Retailing-My Top Five Business ‘Killers’

On Tuesday I pointed you to an article by the Retailer Owners’ Institute called “The Top Five ‘Killers’ of Retail Sales”.  As I wrote at the time, the information in the article was very good, but it was from a bean counter’s perspective.  Today I’d like to give you my top five list.  I’m not saying that my list is better.  Any item from either list could be a business killer.   In fact, the two lists combined would make a pretty good top ten.

5.  Unattractive place of business. People want to shop in a place that’s bright and cheerful, clean and neat.  Take a walk outside and view the premises with a critical eye.  Does the outside make a customer want to come inside?  Then walk in the front door imagining that you’re the customer.  Is your store inviting?  Is everything clean?  Do the displays look fresh and interesting?  Is there proper signage?  Would you shop there?

Be brutally honest.  If the answer to even one of these questions is “no”, you have work to do.

4.  Poor marketing. The idea of marketing is to get customers into your store.  No marketing = no customers.  It’s as simple as that.  Here’s the thing.  Good marketing doesn’t have to be expensive.  Many would argue that word-of-mouth is the most effective marketing of all and it’s virtually free.  The Internet, especially social media, makes it possible to reach out to our target audience at little or no cost.

If you don’t know what to do, there’s plenty of information right here on the web and there are a number of books that are excellent resources.  I recommend “Marketing Your Retail Store in the Internet Age” by Bob and Susan Negin and “The Profitable Retailer” by Doug Fleener.

3.  Poor Salesmanship. Even vending machines are designed to present the product in the best possible light.  If your staff isn’t knowledgeable about the merchandise, sales may be hard to come by.  Sales are made to people by people (with the exception of those vending machines).  In good times, products may fly off the shelf but in times like these, your staff must be able to convince the customer that your offering is the best.

2.  Poor Customer Service. This one goes hand in hand with number 3.  There’s no excuse for poor service and today’s customer won’t stand for it.  Follow the Golden Rule.  Treat customers the way you want to be treated, and mean it!  Someone once said, “Sincerity is everything.  If you can’t fake it, you’ll never be successful.”

You and your staff must genuinely want to make the customer’s life easier and better.  If your number one motivation is profit, people will see right through you.  You may make a sale but you won’t make a friend.  And friends are your best source of word-of-marketing.  Isn’t it funny how all these things tie together?

You may be thinking that great customer service should be number one and a lot of people would agree with you.  But, like I said, all these things work together so here’s my number one.

1.  Unhappy Employees. Unhappy employees will almost guarantee numbers two through five.  They won’t care how the place looks.  They won’t care about marketing.  They won’t practice good salesmanship and they won’t care about serving the customer.

While a happy, satisfied customer may be the ultimate goal, the quickest way to make sure that happens is to have a motivated staff.   Make the staff happy and they’ll make the customers happy.

As a small business you may not be able to offer the perks that a big company can.  But you can make your staff feel like part of the family.  You can offer them intangibles that your bigger competitors can’t like flexible hours and more control of their own career.  You can give them a voice in decision-making and make them feel important every single day.

Happy, motivated employees are the key to a successful business.

Do You and I Really Have Freedom of Speech?

Interestingly, in yesterday’s post I wrote, “When small-business-damaging laws are being considered at the national and local level, we have to speak out.” In today’s local paper there was a story about John Mackey, the CEO of Whole Foods.  In a recent op-ed piece for the Wall Street Journal Mackey offered his suggestions for health care reform.

Mackey’s comments have stirred up a firestorm because they have been perceived by some of Whole Foods’ liberal customers as being anti-Obamacare.  As you might imagine, a company specializing in organically-grown foods does attract a lot of liberal customers.  Some of them are threatening to boycott the chain.

