Retailers Can Win Customers Without Struggle

Mark Albright, staff writer for the St. Petersburg Times published an article in the Sunday paper on retailers struggling to win back customers. He does an excellent job at identifying the key issues customers face when shopping in many stores. In summary, customers know what they want from their shopping experience and they don’t get what they want most of the time.

Two charts were provided in the article. One showed that 68.4% of those responding to a recent poll said knowledgeable, helpful, friendly staff was the most important criteria for a positive shopping experience. The other chart reported that 50% of the people surveyed reported retail service has gotten worse.

Shoppers have always wanted a friendly environment with knowledgeable staff. What is most alarming is how poorly retailers continue to meet the expectations of their customers. With almost 70% of the customers ranking knowledgeable, friendly staff as most important, why is it that so many retailers continue to be obsessed with having compelling price? Studies have consistently shown and Mark points this out in his article as well, that less than 10% of the shoppers name price as the most important reason they shop a store.

Let’s examine pricing and promotion a bit deeper. The paper that Mark Albright writes for has a daily circulation of 1.2 million. On Sunday, like all large metropolitan areas, the paper is thick. Most of it is advertising circulars. Most have between 4 – 20 or more color glossy pages and this format is used by most of the major retail chains. Stores attempt to show items attractive to the largest number of people and offer special buys or sale pricing. The goal is to drive traffic to the stores.

Normally on a store by store basis, retailers are able to tell how effective a particular circular was by measuring customer count (customers that actually buy), average sale and items sold. Most retailers have these statistics, but there is one critical piece of information they do not have. They do not know who it was that purchased something. They do not know their physical address, they do not know their email address and do not know their customer’s phone number. There are exceptions and I will address those shortly. However, in general, large and small retailers spend huge amounts of money on print advertising to drive customers into their stores and they don’t even know who their customer is. Consequently, they are unable to thank the buyers, hear their comments and suggestions and they are not able to personally invite them back.

Here is a brief summary of the issues so far: consumers want knowledgeable and friendly sales staff and over 90% of them place importance on knowledge and friendliness over price. On the other hand, retailers spend a lot of resources developing promotions based on price to drive traffic to their stores. When the customer gets there, not just the price shopper but the loyal customers as well, the retailer is not properly staffed and the staff that is working is not properly trained and managed. I call this a mismatch in expectations and delivery. The result of that formula is a high rate of retail business failure with stores that fail being replaced by new ones that operate the same way. You know what you get when you keep doing things the same way. What is the solution? Keep reading.

When the subject of price in retailing is mentioned, Wal-Mart’s name always comes up. Here are just a couple of things I noticed about Wal-Mart recently. First they are increasing the number of more upscale items offered. Why are they doing this? It is because they understand that appealing just to the low price crowd long term is a risky business model. No retail chain founded on the low price model has ever survived long term. None. What else have I noticed? The other day I noticed a Wal-Mart banner on the front page of Yahoo.com This particular ad was what is known in the Internet Marketing circles and Direct Response Marketing circles as a lead generation ad. I followed it through and noticed interesting “bribes” to get you to register for on line information. You could even categorize the information you were interested in receiving. Wal-Mart promised to give you advance notice of their best deals for the store closest to you. Notice I said store closest to you. When you entered your information they asked for your zip code so they could match you with relevant regional promotion.

Wal-Mart is taking the lead again in building their customer data base. I don’t think they have taken this to the store level, which where it really needs to be implemented. But they are headed in the right direction.

Do you need to have Wal-Mart’s system to implement a similar program? Last September I was testing the implementation of program with a small retailer in a small market. You can review more of the detail of this program at www.localretailmarketing.com We used incentives as a motivator to provide their contact information. This program was hugely successful in a short period of time and confirmed the value of capturing the contact information of your customers and communicating with them. That is the first step in bridging the gap between what customers want and what retailers deliver. Note: if you are a grocery store, restaurant, nightclub, shoe repair store, dry cleaner or any business that has customers, this applies to you.

If you are a local or regional chain of stores, outsourcing this customer contact program is the most cost effective approach. If you are not sure that is a true statement Email Me and I will prove it to you. National Chains should outsource this program in the test phase and then it is likely that in-house technology will be needed long term. Regardless, it is easy to build your customer list, easy to communicate with them and this communication builds loyalty and value. This communication process is the critical link that breaks down when this process is managed internally. In summary, outsource this entire program initially; bring the technology piece in house if and when that makes sense but keep the communication program outsourced.

Does all of this solve the problem of bridging the gap of what the customer wants and what the retailer delivers? Absolutely not! All of the fundamentals retailers are paying attention to today must continue. Having the right product in the right place at the right time is a good goal. Having staff properly trained and managed is a great goal. But this is the planet earth folks. When all the best logistical systems and human resource development processes fail .. and they will from time to time, a strong binding relationship with your customer will overcome any isolated execution failures.

