Our electronic guru, Bruce Geroux is working to have all of our blogs post to our twitter feed. Stay tuned!
Twitter feeds now coming to e-retailer conversations
October 7, 2009
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What is wrong with planograms by Tom Shay
October 3, 2009Went to a friends store this week. There was a beautiful display of merchandise. It was easy to see that it was a planogram as all of the merchandise came from one manufacturer. The kicker was that there was a tip for a walking cane designed to be used when walking on ice.
Might be good in some places, but here in our part of Florida, I don’t think there is a lot of need for it. Of course, someone could buy it and take it up north with them. Then again, why don’t all stores in the south carry items that are suitable for usage in northern climates?
I think it is because the inventory does not turn. What’s wrong with planograms?
People don’t shop for merchandise according to brands; they don’t come in wanting an outfit of clothing that is all one brand. No one wants a sweater, pants, top, socks, and tie by Hilfiger. They come into the store looking for an outfit.
You don’t merchandise by brand; you merchandise a display according to how the customer shops.
You can’t build planograms such that one design works for every store across the continent. They have to be localized. This is what separates the independents from the chain stores – it is that local personalization that counts.
Worst yet, my friend never knew that the ice tip was even a part of the selection. Shame on her for not paying attention and shame on the vendor for putting things that don’t turn enough to earn their keep.
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Tom Shay responds to why surveys stink
August 6, 2009Actually, I think customers satisfaction surveys don’t work because people don’t want to hear what the customer is really saying. The questions are designed to only give data that appears in a chart instead of listening to each customer on an individual basis.
Want to know what your customers think? Ask one question: ‘What could we do to make it easier for you to do business with us?’
Then read their answers, take action and respond to your customers. Here is a report on why the surveys don’t work.
Retail Customer Experience: Why customer satisfaction surveys don’t work
Commentary by William Cusick CEO and founder, VoxThrough a special arrangement, presented here for discussion is a summary of a current article from Retail Customer Experience, a daily news portal devoted to helping retailers differentiate the shopping experience.
Recent evidence suggests fully 95 percent of our cognitive processing is subconscious. That leaves all of five percent of the rational mind to do what it does best: rationalize (some might say “guess about”) our decisions and actions to ourselves.
What that means is we’re pretty poor at telling others what we like or don’t like, and why we feel that way. And the science suggests we’re even worse at predicting what we might like, or do, in the future. One might wonder then, if we’re so horrible at this, just why businesses continue to crank out standardized customer satisfaction surveys. How can you get closer to the truth, to determining real, actionable steps to drive customer behavior, when you don’t know what they’re thinking in the first place?
And there lies the real paradox: our actions are driven by emotion (in our irrational subconscious) much more than logic. Yet, to really understand your customers, you can’t look at those emotions. Instead you must take a step back, stop making assumptions and focus on their behavior. Behavior, it turns out, leads to the truth.
Paco Underhill, a self-described “retail anthropologist,” has understood this for a long time. In his book, Why We Buy, The Science of Shopping, he makes a compelling case for employing observation of customer behavior over other techniques like surveys. To help his clients get closer to the truth, he doesn’t ask customers; instead he sends his “trackers” out in the field to the actual retail environments, and observes customer behavior in real time.
It was through this power of observation that Mr. Underhill discovered what he referred to as the “butt brush factor.” He noticed that there were serious and unintended consequences when two product displays stood in close proximity to each other. If a customer wanted to bend down to take a closer look at a product on a lower shelf, it forced passersby to turn and shuffle by, resulting in said “butt brush.” This seemed particularly uncomfortable for women, and it meant very low sales on the products in those displays. The behavior, in other words, held the answer to an actionable improvement to the customer experience, and to desired customer behavior.
This same idea — that behavior is truth — holds in the online retail world as well. You can’t just ask customers if your website is “satisfactory,” or what improvements they’d like to see.
Can you see just what your customers are trying to do on your site? Where do they enter, and what path do they start down? Where are the road blocks? It’s been our experience that, once you look at the behavior, it’s not that hard to see where customers are abandoning the site, where they are stalling or backtracking, and more.