I’m not going to dive into the health  care debate, at least not today, but you have to admire Mackey’s courage to offer a counter proposal knowing the make-up of his company’s customer base.  But, here are some things that I find interesting:

  • The President has solicited suggestions regarding health care reform.  Mackey’s comments seem to be answering that call.
  • Proposing a different plan from the one that’s currently on the table doesn’t seem to be such a terrible thing, especially in a democracy where the right of free speech is guaranteed.
  • Mackey may be CEO of Whole Foods, but his words don’t necessarily represent the company.
  • Do WF’s liberal customers really want to punish a company that seems to be so in touch with their views and life style?  After all, if the company were to go away, where would they find the same selection of organic and specialty foods?
  • I didn’t read all 4,000 + comments on Mackey’s blog, but if the first couple of pages are any indication, he has a lot of support.

Like I said, this blog isn’t a referendum on health care reform but as I wrote yesterday, don’t business owners and executives have a right and a responsibility to speak out on subjects that are important to their companies?  Obviously Mackey feels strongly enough about the subject to put his name on an article in a national publication.  As a responsible CEO you have to believe that he feels an alternative to the current health care reform bills floating around on Capital Hill would be best for his company, his employees, and his customers.

Where does that leave small business owners?  Don’t we have the same right and responsibility?   Should we back off on important issues for fear of adverse customer reactions?

Personally I think Mackey did the right thing.  What do you think?

Here are some other points of view:

What can John Mackey and Whole Foods learn from publicizing their views on health reform?

“Health Care Stirs Up Whole Foods CEO John Mackey, Customers Boycott Organic Grocery Store” from ABC News

The Most Important Thing

I’m a little behind in my blog reading (and blog posting) but I ran across an excellent piece today from last month by my buddy Doug Fleener at the Retail Contrarian blog called The Most Important Thing You Do. As Doug so rightly points out, the most important thing you do as a manager is to create the best place to work.

You probably think that customers come first, and you’re right.  But without happy, no make that delighted, employees, your customer’s experience will never be first rate.

I hate to tell a story without proper attribution, but I think this originally came from Steven Covey.  A restaurant owner was asked who was more important, his best customer or his very excellent hostess.  Without hesitation, he answered “the hostess.”

“I can always find another customer, but a well-trained, customer-focused, efficient hostess is worth her weight in gold.”

To quote Doug’s post:

You might have a beautiful store with fabulous products but chances are whatever you sell I can find somewhere else.  It’s the people in your store that make the difference. It’s the people that keep your customers coming back time and again.  The reverse is true, too.  At some stores the reason the customers don’t come back is because of the people.

BTW, a Happy Beleated Birthday, Doug.

Salesmanship Part 1

andy rooneyI hate to sound like Andy Rooney here, but have you ever noticed….how few people try to sell you anything anymore? I’m not talking time share pitchmen, or vacation club scam artists (more on that later), I’m talking about the person behind the counter at the retail store or anywhere else where you may need help making a purchase.  You’d think that in a tough economy people would be doing their best to convince you to part with some of your money.

I have two stories to tell you along these lines; one today and the other tomorrow.  Today’s story involves Dave Sinclair, a St. Louis auto retailing institution.  He’s famous for his television commercials, featuring just Dave standing behind a somewhat hokey-looking podium that has his logo on it.  No flash, no gimicks, just Dave talking to you about his latest deals.  Click on the link to meet Dave (somewhat) in person.  Sinclair is in his 80s and must have gone straight from the maternity hospital to the car dealership. or so it seems.  Dave is a blue-collar guy selling blue-collar cars to blue-collar customers.

Lately a lot of his TV spots have centered on the fact that he sells GM and Ford products exclusively.  No foreign-made cars at Dave Sinclair.  He encourages his viewers to buy from him, of course, but if not, “then buy American from somebody.” But, that’s not today’s story.

The story is that Dave’s business is good and he’s hiring…..and that he’s getting few takers.  He prefers to hire older workers (baby boomers) who know what hard work is and aren”t afraid of it.  In his usual straight-ahead approach, he told a local TV reporter “I’m not paying people to stand around.  I”m paying them to sell cars.”

