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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.

A New Beginning for Me, An Old Lesson for You

Today is an exciting day for me! Today I start a new job as the National Sales Manager for HABA USA, a wonderful toy and game company I used to sell at Toy House. I will be responsible for helping the sales reps get more HABA toys into more retailers.

What does that mean for this blog and the resources on this page? Not a whole lot.

I will be blogging less, but the resources will remain, and the insights will only increase as I expand my scope of understanding of all aspects of the retail market. I will still be available for presentations and workshops (albeit my schedule will be a lot tighter and less flexible). And I will always be looking for new ways to help indie retailers and small businesses succeed.

In fact, because of my new position, I had this experience happen last Saturday that we all can learn from.

SATURDAY AT THE MALL

I needed to updated my wardrobe. After years of wearing Toy House logo shirts, and two years of working at home 85% of the time, my wardrobe isn’t ready for trade shows and meeting with retailers and reps. That meant shopping.

I went to a large mall with several of my favorite stores. I used to be a Dockers guy, but have found Haggar pants to fit me a little better. The outlet store was having a sale on pants, too! Road trip.

Of course, when you study retail for a living, you don’t shop like a typical guy—run in, grab, and go. Don’t get me wrong. That’s exactly what I did at Haggar. But then I walked the rest of the mall to see what was happening. Plus, there was a toy store in the mall. I wanted to know if they had HABA in their store.

The store was nice. Decent traffic as would be expected midday on a Saturday. A sales clerk approached and asked if I was finding everything okay (cringe). I said, “I was wondering if you carry HABA toys?” I had seen a few of HABA’s competitors on the shelves but not HABA at that point.

She said, “I don’t know. Let me check.”

While I kept browsing, she went up to the registers and looked it up. A few minutes later she came back and said, “No we don’t.” Then she walked away never to be seen again.

In her mind she thinks she gave me good customer service. She approached me and answered my question.

In reality she missed the boat completely. I handed her the most perfect opening for starting a conversation and building the relationship that could lead to a sale. She could have asked me one of several questions …

  • What does HABA sell?
  • Why are you looking for HABA?
  • What product in particular were you hoping to find?
  • Who are you shopping for?
  • Can I show you some alternatives?

Instead she walked away. 

This is a problem we all have with our sales clerks. At best, they make an attempt at the low-hanging fruit, but never reach beyond that first branch. They shy away from actually helping a customer and making a sale. They back off at the first hint of rejection.

Last summer I created a new presentation for the Independent Garden Center Show called How to Push for Yes (Without Being Pushy) (click the hyperlink to download the FREE eBook) just to help with this situation.

If you want your sales team to go after the better fruit on the higher branches you have to first equip them with the tools to do so. Then you need to motivate them to step out onto the limb. That’s what HABA has hired me to do with their team. I am looking forward to it!

-Phil Wrzesinski
www.PhilsForum.com

PS I love the IGC Show! Last summer they challenged me to create five new presentations from scratch that collectively went on to become my half day workshop The Ultimate Selling Workshop. this summer they have challenged me to create five new presentations on selling. As always, I am looking forward to that challenge. As long as I live there will never be a shortage of new lessons (or takes on old lessons) for us to all collectively learn.

How Much Would You Pay?

Have you ever walked through a store, saw a display, and thought, “Wow! Someone would actually pay that much for that?” Of course you have. We all have. It is the internal pricing game we all play called …

“How Much Would You Pay?”

Unless you’re the only option in town, pricing is a game of finding that sweet spot in price that matches the answer most people would pay for your product or service. The better you determine that price, the better your sales and profits.

And before you think that lowering the price is the only way to go, remember that some people will look at a really low price and think, “What must be wrong with it?” You can cheapen the perception of your products or services by pricing them too low.

I knew a guy who sang at events. He was getting tired of the gigs. He asked me if I thought it was smart of him to double his price so that he would get fewer gigs and still make around the same amount of money. I told him to expect the opposite to happen. I was right.

His bookings doubled with the doubling of his price because people figured if he charged that much he must be really good. In other words, his earlier price was too low. Fortunately, the extra bookings along with the higher price re-energized his career.

I call this concept Perceived Worth. It is something we all do when shopping. We look at an item and determine its Perceived Worth (PW). Then we look at the price. If the price equals the PW and we’re in the market to buy it, we place it in the cart. If it is too high or too low, we hesitate. We won’t make the purchase until we can justify the price discrepancy.

