Mine Your Own Business

Halloween--The New Thanksgiving?

According to the Dallas Morning News, Wal-Mart is promising (threatening?) to offer "Black Friday" pricing beginning this Friday, Nov. 2 to coincide with the opening of their in-store Christmas shops.  [Black Friday is the media's name for the day after Thanksgiving, so-called because it's traditionally considered the day that retailers first turn a profit for the year.]

Wal-Mart isn't the only retailer jumping the gun on the traditional Christmas shopping season.  I've noticed trees and other decorations on display in several stores for at least two weeks, maybe longer.  It's doubtful that even the mighty Wally World can change the decades-old tradition of taking the day off work to go shopping on Thanksgiving +1, but if their prices are low enough, they'll probably have an effect on total sales for the day.

The thing that concerns me is that the doom-and-gloom media will look at the numbers for November 23 and declare that they're off from last year signaling a decline in consumer spending for the season.  Will they be conscientious enough to dig into WM's results for this weekend before they make their dire predictions?  We'll see.

Why the suspicion of the media's reporting on matters economic?  Maybe because of the recent glut of reporting on the sorry state of the US economy.  Anyone paying attention to the news reports might consider putting his/her life savings under the mattress.    But, here are some economic results released today:

• According to the ADP Employment Report, non-farm private employment grew by 106,000 in October.
• The Labor Department announced that total employee compensation rose 0.8% for the third quarter.
• The U.S. Bureau of Economic Analysis showed the the U.S. economy expanded at a faster than expected pace in the third quarter.  GDP growth was 3.9% compared to the 3.1% rate expected by economists.  The second quarter growth rate was 3.8%.
• On a year-to-year basis, GDP growth was 2.6% in the third quarter, compared to 1.9% in the same period last year.

Bottom line?  As we posted earlier this week (How's YOUR Economy) the only economy that matters is YOUR economy.  We're coming into the most important time of the year for most retailers.  This is when we all need to be on our game.  Don't let gloomy economic predictions that may or may not come true affect the way you run your business.  Be aware of your competition, but don't lay awake nights worrying about them.  You'll get your share of the business by being the best YOU that you can, not by trying to be something you're not.

Keep doing what you do best and let your competitors lay awake at night worrying about you. 

Happy Halloween!!!

Protect Those Existing Customers

The experts tell us that it's much less expensive to keep a customer than it is to get a new one.  In fact, it can cost five times as much.  I was reminded of this when one of my sons was taken out to dinner Saturday night by a sales rep.  The occasion?  This rep once had 100% of the business in his particular product line at a major St. Louis hospital.  He had the business locked up and he knew it.

He was so sure of the business that he stopped doing the things that had gotten him the business in the first place.  He didn't visit as often.  He wasn't as prompt at returning phone calls.  His service level fell.  He was spending his time on other things. 

Things happen very quickly at hospitals, at least we hope they do.  Doctors need answers now, not later.  When they couldn't get a quick response, they started filling in with items from other suppliers.  It didn't happen all at once, just a little at a time.  But those other vendors were chipping away at the business until the rep realized that he had a problem.  Now, he's trying to get back in the doctors' good graces.

It's very natural for someone in sales to spend time on the things that are the most productive.  It's easy to assume that you "own" certain business and that your time is better spent looking for new customers.  But, nobody "owns" anyone's business, as this rep (and every other rep) has learned the hard way.  It's true whether you're in wholesale or retail sales.

Picture this scenario.  You're in the process of trying to sell a big-ticket widget.  A regular customer comes in, one who's already bought several big-ticket widgets, and she's obviously looking for some information or maybe some low-cost accessory item.  You know she only buys widgets and widget accessories from you, so you let her wait while you finish the other sale.

Whey you finally get to her, you find out that you were right.  She has a question about her most recent widget purchase which you answer.  But something's not exactly right.  She seemed disgruntled.  She leaves and you wonder what was wrong with her.  Oh well, maybe she's just having a bad day.

Of course you know where this is going.  Your existing customer expects the same great service from you every time she comes into your store.  You've already set the standard.  Like the medical equipment salesman, you've created an expectation in her mind that she expects you to live up to.