In a world where the first question from a lot of job applicants is “How much vacation do I get?” his approach obviously makes a lot of people nervous.  It’s not touchy-fealy, or politically correct.  But it’s brutally honest, and that’s something that’s sorely missing today.  Personally I’d rather work for someone who’s upfront with me than someone who smiles all the time while he’s planning to stab you  in the back.

I believe it’s Sinclair’s honest approach that’s kept him in the car business for longer than most of his customers have been alive.  Good luck, Dave.  I hope you find the folks you need to keep the legacy alive.

The Art of Listening

hearing aidI was speaking to a friend the other day.  He was very excited by his new hearing aid.  He said he can carry on a conversation now, without having to ask the other person to repeat anything.  He can hear birds singing and even crickets chirping.  He said “I can actually hear a pin drop.”  It was expensive, but well worth it.  He said he thought it was the greatest hearing aid in the whole world.

So I asked him, “What kind is it?”

He looked at his watch and said “12:30”

I know it’s a corny story, but it makes a good point.  Even with perfect hearing, we often don’t hear what the other person is saying.  We may think we do, but somewhere between the speaker’s lips and our brain, the message gets short-circuited.  “What we have here is a failure to communicate.”

As business people we have to know what our customers want.  Barring a psychic gift, the only way to do that is to listen to what they’re saying.  But sometimes you have to read between the lines.  It’s been said that people have two reasons for doing something.  One is the real reason.  The other is the one that sounds good.  Sometimes, but not always, they’re the same.

For example, a customer may tell you that you don’t have the item that they’re looking for.  They may cite some feature or other that your offering lacks.  That sounds good.  But maybe their real reason for not buying is that they can’t afford something with the quality that you offer.  They’re over their budget, but they don’t want to admit that.  They save face by putting up a smoke screen.

You may have exactly what they want, but if you don’t ask questions to get through the smoke, you’ll never make the sale.  You can’t overcome an objection that doesn’t really exist.

The same is true with your employees.  Let’s say your best person comes into your office and give you notice.  “Why?” you ask.  And he gives you a reason.  Maybe he says he needs more money.  You offer him a raise but he still says “no”.

Maybe the real reason is that his wife wants him to take a bigger part in raising the kids.  Maybe she’s missing too much work.  But rather than admit that his wife is making him quit, he uses money as a smokescreen.  Again, a few probing questions might get you to the real reason.  By offering an additional day off, or more flexible hours, you might just retain a good employee and not have to give him a raise.

Here’s the thing.  Information is vital in running any business, especially a small one.  The key to good information is good listening.  And the key to good listening is asking the right questions and paying attention to the answers.

Small Business Imperatives

Charles Brad Reynolds, a Warwick Business School MBA candidate asked the following question on LinkedIn.

What do you see as the top 5 innovations that businesses can access, cost-effectively, today that will be imperative for survival and profit maximization in the future.

My vote goes to
1.) Internet facilities for communication, marketing and purchase ordering
2.) Online and electronic banking facilities
3.) Lean Thinking concepts and practices
4.) Business use technologies (laptops, mobile phones, blackberries)
5.) Expanding network (customers, competitors, labour, suppliers, civil, etc)

What do you see as being the top innovations that businesses should be more actively trying to leverage or develop for the future.

There were a number of good answers, many of them focused on the internet and new technology.  Here’s my answer:

“I’m going to take a slightly different approach. You may or may not consider these “innovations” since they’re hardly new. But since they may be overlooked in favor of the latest electronic “toy”, their use can be considered innovative and they’re definitely going to be imperative tomorrow.

1. Relationships. If you’re going to stand out, then you must have strong relationships with your customers and other business partners.

2. Communications. Here’s where the “toys” come in. Facebook, LinkedIn, Twitter, and others. Use them IF they help your business.

3. Empowerment. Unless you want to work yourself to death, you have to have people working for you that you trust and you must give them everything they need to excel, including the ability to make mistakes.