Are there any examples of anyone doing this more right than wrong? I remember in 1996 when I was in my second year of operating an Internet Service Provider company that I founded. I was focusing on industries likely to benefit a lot quickly from using the tools of the Internet. One of them was mail order. I knew there would be huge benefits to catalogue retailers from using the internet. Of course when I contacted many of them and they had no idea in 1996 what I was talking about. So I let it slide instead of pursuing that idea along with a number of other billion dollar ideas I had in the early days of the commercial Internet.

Today there are numerous examples of catalogue retailers doing a great job of communicating with their customer base. Now the big gains are coming from the “brick and mortar” companies who are communicating like catalog retailers. Who are they? Well Circuit City gets my number one vote. Circuit City sends me wonderful emails in addition to their weekly print advertising circulars. Wal-Mart is doing a good job now that I am on their list. In the catalog retail business, the best is Fredericks of Hollywood. Don’t even ask me why I am on their list but they do a great job. There are other catalogue retailers that have an effective communication program in place. In fact if you order on line from any catalogue company and give them your email address, I would bet you start getting information from them. Even if you don’t order, sign up for some of these lists to see what they send you.

The biggest mistake made by companies that have you in their data base, is dropping your contact information when you have not purchased for awhile. I know of one very popular retailer with a huge mail order division that sends me tons of catalogues but not one email. When asked about this I was told I no longer receive emails because I am not a current buyer. But they continue sending me expensive to print and mail catalogues. Go figure! Recently I was talking about this issue with an author and speaker on retail industry issues and discovered the huge successes several companies are having by aggressively pursuing customers who have become inactive. However, you need to know your customer and have their contact information in your data base to execute any program including this one.

In summary, study the companies that are doing this well. Look at your own business. If you are not sure what I am advising you to do will work, call or email me and let’s “kick it around”. Click to email or go to Retail Profit System for phone contact information. I am so convinced that there is a great need for help in this area I have recently partnered with several business development experts and we have formed a new company that will provide the Internet marketing services retailers and others need. Look for a major announcement soon on this advanced service for helping your business dramatically improve revenue and profits.

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue and profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource information.

But Bill … My Business Is Different!

“If You Hang Out With Coconuts, You’re Going To Be A Coconut.” Rocky

You may not have been in Chicago but if you add this blog to your RSS feed reader you will not miss another article when it is issued. Why is that important to you? Here is one reason.

Recently I invested four days of my time and more than a few bucks with Dan Kennedy, Bill Glazier and over 600 of my closest friends all focused on further developing profit building skills. If you don’t know who Dan Kennedy is then go to this link. If you are in business you need to be reading Dan’s No B.S. marketing newsletter Click on this link for a three month FREE trial http://www.dk3monthspecial.com/your_freebie/

It’s too late to join me in Chicago, but add this blog to your RSS feeder by click on one of the links on the right hand side of this page because you will not miss another article. Since I will be giving you a number of valuable business building principles that came from the Chicago conference your are not going to want to miss any of it. Unless of course you are not interested in growing your revenue and profits.

There are conferences around the world every week. I attend on average 4-6 carefully picked ones every year. Conferences, resources I purchase from other experts and a growing network of very successful business owners form part of the foundation of my continuing professional development.

Now here are a couple very important points. You will benefit by making notes of these points. First: if you do not have a professional and personal development plan then you will have increasing difficulty, growing your business. The obvious answer is to have a professional and personal development plan based on you own strengths, weaknesses and interests. Second: while technology and global markets are advancing at lightning speed, the business and wealth building foundation principles are not changing, they are only being enhanced by different views.

The Profit System that I developed has business and profit building principles at its root. By the way, you can get most of this training absolutely FREE simply by subscribing to my six week course at www.stevepohlit.com The conference in Chicago reinforced this point as most of it centered on revenue building business principles that have been around for quite some time. So if they have been around for a long time, why is it that they still need to be taught? Well the facts are that these
principles are almost universally ignored.

What is the #1 foundation business building principle that we spent most of the 4 days in Chicago learning more about?

The Cow

Dan Kennedy told us that he has purchased a cow. Not just any cow but one that had long term value a measured by its ability to produce more cows and it has. So now one cow has produced more cows which are valuable and also produces embryos which are also valuable as they are implanted in other cows and the herd grows faster. The point is it starts with one and with the right action grows into a herd.

The Herd

This is the term used by Dan a lot in reference to the most valuable asset of just about every business. That asset of course is the customers of a business. Without exception, every successful business owner I have met or read about has achieved
success because they have developed a list of customers who trust them.

