What IS Your Job?

We’ve mentioned Bob and Susan Negin here before.  Their book, Marketing Your Retail Store in the Internet Age is a must-read for any serious retailer.  Bob sends out a weekly email (subscribe here) with helpful tips.  Last week’s tip involved his attempt to purchase a butter dish as a gift for a friend.  To make a long story short, in the first store he visited he asked if they had any butter dishes and was told, "Sorry, no we don’t."  End of conversation.

In the second store when he asked the same question the salesperson (my emphasis because the first person could hardly be called anything more than a ‘clerk’) answered that no, she didn’t have any butter dishes but then proceeded to ask a series of questions that led to suggestions for other possible gift items and finally to a sale.

Thinking about the big picture, the story made me think, "Just what is our job, anyway?"  Big companies have lots of people doing lots of jobs.  But, as an entrepreneur you wear a lot of hats.  You’re a buyer.  You look into your crystal ball and try to anticipate what your customers are going to want and order accordingly.  Obviously, it’s very important that you "get it right" when you’re doing the buying.  You order the items that you believe will satisfy the needs of most of your customers.

Then, you take off that hat and put on your salesperson hat.  Your job changes.  Now, you have to find out what your customer needs and match those needs to the products you have in stock.  Notice I said "what the customer needs", not "what the customer wants."  They’re not necessarily one and the same.  Bob "wanted" a butter dish, but he "needed" a gift for his friend.  He ended up with something entirely different from what he thought he wanted, but he did get what he needed.

Whatever you’re selling, you’re the expert.  You know what products satisfy what needs.  Your main job as a salesperson is to find out what those needs are and match them to a product that you carry.  As the old saying goes, nobody really wants a quarter inch drill.  They want quarter inch holes.  The best power saw in the world isn’t going to do the job. 

The customer may ask for product  A,  but you  know very well that product B is a better choice for the customers needs.  But, and this is important, you’ll never know what those needs are until you ask.  The stereotype of the smooth-talking salesman, the Professor Harold Hill/Herb TarlekMusicman1

type is a thing of the past.  The best salesperson is the one who’s the best at asking the right questions.  The "gift of gab" may have worked in our grandparents’ day, but today, not so much. 

Of course, if the customer walks in and asks for a Super Widget and you have a back room full of the things, it’s tempting to take the money and run.  But how do you know that a Super Widget will satisfy that customer’s needs.  You may make a quick sale and shrink that annoying pile of Super Widgets, but have you really done the customer a favor?  Maybe you have, but you’re not really sure, are you?  What if a Mediocre Widget would have done a better job for the customer and saved her some money at the same time? 

Worse, what if the customer didn’t really need a widget at all.  Maybe a Doo Hickey would have been a better choice.  How will that customer react when she realizes that you "sold" her the wrong thing?  You can bet it won’t be pretty.  If you’re lucky she’ll bring it back and exchange it for what she really needs.  If you’re not so lucky, she’ll be mad at you, never come back into your store again, and tell everyone she can get to listen that the Super Widget she bought from you is useless and you’re a scoundrel for selling it to her.

There’s a reason why retailing is called a "service industry".  The "service" is matching the customer’s needs to the right product.  The first step in the process is ordering the right merchandise and that’s critical.  But the rubber meets the road when you provide the customer with the right item to satisfy her needs.

Benchmarking

Benchmarking.  Isn’t that something that just applies to big companies? How can I get useful information from my competitors?  They’re not public companies that share their operating information with the public?  I don’t think it will work for me.

These are reasonable statements.  Each of them holds a grain of truth.  But DHL (yes, that DHL) has a great website, their Business Resource Center,  with some interesting information for small businesses.  For example, "Benchmarking:  How You Stack Up Against the Competition" puts some of the misconceptions about benchmarking to rest.  in particular the article provides links to two on-line benchmarking sites.  One, BizMiner offers detailed information on a number of industries.  Unfortunately, there isn’t much coverage of retail.  And, the site charges for its information.

Another site, BizStats provides less detailed information but it has two advantages.  One, it does include retail businesses and two, it’s free.  While the information is somewhat generic, for example you won’t find specific categories like sewing machine retailers, or vacuum cleaner retailers, or lighting showrooms, you will find more broad classifications like Retailing-Furniture and Home Furnishings. 

BizStats has a lot of interesting information including sales per square foot, profitability, and safest and riskiest businesses. 

The second article, Building Business Benchmarks gets a little more into the "how to" of benchmarking.  For example, don’t get hung up on finding businesses that match yours exactly.  There is plenty to be learned from other industries.  As the article points out, an airline benchmarked an Indy 500 pit crew to learn about fast turnaround and hospitals benchmark pizza delivery companies to improve their response times and the Ritz-Carlton hotel chain to improve customer satisfaction.  One hospital system that I’m familiar with drastically improved their system of ordering and distributing medical supplies by studying a major retailer.