4. Knowledge. Never before have your customers had access to knowledge as they do today. You MUST stay ahead of them or be left behind.

5. Customer Service. This is really a combination of the other four. Find out what your customers want and let them know that you have it. Empower your people to give the customer what she wants and then get out of their way.

I personally have nothing against MBA’s (well, maybe I do.  But that’s a topic for another day.) but, there’s a lot more to running a small business than the things they teach you in B-School.

Treat people the way you’d like to be treated and you’ll have a sound foundation, regardless of the tools you use to get there.

Small Business Retail–More on Store Hours

As a follow up to Tuesday’s post, “Small Business Retail–Setting Store Hours” some readers have commented that it’s just too hard to find qualified employees and that they probably wouldn’t be that good anyway.  In other words, it’s better to be closed than to disappoint the customer with poor service.  While I can appreciate the thought, I have to respectfully disagree.

After all, isn’t the high unemployment rate the top story on nearly every newscast?  As I understand it, millions of quality people are looking for jobs, even part-time ones.  Many of them are middle-aged white collar workers who would be more than willing to make the effort to learn your business.   Their savings, pensions, buy-outs, or other assets may be almost enough to get by, but they’d sure like a few extra dollars each week to pay for their golf habit, to get their hair done,  or for an occasional restaurant dinner.

A case in point.  I have a friend who loves to sew.  She and her husband are retired but she works part-time for a local sewing machine shop.  The extra money is nice, but she’s also very motivated to be around all the newest and best sewing machines and accessories.  Her hours are flexible.  She’s the perfect part-time relief for the owners when they want to spend some time away from the shop.  Besides, it’s not like you don’t have the tools to stay in constant communication with the store, even if you’re lying on the beach.

An hourly worker is never going to replace the store owner, and that’s not what most of you are looking for.  But the idea that you’re indespensible, even in your own business can lead to exhaustion, depression, and who knows what else.

As I said Tuesday, if you’re satisfied with the hours you’re working and the money you’re making, then keep doing what you’re doing.  But if you’d like more time off, or if you’d like to fatten up the bottom line, then you’re not going to be able to do it by yourself.

Hopefully you’re not planning to work in the store until you drop dead of old age.  You’d like to think that the equity in the business will allow you to retire some day.  But if the business can’t be run properly without you’re being there every hour the store is open, then your “equity” is only the building, fixtures, and inventory.

Jesus said that the hired hand doesn’t care for the sheep as well as the shepherd does.  Of couse he was right.  But it doesn’t hurt to have the hired hand fill in once in a while so the shepherd can have a weekend off.

A good reference on this subject is Michael E. Gerber’s excellent book, “The E Myth Revisited.”

Small Business Retailing–Setting Store Hours

The idea for this post comes from another private forum I follow and a discussion about when an independent retailer should be open.   By their nature, many indie retailers are one or two man (woman) operations.  That means store hours = working hours.  It’s only natural to want and need some time off so a lot of small retail businesses are open limited evening and weekend hours, the very time when most consumers want to shop.

My first job (back when dinosaurs roamed the earth) was at a local clothing store.  We were open Monday and Friday until 9:00, and Tuesday-Thursday and Saturday until 6:00.  That was the norm.  There were no alternatives.  Everybody closed at 6:00 during the week.  The only exception was between Thanksgiving and Christmas when we were open M-F until 9:00.  Those were the days.

Make no mistake, on-line shopping and big-box stores that never close are spoiling consumers.  They can shop at any hour of the day and night.  They should have enough sense to know that you’re not going to be there for them at 3:00 am, but they do expect you to have store hours that are convenient for them.

It’s easy for me to sit here in my pjs and pontificate about how many hours you should work. So I’m linking to this article by Bob and Susan Negen. That way you can be mad at them instead of me.   Still, you know I can’t resist throwing in my two cents.

