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The Conundrum of Choice

I used to advertise the heck out of the fact Toy House had the largest selection of toys under one roof of any store in the area. In our heyday we had over twice the selection of a Toys R Us and five times the selection of the Walmarts, Targets, and Kmarts of the world. Back in the 80’s and 90’s when bigger was better, this seemed to be the perfect calling card.

And it was—at least for drawing traffic.

Paradox of Choice cover.jpgSometimes, however, the super large selection was also a detriment to sales. Having too many options can lead to Analysis Paralysis. Barry Schwartz called this the Paradox of Choice (in the book by the same name).

While we like having freedom of choice, when we have too many choices, the process of selection bogs down.

I was thinking about this the other day while I was out shopping. I needed a closet deodorizer. The store I was in offered nine or ten different options. I had no clue. They all seemed to do about the same thing. I didn’t recognize any of the brands so I made my decision based on price.

I eliminated the most expensive item figuring that it probably wasn’t any better than the others, especially since it didn’t have a brand name I recognized. I threw out the least expensive item figuring the company probably cut corners to make it, so it likely wouldn’t be as effective or last as long. I then chose something toward the bottom of the prices left, figuring they were all similar, why spend any more?

Is that the way you want customers shopping in your store?

It was the perfect example of the paradox of choice. Had there only been two or three items, I would have studied the differences between them and chosen a product based on features and benefits. But with nine items, instead of seeing differences, I only saw similarities, so I based my decision on brand and price.

This is the Trader Joe’s philosophy …

Limit the selection to make it easier for the customer to choose based on the criteria of the product.

From this you could conclude that it is better to curate a great selection than to just offer more than your competitors. In many ways you would be right.

There is still something to be said, however, for having the largest selection. It is and always has been a traffic draw. Stores like Lowe’s, Home Depot, Staples, and JoAnn’s still rely on the perception of unlimited choices to drive their business.

The trick to making it work is having a staff that can curate your large selection that drew your customers in into a smaller selection from which they can make a choice.

I worked with my staff to do the following:

  • Ask questions why the customer wants a particular item. What are they trying to accomplish?
  • Curate our selection down to the two or three best “solutions”
  • Always show the best solution first, regardless of price or budget. Often a customer will bust the budget for the item that best fits her needs

When you have too many choices, while the traffic it draws is nice, you’re forcing your customers to shop based on brand and price (and often the lower prices win).

When you curate the choices, you help your customers shop based on features and benefits (and often the item offering the most benefits wins).

See the difference?

-Phil Wrzesinski
www.PhilsForum.com

PS If you are a smaller store, by all means curate the selection in advance, but if you have the space, don’t be afraid to have several choices based on the different “solutions” they provide. Just make sure your staff knows how to curate the choices down for each individual customer. Remember, everyone walking through your door has a different problem to solve.

A Simple Game to Help You Improve Your Store

I was visiting a good friend and toy store owner in Lawrence, KS (The Toy Store – you should visit if you’re ever in the area) and she asked me, “Does visiting stores like mine make you miss being on the retail side?”

My answer was an immediate and definitive No.

Oh, I get inspired when I see fabulous stores done well like The Toy Store. I love walking through a store thinking, “I could have done that at Toy House.” But while visiting great stores and thinking about what I could have done is something that happens all the time, it isn’t the good stores that make me miss being a retailer.

It is the bad ones that get me going.

The game I play the most is inspired by the famous Dr. Seuss book, If I Ran the Zoo. When I walk through a bad retail store my mind quickly goes to, “If I ran this store, the first thing I would do is …”

It takes a lot of hubris to play a game like this. First, to call a retailer “bad” that is still open in today’s retail climate is fairly judgmental. Second, to think I could make it better takes another level of arrogance. Yet, it is a game and an arrogance I would actually encourage you to have.

It will only help your own business.

First, if you’re playing this game, you’re judging retailers against a standard—your own. Since we all think our store is pretty good, we measure all other stores against what we are doing. So it causes you to truly evaluate your own standards and find ways to raise your own bar.