But the fact is that there are always going to be times in any retail store where a customer has to wait.  If that's not the case in your store, then you're probably spending too much on payroll.   So who has to wait?  The existing customer who only has a question, or the prospect who may be about to spend a lot of money?  It makes no difference, but your job is to make sure that the one who does have to wait doesn't feel like she's being shortchanged. 

This is the time when you turn on the charm and make both customers feel important.  It's a balancing act but we all have to do it sometimes and the better we are, the more likely we are to end up with two happy customers.

You either excuse yourself from the prospect, letting her know that you'll be right back after she's had a moment to look at the widget in question, possibly mentioning that the other lady is a very good customer and you pride yourself on your service after the sale; the same service that she's going to receive once she becomes a widget owner.

Or, you acknowledge the existing customer, asking her if she minds waiting.  You assure her that you'll be with her very soon.  You might offer her a cup of coffee, or point out something new that she can look at while she waits.  An unexpected bonus in this situation is that the prospect may speed up her decision, knowing that someone is waiting.

It just may turn out that one or the other, or maybe both ladies will insist that you help the other one first.  They might even strike up a conversation with the widget owner helping you sell the widget owner-to-be.

The key is to make both ladies feel important.  Both ladies would like to feel like they're your only customer, but since that's impossible, the next best thing is to make them both feel like they're your only two customers. 

Catch 22

We begin today by acknowledging that, for obvious reasons, we all prefer to shop at local, independent retailers.  But if you bear with me for a bit, I think you'll see why this is an important piece of information that could save you a lot of money.    It's from the Insureblog.  [Disclaimer:  I found Insureblog when they posted a trackback to a post on MYOB.  Insureblog found MYOB because our post, Bad Ideas is an "Editor's Choice" on the Carnival of the Capitalists this week.  While we appreciate the mention, we don't link to other blogs just because they link to us. We link to other blogs when we think they have something that can help you. This post is a good example.]

Mike Feehan is the author and he points out that you can save money buying generic prescriptions at Wal-Mart.  Even if you have prescription coverage, your co-pay is going to be more than the $4.00 that Wally World charges for generics.  Obviously, if you have a $10.00 co-pay the $4.00 price is going to save you $6.00.  On a prescription that you refill monthly, that's $72.00 per year. 

OK, that's great.  "But I don't shop at the big boxes", you say.  Fair enough.  Neither do I.  But, here in St. Louis, one local grocery chain isn't just matching Wally's $4.00 generic price, they're actually filling generic prescriptions free, so I suspect that similar things are happening in other markets too.  If so, you can support your fellow independent retailer and still save some money.  Just keep in mind that nobody's making any money at $4.00, so if you have a local store offering this price, make sure you do some of your other shopping there, too.   

As mentioned above, our post Bad Ideas is featured this week on the Carnival of the Capitalists.  The COTC is hosted this week by The Startup Blog.  The Startup Blog is brand new, so there's not a lot of material there yet, but according to their initial post, "This blog will feature news, trends, strategies, and advice for startups and entrepreneurs."   You might want to check it out. 

There's also an interesting post in the Carnival called The Introvert's Guide to Selling from the Business Pundit.

Faster Horses vs. Horseless Carriages

"If I had asked my customers what they wanted, they would have said a faster horse."

Henry Ford

The trend in business today is to ask the customer what they want, and we definitely agree with the trend.  The key to modern marketing is knowing and understanding your customers and delivering not just what they want now, but what they're going to want in the future.  It's those future wants that make things tricky.

Of course Ford's customers wanted a faster horse because the horse was all they knew.  It took innovation to come up with something better than a faster horse.  Thomas Edison's customers wanted brighter, longer-lasting candles.  Union Pacific's customers wanted faster trains. Fortunately for all of us, Ford and Edison had the gift of looking beyond what "was" and imagining what "could be".  No one in the railroad industry had that same gift and saw their passenger business taken away by the upstart airlines.

Closer to home, Nick Tacony had that vision. While others were trying to make traditional household sewing machines that created garments that resembled ready-made, Nick saw a market for a smaller, less-expensive home version of the industrial serging machine.  His foresight created an entire industry, the home serger,  and helped revive home sewing. Today sewing hobbyists are creating fashions and crafts that are virtually indistinguishable from store-bought.  (Click here to see some early serger models.)

