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Archive for August, 2009

Mystery Shopping: Now Is The Time

five_guysx Did you catch the coverage of President Obama’s burger run to Five Guys in Washington a month or so ago? USA Today did a great profile on the franchise here.

One of the big reasons Five Guys is wildly successful? “To ensure quality control, Five Guys sends secret shoppers twice a week to all locations. The brothers also are on the road constantly visiting the restaurants.” Five Guys knows you need to inspect what you expect.

High standards each and every day ensure the right employees do the right things. Training new employees to 100% and then making them work for managers who don’t run the shifts up to high standards is spinning your company’s wheels and lowering the brand perception in customers’ eyes. That means it destroys profits. There’s only one way to avoid that: an ongoing program of mystery shops.

The number one thing business owners tell me is, “I just need more customers.” Wrong, you need them to return. You can’t attract your whole neighborhood to try you, deliver lousy results and expect just getting “more bodies in the door” will work. You can burn through a neighborhood with bad word-of-mouth and, without mystery shoppers, never know it.

Five Guys franchise with 436 locations sees the value in nearly 50,000 shops in a year, shouldn’t you? Oh right, the money.

You might not blink at spending $500 per month in advertising, but balk at spending a fraction of that on measuring customers’ experience in your store. That’s just plain dumb. The profit comes from the people wanting to return, not the discount promotions you run to entice new shoppers.

And please, get out of the idea that mystery shops are a way to spy on employees for compliance. That’s what they’ll think if you don’t present it correctly. It’s also what many lesser services use as their logo. If you want to fire someone, you don’t need a mystery shop to prove it.

Here’s the thing, if you aren’t servicing your customers the way they believe you should, you open the door to competitors eager to take your business. It’s not what your regulars tell you, its what the new customers tell you that matters most.

Benefits of mystery shops: images-2

Monitored and measured service performance
Improves customer retention
Makes employees aware of what is important in serving customers
Monitors facility conditions
Ensures product/service delivery quality.
Supports promotional programs
Allows for competitive analyses between locations
Identifies training needs and sales opportunities
Ensures positive customer relationships on the front line.
Enforces employee integrity and knowledge.
Supports hustle by employees to meet customers. See previous post.

But not all mystery shopping companies are the same. Far from it! One client of mine told me how he found the shoppers had never even BEEN to his store. Another said she’d tried it but it “didn’t work.” When I looked at her survey it came screaming off the page why it wasn’t successful because every question was subjective. “Did you feel valued as a guest?” “Did they attempt to meet your needs?” “Did you feel welcomed?” Shoot me.

What would feedback have looked like to the employee who got a low score on her shop? “Gee Sally, the customer didn’t feel valued as a guest. Try harder.” Reminds me of the old days in chorus when the conductor yelled at us to “sing in tune.” If we knew how to do that, we would have done it.

Questions on a mystery shop need to be black and white. The server either did or didn’t say, “Good morning, good afternoon or good evening.” ”Did the salesman describe a product using features (it has) with the benefits (to the customer.)” In addition, you need a narrative so compelling you can actually see the transaction in your store.

I work with clients to get their mystery shopper surveys just right and actionable. One client with 14 locations is now tops in her franchise; another’s average check continues to rise. Is it a mystery? Nope, a mystery shop.

To succeed in a recession, as competitors cry the blues and leave your market, you need to consistently provide clear expectations and demanding high standards of employees. After all, your customers deserve, and pay for those.

Cutting another shift or saving ten cents on freight is like a poor marksman looking at the edge of the target. The real money is on the bull’s eye of selling the customer.

Learn more about the Retail Doctor’s mystery shopping secret weapon by contacting him.

