Monday, December 04, 2006

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Tuesday, November 28, 2006

The Word of The Day is Respect for Two Business Building Tools: Bundling and the Gift Card

Just as Rodney Dangerfield used to say he "didn't get any respect", there are two tools that we all have that we know about, but somehow they just don't get the respect they deserve. First is the Gift Card or Gift Certificate. The numbers in the use of gift cards are just short of amazing. In the last 5 years, the use of gift cards has doubled. Doubled is a very big increase and especially for something that has been around forever.

The first question I would like to address is why. The answer is so obvious that it's scary. It is simply the delivery method of a gift card over a certificate. Many businesses prepared beautifully printed certificates but they don't come close to the effectiveness of the gift card. The reason is it looks and feels just like a credit card but one that you don't get a bill for. It's like FREE merchandise or service and from a marketer's point of view, FREE is still king.

Business after business, regardless of industry, is seeing the gift card as the number one selling item. There has been a shift in our gift giving psyche. We used to say "what would she or he like"? Now it's "what's their favorite store"? That's a major shift in thinking. This change has created a new industry of selling gift certificates. I was at a supermarket the other day and say a display of gift certificates from every major store in the area. Of course there are websites that have been doing that for a while.

So why would I say the gift card gets "no respect"? Because there are some stores that haven't spent the initial money to have a gift card. No excuses here. Worse than that, many stores don't even have a sign or a display telling their customers that they even sell gift cards. Think about it, the best selling item, with the biggest sale increases, but they don't even display or sign it. That's just dumb. Give it the respect it deserves.

The Second Tool: BUNDLING

I got a call the other day from a retailer who was making money but was concerned that she had been accumulating excess merchandise. She defined excess merchandise as merchandise that she had sold well but was left with a couple of pieces. For example, she had sold 22 pieces of one item but she just couldn't move the last two pieces. She could wait for her big annual sale but she explained that method was becoming less and less effective.

My recommendations to her were as follows:
  1. Create a permanent markdown section. Name it, keep it fresh with new markdowns, and above all, don't use percentages. Price everything.
  2. Sign the merchandise. Make the signs fun, like "OOPS WE GOOFED" or "BUY ME... I'M TIRED OF BEING HERE". Or just a sign that will explain either the great value or why they should buy it.
  3. Bundle- Bundle- Bundle-- Put 2 or 3 items together to create a package. Just get similar price points together. No one minds discounting if someone is buying multiple items.

I was traveling through the Philadelphia Airport recently when I spilled some coffee on my shirt and didn't have anything to change into. Luckily I had time to walk some of the shops there hoping there might be one that sells shirts. Sure enough, there was a Brooks Brothers. I had never shopped in Brooks Brothers--maybe I just thought they were too expensive or conservative but I needed a shirt. I was shocked to see all of their price bundles. Three shirts for $139 or $149. It wasn't cheap but what the "3 for" did was make the store less intimidating. Then, once I put one of their shirts on my body and experienced the comfort and fit, I wanted a second one. Well, once I got a second one, it would have been silly not to buy the next one.

Bundling is such a powerful tool! So why don't we all do it? Why doesn't bundling get the respect it deserves? Bundling works in almost every industry. (Actually I am trying to think of an industry where it wouldn't work, but I can't!) Plan and sign your "2 or 3 fors".

Have a great week. It's tough out there but always remember that there is someone doing business. Make that business YOU!

Tuesday, November 21, 2006

Learning from the Winners

Once a year I have the privilege of judging, awarding, and serving as the Master of Ceremonies for the Retailers Association of Massachusetts Awards of Excellence program, referred to as the RAMAEs. It is a program that I started 10 years ago and we have now given 62 awards to deserving retailers across the state of Massachusetts. Last year we even added an award for the best downtown shopping area. Without a question, it is one of the most rewarding things I do. The work is strictly voluntary but I am committed to continuing my efforts for as long as I am able.

There are a couple of reasons for my commitment. First is for the simple reason to recognize someone for doing something they love to do well. That is perhaps the one thing most of the winners have in common. The love and passion for doing what they do. Retailers rarely receive awards and it's nice to see them win. The other reason I love being involved so much is that there is an endless supply of wonderful business ideas and philosophies that I am able to share with my readers and listeners. Here are some of the ideas from one of this year's winners.