Another source for good benchmarking information is the Malcolm Baldrige Quality Award web site and the sites of the various state and local quality awards.  Winners are obliged to share their application information (except for confidential items).  Many of the winners have been small businesses.

No matter where you get your information, you can waste a lot of time reinventing the wheel.  By drawing on the experience of other successful businesses, you can improve your business without going through the pain of a trial-and-error approach.

The Best in the World

Among other things, Seth Godin is a best-selling author.  His current book, "The Dip", has been on the New York Times Best Seller List for four weeks.  One of Seth’s talents is the ability to make a big point using a small number of words.  This is a skill that most of us should try to acquire.  What follows is a recent blog post that needs no additional comment.

I did a gig in New York today about the
Dip and it went really well. Afterward, someone asked me a question
about his new business.

I asked back, "if you accomplish that, will you be seen by your
audience as the best in the world, or will you be seen as doing your
best?"

He didn’t have to answer. He got it.

If you’re doing your best, only your AYSO soccer coach cares. If
you’re the best in the world, the market cares. The secret, if you have
limited resources (don’t we all) is to make ‘world’ small enough that
you can actually accomplish that.

Sidewalk Sales

Sidewalk sales.  I don’t know about you, but I love sidewalk sales. 

Most of my shopping falls into two categories.  One is the purposeful shopping trip.  There’s something I want to buy and I go out and buy it.  I’m usually a very efficient shopper.  I know what I want.  I know where to get it.  Normally I’m one of the Blues Brothers, on a mission from God (or from my wife).  I do my homework and then go out and "get ‘er done".

My other type of shopping trip is more of a research/recreational activity.  I’ll spend a few hours just cruising the stores, especially independent retail stores, looking for ideas.  Most of my working life has been spent working with retailers (or being one) and I like to see how the best ones are getting the job done.  When I go on vacation at the end of July I’ll spend a fair amount of time checking out the retail scene.  A lot of what you read here on MYOB is a result of these "educational" shopping trips.

However,,,,, there is one thing that always gets me out of my normal routine, and that’s a sidewalk sale.  I’ll admit it, I’m a sucker for a sidewalk sale.  I may never, ever, go into a particular store, but let them stack a bunch of stuff out on the sidewalk with a big sign, and I’m there.  I can’t help it.  I’m like one of the bugs that hangs around your porch light.  I can’t pass up a sidewalk sale, and I know I’m not alone.

Saturday morning, I saw an ad in the newspaper.  A local community was having a city-wide sidewalk sale.  Wow!  A whole town full of "stuff" piled high on folding tables at HUGE SAVINGS, just waiting for someone to take them home.  I wasn’t disappointed.  Even though the sale had been going on for a while before we managed to get there, there were still plenty of bargains.  We spent several hours digging and buying and went home with bags of things that we wouldn’t have bought otherwise, mostly because we really didn’t need any of it (two pairs of St. Patrick’s Day suspenders for $3.00 each!)  We also bought some things at regular price (and regular profit for the merchants) because we were there.  Without the draw of the sale, we would have been somewhere else.

I know, everybody may not get as excited about a sidewalk sale as I do, but I’m willing to bet that there are enough of us to make it worthwhile for you to have a one of your own.  Even better, if you’re in an area where there are other retailers, a group event is even better.  You can feed of one another’s traffic, share expenses, and make it a fun/profitable time for all concerned.

Face it, for most of us the July-August time period can be a little slow.  We can always use some extra traffic.  And, unless you’re unusually efficient, there are things in your inventory that you should get rid of.  As much as you’d like to think otherwise, you’re never going to sell them at regular price.  A former boss of mine called them "detectives" because they just sit on the shelf and watch the other merchandise come and go.  Sooner or later, you’re going to have to bite the bullet and cut the price to get rid of them and sooner is always better than later.

A sidewalk sale is one of the cheapest promotions you can do.  You’ve got the merchandise.  You’ve probably got a couple of tables, or you can borrow them.  Put up a sign.  The tables of merchandise will act as their own advertising.  People driving by will stop, just because they know anything sitting outside the store has to be a bargain.  If you can get your neighbors to join in, you’ll attract that much more attention.  You can run an inexpensive newspaper ad. You can talk it up in the store in the days before the sale.