There are a number of ways to develop customers and in the next article I will cover the ones we spent of our time in Chicago discussing, why they work and what you can start doing now to make sure you are getting the highest return on you investment
in your marketing dollar.

P.S. If you are curious as to the reason behind the title to this article, I’ll tell you. Among the more than 12,000 members of Dan Kennedy and Bill Glazier’s Inner Circle, there is a small percentage of people who say to Bill “but my business is different.” The longer you read my articles and say to yourself “my business is different” the longer it will take for your business to realize its profit potential.

You know it the instant you see the person. It is apparent they have achieved an extraordinary measure of success and have the time to enjoy it. Steve Pohlit is an expert business consultant who developed The Profit System shows business owners how to achieve an extraordinary level of profit and the time to enjoy it. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue in profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource box.

The Hidden Costs of Employee Turnover

Mike Ullman, the CEO of J.C. Penny since late 2004, estimates the company has saved over $400 million annually by implementing programs to reduce the turnover of valuable talent. Mike has further quantified this cost per employee leaving. Each one costs J.C. Penny about one third of that employee’s annual salary to replace.

If J.C. Penny only loses one third of the cost of an employee’s annual salary when they leave and need to be replaced, they are fortunate. I have seen huge costs associated with employee turnover including the cost of recruiting, training and relocation. There are also the less obvious costs of lost productivity, lost sales and a loss of control of assets.

J.C. Penny operates fairly large format stores supported by district and regional managers. In theory, if a person leaves there is a backup to cover the business while a replacement is found. The reality is that even in that situation productivity is compromised and customer service standards are at risk.

Consider a smaller format store with local or regional retail chain. Often the only backup is none or maybe the owner. I have seen many instances where a store cannot open because of inadequate staffing. When this happens too often, the customer base loses confidence and the profits decline to a point where a store may have to close. Look at the transportation industry where there continues to be an acute shortage of drivers. How many freight companies are losing revenue because they simply do not have enough drivers for their equipment?

In each of these examples, the cost of replacing an employee is far greater than 30% of the departing employee’s annual salary.

In one of the modules of my FREE course How To Increase Profits by 30% or More in 90 Days or Less, I cover key ways to minimize the turnover of valuable people. One is to make sure you do not retain and nurture mediocre performers. That is a major negative influence on talented staff. Another is to clearly define and communicate company performance goals in terms of how they relate to a person’s job and then answer the question “WIIFM” or What Is In It For Me?

Mike Ullman is right on point focusing on the company’s number 2 asset. Employees in retail and many other industries are key to developing a company’s number 1 asset which, of course, is it’s customers. If you know Mike, please compliment him on J.C. Penny’s vastly improved performance and please ask him to visit www.localretailmarketing.com which is a program that will definitely help him grow profits by customer.

A reminder: the FREE course including the module on human resource development is offered at www.stevepohlit.com I wrote the course and the human resource section based on my experience helping numerous clients across a number of key industries including retail, recruit and retain key people.

Steve Pohlit is a CPA has his MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue in profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource box in tact.

Discover Three Programs Convenience Stores Can Implement Right Now and Win The Market Wars With Specialty Product Stores Like Starbucks and New Format Stores.

The key to success is winning customer loyalty before your competition has a chance to change buying behavior. How do you do that? Every retailer reading this article already has the answers. This short report will review those answers and provide a roadmap for implementation.

Roadmap To Successfully Compete With Specialty Stores and New Competitors:

Standards

Nearly every retailer I have worked with has a basic set of store operating procedures. Rarely is there a consistent management system in place to confirm the standards are being followed. So step number one, make sure your operating standards reflect how you must operate to compete with your neighboring Starbucks, Home Depot Convenience Store or whoever is your biggest threat. (For more detail on having the right management system in place, register for the complimentary Roadmap Course)

Staff

First discard the traditional financial measurements of labor costs as a percentage of revenue. Those numbers are completely distorted by the real costs of not having trained and motivated staff. They are further distorted by the costs of high turnover and the impact of turnover on the costs training and costs of failing to follow the operating standards. The operating standards having the biggest impact on profits are those dealing with inventory control, sale transactions and customer service.

Interim Summary:Have the right operating standards first then hire, train and reward staff for following your plan on how to operate your businesss.

Have the right operating standards first then hire, train and reward staff for following your plan on how to operate your businesss. Your Hidden Asset

The balance sheet for every business includes items like cash, inventory, property, accounts payable and equity. Nowhere on any balance sheet that I have ever prepared or read is there a number for the most valuable asset of the business…your customer.
If you have followed my articles, you already know I am fanatical about developing a customer data base and implementing an effective communication strategy with customers and visitors to your business. I have developed this view after working with possibly the most notable and successful consultant in the world – Jay Abraham. I have further imbedded this concept into my business soul by working with a number of the most successful Internet marketers and direct response marketers who universally state their only asset is their list.