Second, as you think about what you would do first with someone else’s business, you’re reinforcing what is working for your business. You’re most often going to focus on your own strengths, the things you do that set you apart. Keep that in mind the next time you’re putting together a marketing message. It is the things you do differently that will resonate most with potential new customers.

Third, even though it takes an arrogance to think you can make someone else’s business better, it also lends itself to humility because you get into a mindset of improvement. You get into a mindset of looking for things that can get better. You look more critically at your own business.

I encourage you to play this game. Get someone else to play it with you. Take your manager to visit a few stores to play this game. Then, in the middle of your discussion, change the name of the store you’re discussing to your store, and see how the ideas flow.

The good stores like The Toy Store are fun to visit. The stores that need some work, however, are the ones that get my juices flowing. They’ll get yours flowing, too, when you play this game.

-Phil Wrzesinski
www.PhilsForum.com

PS There is value from visiting great stores, too. I wrote a post about it here. Your best lessons come from the best and worst retailers you visit. Average stores can only teach you how to be like everyone else. Visit the best and worst retailers out there. Then apply what you learn. The desire to get better will keep you humble and grounded even as your store starts to rise.

Making it a Better Place to Work

When the tech world exploded onto the scene, everyone talked about the amazing workplace environments at these start-ups. Ping Pong and Foosball tables everywhere. Open floor concepts and collaboration-fostering layouts ran rampant. Legacy companies started changing their infrastructure to match, thinking it would help them attract better people.

News flash: it didn’t work.

In retail it wasn’t even possible. If you had a Foosball table in your retail store it’s because you sold Foosball tables. Even in my big toy store we didn’t have the room for recreational equipment in the employee lounge.

That doesn’t mean you cannot make your work environment attractive.

If you remember from my last post, the way to attract and retain a better level of workers is to pay them more and make the work environment attractive. While workplace layout and break time activities are nice perks on the job, there are two other things your employees want more than that.

Praise & Recognition

PRAISE IN THE WORKPLACE

Praise isn’t a Millennial thing. Praise has been raising productivity since the beginning of time. It is a basic instinct in the animal kingdom. We use praise and positive reinforcement to train animals. When given with sincerity, it works equally well with humans.

It doesn’t have to be fancy, either. A simple, “Thank you,” every now and then, or a, “Way to go!” or “Nice job!” will do wonders for the overall attitude of your team and the feelings in the workplace. You just have to be looking for those opportunities to give that praise.

Even when someone doesn’t do something perfectly right, finding something to praise about what they did will raise the bar for their next time.

Jim Henson of the Muppets was a notorious task master. When he filmed scenes for Sesame Street, he would often shoot a scene dozens of times to get it right. You would think someone that relentless would be a tough boss to work for, yet those who worked with him regularly still sing his praises and talk about what a wonderful experience it was.

Why? Because after each take, Jim would say something like, “Wow! That was amazing! I really liked how you did that one part of the scene. I’d like to do it again, and this time try to do …”

He used Praise to get what he wanted.

Contrast that to the typical situation where you get called into the boss’s office for something you did wrong, knowing your ass is about to be chewed. How would it feel if the boss started out with, “Wow, that was amazing!”? See the difference?

Sometimes you just need to eliminate the anti-praise in the office.

For instance, IF YOU USE ALL CAPS IN YOUR MEMOS AND EMAILS, YOU’RE YELLING AT YOUR STAFF AND THEY DON’T LIKE IT! Please stop.

Or, If you use a significantly larger font than normal in your inter-office emails, you’re yelling at your staff. Please stop.

Those types of actions negate any praise you might be giving elsewhere.

RECOGNITION IN THE WORKPLACE

Once again, this doesn’t have to be a big deal. I’m not talking about participation trophies. I’m talking about simple things like acknowledging everyone on your team with a Hello each day, a thank you for working for you each day.