On the day of the sale play some music.  Pop some popcorn.  Grill some hot dogs.  Give away coffee and soft drinks.  Most of all, have some fun.  Get rid of some "detectives".  Meet some new customers.  Sell some regular merchandise at regular prices (and profit).  And, please let me know when you’re going to do it.

Sidewalk_sale_2

Good Email Advice

Most of us get entirely too many emails every day and most of them are spam that we automatically delete.  In the midst of all the clutter we may accidentally delete something important once in a while.  One way to avoid having the messages you send going into the trash folder is to make sure you use a good subject line.  While you’re limited to the number of characters you can use, you can usually create a pretty good summary of what the message is about without running out of space.

Besides cutting down on the possibility of your message going into the trash unread, a good subject line makes it easier for the recipient to locate the message in the future.  Generic subject lines force the search program to dig into the body of the message and the search can take a very long time.

Thanks to Steve Jeffery, Senior Vice President of our Household Sewing Division for the following tips on email subject lines. 

Don’t be too general.  The overall subject may be an upcoming event, but the detail might be about advertising.  A good subject line would include the name of the event and the word advertising.  If you’re expecting a reply by a certain date, you might include the abbreviation "PRB" (please reply by) 8/1/07. 

An example might be "Subject:  Sidewalk Sale-Staffing PRB 7/20/07" 

We’re all in a hurry and it’s tempting to spend as little time as possible, especially when sending short messages.  But if the message is important, and we assume you wouldn’t be sending it if it wasn’t, it’s worth our time to make sure that the message isn’t deleted as "junk" and that the recipient can retrieve it later if necessary.

One other tip, most email programs allow you to change the subject line on messages that you receive.  There’s nothing wrong with giving an incoming message a new title before you file it away.  You may want to give the message a new subject followed by the original subject either in parentheses, or using the word "was".  That way, if the sender refers to the original email, you can still find it using the original subject. 

For example, if the original subject was "St. Louis" and you want to change it to "Travel Arrangements for July Trip", you could make the new title "Travel Arrangements for July Trip, was St. Louis."

Again, a little time spent today may save you a lot of time and aggravation later, when you try to retrieve the information from your email folders. 

Dropping the Ball

This is really Basic Retailing 101, but sometimes things happen that remind of us of the fundamental truths of the Universe and cause us to stop and think.  That happened to me last night.  But first, some background.

Some years ago, there was a local discount store chain that had the reputation of never having the merchandise that they advertised.  It happened so often that it became a local joke.  "Oh, they’re advertising lawn mowers.  That means that they’re out of them."  Sadly, it was often true and the chain is long gone.

I could never understand why this was.  First, I did business with another division of the same company and the quickest way to get yourself and your line thrown out on the street was to fail to support an ad. 
Their buyers were ruthless.  They might let you slide by once, but if it happened again, you were gone.  Period.  It just didn’t make sense that another branch of the same company could be so sloppy about the same issue.

Second, there are a thousand different ways to make a customer mad without spending any money at all.  Why go to the expense of running ads to tick people off when it’s so easy to do for free?  Again, it just didn’t make sense.

Which brings me to last night.  Here in St. Louis, home of the World Champion Cardinals (I know.  They’re not  so hot this year, but  the season’s only half over.), we have two minor league baseball teams.  They belong to the independent Frontier League.  As you might imagine, sharing the market with the Cardinals, they don’t get a lot of publicity, even though one of the two teams is in first place with the highest winning percentage of any baseball team in any league.  Both teams’ games are broadcast on the radio but there’s no TV and little newspaper coverage. 

Last night the Frontier League played their All-Star Game in Florence, KY.  There was no radio broadcast, but there was actually streaming video on the league’s web site, or at least there was supposed to be.  The league offers a limited number of games on what it calls FLTV, at $6.99 per game.  That seems a little high to me, especially since you can buy a ticket and go to the game for as little as $5.00.  But the All-Star Game was free.  I was home so I decided to check it out.  Maybe it would be worth $6.99 for some future games, especially road games near the end of the season.

So what happened?  It didn’t work.  There was no video.  There was no audio.  There was nothing but a white box with the words "Please be patient."  Oh, there was one other thing.  They thoughtfully provided a chat room where fans could discuss the game, which featured a long string of posts complaining about the lack of the promised video.

Don’t get me wrong.  Things happen, especially when you’re dealing with technology. Please_be_patient_2
But in this case, someone really dropped the ball (pun intended).  They obviously offered the game at no charge to build an audience who would pay for future games.  That’s a great strategy.  We’re big fans of free samples.  But if you’re going to do that, you’d better be sure that the sample is a good one.

