a crowd of people who love you.

-Phil

Free or Priceless?

I’m going out on a limb with my next two Freebies – How Ads Work Part 1 and Part 2.

Pablo Picasso is credited with saying, “Good artists borrow, great artists steal.”

Much of the information in these two eBooks is stuff I stole from Roy H. Williams, aka The Wizard of Ads, especially the mind-blowing Advertising Performance Equation (APE) in Part 2. It will totally transform the way you look at advertising. (I hope he doesn’t mind.)

Part 1 guides you through some of the same discussions I’ve done here – showing you HOW the different mediums work – now all condensed in one single document. Most sales reps in advertising know how to sell their products, just not how to use them. This guide will help you understand the strengths and weaknesses of each medium so you’ll know more than your reps. Plus, as a bonus, I dispel some of the most common myths of advertising and share with you the Wizard’s definition of Transactional and Relational Customers – probably the single greatest business concept I learned at Wizard Academy.

Part 2 includes the APE, plus a bunch of ad examples that have a strong impact. Although the ads are copyrighted, the techniques they use are simple enough for you to steal for your own use.

Best of all, both eBooks are completely FREE! You are encouraged not only to download them, but to share them. Send them to all your friends in the industry. Copy them to your Shop Local campaigns. Distribute them to anyone you know who needs help in advertising. Believe me, we all benefit when advertising improves.

You know why most ads don’t work? Because most people don’t know how ads work. These eBooks are your starting point to making your ads work for you.

-Phil

PS Use these two in conjunction with Understanding Your Brand and you will be light years ahead of your competition in understanding advertising and making it work for you. Think of it as a Master’s Degree without the time or expense (or the outdated info most colleges still teach).

How Much Are You Giving?

Wal-Mart recently announced that it gave $467 million in charitable donations of cash & in-kind gifts to non-profits last year.

Some people will read that and say, “Wow, that’s a lot of money! Way to go Wal-Mart!”

Others will do the math and see that with $401 billion in annual sales for 2009, Wal-Mart’s donations to charity were a paltry 00.12% of revenue. “Geez Wal-Mart, is that all you have to give?”

The bigger question is… Where do you stand? Did you give more or less as a percentage? Are you supporting the non-profits in your town? Are you giving more than 00.12% or are you letting Wal-Mart take the high ground?

I only ask because $467 million is a big number and people like big numbers. You’re not making enough to give that much, but percentage-wise I’m betting you give more. Add it up and see where you stand. If you’re higher, you need to let the community know that supporting you supports them, too. If you’re lower, you have to ask if you’re doing your part to support your community. If nothing else, I guarantee that number will be enlightening.

-Phil

PS Full disclosure… for 2009 our charitable donations including cash & products totaled 0.55% of revenue – and yeah, I think that’s too low.

The 3/50 Project – Are You On Board?

Cinda Baxter had a good idea. A really good idea. An idea that sprouted wings only seconds after she hit “publish” on her blog.

Pick 3 local retailers you would really miss if they closed. Spend $50 in those stores this month. Repeat.

It’s The 3/50 Project and it all started with a blog post on March 30th, 2009. Now, less than a full year later, The 3/50 Project is an international juggernaut with over 17,000 independent retailers registered at her website, over 53,000 fans on Facebook, and a boatload of resources you can download for FREE to help promote your fellow independents.

Cinda came to Jackson last Wednesday night to talk about the project and how it can help promote local Jackson businesses. She gave us the history behind the idea and a laundry list of great ways to bring this positive message to our community.

Ideas like this cross promotion between retail stores and restaurants…

Spend $50 in any/all of these select retail stores this month, get a $10 gift certificate to any of the following restaurants for next month (and vice versa)


Ideas like this window display…

Write on this card 3 locally owned businesses you would miss if they closed. Sign your name at the bottom. We’ll post your card in the window with all the other cards and you’ll be entered to win one of three $50 gift certificates.

(Think of the impact such a display would cause – the reinforcement to the person who wrote the card of supporting those businesses, plus an easy way to cross promote your customers’ favorite businesses to other customers.)

Ideas like this way to create evangelists for your store…

Attach five $5 gift certificates to a 3/50 Project flier with your customer’s name on the back and give to her with instructions for her to pass 4 of those gift certificates on to her friends. Tell her that for every gift certificate that comes back she’ll get entered in a drawing to win a monthly prize.

