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Fair and Square

My wife is frustrated (and thankfully, it is not my fault). She used to love going to JC Penney. Well, love might be a strong word for someone who finds shopping a chore. But now she finds that JCP rarely makes it on her list. And she is not alone. JC Penney just reported that same-store sales fell a whopping 26.1%!

Many are blaming their new Fair and Square pricing policy.

My wife is one of them.

She says it is neither Fair nor Square. As she pointed out to me last night, our prices are Fair and Square. They are clearly marked on every package. There are no misleading header cards on the racks. There are no surprises at the register. There are no gimmicks, exclusions, mark-it-up-to-mark-it-down contrived sales. There are no hidden fees, add-ons, hoops or loopholes. The price you see is the price you pay.

That is what JC Penney promised us when they launched this new pricing policy at the beginning of the year. The problem isn’t in the policy. The problem is they failed to deliver what they promised.

Many pundits will wrongly claim that customers want sales and deals and JCP’s failure is because they aren’t offering enough deals. I will argue that their failure is because they didn’t actually make their prices Fair and Square. Every time my wife went in, the prices were not clearly marked, some items had no price at all!  The header cards rarely matched the price on the product and even less the price at the register. The prices seemed to fluctuate faster than the stock market.

Before you listen to the pundits try to tell you that customers only want sales and discounts, understand that many retailers are quite successful offering pricing that is fair, clearly marked, and not jumping all over the place. JC Penney promised us that back in January. Empty promises lead to empty stores.

-Phil Wrzesinski
www.PhilsForum.com

PS There is a Fair and Square pricing policy that keeps your customers happy and your margins strong enough to be profitable. Download the free eBook Pricing for Profit here.

Don’t Hide Your Agenda

I was about to write a blog about the importance of the little details, like a clean bathroom, and how even those small things need to be consistent with your branding, your Core Values, otherwise they could undermine all the good you do.

I saw a headline and a survey that said 62% of customers think a dirty restroom is a sign of poor management.  Odor, dirty or clogged toilets, and bathrooms that looked old were the three most common problems.

Then I read the source… A plumbing supply company.  Made me pause for a moment.  Made me wonder if there was some sort of bias in the survey.  Made me wonder if there was a hidden agenda.

You, too?

And that, in a nutshell, is why consumers don’t trust us.  They think we have a hidden agenda.  That Hot Toy list that Toys R Us recently published? I watched it get trashed in a blog for being self-serving.

What if the plumbing supply company said… Hey, we’re in the bathroom supply business so we did a poll to see what the main complaints were that people had about public bathrooms.  Not surprisingly, smell and odor was number one.  We also learned some other interesting information about bathrooms.  They make a big impression on your customers, both good and bad.  Sure, we’re telling you because we want your business.  More importantly, we’re telling you because we want you to stay in business.  Without you, there are no public bathrooms for us to update.

Wouldn’t seem so self-serving, would it?  Just by being up front and honest about being self-serving, they sound less self-serving.  Ironic? Yes. People trust an open agenda.  They distrust a hidden one.

How can you be up front and honest so that you don’t seem to have a hidden agenda?  Here is one way we do it.  I constantly tell customers that we will help you install your car seat no matter where you bought it.  I then tell them up front that I have an ulterior motive for doing it.  If the car seat is installed safely, your child is safer.  If your child is safer, your child lives longer.  If your child lives longer… wait for it… you have to buy more toys.

Always gets a smile (we’re here to make you smile, remember?).

Be honest about why you do what you do.  Tell your ulterior motives.  Tell the downside.  It helps build trust instead of destroy it.

-Phil Wrzesinski
www.PhilsForum.com

PS But please be sure to clean your bathrooms!  It does make a difference.  In the book Retail Superstars George Whalin talks about the bathrooms as a positive feature in a number of the stores in the book.

No One is Buying the Hype

Greatest (biggest, best…) ever!

As soon as you hear it, you dismiss it.  You’ve been burned too many times.  If it sounds too good to be true, you know it probably isn’t.

Hype is dead.  Hype has been laid to rest.  People aren’t buying it anymore.

If your advertising campaign is built on the next biggest, greatest thing, good luck with all that.  You’d be better served to drop all the overblown hyperbole and talk about the downside.

Yeah, the downside.