So remember, it’s not what they say, it’s what they do.
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Tom Shay agrees with those that say trade shows are a great investment
May 21, 2009While this article from the Wall Street Journal is written from the aspect of a company exhibiting at a trade show, the logic is just as relevant for those attending a conference or trade show as a buyer or participant.
As I mention in our new presentation regarding the economy, every business has competitors that are making big mistakes during a challenging economy. Not being a part of a trade show means that the attendee is not seeing, hearing and learning what is the newest and latest within the industry.
A challenging economy ‘thins out the heard’. You don’t want to be a casualty because you failed to invest in learning what to do with your business. And by missing the trade show or conference, you won’t get to hear speakers such as myself providing you with business advise.
Trade shows can be worth the sometimes high expense. If, that, is, you’re smart about them.
By SARAH E. NEEDLEMAN
For small-business owners trying to navigate the economic downturn, spending money on trade and consumer shows might seem like a luxury better reserved for more prosperous times.
Not so, say many experts, who believe that exhibiting at—or at the very least attending—these events is one of the smartest things that a small-business owner can do, regardless of the state of the economy. Not only do exhibitions provide critical exposure to potential buyers, they also are essential for learning about unfamiliar markets, building personal relationships and getting an up-close look at the competition.
Conventions will always be one of the most valuable things you can do, says Andy Birol, owner of Birol Growth Consulting Inc., a business-coaching firm in Solon, Ohio. “There’s simply a consolidation of buyers in one place. They have money to spend and buying authority to exercise.”
Yes, exhibitions can be pricey. In addition to the cost of renting a booth or showroom space, exhibitors’ expenses typically include fees for shipping products and display materials. Many convention centers charge for drayage and access to resources such as electricity, phone lines and the Internet. Out-of-towners need to factor in transportation, lodging and dining expenses.
Such costs, combined with the bad economy, are leading some exhibitors to pull back. A recent survey of 240 corporate exhibitors found the number of conventions and trade shows they plan to participate in this year will decrease on average to 26 from 31 in 2008, reports Tradeshow Week magazine.
But that can be good news for small businesses, which are likely to see less competition at the shows this year. Plus, there are ways to minimize some of the costs that shows bring—and avoid others altogether.
Pick Your Battles
First, do some research to find out which shows are likely to offer the best prospects. Review sales figures from events you have attended in the past, including transactions that resulted from leads you obtained, recommends Jayme Broudy, founder of Contractor’s Business School LLC, an advisory firm in San Luis Obispo, Calif.
For new events, ask the registrars what kind of crowds they normally attract and how many of the attendees are actually buyers. Also request referrals to past exhibitors and buyers from within your industry and ask them about their experiences.
In general, if you must choose between an industry or a consumer show, Mr. Birol recommends targeting industry. Consumers are unlikely to spend big money in this economy, he says, and many go to shows just to have fun. For example, people who attend Comic Con, a comics convention held annually in New York and San Diego, commonly go there just to get artists’ autographs or to dress up like their favorite characters.
Once you know which shows you want to attend, consider offering to split the cost of an exhibit space with another firm in a different market. In January, toy distributor Rocket USA Inc. of Forest Park, Ill., partnered with a jewelry company to rent a showroom for a year at an Atlanta convention center. For $14,000, or half the total bill, Rocket USA will be able to exhibit at four shows and use the space for client meetings at any time during the year, says Cesar Vargas, vice president.
The discount on the yearlong lease, in addition to the partnership, resulted in a significant savings for Rocket USA, which Mr. Vargas says would have had to pay about $13,000 per show to rent its own booth. And the company will only have to pay to ship its display materials once each way for all four events, resulting in additional savings.
Mr. Vargas says that he connected with one of the jewelry firm’s executives at a gift-shop industry-association meeting. He suggests contacting trade associations, small-business groups and other organizations that cater to entrepreneurs and using networking sites such as LinkedIn.com to get the word out that you want to share a space.