(Do you think that would get some new business in your store? Of course it would!)

And many more ideas.

It was a fabulous presentation. Unfortunately only about 15 Jackson business owners were in the paltry audience to hear such a message. But then again, 15 is a start. And we have to start somewhere.

Do you think you could round up 15 local businesses to start some sort of cross promotion in your town? Do you think you could benefit from a campaign that encourages people to think about their favorite local stores? Are you one of the favorites? Will you be in the top 3 on someone’s list? (If not, we need to talk. I might be able to help you.)

Do yourself a favor and go to The 3/50 Project. Read all about it. Sign up. Download the freebies. Promote yourself and your local retailers. To steal a phrase from my fellow blogger Jay H. Heyman, it’s a good idea, it’s a really good idea.

-Phil

PS I got to meet Cinda Baxter after the presentation. We had a wonderful conversation sharing ideas. What incredible energy and passion she has for local retailers. I’m a fan. I’ve added her blog to my must-read list. You should too!

More Than One Way to Say It

I wrote two articles for a local organization’s newsletter about Shopping Local. The first was soundly rejected. The second was roundly praised. Funny thing is, both said pretty much the same thing. The difference is that one said it powerfully, one not as strong.

Yes, it was the more powerful message that was rejected. The fear was that it would be seen as offensive to some. Of course, that was my point. No, not to offend, but to attract.

A message is like a magnet. It’s power to attract is equal to it’s power to repel. The stronger the attraction, the stronger the repulsion.

If you are writing to attract, write powerfully and pull no punches. If you are writing not to offend, don’t be upset if your message doesn’t get through as strong as you would like. Those are the trade-offs in making a memorable message.

I understand the reasoning behind the newsletter’s owners wanting not to offend (otherwise I wouldn’t have written the second article). Some of my original points were directed right at some of their membership which wouldn’t have gone over well. And that’s a fair reason for the rejection.

But there’s a lesson here worth remembering. The most powerful messages will offend as many people as they attract. And that’s okay.

Here are the two articles. You tell me which one was more powerful…

What Does it Mean to Shop Local?

There are differing opinions as to how we define a Local Business. Here is the definition that counts…

A local business is one that is owned and operated by someone actively involved in this community.

If in doubt, ask yourself, “Where does the profit go?” Locally owned businesses invest their profits back into Jackson. Chain stores send their profits back to headquarters (usually to pay for some CEO’s golden parachute). Online stores never let the money spend a moment in town.

Studies continually show that locally owned independents and locally owned franchises give back far more to the community than big box chain stores and online sites. They employ more people per sale, pay them a higher wage, pay more in taxes and give more in charity than the chain stores*. They also do more business with other locals keeping the money flowing through Jackson many times over.

A study in Grand Rapids showed that just a 10% shift in shopping habits from big chains to locals would create hundreds of jobs and millions of dollars in economic activity, not by spending more, just by spending it locally.

Your local businesses sponsor local events. They sponsor your son’s Little League teams. They supply most of our local leaders. They don’t run at the first sign of trouble. They are rooted in our community.

Christmas is a time for giving. As you plan your giving, think about the businesses who have given back to Jackson, who have invested their livelihood in Jackson.

You can find a bunch of them at http://www.jxnlocalfirst.com/.

Merry Christmas!

Phil Wrzesinski

*Studies cited at www.jxnlocalfirst.com


Keep Your Dollars in Jackson

They say it takes a whole village to raise a child. It also takes a whole village to raise an economy. But first you have to invest in the village. You have to put your money where your house is. Spend your money in Jackson.

The holidays are a time for increased spending. They are also a time for increased everything else, increased traffic, increased stress, and increased demands on our time.

For some, that’s a compelling reason for shopping online. Sure, you might save a buck or two, but the money you saved was money that left Jackson with no benefit to the local economy. And if you didn’t pay sales tax, that’s a loss of revenue for our schools.

When you shop local – when you stay in Jackson to make your holiday purchases – you are investing in your neighbors. You are employing people in your community. You are adding to the available dollars for charity. You are growing Jackson’s tax base and economy.

Washington, D.C. does not have a silver bullet to kill the recessionary beast. Lansing cannot fix what ails us.

But you can.

Spend your money in Jackson and it will make a difference – a big difference. A study in Grand Rapids showed that just a 10% shift in shopping local would create hundreds of jobs and millions of dollars in economic activity, not by spending more, just by spending it locally.

