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When It Is Time to Move

Maybe it is declining sales in your current location, or maybe you’ve peaked out your sales and don’t have the room to expand. Maybe the demographics of your location have shifted or maybe your store’s product mix doesn’t fit in with the surrounding stores. Maybe a new development has made you an offer too good to be true.

There are dozens of reasons you can justify for moving your store (and just as many for staying put – too costly, lost sales during the move, will the customers still find us? can we afford it? is the grass actually greener? etc.)

The decision to move your store has to be something you research and consider the issues carefully. A bad move will sink you. A great move will grow you. A lateral move will wear you out.

Here is the short version of this blog…

  • Don’t move unless you have to – if it ain’t broke, don’t fix it
  • Prioritize what you need from your new location – More Traffic? Parking? Accessibility? Visibility? Better Demographics?  Do your research
  • Plan for extra expenses – moving costs, lost sales, etc. all add up quickly
  • Buy what you can afford – yes you expect your business will grow eventually, but make sure you can afford it on day one.

NO LONGER SUITS YOUR NEEDS

The first decision is the desire to move. You move when your current location no longer suits your needs. Your business model is working but your location isn’t the ideal spot. It’s too small, too big, too quiet, too expensive, too hard to find, wrong demographics, wrong part of town. There was an auto dealer in San Diego that was constantly advertising that if you would work with their location, they would work with your price. It became their gimmick, but at a great advertising expense. That low overhead from the lousy location was instead spent on advertising and profit margin.

Moves are risky. There are no guarantees your move will grow your business. If your current location suits your needs, the risk factor for moving goes up exponentially and it is often better to stay put.

WHERE DO YOU GO?

Just making the decision to move is huge, but you have to also know where you want to go. What are you lacking at your current location? Is it traffic? You’ll likely have to pay more in rent to get better traffic. Is it space? You can find bigger spaces, but you might have to give up something else like traffic or parking.  Is it better demographics? Do you know your demographics well enough to know what “better” demographics look like? The most important question is this…

Can you afford the new location with the money you’re making currently?

We all would like to think our business will grow hugely at the new location. But that isn’t always the case. Plus there are a lot of costs involved in moving that eat up any extra sales and profits. You have the lost days of sales while you move. You have the build out of the new place. You have the changing of phone and address and lost mail and lost shipments. You have the revving up of the new location as your regulars try to find you before the newbies have discovered you. You have the advertising of the change of address including the banners at the old location, the grand opening banners at the new location, the advertisements and the big grand opening event itself.

PRIORITIZE YOUR NEEDS

We moved once in our 67 years in business. The store started in a house. We bought neighboring houses and tore them down for a parking lot and a couple expansions. But we maxed out our location at about 10,000 square feet. My grandfather wanted three things in his move. First he wanted a larger building. He drew up two plans for a 20,000 sq ft building and a 24,000 sq ft building. Second he wanted to be along the busiest road in the downtown district (suburban shopping malls were not yet a thing in 1967.) Third, he wanted his own parking lot.

He found his location – an easy right hand turn off the busiest road in the downtown with plenty of room for parking in both the front and back of the building – and opted for the 20,000 sq ft building because that was all his current level of business could afford. He also had the expenses of moving. Even as a big fish in a small town, the newspaper didn’t cover our move. He had to take out his own ad in the paper. He used this picture with the headline,

“But Grandpa, Momma Won’t Like it if We Play in the Mud”

Yes, his business grew – fast enough that he needed that extra 4000 sq ft only five years after moving. Fortunately he also had the foresight to buy a piece of property that would allow such growth, and he now had the money to pay for it.

That location served us well for many decades even as new competition came to town. But when the demographics of the whole county changed, so did the options for moving. The criteria that served us well before were no longer the criteria we needed. Our options were downsizing greatly or moving to a new community, neither of which we wanted to do.

Moving is a big deal and can be a huge benefit for your business. It can also sink you. Make sure you are moving for the right reasons.

-Phil Wrzesinski
www.PhilsForum.com

PS I didn’t discuss renting versus owning. That is a topic worthy of its own post (or three).

In Retail it is All About Location

Let’s get the elephant out of the room right away.

How can I write a blog about being a successful retailer when I closed my retail store? I can sum that up in three words…

Location. Location. Location.

Yes, we were having a tough time with cash flow. That’s the usual culprit behind any store closing. Much of that was due to our location.

Location Issue #1

The population of Jackson has been stagnant at best the last several years. The youth population, however, has shrunk considerably over the last several years as birth rates declined for all groups but teens, and school enrollment is down huge since 2007. On top of that, average household income in the city fell from around $35K per household to $27K per household (well below the national average of around $56K).