When it comes to outfitting your booth, consider used display materials, says Aaron Rasmussen, co-founder of Harcos LLC, Santa Monica, Calif., the maker of Mana Energy Potion, an energy drink for gamers. In September, he spent $950 on a used backdrop that normally sells for $1,100 new. “Some companies buy them, use them once and return them,” he says.
He also recommends buying furniture for your booth from a discount store such as Ikea instead of renting it from the show operator. Not only are you likely to spend less, but you’ll be able to use whatever you buy more than once, he says. And be creative. At a trade show last year, Rocket USA displayed its products on the boxes it used to ship the items to the event.
Exhibiting isn’t the only way to find buyers at shows. You could skip the event and host get-togethers in a nearby hotel suite, says Mr. Birol. Many shows list registered attendees on their Web sites and in marketing materials in advance. Promote the opportunity as a chance to break from the noise and stress of the show and sit down in a private, relaxed environment, advises Mr. Birol. If you plan to introduce buyers to a new product or service, describe the meeting as a sneak preview.
Lend Your Voice
If your company sells services rather than products, offering to be a guest speaker at an exhibition is another effective way to win the attention of potential buyers without having to incur steep expenses related to exhibiting. You might even get paid for lending your voice.
Rebecca Morgan, president of Cleveland-based Fulcrum ConsultingWorks Inc., regularly speaks at industry events, earning about $1,000 to $5,000 per engagement. “My business is all about having credibility and being respected by people who are authorized to spend money,” says Ms. Morgan, whose firm advises companies about how to improve their operations. She adds that buyers often approach her about her services after she’s done speaking.
Before landing paid speaking gigs, you may need to get some experience doing it at no charge. Ms. Morgan recommends volunteering to speak at events hosted by local groups. Also, many shows line up speakers months in advance, so be sure to express your interest early on, she says.
As a last resort, you can always just walk the floors of an exhibition and introduce yourself to buyers. Also be sure to bring some product that you can give away to “anyone with a camera or microphone,” says Mr. Rasmussen. At a comic-book industry convention earlier this year, Mr. Rasmussen handed a sample of his company’s energy drink to video producers for The Review Zoo, an entertainment Web site. The crew responded with an on-the-spot interview request, and he happily obliged.
One final caveat: If your only goal is to be seen by your competitors, don’t bother attending a show at all, asserts Mr. Birol. “If you didn’t go, it used to be that the rumor mill would circulate and suggest that you’re not doing well,” he says. Today, this is no longer the case, because most businesses have a constant presence online, he explains.
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Be careful as you change your hours says Tom Shay
April 7, 2009Hey, I all for businesses having shorter hours. This can especially help the independents level the playing field by not requiring the independent to match the hours. Personally, I don’t think the mass merchant is going to squeeze all their staff into the shorter hours. I believe they will continue to lay additional staff off and maintain their sparse staff.
My other concern is that it will be confusing to the customer when a business has too much of a variety in their hours; different days of the week have different opening hours and then open certain evenings and closing at various times. I saw a business that not only had a variation for all of the days of the week, but then they had two seasons and that had variety. All told, the store had 14 different schedules. Who is going to remember that?
Here is the article from the Pittsburgh Post-Gazette.
Stores curtail hours as recession changes shopping habits
Tuesday, April 07, 2009
By Teresa F. Lindeman, Pittsburgh Post-Gazette
Todd Stillwagon, a Best Buy customer assistance supervisor, helps Mattie Williams, of Manchester, choose a Wii system for her 6-year-old granddaughter, Makai Williams at the store in Ross. The store will change the store hours to 9 a.m. to 9 p.m. on Fridays and Saturdays beginning this week.
Retail hours have been stretching for years. No shopping on Sundays was replaced by the possibility of picking up diapers, milk and a new pair of shoes at 3 in the morning.
But the retail clock now may be heading in the other direction. Some stores and malls analyzing the payoff for later hours have decided the equation doesn’t work anymore.