If we don’t need the product, our PW for that item is zero, and we move on, but we’ll still play the Pricing Game to see if what we would expect to pay matches the price.

I NEED YOUR HELP

I tell you this because I would like your help on the PW of a service I have been asked to perform.

You may recall a couple weeks ago I gave you five Self-Diagnosis Tools to help you take a critical look at your business. Those tools were:

I was asked what it would cost to hire me to come to a business for three days to perform those five diagnostics.

I would like to know what you think the Perceived Worth would be to have someone like me do a complete diagnostic evaluation of your business using those five criteria.

I would visit your business for three days. I would need access to your financials (Balance Sheet and Profit & Loss plus your Average Inventory at Cost). I would need to see what Advertising you have done (and any contracts you’ve signed for advertising). And I would need a couple hours of your time over the three days to answer questions here and there.

At the end I would write up an evaluation showing where you were doing well, where you needed attention, and recommendations for what to work on next, including a priority of where to put your resources first.

Two Questions:

  • What would you EXPECT to pay for such a service?
  • What would you be WILLING to pay for such a service?

I am curious to see your responses. You may send them to me via email or PM, leave a comment on this blog, or comment on Twitter, LinkedIn, or Facebook.

-Phil Wrzesinski
www.PhilsForum.com

PS Even if you don’t own a business I am curious to see your response. I am trying to gauge whether there is a viable market for this service or not. I’d love to know what people perceive such a service to be worth. There are no wrong answers.

A Tale of Two Cashiers

It was the best of cashiers, it was the worst of cashiers …

I did something foolish. I went out shopping on Saturday, December 15th last year. Yep, that Saturday. One of the two or three busiest days of the year. My staff and I used to love those Saturdays at Toy House. We were always pumped up and ready to have all kinds of fun with the crowds of people.

Not this gal.

I waited in line as expected. Placed my items on the belt. Waited some more. When it was finally my turn I said to the cashier a joyful, “Hello. How are you?”

In the most monotonous, apathetic voice she could muster, she answered, “I’m here.”

That was it. She didn’t say anything more until she had rung up all my purchases and asked, “Mperks, bottle slips, or coupons?”

No “Hello.” No “Thank you.” No “Fine, thanks.” She didn’t even say those phrases I really hate at checkout like, “Are you ready to check out?” or “Did you find everything?” Heck, by this point I would have taken any kind of interaction. She didn’t even say, “No problem,” when I thanked her for ringing me up.

Any excitement I had for the upcoming holiday was quickly Grinched out in her doom and gloom. I walked back to my car somewhat deflated and dejected.

Fast forward to yesterday. Same chain, different store. I was greeted with, “Hi, how are you today? Looks like you have a pretty good shopping list here.”

By the time she had finished ringing me up, we knew each other’s names, I knew some of her past work history. I knew why she was working where she was and what she “just loved” about working for them. We talked about my purchases. We laughed about the shopping bags that wouldn’t separate from each other easily.

It was a generally pleasant conversation that ended with, “Thank you for coming in. Hope to see you again.”

I’ve shopped this chain all my life and never once been asked to come back like that. 

According to a John Gattorna study published in 2008, the leading cause for customers to switch stores isn’t product or price. It is indifference. Here are his numbers:

  • 4% Natural attrition (moved away, passed on, etc)
  • 5% Referred to a competitor by their friend
  • 9% Competitive reasons (e.g. price)
  • 14% Product/service dissatisfaction
  • 68% Perceived Indifference

If the “I’m here” cashier had worked for me, she would no longer be “here”. If you can’t be happy and enthused for the busiest time of the year, you don’t belong in retail. At the same time, I would be doing everything in my power to encourage more conversations between my cashiers and customers like the “Hope to see you again,” cashier. I actually do hope I see her again.

-Phil Wrzesinski
www.PhilsForum.com

PS Notice how I didn’t mention anything about their efficiency or skill with the actual cash register and bagging? I have had horrible baggers, slow movers, and cashiers not trained well enough to know even the simple procedures at this chain. But the two that stood out the most were both because of their attitude. 

PPS One of the cashiers was a Baby Boomer. The other was a Millennial. Guess which was which?