One of the easiest ways to instill trust in your customers is to be open and honest about what you or your products won’t do.  As in… “This bottle claims to eliminate gas in your baby’s stomach.  We all know that ain’t happening.  Your baby will need to burp no matter which way she feeds.  But here is why you really should think about this bottle versus that other one.  If you are nursing…”

In other words, be honest.

Everyone knows that every product has an upside and a downside.  If you don’t show the downside up front, the customer will wonder what you’re hiding.  They will look for that downside and form a strong distrust of you in the process.  But if you show that downside right up front, first they begin to trust you and second, they are far more willing to listen to everything else you say.

At the end of the day, it is all about Trust.  No one trusts the hype.  No one trusts the salesperson who hides the downside.  So drop the hype, tell the downside.

I’m waiting for the furniture store to run this ad.

“This isn’t our biggest sale ever.  In fact, we’ll probably have another sale next month.  But the items we are selling today won’t be in that sale.  If you’re looking for a great deal on a couch, wait til next month.  But if you need a dining room set, we have a few closeouts we want to move off our floor.  Nothing wrong with them, just not a style that sold well at regular price…”

I think it would resonate far better than the current hype with the circus tents and balloons and shouting MC’s.  Especially to anyone who wants a new dining room set.

-Phil Wrzesinski
www.PhilsForum.com

PS  Not only should you reconsider your hype ads, make sure you are training your sales staff to tell the downside first.  Be upfront and honest in your advertising, marketing, and in your store.  Your customers will trust you far better.

Are Your Staff Experts?

Of course they are experts!  You trained them to be experts.  Here is an easy way to prove to your customers that your staff are experts.

I saw this at The Harvard Book Store.  Each staff member made a recommendation including a little card with a reason why they suggested that particular book.

Two things impressed me about this.

First, they have a lot of staff with a wide variety of backgrounds.  I knew just from looking at this display that I would most likely find someone that could help me.  Trust is a huge factor when you are going after the Relational Customer.

Second, the staff knew their stuff.  I only had a few minutes to spend in the store and I spent most of it reading their recommendations.  They had excellent reasons for each book, which only added to the trust factor for me.

Staff recommendations are a simple way to prove your mettle to your customers.  Just be sure to do it right.  Here are four things to do when setting up a staff recommendations section in your store.

  • Make sure everyone on the staff does it.  Go big or go home.
  • Make selections from a wide variety of departments.  Give every customer a reason to stop and see.
  • Give good reasons for each suggestion so that a customer will know instantly if that is the product for her. Explain who will benefit from the product and what those benefits will be.
  • Make sure the items are in stock.  Quick way to destroy trust is to get a customer sold on a product you don’t have.

You have spent hours training your staff to be experts.  Make sure your customers know how smart (and helpful) your staff can be.  Staff Recommendations are one easy way to do that.

-Phil Wrzesinski
www.PhilsForum.com

PS The only downside to this display was that it was tucked out of the way.  I only found it because I was getting out of another customer’s way.   It was up front, right by the door, but tucked behind two big poster signs for new book releases.  Make sure yours is easily visible.

Return on Investment

In June 2011 we launched a generous Birthday Club.  We offered our customers a $10 gift certificate on their birthday and a chance to ring the Birthday Bell – a thirty-two pound brass bell hanging on a pole in the middle of our store.

We were looking for three things from this promotion.  Traffic, Smiles, and Word of Mouth.

Traffic
Prior to the launch of the Birthday Club we had been in a traffic decline due to the economics of this region and severe decline in youth population in our area (almost 10% drop in children under 18 since 2000).  Since the Birthday Club we have had five months with increased traffic, even as our population base continues to decline.  

Smiles
We take a picture of each kid after ringing the bell.  The current month gets posted on the wall.  The previous months are cataloged in a posterboard-sized book that customers are always looking through.  Those smiles are evident.  Some of the most telling smiles, though, are the comments on my Facebook page.  We asked how the Birthday Club was doing and had a dozen comments in a couple minutes all raving about it.

Word of Mouth
Some of that is happening right now on Facebook.  Some of that is happening as people take pictures with their own cameras and send them to loved ones and friends.  Some of that is happening when people talk about their plans… “Oh. we’re going to the Toy House today to spend our Birthday Gift Certificate.”