People want to be recognized as humans. Your team members have families, have struggles, have illnesses and doctor visits, have bills to pay, have fights with their spouses, have pets that need to be put down, have kids growing up and moving out, have parents moving back home, have weddings to attend, have 80th birthday parties to plan for their parents, have worries and doubts.

Recognizing them as fully-grown humans capable of great things (and big mistakes) and not just cogs in your machine is a must if you want to foster an attractive place to work.

Recognizing their strengths and weaknesses and putting them in the best position to succeed is a game changer for any business.

If you have creative people, give them room to create. If you have by-the-numbers people, give them a good list of instructions. If you have leaders, let them lead. If you have followers, give them a great example to follow.

Most importantly, recognize them for being just as human as you are. Give them a schedule that fits your needs and theirs. Be as accommodating as possible to their requests for time off. Celebrate their victories. Help them learn from their mistakes. Be in their corner to support them. Give them the tools, training, and responsibilities to help them be successful.

That’s the kind of Recognition they desire.

All the Foosball and Ping Pong tables in the world can’t overcome a toxic workplace filled with criticism and uncaring bosses. There isn’t an office layout on the planet that can overcome the hopeless feeling of being an unrecognized cog in a machine.

Those start-ups that were successful did so because they found like-minded individuals and treated them well. That’s what it means to have an “attractive place to work.”

-Phil Wrzesinski
www.PhilsForum.com

PS Before you hire your next new employee, look at the culture of your workplace. Do you recognize and praise your team? Do you treat them like humans? Do you put them in positions to succeed? Get the workplace part right first. Then we can work on how to find better people.

PPS You might be surprised to find that when you start praising instead of criticizing, the employee you thought of as useless has just become amazingly useful.

You Can’t Overpay Good Help

My grandfather stole one of his best employees away from another job. The young high schooler was making 75 cents an hour. My grandfather offered him $1.05 to work at Toy House. He took it.

I still recall the big grin on my grandfather’s face when he told me the end of that story. The other business owner was furious and called him. “Phil Conley, you can’t afford to pay him $1.05!! What are you thinking?!?!”

Oh, but he could.

Toy House Birthday Party May 1974
My dad and grandpa are on the left in white. I’m the clown in the middle.

That was one business adage my grandfather lived by. You can never overpay good help.

Just yesterday I heard the same advice from none other than Roy H. Williams, aka The Wizard of Ads. He was speaking in a podcast and addressed the issue of how to find good employees in today’s market. (If you have to make an hour drive, this podcast will be the best way to spend that hour by far!)

Roy said there are two things you need to do to have a great team:

  1. Pay way more than the market price to attract better people
  2. Make it an attractive place to work to keep them

It’s that simple.

I know what you’re already saying. “But Phil, I can’t afford that. I don’t even pay myself.”

First, if you’re not paying yourself, go read this blog post from last summer. Second, start paying yourself.

Third, and most importantly, do the math. Ryan Deiss of The Digital Marketer said in the same podcast that the business willing to pay the most for customer acquisition will have the best customers. The same is true for employees.

The business willing to pay the most for employee acquisition will have the best employees.

If you have the best employees, if you have a full staff of rock stars, how will that affect your sales? You better believe they will go up.

Repeat and referral business are directly the result of your Customer Service. They are directly the result of your employees and their ability to rock your customer’s world.

They are directly the result of your ability to attract, hire, train, and retain the best staff.

Overpaying for good help creates an upward spiral. Cutting employee costs leads to a downward spiral. Don’t believe me? Just walk into any of the declining department stores and look around for someone to help you.

And before you go telling me Millennials aren’t the same quality of workers, I’ll counter with several Millennials I’ve hired over the years that will outwork anyone you’ve ever met.

Last month I did a presentation on how to Attract, Hire, Train, and Retain Millennials. You could sum up most of the talk like this …

  1. Pay way more than the market price to attract better people
  2. Make it an attractive place to work to keep them

Thanks, Roy, for saying what my grandfather taught me decades ago. It works!