“Typically after 9 p.m., we generally have more employees than customers in the building,” said Robert Smith, general manager of the Best Buy consumer electronics store in the North Hills Village shopping center in Ross.
Starting Easter weekend, his store and about 150 others in the Minnesota-based chain’s East Coast territory plan to close an hour earlier on Friday and Saturday nights, locking the doors around 9 p.m. instead of 10 p.m., although a customer just arriving then won’t be turned away.
Best Buy may save on energy costs and other administrative expenses, but the move isn’t meant to cut labor, said Mr. Smith. Instead, the retailer’s research indicated shoppers would prefer to have more staff available during peak hours than the option of coming in later.
Retailers are giving a variety of reasons for tinkering with their hours but the economic downturn and shopping pattern changes it set off were a wake-up call to use every minute as efficiently as possible. Keeping the lights on and the time clock ticking costs money.
When Dick’s Sporting Goods President Joseph Schmidt was asked during the Findlay retailer’s recent earnings discussion how the company had reduced payroll expenses, he mentioned Dick’s had reduced store hours.
Instead of being open from about 9 a.m. to 9:30 p.m. six days a week, Mr. Schmidt said the retailer had saved a little by opening a half hour later and closing a half hour earlier Mondays through Thursdays.
Earlier this year, mall owner Simon Property Group began closing its three Pittsburgh-area enclosed malls a half an hour earlier. Ross Park Mall, South Hills Village and Century III Mall all started shutting at 9 p.m. instead of 9:30 p.m.
A spokesman for the Indianapolis mall owner said Simon’s 17 properties in New England had done the same thing in January, in part to save on energy expenses and in part because of shoppers’ traffic patterns.
“We’re always looking to run our properties in an efficient and conservative manner,” said Simon spokesman Les Morris.
Last week, Monroeville Mall followed suit in trimming its hours, citing in part the changes by cross-market competition. Westmoreland Mall, which also is owned by CBL & Associates Properties of Chattanooga, Tenn., may follow.
Monroeville Mall marketing director Mindy Suhoza didn’t expect a lot of reaction from customers since the half hour past 9 p.m. was often mainly a cleanup time for mall stores anyway. But, she said, some people are quite pleased. “The store personnel love it,” she said.
Nationally, there have been reports that Cincinnati-based grocery chain Kroger has reduced hours for some stores that had operated 24 hours. So far, area grocers don’t seem to be making a lot of changes. O’Hara grocer Giant Eagle hasn’t, a spokesman said. A Shop ‘n Save representative also said he wasn’t aware of area stores cutting hours.
Some smaller retailers see the moment as an opportunity to be different. Joe Ravita at Empire Music in Mt. Lebanon last week began staying open later on Fridays and Saturdays. Instead of closing at 5 p.m., his doors will be open until 7 p.m.
“While other companies might be doing less, we’re going to be doing more,” said Mr. Ravita, who hopes that people walking by in the evenings may stop in when they see the lights are still on.
He couldn’t have made the move until recently when staffing changes made covering the hours feasible. But he noted his staff was small so his expenses wouldn’t be helped or hurt a great deal by an hour or two here or there, unlike a major retailer who might have 10 or 20 or more people on the store clock at a time.
Over in Shadyside, giftwares shop Toadflax has maintained store hours but trimmed costs by not replacing some staff who left for various reasons. It made sense to cut payroll hours that way, said co-owner Jeff Pierce, who noted business has been slower in the last several weeks.
Meanwhile, at Best Buy, Mr. Smith said shopping patterns have changed as the economy slumps, with customers staying home on the weekends more often. But he said business has held up, and it hasn’t hurt that competitor Circuit City just shut its doors.
Instead, he said, Best Buy officials were interested in research findings that shoppers looking for digital cameras or flat-screen TVs or computers had questions. “The customers told us they would rather have more employees here to help them during these busy times than longer hours.”
Area Best Buy locations cutting back on Fridays and Saturdays will not be shortening all weekend sales days. On Sunday, the stores will continue to stay open until 7 p.m.