So far so good.

But at What Cost? 
So far year-to-date we have redeemed over 53% of the coupons we sent out.  The average ticket has been much higher than projected.  Our profit margin on those sales even after the costs of printing/mailing/redeeming the gift certificate is 32% compared to 48% on non-birthday gift certificate sales.  

So the big question is… Is the 16%  in lost revenue on those sales worth it?  

The Birthday Club generates Traffic, Smiles, and Word-of-Mouth, oh yeah, and Sales.  Would a 16% off coupon generate the same?   

Yeah, some might say there is a better way for me to spend those dollars to increase my sales.  And they would be right… if sales were the goal.  

The most important element for me is the long-term investment in the Smiles. 

Since I am in toys, my customer base is always shifting.  The kids shopping today will take a short break until they have kids of their own.  The parents shopping today will take a short break until they become grandparents.  The Birthday Club is one way I invest in their return, first by giving them an incentive to return even in the “non-toy” years and second, by creating long-lasting memories that will bring them back when the time is right (and still generate that WOM as they talk about me to their friends, even when they aren’t in a buying phase.)

-Phil Wrzesinski
www.PhilsForum.com

PS  The key to any promotion is to know exactly what you hope to accomplish.  Then measure your results based on your goal.  That is the only way to really know the Return on Investment of any advertising campaign.  The best method I have for determining your goal for anything is to finish the following statement…
“This will be a success if…”

What Do They Know?

Your customers know a lot.  You know that.  They often know as much about your products as you do, and usually way more than the part-time neighborhood kid you hired to answer phones and wrap gifts.

Where did they get that info?

From that most informative and reliable source… say it all together…

…their friend!

What? You thought I was going to say Internet?  Okay, yes, the Internet is where that information is held. But the information she tends to trust the most is reviews from other users.  Her new best friends.  People who claim to have used your products and are now experts on those products (even though they never read the instructions, even though they may have used the product in ways it was not designed, even though they may have a slant against or for certain brands, even though they have nothing to compare this product to, even though you have no idea if they are a shill for the brand.)

So let me ask you… Are you reading those reviews, too?  Are you looking at what other people are saying about the products you sell?  Are you finding out what the end-users believe is the downside of your product?

You should.

Your staff should, too.

Then when she brings it up, you’ll be prepared.  Or even better, you can talk about the downsides right up front.  Not only will it reassure her that you know what you’re talking about, it will reassure her that you understand both the pros and cons of the product and won’t sell her anything unless she knows, too.

It is a great way to create trust with your customers.  Plus, when she sees that you read the same reviews she read, she feels more of a personal connection to you.  You’re her type of person.

-Phil Wrzesinski
www.PhilsForum.com

PS  Trust is the most precious commodity you can build for your store.  Own that trait and you’ll own more than your share of the market.  Talking willingly and openly about the downside of a product, is just one way to create trust.  To learn more about how to build trust, read my friend Tom’s book, Currencies That Build Credibility.

An Expensive But Effective Form of Advertising

I was doing my presentation Customer Service: From Weak to WOW! yesterday, talking about how to deal with unhappy customers.  Someone brought up the question…

“But what if there is a problem with the product and the manufacturer won’t back you up?”

I answered that I have taken a loss on products a number of times to make the customer happy. The only difference is that I did not look at it as a loss of money.  I looked at it as an opportunity to be her hero.  I looked at is an opportunity to be helpful, to make her smile, to turn her from unhappy into evangelical.

Do you know how much it costs to turn one customer from unhappy into evangelical?

Better to ask, how much more will it cost if you don’t?

The losses from that transaction are not losses. They are advertising expenses.  Think of it that way and you will never hesitate in doing the right thing.

-Phil Wrzesinski
www.PhilsForum.com

PS Yes, I have then dropped a vendor for refusing to back me up.  But that is a whole different story.

Back it Up

I’m writing this from my laptop – not because I am traveling but because this morning when I arrived at work my desktop computer would not start.

Yeah, the desktop was old.  Was running Windows XP.  Was running Microsoft Office 2003.  I think it died of old age. This time I will finally replace it.  I’m just hoping they can recover the hard drive.  Not because I failed to back it up. I do that regularly.  Just because I don’t want to go through the hassle of reloading all the programs.