Long's Jewelers is a 130 year old jewelry store-- actually there are 7 of them. They are as young and aggressive as a fresh new MBA. Actually, Long's is led by a young man who is more mature with business savvy far beyond his years. If there were ever a CEO that "gets it", Craig Rottenberg gets it. He has moved his stores from being in the premier malls around Boston to stand alone locations near the malls. He has made all of his stores the destination. By doing that he has actually increased visibility to the businesses, expanded their selling floors, reduced their expenses, and allowed the type of event marketing that might be lost in a mall.

This is a higher end jewelry store that has chosen not to get involved in the typical jewelry price war. Mr. Rottenberg has filled his promotional calendar with different events every month. Many times these events are focused on a vendor or designer but they also include charity and sponsored events as well. They supply the trophy for the Boston Marathon and of course they are the Official Jeweler for the road race. Who ever thought a jewelry store would sponsor a road race? Great idea considering they also come out with a complete Boston Marathon Jewelry collection. Brilliant!

They constantly promote but always with interesting themes or give-a-ways. They will joint promote with other businesses, such as a free Mini Cooper. It is always something first class and always something you want to see, do, or learn about. But they do have a very interesting price proposition on certain lines they sell. If you buy the particular item they will give you a gift card for 20% of the value of the item to be used within 6 months of the purchase. If you purchase a $500 item, you get a $100 gift card. No one throws away a $100 gift card, so you go back and buy something else. Brilliant!

Their web site is not only elegant but comprehensive and functional. Form and function come together beautifully here. Regarding the boom in internet sales of jewelry, Mr. Rottenberg's said, "Yes, the sales of internet only jewelers are growing but the numbers to total jewelry sales are still extremely small. We embrace ecommerce but there is more than enough traditional business to handle for years to come". This is as if to say we can go either way and adjust very nicely. Brilliant!

They have also figured out the issues of name brands and building their own brand. They make it simple by carrying the leading brands and therefore they are only enhancing their own brand. Customers go to their store not only because they carry certain prestige labels but because the customer can depend on Long's to have the best. That's Brilliant!

They have adopted the use of billboards and anyone who has been reading this column for a while knows how powerful billboards can be. But the thing I love the most about this award winning business is their business philosophy that can best be described in some quotes I got from Craig.

  • "We make men HEROs."

  • "We help people out of the dog house."

  • "We help people celebrate."

  • "We make the self purchasing jewelry customers feel GREAT about themselves."

  • "It's not the watch... it's the statement on the arm that matters."

Again, Brilliant!

I love those and hope you did to. Next week I will share some tips from the other winners. Now go help a customer celebrate Thanksgiving and be thankful for all that we have. Happy Holiday!

Tuesday, November 14, 2006

Marketing to Women

One of the interesting things about my job is working with creative and innovative meeting planners who know their speakers and get the most out of them. Stacey Heiss Educational Director from Western Exhibitors, who runs the San Francisco, Seattle, and Portland Gift Shows is one of these people. Over half of the programs that I do on a regular basis were born from ideas that Stacey had. However, last week I spoke at the Aqua Show, a trade show for the pool and spa industry, where I encountered Kathy Newkirk, another one of these meeting planners.

This meeting planner asked me to do a program on Marketing to Women. At first I didn't feel qualified--after all this is not one of my core topics. But little did I know it should become one! I ended up doing the program and uncovered so many things I just didn't realize about myself and my core marketing beliefs.