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Supply Chain Digest agrees with Tom Shay
March 17, 2009An article from Supply Chain Digest today says what Tom Shay told audiences last fall; during the tough economic times there are lots of businesses that are going to make some very stupid decisions. One of those decisions they make is to cut inventory, and as they cut inventory they do so by cutting the worst sellers as well as the best sellers.
This is so wrong. You cut the worst sellers and put the inventory dollars into the best sellers so that you have the merchandise that the competition is not going to have.
You also look at the areas where the competition has made cuts and see if you can’t take that business that the competition has decided to leave unprotected.
Read the article below as well as follow this link to the free recording of Tom giving this presentation:
Little things to do to make ‘09 turn out fine by Tom Shay
Are Retailers Shooting Themselves in Foot with Low Inventory Strategies?
03/16/09
By Dan Gilmore, Editor-in-Chief, Supply Chain Digest
Through a special arrangement, presented here for discussion is an excerpt of a current article from Supply Chain Digest.
The recession has caused almost everyone to cut back on inventories, due to both a concern about customer demand and also because right now “cash is king,” and inventory uses up cash.
Nevertheless, I think many retailers may be taking it much too far, and costing themselves sales and profit as a result. Three recent personal anecdotes I hope make the point:
* Two weeks ago I went in a large mass merchant to purchase some mini-DVD tapes for our video work. Virtually every peg was empty. The only ones with product available were terrible deals. An associate there said they hadn’t received inventory in that area “for several weeks.” I walked out without a purchase – as I assume many others have as well.
* At a different mass merchant just this weekend, I needed to buy a gallon of anti-freeze for one of our cars. The shelves were simply decimated. In fact, I assume intentionally, they had taken some of the product that was still available (higher priced “extended life” anti-freeze) and moved it around to make it look like the shelf facings weren’t totally empty. That of course resulted in that product being placed above shelf labels that were for different, lower priced SKUs. I went down the street to an auto parts specialty store that had plenty of inventory and bought a gallon for $11.00.
* I was also at a major office products retailer this weekend. In addition to the usual no help for what I was looking for, as I was checking out I heard a woman at the service counter say this was the third time she had come to the store in the past few weeks looking for some item, and yet again it was out of stock.
Running “Lean” can be a good thing, and inventory management right now is a critical discipline. But from my view, many retailers have gone way beyond smart inventory decisions to ones that are detrimental not only to their own results but also to those of their suppliers.
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Tom Shay and the Washington Post on price strategies
March 13, 2009This article appeared today in the Washington Post. I believe the saying from one of the free posters on the Profits Plus website is, ‘If you gain a customer because of your prices, then you will lose your customer because of your prices’.
I am always amazed by businesses that complain about the number of customers they do business with that are sensitive, and then the business advertises ‘item and price’. Enjoy the information.
Hold the Line on Price by Rosalind Resnick
When business gets slow, it makes sense to cut your prices to boost demand for your company’s products and services, right?
Think about it: If you’ve got a store and customers aren’t coming in, what’s the first thing you do? You hold a sale. Once you slash your prices by 25 percent or give shoppers who buy one pair of jeans the chance to buy another pair for 50 percent off, your merchandise will start flying off the shelves.
Wrong. Unless you’re absolutely sure that charging less will boost your sales (which it rarely does), resist the temptation to do it. If you’re selling a high-value product or service that your customers can’t easily source from another vendor, slashing prices will only slash your profits. And if you cut your prices too often, you’ll educate your customers to simply wait for the sales and never pay full retail. (That’s what happened to the department store business, with mixed results.)
The reality is that, while price cuts may work for airlines and automakers (though they don’t seem to be working so well any more), price cutting is usually not the best strategy for a small business–especially a business that provides specialized products and services to a target market that cares more about value and service than paying the lowest possible price. Not only does discounting generally fail to help you acquire new customers but it may also result in your making less money from the customers you already have.