But it got me thinking… What changes have I made since the last backup? (Saturday)

The only major one is the schedule for the staff I finished yesterday.  If I have to, it won’t take long to recreate from a hard copy.  Plus, I tweaked a couple of my presentations – and I can tweak them again easily enough.

What changes have you made since the last time you backed up your computer?  How much work will it be to recreate those changes if your computer dies mysteriously?

Back it up.

-Phil Wrzesinski
www.PhilsForum.com

PS The worst thing about the computer dying is that I usually become a basket case waiting to get my computer back.  Thank God for laptops and wi-fi.  Maybe I can finally clean up my office today, too.

JC Penney Revisited

I wrote recently about JC Penney’s new pricing policy and my wife’s experience there.

I hoped they won’t muck it up, knowing if they do, no one else will follow their lead away from hyped up sale, sale, sale to a more realistic method of pricing.
Unfortunately…
My wife went in looking for a new pair of pants. Found some she liked. They were marked $20.00. There were a couple other colors of the exact same pant there, but one was marked $25.00. No sale signs, no discounts, no markings on the tags to let you believe they were anything other than the price marked.
She took one up to the register. It rang up at some incredibly low price, like $10.00. She immediately ran back and grabbed two more colors. One of them also rang up at $10.00, the other at $15.
She had no idea what to expect, whether to complain, whether to walk away happy or just confuzzled. She wondered later how many people had walked away from those pants because they thought the pants were $20.00.
We just got the JC Penney catalog explaining their new pricing policy. Now I am confuzzled. Nothing in the catalog made sense and nothing matched the experience in the store.
A simple lesson here. If you want to go after the Relational Customer, the one looking for an expert she can trust, you have to price your store in way that instills confidence and trust. You do that by clearly marking your actual prices on everything. Do not leave anything to guesswork or wonder.
If you want to maximize your sales, do not let your customer walk away because she thought something was too expensive. Put the actual price on the product. Period.
Unless you want to be like JC Penney…
-Phil Wrzesinski
www.PhilsForum.com
PS Would you like to learn how to price for maximum sales and profits? Download my free eBook Pricing for Profit. Pricing is all about perception, something I hope JC Penney learns soon.

The Customer is NOT #1

Yes, I said it. Go ahead and crucify me. But I stand behind it 100%.

The #1 person in your company is your frontline staff. You take care of them, they will take care of the customer. You don’t take care of them, they won’t take care of the customer. Plain and simple.

But how do you take care of them?

Salary and benefits are nice. Other perks like a parking place, uniforms, an employee lounge, are helpful. But those are simply the starting points. Even the ping pong tables and video games and perceived fun that places like Google brag about only go so far.

What your frontline employees really want is to know that they are valued and they create value for others.

In an interview Google did with its employees, what the employees valued most was, “even-keeled bosses who made time for one-on-one meetings, who helped people puzzle through problems by asking questions, not dictating answers, and who took an interest in employees’ lives and careers.” (source)

Value.

Your staff wants to know you value them as individuals and as team members. There are three easy things you can do right now that will show your staff how much you value them.

First, invest in education and training. The more you do to help them become better employees and better people, the more you show them that they are important to you. You should be training them anyway. But are you offering continual training? Are you offering advanced training? Are you offering personal training? Are you preparing them for work above and beyond their current responsibilities? The more you invest, the more valued they will feel (and the better trained and capable they will be).

Second, listen. Listen to their concerns. Listen to their stories. Take an interest in their lives, in what motivates them. They are giving you clues every time they knock on your door and say, “Got a minute?”

Whenever possible, say YES and turn away from your computer, your catalog, your phone. Give them exclusive one-on-one time where they have your complete, undivided attention. Your body language alone sends a powerful message that you value them as an individual.

Third, praise them. People love to be praised. People love to be told they did something right. Our favorite word to hear is our own name spoken lovingly. When someone does something well, praise them openly and in front of others. Not only will they continue to do well, the other staff will raise their own game in an effort to get that same praise.

Do those three things and your frontline staff will feel valued. Only then will they be able to make your customers feel valued, too.

-Phil Wrzesinski
www.PhilsForum.com

PS There is a great book on motivation called Drive by Daniel H. Pink. I highly recommend you read it.