I realized that my basic marketing positions are deeply rooted in the values that women hold dearly. The reason for that is simple: for 25 years running my women's apparel store, I specialized in marketing only to women. When I started to do the research for this topic, I kept on reading the suggestion to observe the way women's apparel retailers market to women. That is who I am. Let me share some of my findings so you can better understand these differences in marketing:
  1. I believe in soft sell tactics. Women resent being pressured.
  2. Women are far more detail oriented. When a woman says she is just looking, she is really looking and observing.
  3. Because women are more thorough in their buying process, education initiatives (which I strongly believe in) are so important.
  4. Women generally have more of a sense of fashion and style. Yes, there are exceptions, but a man will go into a store and ask for a replacement for his navy blazer. A woman will rarely do that.
  5. Women tend to believe that change for sake of change is good where a man wants the same old thing.
  6. Women will recommend products they like 57% more frequently then men do. That means those women are better at creating word of mouth advertising for your business.
  7. One of the exercises I did in the workshop was asking all of the men how many Preferred Customer cards they owned. The response was either 1 or 2 but very few of them had those cards in their possession. Women, on the other hand, averaged at least 3 and 97% had them in their possession.
  8. Women love signage because it gives more detail.
  9. Women communicate via connections with people, where men communicate via status.
  10. Men will buy in a straight line; they need it and buy it. Women will buy with a curving line that stops at asking a friend, reading a catalog, checking it out online, visiting a store, and then finally making the purchase that also has a higher probability of being exchanged. This is not a negative thing-- it is just because of the attention to details that women have.

Let know show you some facts about the changing women's market that completely confirm that men have lost the battle of the sexes:

  1. 73% of new businesses started in this country are started by women.
  2. By 2010, women are expected have $1 trillion or 60% of the country's wealth.
  3. Women purchase or influence the purchase of 85% of all consumer goods, including stocks, computers, and automobiles.
  4. As of 2003, high growth fields such as health care, education, and professional services that require college degrees, mostly employ women. Just look at the TV show Grey's Anatomy.
  5. The number of women earning $100,000 or more has tripled in the last 10 years.
  6. Women earn more than ½ of all accounting degrees, four out of every 10 law degrees, and almost that many medical degrees.
  7. Women continue to purchase online at a slightly higher rate than men (73% vs. 72%) for the third consecutive quarter.

There is some good news, guys:

  • Growth of blue collar manufacturing, transportation, and construction fields that do not require education beyond high school is the largest growth area for men.

What it all means is that many of the old boy traditional ways of marketing are as extinct as the dinosaur. But just pinking up a product won't do it for you either. It must be transparent or the same for both male and female. But the single most important issue in marketing to woman is the issue of stress. Stress was the one single common denominator among all women, from the 20 something's to the time starved working moms (by the way all moms are working but that's another issue) to the sandwich generation of the boomer woman who is being stressed by both parents and children.

Look at what you sell through her stressed eyes. Focus on her reality of stress, not your version of it.

I hope you are as fascinated as I am with these findings and remember to ask yourself the following questions when your market is to women:

  1. Does your business save time and how?
  2. Is it easy to use & understand? Not because they can't figure it out but because they don't have the time to do so.
  3. Does it replace something that is slow or cumbersome?
  4. Is it easy to find? Including your website.
  5. Is it easy to buy? Don't put up obstacles.

So thanks to Kathy Newkirk from Aqua for opening my eyes and to all the folks who attended this program.

Tuesday, November 07, 2006

Payment Issues - From Embarrassment to Good Business

This is a tale of two different scenarios that strangely go together.

What do you do when a friend of yours tries to buy something in your store and the credit card they are using is declined? Talk about embarrassment! The only question is who is more embarrassed--the store owner or the customer? This just happened to me with a loyal reader and friend, Dave Felts from Okalahoma, who is one of the best shoe retailers in the country. He asked me to review his new blog which was a story about the effects of bone spurs on your feet. Coincidently I was just diagnosed with a bone spur. The article was just the information I needed and Dave actually explained it a whole lot better than my doctor did.

So I sent him an email telling him how helpful the article was. He then sent me a silly little wrap around pad that he said would give me relief. My first impression was what has happened to Dave Felts? Has he become a witch doctor or something? There was no way this pad could work. The package label read that it was invented by a foot doctor and had testimonials about how well it worked. But I was still skeptical. After 5 minutes of having it on the severe pain was gone. It was a miracle! So I quickly called Dave to order more. I give him my credit card number but it was declined four times.

He felt funny calling me back but he handled it like the pro he is. First, he asked me to repeat the number of the card to check to see if he had the wrong number. After we went over the expiration date which was correct, he then asked if it was a debit or credit card. It was a debit card so Dave said he would try to run it one more time as a debit card. He did but it didn't work again. I knew there was plenty of money in that account but you always worry about identity theft. Dave suggested that we just use another card as if it was a common occurrence. I gave him another card and the transaction was completed.