I was annoyed that the video wasn’t available, but not nearly as annoyed as I would have been if I had spent seven dollars.  Based on my experience last night, I won’t be spending any money there in the future and I would imagine that most of the other disappointed fans won’t be either.  If you put your money in the Coke machine and you don’t get your Coke, the logical response isn’t to put in more money.

Technology may have let the league down, but they also have the technology to do some damage control and they didn’t take advantage of it.  All we saw on the web site was the white box.  Someone on the transmitting end should have been monitoring the signal.  Someone should also have been monitoring the chat room messages.  When it became obvious that there was a problem, someone should have started posting messages.  Apologize for the problem.  Offer an explanation.  Offer another game at no charge or even offer a replay of the game once the glitch has been fixed. Most important, let people know what’s going on.

Minor league baseball is known for its promotions.  The talent may not be the greatest, but they go out of their way to make sure that fans have a good time at the game.  They should know better.  And so should we.  Any time we make contact with a potential customer, whether it’s an ad, an event, a give-away, or even a simple sales transaction, we should plan ahead.  Every detail should be covered.  We often only get one chance and we should do everything we can to make sure it’s as perfect as we can make it.  And, part of every promotion plan should be a "Plan B".  What will we do if something goes wrong?

It’s really silly to spend money to make customers mad when most of us can do such a good job of it for free.

(BTW, my team won 11-1. I sure would have liked to see it.)

Working Together

There was an interesting article in today’s St. Louis newspaper, but for some reason, it’s not on their web site so you’ll have to take my word for it.  A group of twenty local coffee merchants have formed a group called "Coffee Locals".  The competitors have joined forces in anticipation of a flood of new Starbucks locations that are expected to be opened in this area in the near future.  In fact, the coffee mega-chain plans to make St. Louis one of its fastest growing markets.  With 47 stores in an eleven county area, there are plans to add as many as two dozen stores per year.  That’s a lotta lattes.

The local merchants are joining forces to encourage local coffee drinkers to patronize local coffee shops.  According to one group member, "That local flavor and flair is what a lot of people look for in a coffee house."  You have to admit that when you’ve seen one Starbucks, you’ve pretty much seen them all.  While their competitors admit that Starbucks does increase the total size of the pie, they also take a huge piece of it for themselves.

Coffee Locals is considering t-shirts, a web site with map to participating stores, print advertising, brainstorming sessions, and possibly a MySpace page.   While some local  baristas are opting to continue going it alone, the group hopes to recruit most of the local operations.  The group’s president says that the purpose isn’t to "beat up on" Starbucks, but rather to promote the benefits of buying from its members.

While most communities have a Chamber of Commerce, and we’ve advocated chamber membership here in the past, Coffee Locals is something else.  Rather than just promoting the local community, which can include the "Marts" and the "Depots" and the other big boxes, the group is designed to promote local business.  While most larger towns have a number of coffee shops, your peer group may be considerably smaller, not large enough to form an effective marketing group.  But, what would be wrong with a group similar to Coffee Locals made up of independent retailers in a variety of industries?  Are the problems facing sewing machine dealers, vacuum cleaner dealers, lighting showrooms, hardware stores, drug stores, auto parts stores, or any other local retailer really all that different?

There have been numerous cases of local independents banding together to keep Wal*Mart out of town, and many of them have been successful.  A search for "stop wal-mart" on Google produces 2,530,000 hits.  Why not launch a similar campaign on a more positive theme?  "Keep it local" or "Support the Home Team" programs may be just what’s needed to help level the playing field.

We’ll keep an eye on Coffee Locals and let you know how they’re doing.  In the meantime, if you have any thoughts or suggestions, or especially if you have any experience with similar groups, please let us know.  You can hit "comments" below, or click on the "email me" link on the left if you’d prefer to comment privately.

Dissatisfied Consumers

Here’s something interesting for your Monday morning.  The Wharton School of Business at the University of Pennsylvania and the Verde Group have released the results of a recent study called "Shoppers at Risk:  An annual Study of Retail Dissatisfaction".  1,000 consumers were polled who had made a retail purchase in the past month (and who hasn’t). 

The key conclusion was that consumers are more turned off by what the survey calls "Sales Associate Issues"  than by "Store Issues".  The top three complaints? 

  1. Not being able to get help when needed.
  2. Being ignored:  no smile, no ‘hello’, no eye contact
  3. Insensitivity to long check-out lines.

33% of respondents reported that they had the experience of not being able to find sales help when they needed it, making it the number one complaint.  According to the study, 6% of all shoppers are lost as a result of this problem.

Worse, 1/3 of shoppers who experience a problem will spread negative word-of-mouth.  Actually, this figure seems low.  But "Store Associate" problems are 50% more likely to generate negative comments than "Store Problems".  More of a concern is the fact that one out of two shoppers reports that they have chosen not to visit a particular store because they heard about someone else’s bad experience.