It all comes down to understanding our role.  What do we do and why do we do it?  Henry Ford understood that he was in the transportation business, not the horse business.  Edison was in the illumination business, not the candle business.  Union Pacific's business was to move passengers and freight from point A to point B as quickly and efficiently as possible, not to operate trains.  Nick Tacony wasn't in the sewing machine business, he was in the service business.  His service?  Providing retailers, particularly sewing retailers, with high-quality products that they could sell at a profit. 

In a world that's moving as fast as this one is, we have to focus on the big picture.  What''s your business?  Go ahead.  Think outside the box.  What do you do for a living?  If your answer is that you sell some particular product, or group of products, then you're too narrowly focused. 

You don't sell vacuum cleaners, you sell clean homes.  You don't sell sewing machines, you sell creativity.  You don't sell lighting and fans, you sell a more attractive, comfortable home.  You don't sell janitorial supplies, you sell cleaner, healthier, safer businesses.  As the old saying goes, you don't sell 1/4" inch drills, you sell 1/4" inch holes.

Businesses that stayed focused on the big picture will stay in business.  It's as simple as that.  There's still a market for horses, and candles, and passenger trains, but the companies that have prospered in those industries have expanded into other areas as well.   

In his book, The E Myth Revisited, Michael Gerber writes that the thing that the thing that makes a great business great is perspective.

"The Entrepreneurial Perspective starts with a picture of a well-defined future, and then comes back to the present with the intention of changing it (the present) to match the business....To the Entrepreneur, the present-day world is modeled after his vision."

And that brings us back to where we started.  Henry Ford had a dream for his business that he could never have achieved by selling horses.  He became a household (or garagehold) name by making reality match his dream.  He made something better than people wanted. He exceeded their expectations.   Edison did the same.  So did Nick Tacony. 

What's your dream?  Do you have a plan to reach it?  Is your plan big enough to match the dream?  That's a question that only you can answer.

 

 

They CAN Afford It

The always insightful Seth Godin suggests that when the customer says "I can't afford it", they really mean is "It's not worth it."  He writes, "As in, it's not worth reprioritizing my life, not worth the risk, not worth what I'll have to give up to get this, not worth being in debt for."

A lot of us try to overcome the "can't afford it" objection by lowering the price when, in fact, the fault isn't with the price at all.  The fault is our inability to sell the value of our product to the customer.  A sales trainer once told me that there are two reasons why a person does something.  One is the reason that "sounds good".  The other is the real reason.  Sometimes the two reasons are the same.  Most of the time they're not.

We can drive ourselves crazy trying to close a sale by overcoming the wrong objection.  Our job as salespeople is to dig deeply enough to find the real reason why the customer won't buy and then dealing with that objection, not just at the close, but throughout the presentation.  In a retail situation, the price of an item should be right there on the sign or tag, visible to the customer from the outset of the conversation.  Confirming the fact that the item is something the customer can afford should be done as early as possible, eliminating the "can't afford" objection long before the close.

Yet Another Survey

It's another one of those surveys where you just shake your head and say, "I knew that already". In an article titled, "Entrepreneurs Happier, Busier Than Average Americans, Inc.com is reporting on the results of a full year of Discover Small Business Watch surveys.  The surveys cover 1,000 business owners with five or fewer employees.

Some of the 'surprising' conclusions:

• 61% said they would not give up the independence of owning their own business to go to work for someone else for more money.
• 46% started their own business to have more freedom.
• Discover's Sastry Rachakonda is quoted as saying, "As we've gotten more familiar with small-business owners, we realize they care about independence more than anything else."
• 28% of business owners work at least six days a week.
• Rachakonda again, "Clearly, most small-business owners are working harder than the rest of us.

I really hope that Discover didn't spend a ton of money to conduct their surveys.  I doubt that anyone reading this post couldn't give them the same information for free.

Bonus survey item:  Health care is a major strain on small-business owners.  MYOB will stay on top of this and keep you posted on any other exciting developments.  Stay tuned....

Ask Before It's Too Late

Today's post has nothing to do with business, but it's such a good idea I had to pass it along.  Thanks to Dave Delaney for mentioning this in a comment on Mitch Joel's Six Pixels of Separation podcast.  About.com, under the subject of genealogy offers a list of fifty things to ask your parents or other family members.  The object is to get information for a family history search.  But, even if you have zero interest in genealogy, the answers to these questions will give you a great insight into your parents, probably revealing information about them that you don't know because you've never asked.