I have constantly talked about paying attention to your Market Share. To know your Market Share you first have to know your Market. Our market has shrunk over 40% since 2007. Fortunately, our Share of that market had stayed the same. We still had our piece of the pie, but our pie had turned into a tart.

Location Issue #2

We own and occupy a large building on the north edge of downtown. We have been a large toy store for decades, carrying toys, hobbies, baby products, sporting goods, scouts, and more. When the market could bear it, we had a ton of inventory, but scaling back inventory to match the needs of the community meant less efficient use of space and less of the “impact” of being that large store that had everything.

We discussed converting to a smaller store, more in alignment with the population and income, but that would have led to many long-time customers lamenting that we just weren’t the store we used to be or the store they remembered. Better to close while the memories were still positive.

Location Issue #3

I am a big believer in downtowns. Call me naive but I still believe downtown shopping districts can be successful. It takes dedication from the shop keepers, the landlords, and the city leaders to make it work. It takes smart policies, united fronts, and strong relationships to make it work. We have some of that in Jackson, especially among the retail owners. We also have a city council dedicated to improving the streets and sidewalks and green spaces in our downtown. Unfortunately, that also means a ton of disruptive construction. Two years of it! (and counting.)

Our city leaders are not retailers and don’t understand how construction affects retail. They saw an opportunity to get roads fixed and attract new development (all good things), but didn’t see the consequences to the existing retailers and restaurants. When you are trying to dig out of a cash flow hole, having the busiest street in town—the one that goes right by your building—be restricted from three lanes to one with backups that stretch for blocks for an entire spring and summer is not a good recipe for success. At one point we had so much construction downtown that one detour actually led you to another street closure dead-end, and only if you had local knowledge would you know which alley would get you back to open road.

In a couple years, our downtown is going to be new and fresh and repaved and ready for business. But the last two years were pretty tough on the businesses already here, especially for us as our market declined.

Yeah, Amazon is a deal-changer for many retail categories. Yeah, our own vendors are making decisions that hurt the indie retail channel. Yeah, customers are as fickle as ever and have power like never before. None of those are insurmountable. You can still compete. Even as we closed, we were holding our own for our market. We just didn’t like the direction our market was heading.

If your market is your problem, you can do one of four things, Move, Close, Change or Wait. We chose to close.

Now you know.

-Phil Wrzesinski
www.PhilsForum.com

PS I’ll discuss the other three options and what would make them attractive in future posts. Right now I have to go let the big elephant in the room out to roam the savanna.

Anatomy of a Promotion That Pays

What if I told you that you could market your business to 6,000 customers and instead of costing you a penny, you would actually get paid $328 to do it?

What if I told you that you would also get valuable market data from that promotion?

What if I told you that you would be praised mightily for the campaign?


Here is what we did… (shout out to Bob Negen of Whizbang Training for this idea)

I contacted the local public school district and asked permission to send each of their 6,000 students a $5.00 Gift Certificate. They said yes and sent us a breakdown of how many students in each school. I mocked up the gift certificates as postcards and had them printed locally for $278.

When we got the GC’s from the printer we bundled them in bundles of 30 and made a bag for each school. I delivered them a week ago Wednesday to the main offices. They distributed the GC’s to the schools the following day.

The GC’s had only this disclaimer: “For Student Use Only. One Per Student. Expires 11/15/14”

Here is where it pays…

We are expecting a 10% return on the gift certificates. That’s 600 GC’s we expect to be used between now and 11/15. In the first couple days alone we already had 60 returned and not all the schools had distributed them! The average ticket so far has exceeded $12.00.

So let’s do the math…

600 x $12.00 = $7,200.00 in sales

Minus Cost of the GC’s  (600 x $5 = $3,000.00)
Minus Cost of the Products  ($3,600.00 – 50% of the retail price)
Minus the Cost of the Printing ($278)

7200 – 3000 = 4200
4200 – 3600 = 600
600 – 278 = $322

Here is the bonus…

Not only did we get the word out to 6,000 students (and their parents) about Toy House, but we will get 600 of them (and their parents) into the store right before the prime part of the holiday season where we will entice them with product displays, events, and wish lists for them to fill out and get them back for Christmas shopping.

Not only did we get the word out to 6,000 students, but we also will get 600 purchases to tell us what kinds of impulse items are popular with today’s kids.

Not only did we get the word out to 6,000 students, but I have received tons of praise from parents and teachers for our generosity.