The good news from the study is that "Category Killer" or  big box stores have 17% more sales associate problems than the average retailer, while "Specialty Stores" have 15% fewer problems than average, making them the most problem-free of all retailers.

The study also identified four "types" of sales associates.  They are:

The Educator who knows the store’s products and will help shoppers find them
The Engager who’s available, friendly, and willing to help
The Expeditor who ensures a customer wastes little time when shopping or paying
The Authentic who shows a genuine interest in shoppers’ needs and preferences,
even at the expense of making a sale

Not surprisingly, the best associates combine the traits of all four types.  But, customers are most likely to be lost by the failure of associates to engage.

You can find the executive summary of the study here at no charge.  Or you can download the entire study here, but it will cost you $1,500!

Or you can just make sure that someone is always available to help your customers, that customers are never ignored, and that you’re sensitive to customers waiting in line.

Puttin’ on the Ritz

"Whenever I enter a Ritz-Carlton hotel, I know ‘I’m not in Mediocreville anymore!’”  That’s how Bill Kalmar begins his Quality Digest article on the Ritz-Carlton Hotels.  Kalmar’s article describes the "love fest" between him and the upscale hotel chain.  Of course, there’s no question that "the Ritz" sets the standard for quality service.  Even the name itself brings luxury to mind.  The phrase "put on the ritz" means to live in elegance and luxury.  (Dictionary.com). 

But it takes more than just a "ritzy" name to create a "ritzy" experience in more than 60 hotels with more than 40,000 employees. 

How do they do it?  The Ritz has a system in place that allows each of those 40,000 employees to duplicate the experience in each of those 60 hotels.  The system is very much the same in every single location yet it allows each employee the freedom to make sure that each guest is treated exactly the way they want to be treated.

The Ritz has won the Malcolm Baldrige National Quality Award twice, in 1992 and 1999.  More important, they use the Baldrige criteria as the basis for their quality system and use the feedback from the Baldrige examiners as a blueprint for improvement.

How do we know it works?  One way is to take a look at what it costs to stay in a Ritz-Carlton Hotel compared to the competition.  A rate comparison of the R-C in St. Louis, MO with the  competition shows that the least expensive rack rate (for a "quality room") is $279.00 for one night, July 16, 2007.

A deluxe room at the five star Chase Park Plaza Hotel is $189.00 for the same one night.  While the Ritz is located near the St. Louis County Government Center, The Chase is across the street from St. Louis’ Forest Park and convenient to downtown.  There must be a reason why travelers are willing to spend $90 more per night at the Ritz.

Personally, I’ve never stayed at either hotel (too rich for my blood), but I have attended events at both and there’s a certain customer-first attitude that’s present at the Ritz from every staff member that you meet.  (They refer to their associates as their "ladies and gentlemen".)

You might think that it’s easy to be good when you’re charging an extra $90 per night per room.  But I like to think the reverse.  It’s easy to charge an extra $90 when you’re that good.  The R-C is so good, in fact, that you can attend a session at their Leadership Center where they’ll teach you how they do it.  A one day session will set you back between $1,400 and $1,700 per day.  The price does include a continental breakfast and lunch.

If those prices scare you, you can get an idea of how the Ritz does things by reading their 1999 Baldrige Application Summary.  It’s available from the Baldrige web site.

But, to boil it down to just its simplest points, the Ritz-Carlton system focuses on satisfied customers, no matter what it takes, and empowered employees who are trained to make the customer happy, no matter what.  They use what’s called the CLASS database to keep a record of what the customer likes and doesn’t like.  Once you’ve stayed at the Ritz and mentioned to the housekeeper that you like an extra feather pillow on your bed, every time you stay at one of their hotels in the future, that extra pillow will be waiting for you when you arrive. 
And every employee has the ability to make entries in the database.

We can all take a lesson from this high-end hotel chain.  Customers like to be pampered.  They’re flattered when you remember what they like and don’t like.  They’re loyal to businesses who take care of them the way they want to be taken care of.  And they don’t mind paying for it.

There are a number of tools on the Baldrige web site that you can use to evaluate and improve your own business.  Check them out.   

Tags: , , ,

You Think You’ve Got Problems?

From Business Week Online, "

"In the face of staggering customer returns of the Xbox 360 console, the
software maker announces a charge of at least $1.05 billion to address
the problem."

X_box_boo_boo

Faced with "staggering returns" Microsoft will take a $1.05 to $1.5 BILLION charge to cover the cost of extending warranty coverage of repairs and replacements of its popular gaming console.