Keep your dollars in Jackson this holiday and you’ll be giving a whole lot more than just presents.

Merry Christmas!

Phil Wrzesinski

See the difference?

Cheers!
-Phil

Ambassadors Among Us

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

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

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

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

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

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

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

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

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

-Phil

One Thousand Dollars Back!

Do you know any retailers who would like $1000? (Better yet, do you know any that wouldn’t?)

The Jackson Retail Success Academy (JRSA) is looking for retailers who want to earn $1000 by taking ten three-hour classes to make their stores better, stronger and more successful

JRSA is looking for retailers willing to learn tips and practices that will help them better manage their inventory, their finances and their cash flow, making them more profitable.

JRSA is looking for retailers willing to learn marketing tips, practices and ideas that will drive the right kind of traffic into their stores and increase their fan base.

JRSA is looking for retailers willing to learn about solid hiring practices and training tips to raise their customer service to a level that creates raving fans that talk about their store to everyone they know.

Do you know a retailer who wants to improve in marketing, customer service and profitability?

Yes, it will take some work – 30 hours to be exact – ten Mondays from 6 to 9 pm. Yes, it will cost some money – $750 to be exact – payable prior to the first class.

But look at the bennies…

First, there is 30 hours of top-level classroom instruction on topics like financial statements, inventory management, cash flow, marketing & advertising, hiring & training, customer service and a whole lot more. This alone is worth $6000 (top level consultants earn $200/hour or more).

Plus, there are actual cash-back benefits.

JRSA Graduates get:

  • $250 in reimbursements for joining a trade organization or attending an industry trade show
  • $400 in reimbursements for advertising expenses
  • A one-year membership in the Greater Jackson Chamber of Commerce ($300 value)
  • A one-year membership in the Midtown Association of Jackson ($50 value)

Add it up and it’s $1000 back to any retailer who signs up and attends the Jackson Retail Success Academy.

Oh yeah, and a pretty good chance you’ll learn something new to make you a whole lot more money on top of that.

The next class starts Monday, March 16th.

Tell your retail friends about this offer and have them contact Susan Franck (susan@gjcc.org) at the Greater Jackson Chamber of Commerce (517) 782-8221 to sign up.

-Phil

PS JRSA is a collaboration of Greater Jackson Chamber of Commerce, Jackson Local First, Midtown Association of Jackson, The Enterprise Group, The Small Business Technology Development Center, and the Jackson DDA

Big Yellow Taxi

“They paved paradise and put up a parking lot…”

There are some songs that no matter who covers them, no matter where I am at the time, no matter what’s on my mind, I stop and listen.

“Big Yellow Taxi” by Joni Mitchell is one of those songs. From Joni’s lilting voice to Amy Grant’s smooth vocals, to the Counting Crow’s more gravelly sound, I just love listening to that song.

I’ve tried to play it myself but could never do it justice.

It is one of those songs that transcends generations, too. The line in the refrain is all too familiar. Sing along with me…

“Don’t it always seem to go, that you don’t know what you’ve got til it’s gone…”

Okay, a little off key, but the point is made. Many times we don’t know what we’ve got until we no longer have it. I had two moments like that recently.

While reading a trade magazine I came across a reference of a new book on branding. The book was right up my alley. I checked it out online and found multiple sites selling it. I was about to order it online but my Buy Local button kicked in. So I started to shoot an email over to Nomad Bookhouse to see if they had it before realizing they were gone, closed. I miss them.

At the same time, my wife and boys were visiting Fun 4 All Kids, a big inflatable playground where we have celebrated both boy’s birthdays. It was their last visit. As you read this, F4AK has closed.

One of our friends made the comment, “If I had known they were in trouble, maybe I would have stopped by more often.”

I heard the same things said about Nomad.

The point I want to make is this…

What are we waiting for? If there is a store, restaurant, or hangout that you particularly like, what are you doing to ensure it’s success? If there is a business you would hate to see go away, have you told your friends about it? Have you touted their virtues, sung their praises, shouted their benefits to the world?

Seth Godin, one of my favorite bloggers, said that we too often keep our favorite stores to ourselves, maybe fearful that if too many people know about it, it won’t be special anymore. (Read his blog on the subject here http://sethgodin.typepad.com/seths_blog/2008/11/dont-know-what.html) But how special are they if they’re gone?