-Phil Wrzesinski
www.PhilsForum.com

PS That young guy my grandfather hired was my father, one of the hardest workers I’ve ever known.

PPS The podcast with Roy H. Williams and Ryan Deiss is full of other great insights from two of the most amazing marketing minds on this planet. Normally you would pay tens of thousands of dollars to have an audience with either one of these guys. Here is the link to do it for free.

9 Out of 10 People Don’t Recommend Your Store

I think a lot about Market Share. Maybe too much. I find it the most fascinating piece of data you can track because it tells you so much more about how you are performing than just sales, profits, or cash flow.

For one, it tells you how well you are competing in your market. If your share is growing, you’re obviously doing something right. If you’re losing share—even if your business is growing—you have a leak in your ship that needs fixing.

It also helps you focus your marketing. Once you realize that 9 out of 10 people in your area don’t shop in your store (results may vary but most indie retailers have less than 10% share of their market), you can hyper-focus your marketing on just one of those nine “people.” Win that one and you’ll double your sales.

Make the “one” the loudest voice in the crowd.

Let’s talk about those nine people for a moment.

I was at an event recently that had a panel of expecting moms. They were asked where they went for information to buy baby products. All six answered Friends and Online Reviews. None of them answered Sales Staff in a Store. None of them said Advertisements for Baby Stores. None of them mentioned Informational Fliers at the doctor’s office. Not one of them discussed Emails from brands or stores. They barely talked about Instagram influencers (and not in a positive way).

Friends and Online Reviews.

Even the online reviews didn’t get a favorable viewing. Most of the panel said they didn’t fully trust online reviews but would read the negative reviews in detail. They trusted most the information from friends who already had children.

From this panel you might conclude that the most important form of advertising for your business is the word-of-mouth referral from your happy customers. You would be right.

Yet nine out of ten people don’t refer your business to their friends. That’s a lot of friends telling their friends to go elsewhere. Not one member of our panel had visited an independent specialty baby store. Only a handful had gone to a Buy Buy Baby chain store. Most did their shopping/registering at Target because nine out of ten of their friends went there.

It didn’t help that there was only one indie specialty store in their town and it had a limited selection. I would have loved to see the responses of a panel like this in a town with a powerful indie store. I think Sales Staff at a Specialty Store might have made the list of trusted sources.

As it is, the lesson for all of us is simple. You have to give that one out of the ten such an amazing experience that her voice drowns out the other nine when the subject comes up where to shop.

Conversely, you cannot allow one bad experience to walk out your door. You’ll be dead to her circle of friends. Yeah, you might have to eat some crow from time to time, but it is better to eat the crow now to get the chance to eat the filet later.

Retail is not a money game. It is a game of the heart. Win your customers’ hearts and the money will follow.

-Phil Wrzesinski
www.PhilsForum.com

PS Not sure how to calculate your Market Share? Check out the Market Share Diagnostic Tool. It will not only show you how to calculate your Market Share, it will tell you why this is the second most important part of your business to track.

Removing Barriers and Obstacles the Toledo Museum of Art Way

I could probably go back through the records of Toy House and tell you when the first nice Saturday of spring hit every year. You know the day. After a long winter, it is finally sunny and warm enough to not need a coat.

We never had much traffic on that first nice Saturday. People were doing yard work, taking down Christmas lights they had unplugged months before, and pumping air into bike tires that hadn’t seen pavement since Halloween. Our busiest part of the store was the back door where the air compressor sat.

It was the cold, rainy Saturday that followed that was usually our best day.

Last Saturday was one of those cold, rainy days. The temperature hit 41 degrees for the high. The rain was steady all day. I did the other thing you do on cold, rainy spring days when your shopping is done. I went to the Toledo Museum of Art.

If you’re in the area, I highly recommend the TMA. The museum has a fabulous collection including a couple Van Gohs, a couple Renoirs, some amazing sculptures, and a fascinating glass display. It’s fairly easy to find, too. There is a nice parking lot behind the museum that has several covered spaces (perfect on a rainy day) near the back door entrance.

