Mine Your Own Business

24 Tips

On his WhizBang Training web site, retailing guru Bob Negen offers 24 tips to "boost your sales and save your sanity" during this busy time of the year.  There's still plenty of time to incorporate some of them into your plans. 

In general, Bob is telling us to work hard, stay healthy, and have fun.  The advise is good.  Check it out.

More on Point of Sale Systems

Here at MYOB, we're not in the business of selling computers.  But, if you're thinking about taking the plunge into a Point of Sale System, Dell is having a sale.  You can save $300.00 on one of three different systems.

Their web site also features a really cool tutorial on the Intuit QuickBooks POS software.  Click on the "See it in action--View Demo" button for a walk-through of the software's features.

Microsoft has a similar tutorial for their Point of Sale system on their web site.

Don't Lose the Customer!

From Marketing Profs.com's blog, here's an interesting article by Jim Kukral.  Last Friday he was attracted to a local store by an ad offering "HALF-OFF WREATHS!".  It was only after he and his wife were in the store that they found out there was "fine print" in the ad.  The half-off offer only applied to a second wreath when the first one was purchased at full price. 

Jim writes, "

There's a line there that I don't think many retailers consider. That line is crossed when two things happen to consumers.

1. You try to fool us
2. You're wasting our time

Both are unforgivable."

He and his wife left without buying anything and he promises to "never, ever" shop there again.

I disagree with Jim's  conclusion that  "many retailers" don't consider his two points.  There may be a very few who try to fool customers, but they're few and far between.  Since I didn't see the ad in question, it's possible that the confusion was at least partly his fault.

But, and this is important, the store's response was terrible.  I'm no expert on Christmas wreaths and have no idea what they sell for, but I'd bet that the margin is somewhere around 50%, probably higher.  It would seem to me that a break-even or low-margin sale would have been a small price to pay to avoid losing a customer forever.

"Black Friday" is a stressful day for shoppers and retailers.  Nerves can get frayed and mistakes do happen.  But, with the competition we all face for the consumers' dollars, it's critical that we not send even one customer to our competition when we can avoid it.

Safety First

Personally, I don't shop on the day after Thanksgiving for the same reason I don't go out on New Year's Eve or St. Patrick's Day; too many amateurs.  So, I don't know what the crowds are like today but I hope this first big day of the shopping season is finding you too busy to spend a lot of time on the Internet, so this will be short and to the point.

The purpose of this blog is to pass along what we think (or what you tell us) is useful information.  Here are two things I learned yesterday:

1. Never leave candles burning unattended.
2. If you don't have a fire extinguisher in your home and at your business, get one!

Have a great weekend!

Here's a bonus tip:  WD-40 does a great job removing burnt candle wax.

Happy Thanksgiving

Parades, football, families, and food; lots and lots of food.  It must be Thanksgiving. 

As we all learned in grade school, the Pilgrims celebrated the first Thanksgiving Day in 1621.  It became a national holiday in the United States, even before there was a United States.  General Washington declared a day of Thanksgiving in  1777, during the Revolutionary War.  The tradition continued after we achieved our independence.

I hope you have lots to be thankful for this year.  At Tacony Corporation, we're thankful for you, our valued business partners and friends.  For sixty years you've been a part of our success.  I hope 2006 is turning out to be your best year ever and that the days and weeks that remain will be the best of all!

In just hours, the busiest shopping period of the year will begin.  All the predictions point to a very successful Christmas season.  As we collectively take a deep breath before we begin the sprint to the end of the year, I hope you find time to give thanks for the things that are really important:  family, friends, good health, freedom, prosperity, and all the other good stuff that we sometimes take for granted. 

Many of our fellow Americans will be spending this holiday in far-off lands risking their lives so we can enjoy our way of life.   We should be especially grateful this year for their unselfish service.

Thank you very much for your continued support and Happy Thanksgiving.

Service Before the Sale

I've heard more than one dealer (in various industries) make the statement that if someone buys something from a big box store, they'd better not come to this dealer for service.  It's not an unreasonable thing to say.  After all, the big box made the sale (and the profit), they should handle the problems.  Why should I help them by helping their customer?

Seth Godin answers that question in his post, A Friend in Need.