There is an entire website devoted to this issue which is www.localretailmarketing.com So I will avoid the temptation to lecture here. However, before moving off this point, the following are important:

  • Have as one of your primary missions to develop your customer and visitor list beginning now. This next sentence will seem self serving because in some respects it is, but let me assure you that you will never regret outsourcing this program. Of course you should hire me to get it done for you because I know how and I can do it much more economically than you can. And one more thing: if you say you are going to get it done, you won’t and you will be leaving tons of money on the table.
  • Do not attempt to implement a communication strategy using email with your own servers.
  • Integrate membership programs, email autoresponders, email broadcast and eCommerce at the same time.
  • Have a website and blog as a foundation for your customer and visitor list development program.
  • Have multiple secure backup points for your list – your most valuable asset.

Practical Examples:

My business is based on the theme “no reports…just results”. So let’s look at a couple topical items based on what seems to be a hot topic in the trade journals.

First Example: Can a C-Store successfully compete With Starbucks?

Answer: yes

Second Example: Can an older C-Store successfully compete with a new format store like those being opened by Rally’s or Home Depot?

Answer: yes

In each case the answer is in your people, your offer and your management of your customer list. Attempting to win on price won’t work. In the Starbucks’ example, their target audiance is not that price sensitive. So you have to offer a competing or even better product (not hard to do) with a higher perceived value. How do you know what to do? You test your ideas. In the case of Home Depot or some of the other major players coming out with new and exciting formats, you cannot compete on price because they have deeper pockets. You have to be prepared to take a bit of a hit when a new store opens and then win back your traffic plus add new customers with your service level, your product offer and your customer communication strategy. The big players will have a tough time competing with your local retail marketing strategy. They won’t be as nimble as you can be.

Now if you are a national chain leader reading this then you need to be implementing local retail marketing because the facts are most of the local merchants will not take action on this and when you do you will take major market share.

Let the games begin and remember the game is always won in the details.

Steve Pohlit, Business Consultant
www.stevepohlit.com

PS. This article and a growing list of all articles developed by Steve Pohlit can be found at www.stevereports.com

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue and profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource box in tact.

 

Develop A Customer Data Base, Communicate With Them And Beat 85% of Your Competition!

Maybe you don’t want to work that hard, or maybe you have been burned by consultants or maybe you already have a measure of success. No matter what position you are in, if you Do This One Thing you will beat 85% of your competition. If you are in the 15% category already, please email me with a sentence or two confirming how well this works for you. 

What we are about to discuss applies to every business large or small and in every industry. Next, this is easy to do, but it does require some work. Finally, when you do this consistently, you will make more money than you ever imagined. This action is at the core of what makes people happy.

OK, here it is: every business has customers. if you are a professional service business, your customers may be called clients or patients. At the transaction level they are customers. They buy something from you. Some people cross the path of your business and don’t buy. Others you call on and some buy and some don’t. With each action there is a contact and when you have contact you have an opportunity to make a record of that customer or prospect’ s contact information. That record can be as simple as a first name and email address. It may be comprehensive including complete contact information, biographical sketch, business history and so on.

The one thing you must do if you are in business is obtain the contact information of people doing business with you and people who visit with you but have not yet purchased. You must then use this information and let them know you are thankful and you are sincerely interested in continuing the business relationship. Yes, this applies to every business.

One of the questions I consistently receive is the concern of contacting customers using email. Think of it this way, for most people they are going to business to buy something they want. They will welcome properly positioned messages from you. When you communicate with them regularly with messages containing valuable information and offers, they will continue to support your business and tell all their friends about you.

In assisting clients with implementing a customer development plan I have confirmed the importance of a couple very important points: First you must have a clear privacy policy, next you must use a registration process that confirms their interest in receiving information from you (opt-in) and finally they must be able to easily unsubscribe from your mailing list at anytime. I do not recommend telemarketing to your customers. However, an email alerting them to be listening for an important voice mail broadcast can work and should be tested. Email should not be relied upon exclusively. It should be part of a comprehensive marketing strategy.

I offer all potential clients a complimentary call for up to one hour and most prospective clients walk away with five or more ideas they can use right now to grow their business profits. I highly recommend you take advantage of this offer before time constraints make it impossible to continue.

Be well and prosper,

Steve Pohlit

www.stevepohlit.com  

 

P.S. For more information visit www.localretailmarketing.com

Steve Pohlit is a CPA has his MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue in profits by at least 30% in the next 90 days, please visit www.StevePohlit.com  All articles published by Steve unless specifically restricted may be freely published with this resource box in tact.