We crossed the street, checked our umbrella and coats, and spent a couple hours lost in the amazement of art. There were docents and security guards at every turn (sometimes it was hard to tell one from the other as they all seemed to know everything about everything) to make the trip more enjoyable.

All of this was quite impressive for a museum where admission is free and parking is only $8.

But before you think this is just a plug for a museum, I want to tell you the part of the story that blew me away. Here are the three key factors to remember so far. It was raining. We walked in the back door. We checked our umbrella because umbrellas are not allowed in the museum.

For those of you not familiar with Toledo, OH, it is known as Glass City. Owens-Corning and Libbey Glass both have their origins here and a long history with Toledo. One of the coolest parts of any trip to the Toledo Museum of Art is right out the front door and across the street at the Glass Pavilion.

Here you can see a demonstration on glass blowing and some of the most beautiful works of glass you can imagine.

Our dilemma was that it was raining and our umbrella was downstairs by the back door.

I stood staring out the front door through the rain to the Glass Pavilion, at which point a security guard handed me a large red golf-style umbrella with the words “Toledo Museum of Art” printed on it. He had a whole rack of them by the door. Across the street I could see a similar rack inside the door of the Glass Pavilion.

We grabbed an umbrella and off we went.

Without the umbrella, we might not have made that trek. It would have involved heading out the back door and walking around a massive building in the rain. Or it would have involved putting raincoats to the test. Not everyone at the museum had a raincoat that day.

Yet the museum director had the foresight to recognize this obstacle, order a bunch of umbrellas, and make it easier for patrons to enjoy all aspects of the museum.

The lesson in this is to look at your business with the same eye. Look for the obstacles and barriers that keep people from shopping at your store. Is it your hours? Is it your location? Is it your lack of parking? Is it your restrictive return policy or the limitations on how people can pay?

The more barriers you can remove, the better.

Change your hours to better accommodate the times your best customers can shop. If parking is an issue, create valet parking (get your neighboring businesses to pitch in because they’ll reap the benefits, too). Change your policies to make it easier for customers to pay.

Every barrier you remove adds to your bottom line—no matter what it costs.

Why? Because of the word-of-mouth. Do things no one else is doing to make it easier for your customers and they will tell their friends. Do the same thing everyone else is doing and there is nothing to say.

In fact, the two questions you should be constantly asking are:

  • What barriers or obstacles keep my store from getting more shoppers and buyers?
  • Does this new policy/procedure/campaign/tool/tech/program make it easier or harder for customers to shop and buy?

The Toledo Museum of Art filled my cold, rainy Saturday with a warm, sunny rainbow of surprise and delight with a simple red umbrella. What can you do for your customers?

-Phil Wrzesinski
www.PhilsForum.com

PS The fact it was hard to tell a docent from a security guard because everyone seemed to have so much knowledge was just icing on the cake. I like how the director of this museum thinks.

PPS If your neighborhood shops think valet parking is a good idea, take the lead on this issue and make sure the valet stand is close to your front door and associated with you. That way you reap the full benefits.

Be Yourself, Be a Unicorn!

I love those signs that say, “Be yourself. Unless you can be a Unicorn. Then be a Unicorn.” (Substitute Batman for Unicorn for those who identify that way.)

Be yourself is the best advice I could ever give to any business owner. Know your Core Values, what drives you in your life, and be them so clearly and proudly that everyone knows exactly who you are.

Those who share your values will become lifelong fans and evangelists of your business. You’ll always have a core of supporters.

HABA USA Unicorn Rainbow Beauty

To truly stand out in retail, however, you also have to be a Unicorn. You have to be so different from every other retailer that people believe you to be magical.

I say this in light of the article that came out last month stating that the Retail Apocalypse is still upon us with over 5800 stores closing in 2019 alone (and that’s only through March!)