I do disagree with Bob and Susan on one point. Unless you’re running a church or a pharmacy, I don’t think anyone should work on Sunday. (Or whatever your Sabath happens to be) Otherwise, if you’re going to compete, you have to set your store hours for your customers’ convenience.  Here in St. Louis one of the last surviving independent appliance retailers refuses to be open on Sunday.  It’s part of his advertising.   “Shop us every day but Sunday.”  He’s outlasted most of his competition.

With a few exceptions, people who can afford your top-of-the-line product work during the day. If they decide to shop for a whatever you sell chances are very good that  they’re not going to take off work. They’re going to shop in the evening after dinner or on Saturday. Unless they’re incredibly loyal to your store, they’re going to go somewhere else if they find that you’re not open when they need you. Worse, when your product comes up in conversation, they’re going to tell their friends not to go to your store because “you’re never open.”  (If you’re not there when they need you, in their minds you’re never open.)

I know how hard retail is. I know you get tired and need some time off. The solution is to hire someone to fill in when you’re not there. How many high-end widgets do you have to sell to pay for one part-time employee for a few hours per week? You have to do your own math and make the call.

Remember, I’m not here to sell you more merchandise. If I were a vendor I’d want you to be open 24/7 so you never miss a sale.  (Which makes you wonder why Chrysler and GM are eliminating dealers, but that’s another story.)   I just want to see you succeed in business and in your personal life. If you have limited store hours and you’re happy with your income, then keep doing what you’re doing. You’ve found the right combination for you. But if you want to increase your income and reduce your hours at the same time, then hiring additional help is the way to go.

The name of the game is customer service. But your most important customers are your spouse and kids (and grandkids). They’re the reason you’re in business in the first place.

Small Business Attitudes Affect Employee Performance

Lisa Temperley, writing at Small Business Talk, suggests that the attitudes and behaviors of the owner are reflected in the business.  No real surprise there, but she makes a good point about how your attitude towards your employees affects their performance.

Like Temperley, I’ve often heard from business owners that it’s hard to get good help.  I also know dozens of small businesses that have excellent staffs.  The difference?  Maybe it starts with the word “help” itself.  It’s always seemed kind of demeaning to me.  Who wants to be thought of as “help”? ” Staff ” is a good word.  “Associate” is nice.  “Team member”, though overused by many managers, is better than “help”.  I know one company that refers to its employees as “family members”.  I like that one, though I suppose it could be confusing if the owner has actual family members working for him.

Temperley speaks about trust.  Your people want to be trusted.  If you let them know you don’t trust them, you may find that you’ve created a self-fulfilling prophesy.  People tend to act the way you expect them to act.

Finally, your attitude about compensation has a big effect on the amount of work you can expect from your staff.   Minimum pay usually leads to minimum performance.

To quote Temperley, “Successful owners pay to get the best people they can and then train them well.  This means their staff can deliver top class service to customers and owners can happily delegate whenever possible.”

That’s excellent advice!

Another Virus!

Just last month we were all concerned about a virus that might attack our computers. The April 1 date has come and gone but according to the experts we’re not out of the woods yet.

Now we’re being warned about a different type of virus. This time the target isn’t our computer, it’s us. We’re being warned about a potential “pandemic” of swine flu. “Pandemic” is a good example of an obscure term that can suddenly become a buzzword, seemingly overnight.

Obviously this is no laughing matter.  Like the conficker computer virus, swine flu may be an overblown threat. But since this one has killed people, it’s certainly worth our attention. Since it spreads by human contact, and since most of us are in the business of human contact, we should be careful.

There are a number of precautions that you can take and that’s beyond the scope of this blog. Check out the Centers for Disease Control and Prevention web site for more information. But at the very minimum, you should wash your hands frequently and make sure the things you touch often are squeeky clean. Cash registers, phones, counters, door knobs and handles, display merchandise, and any number of other surfaces should be kept clean with a disinfectant cleaner.

Waterless hand cleaner, can literally be a life saver. Make sure you have some at every work station and that you and your staff use it.

When in doubt, it’s always best to err on the side of caution.