From The Retail Doctor’s Guide To Growing Your Business published by Wiley & Sons
© Bob Phibbs 2010

Family Business Manifesto: Why They Aren't Down On The Farm

Recently, I had a chance encounter with a person involved with the Virginia Cooperative Extension. Some facts I learned shocked me but point up both the opportunity and what’s wrong with most family businesses today – not just Virginia farmers – and why the next generation wants no part of them.

farm_tractor The Census of Agriculture is conducted by the National Agriculture Statistics Service of the USDA every 5 years and is where I got these figures. As Joe Friday would say on Dragnet, “just the facts ma’am:”

*63% of VA farms are not profitable. There are a total of 47,000 farms in VA in 2007-farm operators reporting a net loss: 29,616.

*95% of all farms in VA gross less than $250,000 in sales which is the volume necessary to support a “farming family of four above the poverty line.”

*86% of farms gross less than $40,000, the level of sales commonly described as “small farms.”

* Most farms are very small and getting smaller. About three-quarters of the farms in VA in 2007 are less than the average size (171 acres…down from 181 in 2002)

From another USDA publication we find, “Operators of new farms were more likely to be engaged in occupations other than farming and to derive income from non-farm sources.”

From the comments of attendees after my presentations in the last several years and from news stories, it appears a lot of business owners are in the same boat as Virginia farmers. Many are small and getting smaller, unable to make a profit and unable to support a family so owners take on other jobs to support their family business.

Of course kids don’t want to pick up a family business making $40,000 a year! Would you? They are looking for prosperity, for profits, for the good life – not a job pulling in less than a Starbucks manager.

The classic way of building wealth has been to find a need ahead of time and then fill it – that is innovation. Think Bill Gates and Steve Jobs creating the personal computer industry. Look at Jeff Bezos at Amazon seeing the future of Internet retailing or eBay’s Pierre Omidyar’s prescient view of customers trading online. But the race to build a better mousetrap has stagnated with the recession.

Entrepreneurs around the world are trying to decide what’s the next “big thing” because nothing on the horizon is that innovative.

In a world where everything from insurance to banking, from real estate to Wall Street seems to have been built as a house of cards, how will we build wealth? The days of expecting a 20% return on anything from our houses to stock may be way in the future.

Stop looking across the fence America! The opportunity is right here, right now, with your family business.

american gothic American family businesses must get back to basics and get smarter about becoming profitable. The endless promotions of low-price and discounting that has eroded the businessman’s reason to invest in America has got to be reversed.

That may mean you need to get outside help with technology, modern management practices of how to get a decent ROI on your investment of time or taking a financial class at your community college. But it is up to the older generation to fix their businesses if they want to attract the young.

It hurts when I hear people say they don’t take a salary from their family business. That means they have all of the problems but none of the financial rewards. The reason kids don’t want to be a part of most family businesses is because they see all of the work and none of the benefits. It’s like they’d always have the baby in dirty diapers, never the child going off to college.

The opportunity has dried up in many segments of the economy – the grass isn’t any greener in New York or Seattle than in your community.

You want your family business to provide something for your kids? Make sure they see the upside – profits, not the downside.

Learn how to make your business more profitable.

Retail Sales Training: Get Customers To Picture Regret

I was speaking at the Sturbridge Inn & Convention Center recently and had to print something at the business center. A guy was on the one computer checking email and then an agitated woman and her daughter logged on.

They were searching for something to do with dolls. After about 10 minutes I saw they were searching for a particular Ugly Doll they had seen. The website didn’t have it and the mom was getting more upset.

“You shoulda bought it at the time,” her daughter scolded. They kept looking. Next a search for the Cheseapeake, VA Chamber of Commerce to find the store. “There was some type of restaurant next to it, maybe we could call and ask them for the name.”

After 20 minutes they realized how fruitless it was and gave up trying to find the store that day.

What was the mom really trying to do that day? Appease her guilt.

She should have gotten it when she saw it.

How many times have you left something behind and lived to regret it? I know there was a great piece of art I let go that I shouldn’t.

That’s what salespeople are in business to help us avoid. We need to change the dynamics of what selling IS in the mindset of our retail employees so they can see the goal is to serve the customer so they don’t walk out with regret later on. That takes retail sales training…

It’s not pushy, it’s not artificial. If your salesperson can see how helping another human being do what they really wanted to do in the first place – buy something in your store – we can move the dialogue from pushing merch to helping avoid regret.