Before you panic, 2,500 of those stores are Payless Shoes. Another 390 are Family Dollar stores closing after Dollar Tree bought them out. Other big chains with big closures include The Gap, JC Penney’s, Chico’s, and Gymboree.

None of those stores were Unicorns. 

The Gap was the closest, but no one under forty remembers when they made their splash on the retail scene. Their horn fell off decades ago.

The culprit most often blamed is Amazon, followed closely by Millennials. While Millennials probably had a lot to do with Victoria Secret closings (Hey, VS, have you noticed society has mostly shifted away from your idea of sexy lingerie?), they and Amazon are more symptoms than causes of retail store closures.

The real culprit is the stores themselves.

Chain stores are dropping like flies and they only have themselves to blame.

First, we are over-saturated with retail to begin with. Too many chains competing for not enough dollars. The chain stores work on the premise that the more stores they have, the more revenue they would be able to collect to “make it up with volume” which led to rapid growth and expansion well beyond what the market could bear.

Second, these stores invest next to nothing in training for their managers and staff. A couple of my former employees went to work for chain stores and showed me their employee handbooks. Sixteen pages on how to use the time clock and what will happen if you get caught breaking a policy, but not one word on how to create a relationship with a customer or even how to sell.

Third, there is little to differentiate one chain from the next. They all have the same merchandise from the same manufacturers. They all have the same lack of service that begins at the top with poorly trained managers who know nothing about team building, HR, or how to teach and motivate others, let alone how to merchandise and run a customer-centric store. They all fail to grasp how much of the population has moved on from the materialism in the 80’s and 90’s to more sustainable approaches to life. They all think big discounts = loyalty. They all chase the shiny new baubles like omni-channel, big-data, BOPIS, and social media, thinking those will be the big fixes that will help their businesses.

Nothing about any of these stores is or was unique, exciting or magical.

The downside for you is that all of these lousy experiences in other stores are driving customers online and making online shopping more prevalent and convenient.

The upside for you is that it is much easier to become a Unicorn of a store than ever before.

The bar is so low now that stores that care about their customers through their actions and policies stand out like lighthouse beacons on a desolate ocean of crappy retail.

Toys R Us is the only chain store closing where I actually heard customers lamenting the loss. No one is lamenting Payless going away. No one will even remember Charlotte Russ stores once they’re gone (if you even knew they were there). Heck, most people thought JCP was already closed!

Be yourself. But be the most Unicorny version of yourself you possibly can. Amazon is the default when you don’t give your customers a reason to believe in the magic.

-Phil Wrzesinski
www.PhilsForum.com

PS If one of your Core Values is Nostalgia, celebrate those nostalgic moments in your customers’ lives with gusto. Ring a 32-pound brass bell on their birthdays and put their picture up on your wall. If one of your Core Values is Education, hit the road and do Free Classes on how to better use the products you sell. If one of your Core Values is Helpful, have a high school kid with a golf umbrella escort customers out to their cars on a rainy day.

PPS If you aren’t well-versed in Team Building, hire someone to help you build your team. (Note: check your local YMCA or Y-Camp.) If you aren’t well-versed in motivating your employees, I suggest you read Drive by Daniel H. Pink or Maestro by Roger Nierenberg. If you aren’t as good at teaching the sales process as you’d like, check out my Free Resources – The Meet-and-Greet, Close the Sale, and How to Push for Yes. The resources are out there to help you grow your horn.

Getting Internet Customers Back Into Your Store

I did a mash-up of two presentations at an event for the pet store industry last week. I took elements from Selling in a Showrooming World and Generating Word-of-Mouth and put them into a new presentation we called “Getting Internet Customers Back Into Your Store.”

It worked.

One of the reasons it worked so well was because it went beyond Showrooming. Showrooming is less and less of a thing as people are becoming more and more comfortable with shopping online. Customers used to showroom a lot when they didn’t feel they could trust what they saw online, but easy return policies and trustworthy sites are changing that.

Customers are going online first and staying online to buy.