The past is past.  There's nothing we can do about it except start working on the next sale.  Customers expect service after the sale.  Service before the sale will make them say "WOW!"  Isn't that what we're really looking for?

Pay Per Click Advertising

WSJ.com reports that consumers are turning to the Internet to find local merchants and service providers.  Even though the first "W" in "www" stands for "worldwide", it's possible to have a cost-effective advertising program using the Web.  "Pay per Click" or PPC advertising lets an advertisers message appear on search engine results pages based on the search terms used.  These are the listings that you see either above or along side the regular results.  Advertisers pay only when the searcher clicks on the ad.  If you use the right key words in your ad campaign, you'll get very qualified prospects at a very competitive price.  According to a report from US Bancorp, the cost per lead from search engines averages just 29 cents compared to $1.18 for the yellow pages.

Google, Yahoo, and MSN, all offer PPC advertising that can be surprisingly inexpensive.  For most retailers, the key is to use local targeting to avoid paying for impressions that aren't likely to become customers.  For example, Google AdWords offers local targeting by city, by state, by metropolitan area, or even by distance from your location, for example within twenty-five miles of your store. 

Internet users are identified by their IP address, which tells the search engine where they're located.  Say you're in St. Louis and have specified your geographic location as users withing 50 miles of your store.  Anyone whose IP address falls within the two state area within 50 miles of your store and who types in your chosen key word(s) will see your ad.  If they click on your ad, they'll be taken to your web site and you'll pay for the "click".  Someone in Texas won't see your ad and you won't pay for them.

The search engines use a remarkably sophisticated system to direct customers to you and offer assistance in selecting your key words.  You place a bid for your chosen key word(s) which can be anywhere from $0.01 to $100.00.  The higher your bid, the higher your ad will appear on the search engine listing. 

Google has a tool that lets you set your daily advertising budget and helps you select your keywords to get the best results.  Yahoo lets you see what the current bids are for each keyword.  You can choose your position in the results by bidding higher than the advertiser currently holding that position.  For example, Yahoo has a "View Bids Tool".  Put in your keyword and it shows what the current bids are.  Oreck currently has the number one spot for the term "vacuum cleaner" and they're paying $1.51 per click. Black and Decker has the number two spot, paying $1.50.

You may think you can't afford $1.52 per click to get the number 1 spot away from Dave, but you can break into the top 10 for just 60 cents.  And remember, with localized search, your ad will only be seen by searchers within your selected area.  If you can get just one in ten people who see your ad to come into your store, is that highly qualified prospect worth $6.00?  You make the call.  That $1.52 price for the number one spot may not be so bad after all.

You can also break into the top ten Yahoo results for "ceiling fan" for 60 cents and for "sewing machine" for just 30 cents.   Microsoft's Live Search offers similar features.  It's worth mentioning that Google has about 46% of the search engine market.  Yahoo has 16%.  MSN comes in at 12% and all the rest of the search engines share the balance.  Ads purchased on Google also appear on AOL, EarthLink, and Ask Jeeves.  Ads on MSN also appear on Yahoo, AltaVista, and CNN.  A combined buy of Google and MSN will reach over 90% of the Internet audience, according to SEMPO, the Search Engine Marketing Professional Organization.

With the decline in the use of yellow pages and the ever-increasing use of the Internet, it makes sense to take a look at PPC advertising as a cost-effective way to drive traffic into your store.

Beware the Grinch

From the Billings (MT) Gazette, of all places, comes an interesting article of the perils of the upcoming busy season for retailers.  It's a good reminder that there are bad guys (and gals) out there who want to literally steal your hard-earned profits.

The next few days before Thanksgiving might be a good time to sit down with your staff and review your security policies.  Remember that shrinkage comes right out of the bottom line.  If  you work on a 10% net profit, for every dollar that's stolen from you, you have to do an additional $10.00 in sales to make it up.  Obviously, the loss of a $200.00 item means you need an additional $2,000.00 in sales. 

It goes without saying that you should keep an eye on your merchandise.  November and December are also no time to get lax about credit card sales and about taking checks.  If you don't have a formal security plan, now's the time to make one and be sure that everyone who works in your store knows what it is.  That includes repair techs and delivery people as well as those who work in the store.

About.com provides links to some articles on the topic of retail security that you might want to read.