Another Phrase You Need to Quit Using

One downside to being a speaker for the retail industry is that there aren’t a lot of speaking opportunities in December. (It is also an upside in that I had a lot more time around the holidays, but I digress.) With all that free time, I took on the project of replacing the cabinets in my friend’s kitchen. He had a broken cabinet, plus wanted to do some simple remodeling and moving of appliances. It was a fun project.

One day shortly after finishing that project, I happened to be walking through the cabinet section at Lowe’s with my girlfriend. We were talking about some of the cabinets we might have chosen for the project.

A sales clerk approached us and asked, “Are you finding everything okay?”

“Yes, we are. Thanks.” I cringed as I said it because it rolled off my lips without a moment’s hesitation. It was as knee-jerk a reaction as “Just looking,” or “I’m fine. How are you?”

The annoying thing is that I often asked that same question of customers at Toy House. I often got the same response. Until I learned a better way.

We all know not to ask a customer, “Can I help you?” Now asking the customer, “Are you finding everything okay?” is the new no-no.

Why? Because the knee-jerk response kills the conversation with the finality of a Clint Eastwood Smith & Wesson.

OTHER WAYS TO OPEN

There are a whole bunch of other ways the salesperson could have opened the conversation.

He could have used a question about the product we were admiring …

“Are you admiring that set for the color or the style?” I would have answered color. My girlfriend would have answered style. And we would be talking.

He could have led with a feature …

“Have you seen the new soft-close drawers on that unit? You have to try it.” I would have opened a drawer and he would have had the opening (both figurative and literal) to talk to me about features and benefits.

He could have used a personal statement …

“You’re looking at my favorite style. I’ve been dreaming of remodeling our kitchen with those. What style would you put in your dream kitchen?” We probably would have talked for several minutes.

He could have even led with his name …

“Hi guys. I’m Carl, your kitchen remodel expert.” I would have responded, “Hi, Carl.” I might have even taken his card.

The point here is that there are many ways Carl could have opened a conversation that might have led to a sale. Big sales like kitchen cabinets rarely just happen out of the blue. They take time and effort, and a relationship you build with the customer first.

“Are you finding everything okay?” implies that the customer is in control, you don’t really want to help unless absolutely necessary, and a relationship isn’t even on the salesperson’s mind. The customer really only has to give you one of two responses—Yes or No. If she says Yes, you’re out of the game before you even got in. If she says No, there still is no guarantee she’s going to ask for your help because she still doesn’t know or trust you.

Half the time she will lie and tell you Yes when she means No just to not have to deal with you.

The next time you and your staff get together for training, work on alternate openings to “Are you finding everything okay?” and strike that phrase from your vocabulary. It will help you convert more customers into relationships which will lead to more sales.

-Phil Wrzesinski
www.PhilsForum.com

PS Sure, I wasn’t in the market for cabinets that night. The salesman didn’t know that. And with that opening he was never going to find out. The opening of the relationship is not only crucial to making today’s sale, it also sets the foundation for a long-term relationship and customer loyalty. For more ways to meet and greet your customers, check out the FREE eBook The Meet-and-Greet: Building a Long-Term Relationship with Your Customers.

Self-Diagnosis Tool #3 – Customer Service

My favorite Smile Story was actually told to me by a customer, not my staff. Dawn had three grandchildren coming to visit her for five days. She wanted to have a different gift to give each child each day they were there. Fifteen gifts in all. Lakisha said, “I’m on it,” and led Dawn all around the store.

A few weeks later Dawn called me. “Phil, I have to tell you that gal of yours was fabulous. My grandkids loved the gifts. My grandson, he’s seven, turned to me and said, ‘Grandma, these gifts are better than if we had picked them out ourselves!’ Thank you, thank you, thank you! And thank Lakisha, too!”

That’s the phone call every store owner and manager dreams of getting.

If you’re regularly getting that call, you’re doing the right things with your staff and with your customer service. Go back to Tool #1 Core Values and Tool #2 Market Potential or wait until tomorrow for Tool #4 Cash Flow.

If you’re not getting that call at all and would be totally shocked if you ever did get a call like that, read on.

NOT AS UNMEASURABLE AS YOU THINK

Many people say Great Customer Service is not quantifiable, therefore it cannot be measured. I disagree. There are numbers you can run to see whether you and your sales staff are doing right by your customers.