I then called the credit card company to inquire why the card was declined. They had no record of the decline and said that it was probably caused by a system error from the merchant's processing company. Dave handled that scenario exactly the way it should be handled. It was a text book case. Thanks Dave for being a pro.

There was a second part of that transaction that is relative and that is the issue of discounts. I didn't want Dave to give me any type of discount for my purchase. So before he even had a chance to offer any, I told him I would be paying full price. I wanted to be treated like a good customer and I was. I would have paid full price for those pads from someone else so why shouldn't I pay full price to someone whom I consider to be a friend? If Dave had insisted in giving me a discount I would have felt guilty about it and probably would not buy anything else there. It would work in the complete opposite way that it was intended.

When I ran my woman's specialty store, I made an announcement at a family gathering that I would extend a 20% discount to any family member. I explained that I can make money at 20% off and still treat them like a customer and be happy when they come in. Up until that point I rarely saw many family members, but after I made that announcement I started to see more come in. But what reinforced my decision were the family members and friends who appreciated my openness and now felt more comfortable shopping at my store. People want to be treated like a good customer and with respect. As for the friends or family members who didn't think that 20% off was good enough--well too bad. Anyone who feels that way doesn't deserve even the 20%. We can't sell everyone. By the way, many retailers just offer 10% but I felt 20% worked for me.

The moral is simple: lowest price might just turn some folks off. This is the type of people that I want shopping in my store. As for the other cheapskates-- give them directions to your competition. Life is too short to have to deal with them. Thanks Dave for the inspiration this week.

P.S. If you have Plantar Fasciitis, check out Dave's Blog at .

Tuesday, October 31, 2006

Are You Working Hard or Smart?

This past week I worked with several communities in upstate New York and I stayed at a major hotel chain that is franchised to a local businessperson who also owns a conference/banquet facility and a great restaurant next door. There is a well done stone path that you can follow on foot between the hotel and the restaurant. I was speaking at the conference facility on one of the days so I really appreciated this convenience.

Sounds good so far? Absolutely, but it gets even better! The facility was first class, the function room size was excellent, the acoustics and sound were great, and the staff was WONDERFUL. They were so helpful and accommodating and they couldn't do enough for me even though they were very busy because they had two conferences taking place at the same time.

It was a family business with three generations working in perfect harmony. It was a beautiful thing. The food at the conference was very good and served when and how it should be served. Later that night I went back for dinner and it was superb. The quality of the food was creative, interesting, prepared perfectly, and served in a dining room with pure white table linens with a server who was as good as I have ever experienced.

So what could be wrong? Why was the dining room almost empty? Why am I totally convinced that this business could increase its bottom line almost instantly by 20% with very little work? (And most of you could also do the same!) I say that because the owners of this business were just too close to the business and weren't looking at their business like a customer would. I felt so bad because I saw how hard this family worked and the business could explode with a few minor adjustments.

Here is the rest of the story. I was sent a brochure of the hotel facility which looked good but it didn't have directions to the hotel on it. It just said "south of a certain highway". I didn't know what that meant. There was a sign on the highway, which was good, and at end the end of the ramp there was an arrow pointing left. But the hotel was about 3 miles from the exit and there weren't any other signs. You even came to an intersection in a downtown but there was no sign to turn right or left. It took me 30 minutes to travel that distance because I kept on making the wrong turns. Normally I would have used my cell phone to make a call and get directions, but the reception was terrible in this area.

I got to the hotel and was greeted by wonderful people but no one told me about the restaurant next door. There wasn't even a sign or a coupon to encourage travelers to try the restaurant. After I unpacked I traveled 8 miles to another restaurant that someone suggested to me. Why didn't I notice the path or the restaurant? Good question. Maybe a sign on the path would be helpful but maybe the sign for the restaurant should also be changed. It said Meeting Facility and REST. That's not a misspelling on the well done carved wooden sign--they abbreviated the word restaurant to REST. How is anyone supposed to know what the business does? I only learned that it was a restaurant after I spoke at the meeting facility, walked through a dining room by mistake, and someone helped me to the right door when I asked if this was a restaurant.