Product Sourcing

This is number fourteen in our series based on Challenges of the Future: The Rebirth of Small Independent Retail in America, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum Community Charitable Trust, the Illinois Retail Merchants Association, and the National Retail Federation Foundation.  Today we take a look at Stanyon's second Challenge (opportunity).

Challenge #2

Difficulties in product sourcing and merchandise acquisition.

If you're a Tacony Corporation customer, this shouldn't be a problem for you.  Stanyon cites (1) shrinking vendor structure (2) vendor minimum orders for single shipments and minimum annual purchases and (3) quantity pricing as issues which make it difficult for the independent to compete.

He says that "Manufacturer and distributor consolidation and the channel crossing of products are causing many problems for small independent retail."  Standardized products and the pressure for manufacturers to sell through multiple channels are two problems that Stanyon mentions.

He goes on to say that independent retailers can take advantage of sourcing new manufacturers and suppliers who are looking to establish themselves with innovative new products.  We couldn't agree more. 

This may be shameless self-promotion, but Tacony Corporation began as an independent retailer sixty years ago.  Through the years we've grown our business by providing protected brands that the independent retailer can sell without fear of their customers seeing the same thing at the big box store down the street.   To be fair, we're not the only manufacturer to do this, but many others have chosen a different approach to the market.

As a family-owned company, we don't have the pressure from stockholders to constantly increase the value of their holdings.  We put pressure on ourselves to continually come up with new, innovative products and better, more efficient ways to serve our customers.  Our goal is to be the best, not the biggest.

Stanyon says that "another important aspect of the product sourcing challenge is often the need to establish an anchor brand to provide added credibility for other desired suppliers."  Unfortunately, many of those "anchor brands" are sold through multiple channels and offer profit margins that aren't acceptable.  They become victims of their own success.  Their credibility comes from national advertising and wide distribution, which drives the price down making the product unprofitable for the smaller store.

One of the means for a dealer to increase profit margins is membership in a buying group.  Buying groups provide purchasing power and other benefits.  Their downside is that the dealer loses a certain amount of control by being a member.  A diversified supplier who specializes in the independent retailer market, not selling protected brands to mass merchants, provides many of the benefits of belonging to a buying group without the limitations.

In summary, it's important that the successful retailer be a good shopper.  Work with your vendors, whoever they are, to increase your business.  Keep your inventory fresh by bringing in new products whenever possible.  Work with your manufacturers' sales force to come up with new promotions, new in-store displays, and anything else that will increase your business.  Ask them what's working for other dealers in other towns.

Network with other retailers at trade shows and conventions and don't overlook those in other, non-competing industries.  The lawn and garden store, or the bicycle shop, or the bakery has many of the same problems that you do and you might just be able to brainstorm and give/get some good ideas. 

'Tis the Season

No, not the Christmas season.  Not the hockey season.  Not the college basketball season.  It's all of those, but it's also cold and flu season.  One of the ironies of the retail business is that the busiest time of the year coincides with beginning of the period when there's the most illness.  Everything moves indoors, at least in the cold-weather states, bringing germs and viruses inside too.  Business picks up and you're surrounded by coughing, sneezing customers.  Staff calls in sick, putting more pressure on everyone else, who get run down and soon they (and you) are sick too. It's a vicious circle.

Bob Negen, on his WhizBang! Training web site offers some good sense tips on cold and flu prevention. 

• Keep a bottles of "waterless hand cleaner" at every work station.  This is the same stuff that hospital staff use between patients.  Make sure everyone uses it regularly.
• Clean the cash register, computer terminals, door handles, and anything that people regularly touch with a disinfecting cleaner.  It's available as a spray, or as pre-moistened towelettes.
• Make sure the restrooms are stocked with plenty of paper towels and anti-bacterial soap. 
• Consider paying for a flu shot for you and your staff and give them paid time to go and get it.  It's cheap insurance.
• Make sure you set the example for everyone else. 

This one is mine.  Don't let yourself or your team get run down.  It's tempting to put in lots of hours at this busy time of the year, but if you don't take care of your nutrition, exercise, and sleep needs, you'll get sick and the net result will be less hours worked, not more.  The same holds for your people.  For most of us, it's a long winter and taking care of your health will keep it from seeming even longer. 

Remember, it's only three and a half months until pitchers and catchers report for spring training.