I showed you two ways to measure your Customer Service in the post The Right Measuring Cups – Repeat & Referral Business and Units per Transaction. They are good starting points even though neither of those is completely perfect.

Sometimes your Referral Business is because of a product you sell that is hard to find. Sometimes it is because of some Over-the-Top Design element in your store your current customers tell their friends they have to see. I knew a jeweler who had a $30,000 diamond ring, way out of the league for that sleepy summer tourist town. She had tons of traffic right up until the day that ring finally sold. Once the ring was gone, her Referral Business dried up.

Sometimes your UPT grew because the hot item that year had several accessories or attachments. The following year the hot item had all those things included so your UPT fell.

I would still start there and see what you learn.

OTHER PLACES TO LOOK

If I were to come in to your store to do this diagnosis, here are some places I would look to get a handle on your levels of customer service.

  • Team Member Handbook – Do you have one? What does it cover?
  • Training Videos – Do you have them? If not, how do you handle new employee training?
  • Continued Training – How often does the staff meet for training purposes? What are you covering? How do you measure results?
  • Your Store Policies – Are they Customer-Centric or Business-Centric? Who do they protect?
  • New Hire Process – How do you find new employees? I want to see your Help Wanted Ads, Job Descriptions, and Interview Questions

If you don’t have a Handbook, you should make one. Write out all your policies. Write out all your philosophies. Write out how you will measure their employment. Have an HR professional and an HR lawyer proof it to make sure it is legal. Then give a copy to everyone and use it as your guide. It puts everyone on the same page and helps eliminate confusion from different team members saying, “That’s not how I was taught to do it.”

Training Videos are another way to make your staff training consistent and thorough. They don’t have to be fancy or even perfect. You can shoot them fast and simple on your phone, post them privately to YouTube, and provide the links to your new hires. If you don’t offer Training Videos, how else can you ensure that training is consistent and thorough? One way is to have the same person do all the trainings. Another is to include a checklist of everything to be covered. No matter which method you use, there also has to be a final check. One person who will verify what the new hire has learned and send him or her back for further training if necessary.

Continued Training is a must. Back in third grade I may have learned how to golf, but I’m still a few million hit golf balls shy of going pro.

“An amateur practices until he can do it right. A professional practices until he cannot do it wrong.” (source unknown)

One way we measured the results of our continued staff training was through Smile Stories. Every staff meeting began with Smile Stories where my team would share the different ways they made customers smile. Those stories not only reinforced the culture and the goal of the store – “We’re here to make you smile!” – but they also encouraged the team to actively seek out opportunities to make customers smile.

Store policies should be Customer-Centric, meaning they are in place to protect and help the customer. Liberal return policies, easy layaway plans, helpful services that make less work and less thinking for the customer are the hallmarks of Customer-Centric policies. If you limit what forms of payment or how much someone has to spend to use a credit card, you’re telling the customer that your nickels and dimes are more important than them. Once your product is no longer exclusive or hard-to-find, they will leave for someone who treats them better.

If you have aligned your business with your Core Values in a market with a lot of Potential, and are taking care of your customers the right way, you should see your Share of the market steadily climbing upward. Rarely does a company get through all three of these tools without recognizing areas that need shoring up. Start working on those.

Tomorrow we do math. (Just giving you fair warning.)

-Phil Wrzesinski
www.PhilsForum.com

PS If Cash is King, why does it fall all the way down to fourth on the Self-Diagnosis priority list? Because all the cash in the world won’t help you in the long run if your business model is flawed. Those first three priorities are all about your business Goals and Strategies. Buying and selling product is simply a means to the end. Notice how I didn’t say, “We’re here to sell you toys!”? Our goal was much bigger than that. Sometimes your Cash Flow problem is because you aren’t attracting the right customers (Core Values), don’t have enough customers (Market Potential), or are driving customers away (Customer Service). Make sense now? Get those three areas right first. Then you’ll know if your Cash Flow problems are truly Inventory Management problems.

The Thirty Questions to Find Your “Silver Bullet”

I got suckered in once. Long before the phrase “fake news” came into existence, back in the days when Norton and MacAfee were the only names in anti-virus protection, my computer started slowing down.

Then up popped an ad for a free diagnostic test of my computer, guaranteed to clean it up and take it to speeds the factory settings never could. I downloaded it and immediately all these warnings came flashing on the screen telling me I was infected and needed to download this fancy, official-sounding fix right away before I lost critical data.