“If you provide an exceptional product or service, people will buy from you–even in a tough economy,” says Laura Allen, co-founder of15secondpitch.com, a website that has helped more than 11,000 people pitch themselves more effectively to customers, employers and referral sources. Rather that cutting prices, “you’d be better off increasing the value that your clients get for their money. It’s much easier to add a few useful extras, than it is to get by on even smaller margins.”
While slapping a price tag on your product or service seems like a one-minute job, it’s actually a lot harder than it looks. Set your prices too high, and you lose sales. Set them too low, and you lose money.Over the years at Axxess Business Consulting, we’ve worked with many clients to help them analyze their pricing models and figure out how to maximize their profits without sacrificing revenue. As a result, one client–a quick-serve restaurant–was able to raise prices on some of its high-end juices by as much as 20 percent to 30 percent. Another–an outsourced relocation specialist–was able to re-price its hourly services as affordable, fixed-price packages geared toward corporations and high-net-worth individuals.
What’s the secret to great pricing? While setting prices has always been more art than science, most businesses typically employ one of three strategies:
Cost-plusYou buy filet mignon from the wholesaler for $10 and sell it at your restaurant for $30.Market-basedThe restaurant down the block starts charging $29.95 for a surf-and-dinner, so you decide to do the same.Value-basedFirst, you whip up a fancy, new tasting menu and charge $100 for a seven-course meal that costs you only $20 in ingredients (much higher than the standard restaurant markup). Then you pair each course with a selection of wines and you make even more money.
If you have any doubt which pricing strategy makes the most sense for your business (or any business, for that matter), just go to Starbucks and try to order a $2 cup of coffee.
“While it’s tempting to cut prices, be very careful of any permanent changes to your pricing,” says Sanjyot Dunung, CEO of Atma Global Inc., a New York City-based software company. “The hard calculation is if a price discount will lead to more volume and overall sales. You have to also note if more volume equals more profitability. Many people assume incorrectly that more sales means more profitability, but not always. In lean times as well as good times, you will serve your business best if your focus stays on profitability as well as gross sales.”
Dunung’s solution: “When working with customers or resellers, we have found that it is more useful to always note the SRP (suggested retail price) and then offer a temporary discount based on a customer or reseller. This strategy is harder for retail sales but works very well for our wholesale product side of our business. It’s very important to stress that the discount is temporary so that your customer is aware that it is a unique opportunity. If you choose this approach, make sure not to repeat it too frequently or keep it in place indefinitely as the customers become used to the discount and base their buying decisions on the timings of the discounts. The risk, then, is that the discount becomes your de facto price.”
When negotiating long-term contracts with resellers, Dunung makes sure to link discounts to guaranteed sales. “For clients who want a reduced fee, we request a multi-year commitment,” she says. “This way, it creates a mutual win–they get their price, and we get a guaranteed contract. While you may leave some money on the table, having a guaranteed term of business can be very helpful in navigating challenging economic times.”
Make the PitchOne way to defend your value-based pricing is to let potential clients know upfront that you are excellent at what you do, Allen says. The best way to do this is to create a short pitch that will grab their attention and tell them everything they need to know about you in record time. According to Allen, every successful pitch has four key steps.
Who You AreWhat You DoWhy You Are the Best at What You DoYour Call to Action
For example, Allen’s client, Karineh, markets herself as a high-end fashion photographer.
This is Karineh’s pitch:
Hello, my name is Karineh. I’m a high-end fashion photographer, specializing in clothing, cosmetics and jewelry. I work with the world’s most prestigious brands, including Versace, Victoria’s Secret and Prada. I transform simple items into vividly beautiful objects of desire. Please visit: Karinehnyc.com to see select samples of my work.
“When you hear a pitch like that, you know that you are speaking to someone who is highly successful and can command top dollar,” Allen says.
Bundle Your Products and ServicesAnother way to defend your pricing is to find new ways of packaging your products and services that allow you to charge more money, says Meredith Liepelt, president of Rich Life Marketing and a marketing expert, speaker and entrepreneur. Liepelt also publishes Smart Marketing, a free bi-weekly e-zine providing business owners with marketing best practices and creative ways to make more money. She says that, by “bundling” your products and services, you can sell your customers more products at higher prices than you ever could before.