No wonder why I was one of only 3 tables being used. The next day I told the meeting planner about the great meal I had and she admitted that she had never been in the place for a meal other than a banquet.

The bottom line is simple. Some great informative signs would turn this business around almost instantly. But I don't want to be the consultant to have to tell the owner to throw away the sign that he spent thousands of dollars on because it is hurting his business. Generally business owners will fight you on this one but they are dead wrong. They are just too close to the situation. It's time to think like a customer. The initial loss of the sign expenditure would be offset by the added sales. Everyone doesn't know us; we think they do, but they don't. Yes, you see your business everyday and we just assume everyone knows us.

My advice to all of my readers is simply to stand back and look at the obvious. Look at your business the way a customer looks at it. Ask yourself this question, "If I were first coming in contact with this business and I was a perspective customer, what would my reactions be?" It's not an easy thing to do but it is something we must do.

There is also one more message here that is quickly becoming a passion of mine and that is the power of signage. This includes both interior and exterior signs, informative signs and signs that sell. Signage can be the difference between success and failure. So look at your business through the eyes of your customers and ask the questions your customers would ask and answer those questions with a sign. Then add a dose of fun with the signs and you have a home run. I dare you to try.

Tuesday, October 24, 2006

What Makes You Successful?

After struggling for a couple of weeks now on how to use all of the comments I received about success I have decided to just share some of the best and add a comment about them. Because I didn't ask permission to use the comments, I am withholding the names and the names of their businesses. This article is much longer than normal but I just couldn't cut anymore. I hope you find it as interesting as I did. Enjoy!

From Lexington, NC: "In a nutshell, what has made me successful is my parents believing in me and telling me I could do it. That made me believe in myself!"

Rick: It's not only just parents. It's anyone who encourages us and tells us to keep it up. You never hear anyone at the Academy Awards thank the person who discouraged them.

From Arvada, CO: "I can honestly say that personal, hand-written notes after a conversation with a customer has made our business successful. Not many auto repair shops appreciate their customers like we do, and it only takes two minutes to make a lifetime customer. We really focus on giving that 'personal' touch. The main question that your customer is asking is: 'Am I important to this business?'"

Rick: It's all about making that emotional connection

No Location Available for the next: "There is no reward without some risk, and you can't be successful without throwing your hat in the ring and trying."

"For every one or two people I meet who has evolved and moved on after high school, I meet a dozen who are still clinging to the old days. They often seem defeated and some are even quite bitter.
Every time that happens, I think 'Aha! This is why this person is seems so unhappy!' They view forward motion of any kind as a threat - anyone who disrupts the status quo or creates change threatens the status quo and alters the script.
I don't believe true success can be quantified by specific attributes. To me, success means having something you're excited about doing TOMORROW."

Rick: Those comments made me think that I feel badly that I had to cut some of comments for the sake of this article.

From a Community in the Midwest:
"I wanted to share with you - I was the admin. asst. for the exec. director of our downtown revitalization group. I had been in retail all my life. No background in economic or community development at all. I saw the ED, who was 'not from around here' missing opportunities right and left and really felt I could do some things better. But it was way outside my comfort zone. When she gave the board her resignation, I did a gut check. I wanted to at least try. I felt I could create an atmosphere where public and private entities could work together and improve conditions downtown. I asked the board to give me the job of interim director and when they did, I rolled up my sleeves and went to work. That was three years and $3.4 million in investment to downtown properties ago. We are seeing new projects every week in our downtown and some of that is because I took a chance on myself and believed in myself."

Rick: Sometimes success comes in just taking that leap of faith.

Location Unknown: "My strengths are knowing what I am successful at and to look for people whose strengths balance my strengths and weaknesses."

Rick: I'd have this person run my company any day!

From Central South Carolina: "Success for me is being able to work at home, spend time with my husband and enjoy the flexibility and daily challenges of operating an on-line Home Fragrance business. I left a wonderful Purchasing Agent position at a Fortune 500 company at age 45 (after 9/11) and took a 60% pay cut to pursue "The Good Life". I now love getting up every day to solve new problems and create continued growth for my baby:
Being an entrepreneur means never giving up when life throws obstacles in the way of your vision. Many times I have succeeded because I didn't know I wasn't supposed to do things the way I did them. Everyday I focus on great customer service, wonderful products that I love and improvements that create growth for my business and my employees."