Obviously if you know some of the answers, you won't have to ask all fifty questions.  On the other hand, the fifty questions listed may give you ideas for some other things you'd like to know.  The best way to do this is to set up an audio recorder to save the answers for posterity.  Attach a microphone to your PC or laptop to do the recording and you can save it as an .mp3 file.  Then you can burn it to a CD or email the file to out-of-town family members. [Audio recording software like Sound Recorder (included with Microsoft Windows) and Audacity are easy to use and they're free.  Many laptops have built-in microphones that make recording easy.  If you're uncomfortable with the process, a cassette recorder would also work.  But there's probably a teenager in your life who would love to help you do the recording.]

If your parents are gone, or even if they aren't, you should pass this idea along to your kids.  They may not be interested today, but someday they'll thank you for having the foresight to leave them a priceless family record.

"Bad Ideas"

You know you've had them.  I've had a ton of them.   We've all had ideas that just didn't work.   I put the title in quotation marks because there's a school of thought that says there's no such thing.  But, whether you call them "bad" ideas, or misdirected effort, or failure to execute, or whatever, stuff happens. 

You may recall the episode of the comedy series "WKRP in Cincinnati", where Mr. Carlson dropped the live turkeys out of the helicopter at the shopping mall thinking that they could fly. I'd call that a bad idea. On the other hand, there were some folks at 3M who thought little pieces of paper that would stick to things and could be easily removed without leaving a mark was a bad idea.

The fact is that the only way to avoid bad ideas is to never have any ideas at all.  Continuous improvement can't happen without a constant supply of ideas; some good-some bad.  The trick is to recognize the bad ones before you implement them.  If that doesn't work, and sometimes it doesn't, then the next best thing is to pull the plug as quickly as possible on the less-than-successful ones.

That sounds easy.  Try it.  If it doesn't work, then stop and move on to something else.  You probably remember "New Coke".  The idea wasn't bad.  The lifeblood of the soft drink industry is new products.  Things went wrong when the company decided to replace its flagship cola with a new taste.  Fans of "old" Coke were outraged!  Almost immediately Coca Cola went into disaster recovery mode.  They brought back "old" Coke, now called "Coke Classic" and did a public "mea culpa".  In the process they got millions of dollars worth of free publicity. 

The rest of us aren't usually so lucky.  For starters, every new idea "belongs" to someone and ideas are like children.  No one likes to hear that theirs is ugly.  But some ideas are ugly, or at least the outcome is, and they have to go.  But human nature is to hang on.  Give it time.  Besides, we've spent money on this.  If we stop now, that money's wasted.  Of course, if it's your idea, the tendency to wait is even stronger.

Here's the thing.  Every idea's not going to succeed.  That doesn't mean it's a bad idea and no one should take it personally.  Maybe the time wasn't right.  Maybe we had bad information.  Maybe we left something out.  Maybe someone beat us to the punch.  It doesn't matter.  As managers we have to put our emotions aside and make sound business decisions.

As far as the money spent is concerned, it's never wasted.  If nothing else, we've paid for a short course in what does and doesn't work.  Every new initiative, every new product, every new ad campaign should be analyzed.  Did it work?  Did it fail?  Why?  That information is money in the bank when the next thing comes along.  It's called a quality improvement cycle.  Plan, do, check, act, or PDCA.  Once you've done the planning and the doing, it's time to check.  Did it work, or not?  Once you've answered this critical question, it's time to act.  Act means either continuing as is, continue after making adjustments, or cut your losses. 

If everything points to the third choice, then take a deep breath, get your ego out of the way, and as Nike says "Just do it!"  Then file the learning away so you can us it to improve the execution of your next idea.  As a former boss of mine used to tell me, "I don't care how many bad ideas you have as long as we make more money on the good ones than we lose on the bad ones."  Good advice.

How's YOUR Economy

I've been following a thread on another forum on the topic of "the economy".  We've all seen the news stories.  Chicken Little was right!  The sky is falling!  The economy is in the tank!  No wonder my business is down.  While some dealers complain that their business is down because of the economy, an amazing number of them report that their business is up, in spite of the economy.