Yeah, you can probably guess the rest.

I took the computer to a local shop who cleaned several viruses and Trojans off the hard drive and got me back to my normal, plodding, limited-by-my-service-provider-not-my-computer speeds.

We’re all looking for that quick-fix, aren’t we? That guaranteed, take-you-to-the-next-level tool that will transform your business? That’s why scams like that computer virus one worked so well. We all keep thinking there is that one silver bullet we’re missing that will make all our ills go away.

Here is where I’m supposed to tell you there isn’t a silver bullet. Eat less and exercise more, right?

The truth is there is a silver bullet. And a bronze one. And a gold one. And a titanium-plated, platinum-infused, diamond-encrusted, gold-leafed, emerald-cut, space-aged aluminum, time-released-capsule one.

The problem is that every business needs a different bullet. In retail there is no one-size-fits-all bullet.

You might be struggling with cash flow while your neighbor down the street needs help with a better marketing message. The store on the next block has a customer service problem, while the store across the street is in a market with too many competitors.

What retailers really need is a good diagnostic tool to help you identify the true problem(s). Unfortunately your business isn’t like an automobile where you can plug it in and see what’s wrong.

You can hire a consultant, but unless they have a background in understanding independent retail, they might not be able to diagnose your true problem either. You can try to do it yourself (I gave you a few Measuring Cups to use in an earlier post), but it is often hard to read the label from inside the bottle.

Since I am the DIY guy of retail, though, I want to show you the approach I would take to diagnose where your business needs work so that maybe you can find the demon holding you back. If you were to hire me, I would look at your business in this order …

  1. Core Values – Is your business aligned with your Values? If not, how and where can we change things?
  2. Market Potential – Where do you stand in your market? Who are your competitors? What is your share of the market? Is it shrinking or growing? What local factors influence your market presence?
  3. Customer Service – How much of your business is Repeat and Referral? How much training do your front line people have? What skills do they have? How well do they greet, meet, and interact with customers? How are their “closing” skills? What services do you provide? Do your services lean customer-friendly or business-friendly? Do you meet and exceed expectations?
  4. Inventory Management – How is your cash flow? What is your Profit Margin, Turn Ratio, Accounts-Payable-to-Inventory Ratio, Cash-to-Current Ratio, etc? What are the “must-haves” and how was your stock position on those items last year? Where is the fat that needs to be trimmed from the inventory? What systems do you use to keep from over-buying?
  5. Marketing & Advertising – What is your Marketing Message? Is it consistent across all platforms (including the in-store experience)? How can we make that message more powerful and effective? Where are you spending your marketing money? Are there cheaper, better alternatives for reaching the people you want to reach? Are there collaborations that make sense? Are you harnessing all the free publicity available to you?

Notice the order of things. Most businesses come to me saying they need help with their Marketing because they aren’t getting the traffic they want. Yet sometimes the problem is their business isn’t aligned with their values so they aren’t attracting the right types of customers. sometimes the problem is there aren’t enough customers in their market to sustain their business. Sometimes the problem is their service is so bad, those who do visit are telling friends to stay away.

Better Marketing won’t fix those other problems or help the business.

If you want to run your own diagnostics, there are several hyperlinks to articles and blogs related to the thirty questions posed above.

If you want to hire me to run your diagnostics, I’m going through that list in that order until we find the first problem.

There is no single silver bullet to fix any and all retailers, but there is a bullet to slay the specific demon holding you back. I encourage you to run your diagnostics on your own to see if you can isolate your problem. When you do find it, send me an email and I’ll help you brainstorm several solutions to solve your problem on your own or with help.

There is a bullet for you, but it’s buried in the haystack next to the needle.

-Phil Wrzesinski
www.PhilsForum.com

PS I hired a consultant once. He compared my Turn Ratio to Walmart’s and told me my problem was inventory control and that I needed to go to “just-in-time” inventory where I had at most a one-week supply of inventory on hand. My dad hired a consultant. He compared our prices to Kmart and Toys R Us and said our prices were too high and then pitched a total revamp of our sales floor into a circus theme (not sure what that had to do with prices). If you’re going to hire someone, make sure they have extensive experience working with indie retailers. Make sure they have a list like this one, too, that spells out what they’re going to evaluate.

PPS Sorry for the mixed metaphor at the end. It sounded good in my head.