Rick: Yes, I left the plug for her website, Why not? She wrote a GREAT piece. Do what you love and the money will follow.

From Detroit: "I think that successful people also take time to assess their strengths and weaknesses, their talent, unique ability, gifts, or whatever one wishes to call it.
I believe that successful people are successful because they've focused their time, energy, and resources in their gifted area. In addition, they lead more fulfilling lives, as they are 'living the dream.'
I would challenge your readers to ask themselves if they are 'living the dream' for them. If not, why not? Is it because they don't know what their dream is? If so, then I would encourage them to turn off the TV, stop the rat race of daily life as much as possible, and get busy finding out what their reason is for being here. This is the starting point to a life of satisfaction, fulfillment, and success."

Rick: It works for me. I couldn't have said it better

From Colorado: "My daughter was born 3 and half months early and was not expected to make it; I was 19 at the time. I saw her fight for life and she won! She will be 9 in December, she has some medical problems but she hits them head on and never hides from them. Seeing her fight for what she wanted drove me to fight for what I wanted.
Strive for the things in life that others say you can't reach and when you reach them don't brag just find the next goal that others say is too far."

Rick: Do your children create success or are they the success. Sometimes both.

From Livermore, CA: "We must deal with 'That Little Inner Voice' that interferes with perseverance, creativity and the ability to look for the new and different ways that lead to successes of any size. Let's call it 'TLIV'.
TLIV has learned it can grab even more power over our thoughts and behaviors. It enjoys intruding into our everyday thoughts, those having nothing to do with real risks or dangers. I guess our biology hasn't caught up with our social advances, but hey, that's a different article!
TLIV tries very hard to keep us stuck right where we are, doesn't it? It's concerned only with security, and risk is its dangerous opposition. It often leads us away from our true path, one little step at a time. And when you think about it, perseverance and success are only available to us one little step at a time. So, dealing with TLIV is a key factor in learning how to persevere.
OK, so what can be done? I have found two very simple things to be valuable: observation and practice.
1) Listen to your own inner dialog a few times each day. Observe TLIV in action and notice how it fights against your natural desire to ask a question, to be curious, to learn, and to act in accordance with your creative self.
2) Practice each day by taking a deep breath and be open to the moment.
I almost let TLIV talk me out of sending you this e-mail, but I enjoy sharing ideas, so we had a little talk and I won..."

Rick: Sorry for the edits. I feel guilty I had to cut any of this. Great stuff. Thank you.

Unknown Location: "What I like about myself is never giving up, if I'm going down I'd rather go down fighting... In times of difficulty, when you make a choice to never give up, your mind just figures out a way to succeed."

Rick: I just love "your mind just figures out a way to succeed".

Rick: This last one is a lesson for us all.

From a Proud daughter about her dad:
"This is a response to your recent email about success. Like you, my Dad keeps on learning and striving no matter what. He was unable to go to college because of serving in WWII so he came back to his little home town in North Carolina and went into business. All his businesses still exist and operate beautifully, he owns almost half of Main Street and he is a respected developer. He will be 88 in November. A few years ago he was diagnosed with macular degeneration. He called me to tell me his doctor told him he would be blind in three months. I expressed my dismay and concern. He only asked if I knew whether or not the local paper put its news on tape.
He had an experimental surgery in Atlanta that allowed him to keep slight vision in one eye. He cannot see straight on, but can see out of the corner of one eye. He has taught himself to read again by seeing only one or two letters at at time. He walks two miles every morning, 'reads' two books on tape each week, keeps up with the news and can talk to my 29 year old computer major son about computers with ease. His newest project is to build an apartment complex because he feels our town needs one.
I think my dad's success is due to courage and willingness to change. He has never feared the future. When WalMart came into our town many stores went out of business. He adjusted his inventory and his stores still operate today.
It is not about the money. It is about the challenge. He just doesn't know any other way."

Rick: I guess that sums it all up.

For all of the other folks who sent comments, I apologize for not being able to include them all. Thank you all for teaching me that part of my success is constantly learning and understanding how others define success. Success is different things to different people. Let's all try to better understand and respect them all. The world might just become a better place.