In today’s economic climate, when traditional advertising is less and less effective, the one tried and true, always works, form of advertising is word-of-mouth.

Don’t let any more of your favorite places go away. Start talking about them now before they’re in trouble. As my friend, Bridget can attest, the outpouring of wonderful sentiments was incredible when she announced the closing of Nomad. Just think what might have happened if that outpouring of sentiment happened three or six months earlier, and not just to her but to everyone you know?

Make it your New Years Resolution to sing the praises of your favorite stores ten times more this year than last. You might be surprised how much impact and influence you can have.

Happy New Year!

-Phil

Why You Love (Or Hate) Black Friday

Are you Relational or Transactional? Chances are, you’re probably both. You just don’t know it. And whether you’re more Relational or more Transactional tells you everything you need to know why you either love Black Friday or were part of the Buy Nothing Day crowd.

Let me explain.

A Transactional Customer (TC) is someone who has done all of the research, knows exactly what she wants, and now is on the hunt to find the best price on that item. And once the best price is found, the TC makes the purchases.

The driving force behind a TC is the fear of paying too much. The TC sees all the research and price-shopping as part of the transaction, and each transaction is a single event, a conquest to beat the system. Transactional Customers love to brag about the deals they found and are great at word-of-mouth. But TC’s are loyal only to the price, not to any particular store or brand.

Black Friday was made for Transactional Customers. The newspaper flyers are the research. The early bird deals are the attraction. Finding the right item at the right price and getting it before anyone else is the conquest. And making it to five or more stores by 9am is the Mount Everest of Transactional Customer shopping.

The Relational Customer (RC) is a different breed. Unlike the TC, who believes she is the expert on the product, and only needs to find the best deal, the RC knows she is not the expert. In fact, the driving force behind the RC is finding that expert that she can trust, the one that will help her make the smart purchase, because an RC’s biggest fear is buying the wrong item.

Relational Customers don’t tend to brag as much (they don’t want to show their lack of knowledge), but their loyalty to a store or particular brand is especially strong. Once an RC finds that expert, all other stores disappear. If you’re second on an RC’s list, you’re just first loser – there is no second. The Relational Customer sees each transaction as one in a long line of transactions – a relationship between herself and the store.

A great example of the difference between the TC and the RC happens in the arena of auto repair. If you always take your car to the same mechanic, even if it means waiting an extra day or two, you are probably a Relational Customer. You’ve found the expert you can trust. But if you call around just to find the best price on an oil change and take your car to a service station you’ve never visited before just to save $5, you’re probably a Transactional Customer.

Wait, you cry! Do i have to be one or the other? Can’t someone be both? Aren’t there people who get all major repairs done by the same mechanic who also drive around looking for the best price on an oil change? Yes! You can be both.

In fact, we are all both TC and RC depending on the item in question.

Studies also show that not only are people both Transactional and Relational, every category of product is also split quite evenly between TC’s and RC’s.

The big theory (and myth) of the Internet is that it is all about price. Students from MIT once did a study to prove this theory. They studied the buying patterns of people who shopped for videos and DVD’s through DirectLink – a website that helps you locate items available for purchase online. You type in the item, and DirectLink pulls up all the places that item can be purchased online and lists them from cheapest to most expensive. The students theorized that if you were not the cheapest price, you wouldn’t get the sale, that 99% of customers would probably click on the first link.

To their surprise 51% of the customers they tracked did NOT buy from the cheapest website. Instead they spent about $3 more per item buying it from someone other than the first site listed. Why did they spend more? Because they didn’t trust the websites offering the lowest prices. The vast majority of those higher price purchases were done at websites like Amazon.com, WalMart.com and other recognizable names. Final Score? Price 49%, Trust 51%.

Here’s another example as told by Roy H. Williams, aka Wizard of Ads. Roy was speaking to a roomful of marketing directors for grocery stores. When Roy asked how many believed that price was the major driving force behind their sales, 290 of the 300 people raised their hands. Roy then asked how many offered loyalty cards, discounts for people who swiped or scanned a special card at the checkout. About half the room raised their hands. When asked how well it worked one person stood up and explained that 43% of his customers used such a card, higher than the national average for such programs. Did each customer get asked if they had or wanted such a card? Yes, the cashiers were well-trained to ask everyone. Yet, 57% of the people in that store basically said “No thanks, I’ll pay more.” When Roy asked again how many thought price was the driving force behind their sales, a lot fewer hands were raised. Final Score? Price 43%, Trust (or convenience) 57%.