Not only did we get the word out to 6,000 students but I have had friends and customers ask me what is going on that has kept our parking lot so full the last few days.

Here is the kicker…

There are some people who will tell me that I have the math all wrong, that I sold $7200 worth of stuff and only made $322 dollars. Those people are looking at the gift certificate as the be-all, end-all of the promotion. The customer came in once, spent a little money, and left. Promo done. They missed the whole purpose of the campaign, which is to earn top-of-mind awareness by getting them in the store right before the time we really want them in the store. I am banking on my staff’s incredible customer relations skills to earn their repeat business whether they spent $1.62 (our smallest transaction with the GC to date) or $58.02 (our largest).

Frankly, the $7200 in sales, while nice, is just a drop in the bucket. The real value is in getting the word out, getting them in to look around, getting them to buy into our generosity, and getting an idea of what is attracting their attention once they are in the store. The fact that I get paid $322 to get all of that is the icing on the cake.

Do you have any promotions planned that pay you to do them?

-Phil Wrzesinski
www.PhilsForum.com

PS If you sell stuff for adults, is there a major employer or three that you could contact about giving away gift certificates to their staff? Colleges, hospitals and city governments employ a lot more people than you might imagine.

9 Ways to Draw Traffic With Only $400 a Month

A fellow store owner was contemplating an advertising deal offered to her from Yelp that was going to cost about $400 per month. That got me thinking about what different things you could do to draw traffic with $400/month.

  1. You could rent a bouncy house and run it in your parking lot every Saturday.
  2. You could run a customer survey poll in your store and donate that money to the charity your customers vote on every month.
  3. You could give away eighty $5 gift certificates to people who have never been in your store.
  4. You could buy an espresso machine and give away free espressos every day.
  5. You could have your customers help you invest it in the stock market and track each investment on a big board in the store with proceeds going to a local charity.
  6. You could use it to send eight $50 gift baskets to your top customers each month.
  7. You could use it to hire a valet parking service for your busy days.
  8. You could use it to host classes and meetings at your store.
  9. You could use it to pay top-level local entertainers to perform at your store.

Don’t be limited by your media choices for getting the word out. There are far more options than just online, broadcast, print and billboard. There are as many ways to draw a crowd as your mind can conceive when you let it get creative.

-Phil Wrzesinski
www.PhilsForum.com

PS My favorite is #2. Just imagine all the charities sending their people in to your store to stack the vote each month.

Think Big to Draw Traffic

I was visiting a jewelry store in a sleepy northern Michigan town. The store used to be known for having a $32,000 diamond ring. Now those of you in a big city might think no big deal, but to this community, it would take the entire population pitching in $6 each to buy that ring.

People used to flock to the store to try it on.

After about ten years on display someone finally bought the ring a few years ago.

You would think that was a good thing. The store owner thought so at the time. But on the day I visited, she was lamenting how her business was down. Traffic wasn’t what it used to be. I asked her when it started. You all can probably guess – right after she sold the ring.

No ring, no draw.

Sometimes you have to take a little bit of your ad budget and put it toward buying something completely outrageous that you don’t expect to sell (but people will want to see.)

We do that all the time. Nothing better than hearing a customer say to someone shopping with her, “Oh you have to come over and see this!” You know she and her friend are going to be talking about it to others, too.

Some might look at a $32,000 diamond ring and say, “That’s pretty expensive advertising.” Unless you consider she got ten years of advertising from it, and then had someone refund the money back to her by buying it.

When you are looking to generate Word-of-Mouth advertising, you gotta give them something to talk about. A 32,000 piece puzzle that is almost eighteen feet long and over six feet wide and comes with its own hand cart is gonna make people talk.

-Phil Wrzesinski
www.PhilsForum.com

PS I suggested she needed to buy another $32,000 ring or bigger. That was an investment in advertising that paid off big the first time and will pay off big again. There are a few tried and true ways to Generate Word of Mouth (click that hyperlink to download my FREE eBook on the topic). Over-the-top design including over-the-top products is one of those ways.

PPS I guess 32,000 is my lucky number today.

Have You Tried This?

Another restaurant closed in town. They posted a wonderfully grateful goodbye on Facebook, thanking everyone from the staff to the suppliers to the customers to the city leaders (well, okay maybe not that last one). They even apologized for the inconvenience of closing. They said they gave it their best shot but just couldn’t make a go of it.

One of my staff, when hearing of the closure asked a profound question…

Why didn’t they try something else?

They had the kitchen, the staff, the liquor license, a small group of dedicated followers. Why didn’t they try something else?

They had a premium location downtown, a banquet room (a couple of them), parking out back. Why didn’t they try something else?