That means paint a picture of what it might look like in their room, or them using it based on what they told you they liked about the product.

That means not folding your tent when they say they’ll have to, “Think about it.”

That means sticking with the customer through their indecision and critical parent voice circulating in their head that they really don’t need it.

That may mean asking if they ever regretted not buying something they really wanted then finding a way to help them not repeat that behavior.

The higher priced the item, the more regret that can happen down the line as there aren’t a ton of them out there.

If the salesperson begins with thinking, “Why on this day, did they come into this store and look at this object.” Once you find their why, you can help them.

And one more thing about regret. The best salespeople almost always examine their previous sale to see if they could have done something better. Did their product knowledge overwhelm? Did their manner come off curt? Did they make eye contact or miss a buying cue? No one wants regret for something we could have done.

Train about customer regret and employee’s survivor guilt and you just might have the best fourth quarter ever.

Train employees even better with Sales RX: The Five Parts to a Successful Sale

Training Customer Service Is Like A Game of Pool

pool break
Ever played pool? It starts off with all the balls together, the cue ball comes along to break them up, they scatter and the game commences. That’s what I expect in a retail store. In fact it’s one of my pet peeves when employees stay clustered, like a beehive daring someone to come in and be stung.

I went into a Home Depot Friday afternoon in one of the most torrential rains I’ve ever been though looking for a particular panel I’d seen over the weekend to build a backsplash. The place was dead and devoid of customers.

I returned to the display, discovered that it only had 10 and began searching for someone to check back stock as I needed a total of 18 pieces. I looked around to the left and saw nothing but empty work desks. Then to the right. No one was there either. The computers were on and stuff stacked in front like someone had been there.

I went around to the right, then left, then to the right and discovered three male employees standing around a workstation desk and a fourth employee sitting back in her chair. She was chatting about the lack of customers, I think.

I came within 10 feet of the desk and they kept talking. She remained tilted back in the chair and looking at me. No one said a word.

“Excuse me,” I said, “can I get some help?”
The woman without moving said, “What are you looking for?”
“There’s something over here…”
She jumped in, “Well what is it?”
In frustration I blurted out, “If you would get off your butt, I could show you.”

She got up and moved towards me and I led her back to the display. As I explained what I needed I felt bad and said, “Sorry I didn’t mean to say that.” She said, “That’s okay, people don’t always get what we’re saying.”

I don’t think she got my problem. It’s not up to the customer to respond correctly. They should have broken up, one of them come over and offered to assist. Instead they clung together making the customer uncomfortable trying to spit out the correct name of the product (which I still can’t recall.)

When I was starting in retail I had done the same thing. I was just out of high school working at the Nunn Bush Shoe Shop in the Glendale Galleria. I was talking to my boss behind the counter while a customer looked through all the shoe displays. Instead of breaking and talking to him in assessing his needs, we kept right on talking.

Finally, the customer came up to us and asked, “Is this all you have?” I guess I was feeling my oats that day when I said, “No, we have three floors above us – we want people to guess what we have.” The customer said, “Next time take your bad mood out on somebody else!”

I truly had been a jerk that day and it wasn’t until later that I realized why and how. I think it started by allowing there to be a wall between myself and the customer. I think I considered myself as the great resource – people would ask for my help. But that incident stayed with me for a long time as how NOT to be.

A few days ago when I was at the same Home Depot, I had looked at an appliance. The guy (who was part of the gang of four today,) had offered to print out the sell sheet for me. When I asked, “Should I buy this from you or online?” he replied, “I’d appreciate it if you’d buy from me so I could keep my job.” After today, I’m looking anywhere but HD.

Looking to grow sales? Don’t allow your employees to cluster like somebody had racked them up. It builds a wall. And if you have a counter, it becomes a castle they can feel superior to customers behind.

Train your crew that when a customer walks in, they’re the cue ball and the crew should scatter.

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