Business Building Lessons

Thanks to Sandy Berkshire of Stuart’s House of Vacuums, Billings, MT for pointing out the following article.

Consultant Stacy Karacostas has written an excellent article called “Business-Building Lessons Learned in 2009: What Highly-Successful Small Business Owners Are Doing that You Can Do Too”. The title’s a mouthful but the article offers some very good advice on surviving and even thriving in our current economy.

The article promises ten things that successful entrepreneurs are doing but delivers only nine.  I guess that’s further evidence that the economy’s a mess.  Maybe the government’s imposed a 10% tax on internet lists.  Yeah, I’ll bet that’s it.

Anyway, I encourage you to read the article for the details, but here are the bullet points with some added commentary from yours truly.

1.  Forget about the state of the economy. I’m not sure you can entirely forget it, but don’t dwell on it, especially the emotional, mental part.  You have to look and act successful to be successful.

2.  Offer something new. People need something exciting in their lives.  Make your business exciting by adding new products, or just remerchandising your product line-up.

3.  Stop guessing. Ask your customers what they want.  Then give it to them.

4.  Embrace technology. More on this later.

5.  Build your list.  Use your customer list to build up your business.

6.  Provide value. I would add to this one, let your customers know about the value you provide.  Don’t be afraid to blow your own horn.

7.  Embrace mixed media marketing.  You can’t build a house with just one tool.  Use the whole box!

8.  Keep learning. Your customers are getting smarter every day.

9.  Stop doing it all yourself. If you haven’t already, read Michael Gerber’s “The E Myth Revisited.  If you’ve already read it, read it again.  Focus your efforts on what only you can do.

I’ve highlighted numbers 3, 4, 7, and 8 to create  MTS’s number 10.   Get out there! Get online.  Get on Facebook.  Get on LinkedIn.  Use all the tools at your disposal to find out what your customers want (3).  Use Facebook, or the brand-new Google Buzz to create a community of people who are interested in what you sell and then talk and listen to them every single day (4, 7,8).

You hope your customers are talking about you in a positive way.  If so, they’re probably doing it through social media.  If they’re talking about you in negative terms, they’re using the same social media.  Either way, you must be part of that conversation.  (See Retailers, What to do About the Internet.)

I guess I’ll add a number 11 and a number 12.

11.  Under promise and over deliver.  Nuff said.

12.  Keep on keeping on.  If you’ve been watching the Olympics you’ve seen stories about athletes who keep coming back even though they’ve failed many times in the past.  It’s called persistence and it’s the difference between a gold medal and a long, lonely trip back home.

Seasonal Marketing

We all know that the weeks before Christmas are the busiest shopping days of the year.  Other holidays, real (Easter) and manufactured (Valentine’s Day) can bring out the shoppers as well.  But, what can we do to stimulate the shopping gene in those times between major holidays?

Why not have some fun with the more obscure festivities like National Embroidery Month or National Snack Food Month  (February) or Random Acts of Kindness Day (February 17).  To get you started, here’s a web site that lists all variety of occasions, both monthly and daily.  Add a little imagination and you can liven up the last week of February with a big Polar Bear Sale (February 27th).

These off-the-wall celebrations can be a lot of fun and you have little or no competition.

Retailers, What to do about the Internet?

I’ve been following a conversation on another forum that was started with my recent post, “Are Your Suppliers Letting You Down on the Web?”  You may recall that the original article was about manufacturers who don’t use the web effectively to communicate with their dealers.  Like most on-line conversations, this one has morphed into a discussion on how independent retailers and manufacturers should handle Internet sales to consumers.

We know that there are price-only shoppers who will come into your store, get all the information they need, then go to the web to buy the item at the lowest price they can find.  On the other hand, there are customers who do their research on the web then buy the item locally.  The question is, which group is bigger?  My guess, and it’s only a guess, is that more consumers fall into the second group.

Maybe I’m not a very good shopper, but I’m in the second group mainly because I (1) prefer to support my local merchants and (2) I’ve yet to find anything on line that I couldn’t buy at the same price, or close to it, locally.

Here’s the thing.  If I can buy an item for, say $200.00 on line and I can buy it for $210.00  or $220.00 locally, I’ll buy local every time.  Basically, I’m a mechanical idiot.  It’s worth it to me to spend an extra 5-10% to have somebody close by to hold my hand when I can’t figure out how to make something work.  I’m not alone.  Based on the statistics, a lot of people feel the same way.

Case in point:  I just bought a new cell phone.  The instruction book wasn’t in the box.  Today I’ll go back to the store and get it.  If I had bought the phone on-line, I’d have to send an email and wait for a response.  Assuming they get back to me, I’ll then have to wait for the instruction book to come in the mail.  Meanwhile, I have a $179.00 phone that I can’t use properly.

To me, the key to competing with on-line merchants is to let the customer know how much your service is worth.  Granted, some people just don’t care.  All they’re interested in is getting the lowest price.  Chances are those people aren’t your customers anyway.  If there were no Internet, they’d either buy from the big box store, or they’d be searching the ads in the back of the magazines.  Either way, you don’t get the sale.

There’s a lot of hype about on-line merchants.  The media love them!  Price shoppers think they’re the greatest thing since sliced bread.  (I wonder what the greatest thing was before somebody invented sliced bread?)  Anyway, the facts don’t necessarily support the hype.  Depending on the industry, web sales still represent a small piece of the total pie.  According to the US Department of Commerce, 3rd Quarter 2009 on-line sales represented 3.7% of all retail.  Obviously the percentage varies by industry, but overall, nine out of ten retail dollars are spent at brick and mortar stores.

e commerce stats

Big on-line merchants like Amazon.com are doing very nicely, thank you.  But there’s still a huge market out there for your store.  Rather than chasing sales that you’re never going to get, in 2010 your brick and mortar customer should be your major focus.

Granted, on-line sales are growing, 4.7% in the third quarter of ’09 vs. 4.3% in ‘o8.  Today’s strategy may not work in the future but carpe diem,  seize the day.

Meanwhile manufacturers will continue to wrestle with the question of how best to market their products.  That 4.7% is worth more than $30 billion, hardly chump change.  Like I said in my last post, brick and mortar independent retailers should support suppliers who support them.

Here’s a post that I wrote in 2006 on Your Business Strategy that you might find interesting.