Yes, everyone of you is both Transactional and Relational. Yes, every category has both Transactional and Relational customers. You’re probably trying to figure out right now in what categories you are RC and TC. Me? I’m mostly RC. The mere thought of getting up early to fight crowds, wait in lines, and have no chance of finding a clerk to answer my questions is downright frightening. Then again, I would never want to get in the media’s way of hyping up Black Friday into the shopping day it has become. What’s good for the goose is good for the gander.

If you’re still puzzled, here’s a quick quiz to help you figure it out.

Do you drive all over town to save 3 cents on a gallon of gas or always stop at the same convenient station on the way home? Do you top off the tank every time you see the price drop, or do you fill up only when you’re empty? Do you grocery shop at five different stores based on what’s on sale, or shop at only one store because you know the layout? Do you decide to do without something because the only store in town that has it is one you wouldn’t be caught dead entering? Do you continue to shop for a better deal even after you’ve made your purchase? Do you believe you know more than the sales staff or do they know more than you?

The fun thing is that there is no right or wrong way to be. You just are what you are. And it’s interesting when we understand why we do what we do.

And now you have a better understanding why you were out early Friday morning (or why you thought all those people were crazy).

And now you also know that while some stores only play the Price game, we’re going after that 50% plus who want an Expert to Trust. Yes, we’ll win some and lose some in the Transactional Customer game (our prices are more competitive than some people think), but you can guarantee that we’ll always be here to answer your questions, help you make great choices, and share the joy you have watching your children grow. That’s the RC in us, and part of the reason why we had such a big Black Friday that continued all weekend long.

The other stores went after TC customers. Once their sales ended, so did their traffic. The TC’s were off to look for more great deals. The RC’s, on the other hand, avoided the Friday early morning crowds and filled the stores Friday afternoon, Saturday & Sunday. Unfortunately, their presence wasn’t recorded in any of the major media stories because they typically don’t shop the big box chain stores and discounters where those numbers are gathered. But ask your neighborhood retailers, your local independents, how they fared. According to Michigan Retailers Association, more than half reported better than expected sales.

The other factor driving this is that there isn’t that one “must have” toy driving Christmas sales this year. No Tickle Me Elmo or Cabbage Patch Doll causing a retail frenzy. So without a “hot” product, the advantage goes to the stores that know their products best, the stores that cater to the RC’s.

As Paul Harvey would say, “Now you know the rest of the story.”

Good day!

-Phil

Happy America Unchained Day!

Austin, Texas started it with “Austin Unchained”, a day in which all Austinians were encouraged to “Keep Austin Weird” by shopping only in local stores for one day.

The American Independent Business Alliance (AMIBA) latched on to the concept and began promoting it nationwide.

Now America Unchained is happening all over, including right here in Jackson. Many downtown businesses are having events today to encourage you to Shop Local. But the question still remains…

Why should you shop local? What advantage does is bring you?

Here are five reasons why you should consider shopping local this Christmas season.

#1 Building Community: The casual encounters you enjoy at neighborhood businesses and the public spaces around them build relationships and local cohesiveness. They’re the ultimate social networking sites! Have you ever been to Jackson Coffee Company and didn’t see someone you knew?

#2 Economic Vitality: Each dollar you spend at a local independent business returns 3.5 times more money to our local economy than one spent at a chain—both a short and long-term solution to our local economy. Just a 10% shift in your buying habits from chain to local stores could have millions of dollars of impact on Jackson.

#3 Character: Why did you choose to live here? What keeps you? Independent businesses help give Jackson County its one-of-a-kind personality. Plus, the owners of these businesses are more rooted in the community, more involved in its growth, more passionate about what makes Jackson great.

#4 A Healthier Environment: Independent, community-serving businesses are people-sized. They consume less land, carry more locally-made products, and locate closer to residents—creating less traffic and pollution. With all the talk this election about energy, one of the easiest ways to go green is to shop local.

#5 Lower Taxes: Local businesses put less demand on our roads, sewers, and safety services than most chains and generate more tax revenue per sales dollar, helping keep your taxes lower. Again, another hot topic from this past election could easily be solved by shopping local.

And if those five reasons aren’t enough, go to http://www.jacksonlocalfirst.com/ to find out more.

Enjoy the freedom of becoming unchained!

Happy Shopping!

-Phil