They had ambiance (although a little loud), great window seating along the street, outdoor seating, gigantic fish tank seating, and really cool bathrooms. Why didn’t they try something else?

Two things I didn’t see happen. They didn’t change the menu. They didn’t change the pricing. Two complaints I heard the most (besides how loud it was with all the wood floors and vaulted ceilings) were the menu and the pricing.

You gotta get those two right.

The right menu (products).

The right price.

Get those wrong and all the rest doesn’t matter. If you’re doing everything else right and your business is failing, chances are you got one of those two wrong. Why don’t you try something else?

-Phil Wrzesinski
www.PhilsForum.com

PS I get it that they may have chosen a menu/pricing consistent with the type of restaurant they wanted to be (their brand), but there is a lot of wiggle room within “fine dining” and “upscale” and “top-shelf” and “gourmet” and “specialty” and “unique” and “quality” to work with your particular crowd. Also, it may be that it wasn’t the actual menu and pricing that caused the problem but the perception of the menu and pricing. Perception is reality, folks. You gotta win the perception battle.

PPS I’m sad to see them go. I’m not trying to criticize them, but to help you learn from their experience.

What are You Doing to Reach the Influencers

McDonald’s spent millions advertising the Happy Meal to children. Yet, who ultimately controls what a child eats? The parent, of course. Yet, McDonald’s made billions from the Happy Meal by advertising to the strongest influencer.

There is a bra store near me that specializes in custom-fitted and hard-to-find sizes of bras. They advertise on the local ESPN sports/talk radio station. Yes, a bra store on a sports/talk station. And they’re making a killing by saying, “Hey guys, tired of hearing your wife complain about her bra not fitting?”

Later this fall I am going to give out about seven thousand $5.00 gift cards to the students of one of our school districts. In a couple weeks I am going to wine and dine and bribe their teachers through a Teachers’ Night Out private party at our store with food & drinks, prizes, fun activities and incredible incentives for attending. I want to make sure that when the teachers hand out these gift cards that we get a great return on our investment.

Too many retailer make the mistake of thinking they have to focus all their efforts only on the person who might buy or use their product. The most powerful push someone gets to shop at your store usually comes from someone other than you. It seems counter-intuitive, but sometimes your best advertising and marketing needs to be directed at a non-customer.

If you can convince the influencer of the benefits of your business, they will convince the end user of your benefits.

There are two advantages to this approach.

First, since you are advertising to an indirect target, they are going to be more surprised (which is a good thing) and interested in your ad. It won’t come off as such a sales pitch. The bra ladies weren’t trying to sell a product, just to offer a solution to a common problem heard by married men all over the planet.

Second, the influencer has far more power to affect the actions of your intended customer than you do. Word of mouth from a friend always trumps advertising by a company. Let the friends and family and influencers do all the heavy lifting for you.

Yeah, it’s risky. All advertising is risky. At least this one has a pretty good track record (or why else would people be trying to ban the Happy Meal toys?)

-Phil Wrzesinski
www.PhilsForum.com

PS To do this you just have to do two things. First figure out who is that non-customer that has the power to influence your shopper. Is it a parent, a child, a spouse, a friend, an authority figure? Second, figure out a message that will resonate with that person. It is powerful and it works.

A Clean Business is a Happy Business – Three Reasons to Get Out the Paint Brush

I hadn’t washed my car in weeks. When it was sunny, I didn’t have the time. When I had the time, it was raining. I finally got it done two days ago.

As I was toweling off a few last sprinkles, I felt a little extra bounce in my step. There was a little more pride driving around town in a shiny vehicle. Even walking up to it, I thought my Pilot winked at me in the sun. The car was cleaner. I felt better. More pride.

Yes, a clean car is a happy car.

I felt the exact same way a few weeks ago. The cottonwood trees had slowed down enough for us to put a fresh coat of paint on the front of the store. Coincidentally, our business skyrocketed 20% after the paint job.

A clean store is a happy store.

I’m smart enough to know that our success the past three weeks is not just because we painted the building, but never underestimate the power of a simple cleaning job.

  • It puts you and your staff in a happy mood. A happy staff delights your customers more.
  • It sends a signal to your customers that you care about your business and, likewise, that you will care about them.
  • It sends a signal to your customers that you are fresh and new and on top of things.

Those last two are the kickers. A fresh coat of paint on the outside of your building is often a much cheaper and more powerful marketing tool than a month of billboard and newspaper ads.