For example, if you have 10 products, bundle them in three or four different packages. This way, you can charge even more than the total sum of the individual products if you toss in a bonus or two, Liepelt says. If you are a consultant or coach, you can even offer one hour of your time as well. This puts you in a direct conversation with a hot lead where you can demonstrate your expertise and upsell him into one of your high-end programs. If you have a gift shop, she says, you can create a membership program where customers pay a set monthly fee to receive VIP benefits such as notifications of new arrivals, customer appreciation shopping days, special hours, discounts, a free birthday gift, VIP trunk shows, wine tastings or specials from other stores in your area.
Margaret Prusan, the founder of Illumin LLC, a consulting firm that provides consulting, workshops, networking and resources to women entrepreneurs who own professional or service-based businesses, says, “There are lots of ways to keep current customers buying from you as well as attract new customers during difficult economic times. Reducing the price can cheapen the perceived value of the product or service as well as the brand.”Here are some of Prusan’s tips and tricks:
Change the scope of your deliverable. Offer more value to your customer by expanding the scope of your work or deliverable while keeping it at the same price to offer more value to your customer. In service industries, this is often easy to do without incurring much additional cost because the “product” delivered to clients is knowledge or experience. In product-based businesses, hard costs will be incurred but this can be a great way to introduce a new product and test the market while providing clients with a valuable “bonus” or “gift.”
Deliver more effectively. Find out how you can you automate your delivery, eliminate the middleman and cut out processes that don’t add value to your end product or service. Consider creating processes that enhance delivery, save time and ensure quality.
Repackage your product. Consider repackaging your product or service to create the perception of greater value for the same or a “value-added” price. This can easily be done with what you already have at your disposal without incurring the costs of new product development. Repackaging can also mean offering options to customers. For instance, you can offer a “premium package” that can be broken down into individual products or services should your client’s financial situation prevent him from buying the whole enchilada. By including value-added bonuses in the more expensive packaged options, you’ll give clients an incentive to trade up because they feel they are getting a better deal.
Eliminate what’s not selling. Don’t fall so in love with your products or services that you’re not willing to part with those items that aren’t benefiting you. Consider eliminating a product or service if margins are low, sales are slow, your ROI is minimal, the product doesn’t enhance your visibility in the market place and customers stop coming back for it.
Market the benefits of your product, not the features. Customers may be able to live without your product’s features, but it’s much harder for them to live without the benefits. Added or customized features can be seen as frivolous expenditures in tough economic times, but the benefits derived from them, such as saving or generating more time, money, energy or sales, are reasons customers can emotionally and intellectually justify. If you can show your prospect how your product or service relieves personal, professional or emotional discomfort for themselves or their loved ones, the prospect is far more likely to make the purchase. You can tug on those emotional purchasing strings by marketing their benefits.Make customers feel good. Tough times are stressful for everyone. Create an environment where prospects and clients feel loved. Host an afternoon tea in your boutique to encourage customers to relax and linger while they check out your merchandise. Send out weekly e-mails with encouraging words or share great resources to let clients know you’re looking out for their best interests. Refer customers or businesses you admire to other businesses that can help them, then let those other businesses know. Personalize sales by following up with a hand-written thank-you note. Small gestures like these can go a long way toward building great relationships with clients or prospects.
© 2009 Entrepreneur.com, Inc.
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‘Have you heard this before?’ from Tom Shay
March 11, 2009The March 2009 issue of Fortune Small Business magazine has a great article by Jay Goltz. It is in their startup section, and deals with the issue of taking ownership in your business. The article is titled, “Do the Math”.