The real issue today is that many people have become so comfortable with shopping online that it is now the default position. They would rather order it from Amazon than stop in and see you or the product.

That’s scary.

The problem is that you and I are partially to blame. Although roughly half of the population would love to shop for reasons other than price (“trust” and “experience” being the two biggest of those reasons), in the absence of those other reasons, price becomes the default, and, right or wrong, Amazon has won the minds of people believing them to be the best price.

ONE BAD EXPERIENCE SPOILS THE WHOLE BUNCH

The real culprit is the collective experience your customers have in all their brick & mortar shopping. Every time they step foot in a store, that store influences whether they keep shopping brick & mortar or go online.

Yes, you get hurt because JCP didn’t train their sales staff very well, because Macy’s cut back on payroll, because Walmart installed self-checkout stands. Yes, you get hurt by experiences out of your control.

How do you win those customers back that are defaulting to the Internet? By doing the kind of things in your store that get people excited, the kind of things that get people talking about you to their friends.

In short, you do the same things you would do to generate Word-of-Mouth advertising.

GO OVER-THE-TOP

Make your services, your events, your store design, your displays, and even the simple little interactions you have with your customers so over-the-top and unexpected that they can’t wait to tell their friends and are already planning their next visit to see you.

There are four words that pretty much define most peoples’ choices for where to shop—Price, Convenience, Trust, and Experience.

All the big chains have been fighting over those first three (well, really, the first one or two) to the detriment of the Experience, not realizing that Experience is the one thing that brick & mortar can always win over the Internet. Plus, Experience is a short path that leads to Trust.

Want to win the Internet customer back to your store? Give her an Experience worth sharing. She’ll be back and will be bringing her friends with her.

-Phil Wrzesinski
www.PhilsForum.com

PS You and I both know Amazon isn’t always the best price. You and I both know the hassles and inconvenience of shipping (lost or stolen packages, missed deadlines, etc.). You and I both know no one cares as much about their customers as you do. No other retailer frets over a mistake or bad experience like an indie retailer. Yet your customers don’t judge you solely on you. You are judged three ways—as yourself, as part of a collective known as “indie retailers”, and as a collective of “brick & mortar stores.” One bad experience in those latter two groups hurts you. Your best defense is to play the Experience card. Play it hard and play it often until you become the unicorn in those other two groups.

PPS Indie Retailers used to own both Trust and Experience. Go read that third paragraph again. I shuddered when I said it last week in the presentation. I shuddered when I wrote it today. If we lose that word to the Internet, it will be a game changer.

When a Raise Isn’t a Raise

A friend of mine posed an interesting question a few weeks ago. He asked, “How much of a raise should you expect each year?”

In light of what is happening with the Sonic restaurants in Ohio, that is a valid question.

The problem is that the answer has too many variables to fit into a Facebook comment.

For instance, is the employee hourly, salary, or commission-based? Does the employee get any benefits such as healthcare (and how much does the employee have to pay out of their paychecks for these benefits)? Is the company experiencing growth or decline? How is inflation (and not just the overall number, but also locally)?

TAKE HOME PAY

A salaried employee is the easiest to figure out an appropriate raise. The employee should be getting at least enough of a raise so that his or her take-home pay is larger than the previous year adjusted for inflation.

If it only equals inflation, it isn’t a raise, it is a cost-of-living adjustment. If it is less than inflation, it is a pay cut.

I say take-home pay because if the employee has to pay any portion of his or her benefits, those often go up much higher than inflation. I heard the story of an employer who gave everyone a 4% raise because inflation was 3%. Unfortunately, because healthcare premiums went up 15% and the employees paid a portion of that, they had less take-home pay than the prior year to cover their other increased expenses.

Hourly employees follow the same rule, but the issue then becomes one of how many hours do they get? If you’re keeping the hours roughly the same, the same rules would apply.

Commission-based salary is different. In theory, the increase in prices of the items they are selling should lead to higher pay through higher average tickets. But if your prices didn’t go up (even as all other expenses did) you put your employees in a position where they have to work harder just to pay their bills. You may have to reconsider either their commission or offer them a base salary to compensate.