Here's a basic fact:  The (capital E) Economy is made up of thousands of individual (small e) economies.  In general, if the economy is on an even keel, some people's business is up, some people's business is down, and some people's business is the same.  Even in the Great Depression of the '30s, there were people making money. 

We know there are certain sectors that are having a rough time right now, particularly new home sales.  We also know that new home sales drive other purchases.  A lot of furniture and appliance sales are the direct result of the sale of a new home.  On the other hand, if I put off buying a new home, how much more likely am I to buy a new flat panel TV? 

Dealers often ask their suppliers the age-old question, "How's your business?"  The unpolitically correct answer might be "What difference does it make?  How does someone's business on the other side of the country affect you?"  The more politically correct answer, and the most truthful answer would be "We have some dealers whose sales are up and we have some whose sales are down.  What can I do to help you stay in the first group?"

Going out on a limb here, I'm going to suggest that if you're reading this blog, looking for ideas to help your business, then you're in the elite group.  You're working ON your business, not in your business.  (catchy, huh?)  You spend your days looking for ways to improve your business, not looking for excuses.  Is business harder when the news media are saturating your customers with doom and gloom?  Of course it is.  But nobody ever said it was going to be easy to be the best. 

There are all kinds of resources to help you increase your sales and profits.  The Internet is loaded with information.  We list some good sources in our "Useful Links" list on the left of this page. 

There are a number of good books that are full of ideas.  Bob and Linda Negin's book, Marketing Your Retail Store in the Internet Age is excellent.  John Jantsch's Duct Tape Marketing is another one.  The E Myth Revisited, by Michael E. Gerber is another good choice.  You wouldn't want to go to a doctor or a dentist who didn't keep up with the latest developments in their field.  Our profession is no different.  We need to be aware of what's new and be reminded of the tried and true.

And don't forget your suppliers.  Your sales representative is in contact with the most successful dealers (and the other kind, too).  He (or she) knows what's working and what isn't.  If (s)he's not volunteering the information, ask!  You're partners in the process of getting the merchandise from the factory to the consumer.  When you're successful, your suppliers are successful.

 

Forget the Economy and focus on your own economy and you're always going to be successful.

Oh My Gosh, I Think I'm a Geek!

Granted I spend a lot of time at the computer but until this morning I would never thought of myself in terms of geekdom.  But, as I walked into my office a little while ago, I realized that I have no less than five digital devices running on my desk at the same time.

I have my PC, which is always on.  I have a laptop running to keep track of the 196 blogs I subscribe to.  I have another laptop running, sending faxes for one of our sales divisions. My PDA is connected to its charger and my iPod is hooked up to the laptop, collecting podcasts for later listening.  Yikes!  Maybe I am a geek!

Last week I went on retreat to a Trappist monastery.  Surprisingly, though they don't watch television or listen to the radio, the monks do have access to the Internet for a few hours a day.  Guests, however, have to go cold turkey.  There's no WiFi at the abbey; not even a dial-up connection. I could only get my cell phone to work from a few places on the property, all of them requiring me to climb a hill.  The only place I could get more than one bar was on top of a 900 foot high mini-mountain.  It was a very peaceful week.  Of course, I had about 800 emails waiting for me when I got back to reality.

I mention my possible geekiness and my visit to Gethsemani to make a point.  When monks start surfing the web, I'd say it's pretty much taken over.  If the brothers are on line, you can bet your customers are too.  The question is, "What are we going to do about it?"  We've been posting recently on the various types of social media, and that series isn't finished yet.  Just when you think you've gotten a handle on what's available they (whoever "they" are) either improve something or introduce something entirely new.  The Internet and its users are definitely a moving target.

One thing is sure, computers, and especially the Internet, have changed the way we all do business and we've barely scratched the surface. The big winners are going to be the retailers (and manufacturers) who can get ahead of the  technology curve.  At MYOB, as your intrepid geek blogger I'll do my best to keep you up to date.

UPDATE.......10/18/2007 3:26 cdt

Thanks to Six Pixels of Separation for the link to this video.  It's only 5:28 long, but it's very interesting and ties into this post.  Enjoy.