While the topic is how a business has gotten in trouble because of their improper accounting method, the writer says of the business he is writing about, “Although his balance sheet now shows some equity, the reality is that he’ll be down hundreds of thousands of dollars once those sales are no longer listed as assets. That’s pretty basic accounting. And yet mistakes like this are quite common. During the electrifying startup phase, many owners don’t even think about accounting procedures. They assume their accounting firm is on the case. But many hired accountants simply fill out quarterly tax returns without scrutinizing the underlying business. Most businesses need more help than that.”
If you have ever attended presentations I have given on financial management you know I do more than my fair share of accountant bashing. This article is exactly why I do it. And this example is with a sizable business. What about all of the others?
Come listen to the many free sessions dealing with accounting that you can listen to on our website. You can also download the presentation notes as well as see the powerpoint for each of the sessions. Nothing like learning a lesson from someone else’s mistakes.
Here is a link to the entire article:
http://money.cnn.com/2009/03/03/smallbusiness/do_the_math.fsb/index.htm
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Tom Shay interview with George Whalin
March 7, 2009George Whalin is one of the great minds in retail. In this audio blog conversation George gives his outlook on the retail economy, some suggestions for small business, and announces his new book.
George's website is http://www.georgewhalin.com/
And the website for the new book by George is http://www.retailsuperstars.com/
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Why dead competition can help your business live by Tom Shay
December 24, 2008In the presentation I wrote, “Little things to do to make ‘09 turn out fine”, this is one of the aspects we discuss; a retreating competition can open up many opportunities for your business to grow. There is a reason why ‘Recession’ and ‘Rear View Mirror’ both start with the letter ‘R’; they are for people that look at their business that way. There is a wonderful view when you look through the windshield.
Published: Dec 23, 2008 12:30 AM
Modified: Dec 23, 2008 02:41 AM
Retailers court customers of failing rivals
, Staff Writer
When retailers go out of business, it confuses shoppers but creates opportunities for the competition.
And when it’s tough for any retailer to survive, any way to find additional customers is a good one. So more stores are increasing efforts to attract customers of struggling rivals.
Staples responded to Office Depot’s decision to close 112 underperforming stores by sending e-mail that said in part, “We invented the office superstore in 1986 and we aren’t going anywhere. And remember, when other suppliers are closing their doors we’re here to stay.”
Electronics and appliance retailer hhgregg has twice extended a promotion in which it allows shoppers with Circuit City gift cards to apply them toward 20 percent of their hhgregg purchase.
Hhgregg spokesman Jeff Pearson said the promotion is more about trying to attract new customers and less about hurting a competitor that is already in bankruptcy.
“We are certainly trying to be sensitive to the business environment that all retailers are under, and we are wanting to see more customers,” he said. “It’s similar to a marketing event where [we offer] a percent off. It’s really an opportunity to have customers experience hhgregg.”
This type of strategy is common, said retail analyst Britt Beemer, of America’s Research Group in Charleston, S.C.
When the Sharper Image filed for bankruptcy and closed its stores earlier this year, its competitor Brookstone offered to accept then-worthless Sharper Image gift cards for a 25 percent discount. It’s something Beemer called prudent marketing.
“You’re not kicking the guy while they’re down,” he said. “You’re taking care of their customers. When they file bankruptcy, all you’re doing is assuming responsibility and you’re taking care of their customer when they’re going to go out of business soon.”
Shoppers should expect to see more of these promotions in 2009.
The International Council of Shopping Centers estimated that 148,000 stores will close in 2008, the largest number since 2001. The council also said 73,000 stores will close in the first half of 2009 as the recession drags on.
But current financial conditions may prevent some companies from fully taking advantage of these opportunities.
In late November, Best Buy reported third-quarter profits down 77 percent and announced a voluntary buyout program for employees.
That makes the company hesitant to spend lots of money on anything right now — even though there’s a golden opportunity with one of its biggest competitors, Circuit City, filing for bankruptcy and closing stores.
“We believe that the environment for consumer spending is likely to get worse before it gets better,” said Best Buy CEO Brad Anderson. “In fact, we can foresee a period in which consumers may significantly shift their spending behaviors, which could have a dramatic impact on retailing.”
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