-Phil Wrzesinski
www.PhilsForum.com

PS Landscaping, painting the inside walls, moving the merchandise around, mopping/shampooing the floors, and updating the signs all have the same effect. The inside stuff, however, doesn’t send those signals to the outside world, only to the current customer base who already love you despite your messiness.

PPS None of that cleaning matters, however, if you aren’t first taking damn good care of your customers. Otherwise it’s just a band-aid on an amputation. If you don’t have a capital fund for repairs and improvements, take the money from your advertising budget, not your customer service training budget.

Getting Customers to Walk Those Last 20 Feet

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

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

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

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

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

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

If you do nothing, you’ll get nothing.

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

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

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

-Phil Wrzesinski
www.PhilsForum.com

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

Doing Business When Your Street is Closed

Winter is finally giving way to that other season – Construction. Orange cones are popping up everywhere.

And shortly after that, if you’re a downtown business, you’ll probably be facing Festival Season – that time of year when the city shuts down the street for a car cruise or an art fair or some other event.

Either way, at one point or another, if you have a Main Street business, your business is going to have to deal with a street closure. How you deal with that will be critical to your success. Here are some suggestions for keeping the till humming while the streets are closed.

CONSTRUCTION

This is usually a long-haul situation and requires some smart strategy. The key is communication.

  • Communicate with your fan base the best ways to approach the store and the best places to park.
  • Communicate what is happening with the construction. Give blow-by-blow accounts and updates.
  • Have fun with the construction. Post trivial facts, goofy pictures, interesting finds. Get your fans to post their own pictures. Play guessing games – take close-ups or partial pictures and have them guess what machine it is. Turn it into a focal point that might make people want to stop by and gawk.
  • Set up a shuttle (you can partner with other businesses affected by the closure) to help get your customers in to see you.
  • Offer delivery services for the time the construction is taking place.
  • Expand your hours so that you are open at times when less work and disruption is taking place.
  • Roll out a red carpet – yes an actual red carpet – to get people over muddy, dirty, disrupted areas.

Don’t just assume business as usual. Plan for a small fall off, but be proactive in your approach to make it as convenient and fun as possible for your customers to do business with you.

FESTIVALS

Street closures for festivals are a different beast and require different tactics. First, they are usually short-term events that take place during your typically busiest times – Friday nights and Saturdays. Second, they draw a lot of people, but not necessarily your regular customers, and not necessarily anyone who wants to shop with you. At the same time, they disrupt your regular customers and keep those people away.

Therein lies the key. The people on the street are not your regular customers. What would you do differently to try to turn these people into your regular customers? The first goal is to get them off the street and into the store.

  • If you sell jewelry, put out a sandwich board and offer “Free Ring Cleanings”. Get those customers in the store looking at the shiny, bright, glittery stuff in your cases while they wait for your polishers to make their rings sparkle. 
  • If you sell clothing, put some racks on the street of your unique offerings that will entice someone to stop on by.
  • If you sell candles, get that aroma wafting out your door and onto the street. You’ll attract attention in no time.
  • If you sell baked goods set up a fan inside the door so that chocolate chip cookie scent reaches the end of the block.
  • If you sell shoes, put out a sign showing how to check your own shoes for wear and tear. Have a sizing specialist standing out front to engage the folks on the street. Offer a free shoe-polishing stand.

No matter what you sell, there is something you can do to engage with the festival goers and either get them in the door today or at some point down the road. You just have to be creative and proactive. Open the doors, put out a banner and make sure people know you are open for business. Do something in conjunction with the theme of the festival. Sign them up to your mailing lists, your birthday clubs, and any other program you offer. Use this opportunity to farm for new customers. There are a ton out there. Most of all be ENGAGING. Have fun with the event.

Street Closures are a reality. How you deal with them will have a direct impact on your bottom line. You can wallow in misery complaining about the lost business or you can let your creative juices flow and look at them as an opportunity to do things differently.

You know which one will pay off in the long run.

-Phil Wrzesinski
www.PhilsForum.com

PS I knew of a hair salon that was half a block off the beaten path of a major festival in her town. Rather than lament the street closures combined with no foot traffic at the front door, she had her staff on the street handing out coupons for free ice cream cones inside her salon. For the cost of some ice cream she was able to get a ton of traffic that always resulted in new clients and new appointments.

PPS Also remember that those festivals do serve a purpose. First they make your downtown seem more active and vibrant. That message sticks with people throughout the year. Second, they attract people to downtown that might not go otherwise. Fear of the unknown keeps people from shopping in new locations. Third, they often serve to raise funds for charities and non-profits, the same ones that would be hitting you up double if not for the events. Embrace them and enjoy them and make them work to your advantage.