I tell you this because I always want you to think of your employees as assets to your business, not expenses.

I had another friend of mine get told in a review exactly how much this person had “cost” the company in terms of salary and benefits. The boss made no mention of how much this person had “made” in revenue for the company. Do you think the employee felt valued after that? Do you think the employee felt like the company had the employees’ backs?

EMPLOYEES AS ASSETS

When you think of your employees as assets, you invest in them to get the kind of return you want. You educate and train them. You give them actual raises, not just cost-of-living adjustments. You focus on the value they bring to your company, not the costs. You treat them as partners, as living, breathing, full-of-dignity human beings.

Do that and your staff will never walk out on you. In fact, you’ll rarely ever have to advertise for help again.

My grandfather always said, “You can never overpay for great help.”

He was right.

-Phil Wrzesinski
www.PhilsForum.com

PS I was reading a Forbes article on 13 Employee Benefits That Don’t Actually Work. The second line in this article tells you all you need to know … “[Employees] like to feel valued and appreciated by the company they work for.” If your business doesn’t have the resources for raises, find other ways to invest in your team and make them feel valued and appreciated.

PPS If you’ve invested heavily in someone and that employee doesn’t bring you value, you need to cut him or her and move on. If you’ve invested heavily in several people that haven’t brought you value, you need to revamp your hiring and training programs. The problem is you, not them.

Different Eyes See Products Differently (And That’s Okay)

I got a new laptop. While I was preparing to transfer files from the old laptop, I figured now was a good time to purge. I went through all the document files one by one, deleted all the duplicates, consolidated all the pictures, and opened up files I haven’t seen in over 10 years.

One of them was a staff meeting idea. The concept was to flash certain words on a screen and have everyone write down their own definition of the word. Some of the words would be applicable to our situation like “service”. Others could be words that have dual meanings to begin with like “experience” (noun or verb?). The point of the exercise was two-fold. First, we would see how different people interpret words differently. Second, I would see how the members of my team interpret important words like service.

We all come from different backgrounds with different life experiences, so we see and interpret things in our own unique way.

Never was that more apparent than at Toy Fair last week.

My retail customers came in looking at our brand new offerings. For everything I showed I had some retailers who loved it, some who hated it, and some who just said, “Meh.” Not everyone who loved it, loved it for the same reasons. Nor did those who hated it, hate it for the same reasons. In fact, I had one retailer give me a reason for loving an item and another gave me the exact same reason for hating an item.

Just because the first customer who sees your new offerings hates them doesn’t mean they are bad.

Just because the first customer who sees your new offerings loves them doesn’t mean they will do well.

I missed one of the biggest fads of the last two decades in the toy industry. It was Webkins. I loved the toy. Loved it so much that when it was first introduced, I bought the display and the TV monitor to show the video of how it worked. Got it in August. By December 1st I had only sold 2 of 144 pieces. That night I clearanced them all at 50% off.

Do you know when the craze hit? December 2nd. The first customer of the day walked in and asked, “Do you have any Webkins?”

She bought six. By the end of day on December 4th we were sold out. I never reordered and never looked back.

Some of the negative feedback we got in the booth was really good. It was constructive criticism of things we can (and will) change. Some of the positive feedback was location-specific to the person and store giving us the feedback. Knowing the difference and knowing how to decipher the feedback you get goes a long way.

“You are not a hundred dollar bill. Not everyone is going to like you.” -Meg Cabot

We all see the world differently. When you look through the other person’s eyes, however, you see things in a whole new light.

-Phil Wrzesinski
www.PhilsForum.com

PS Normally I like to give you something concrete to do in these posts—an action step or two. This post does not. But it does set up the next couple posts where I’ll try to show you what happens when you look through someone else’s eyes. It will transform your marketing & advertising, your customer service, your staff training, and even your merchandising. Stay tuned.