There are a lot of ways your displays can be your silent salesperson. The trick is to make sure your displays include some of the basics which include:
1. Change your displays monthly
You’ve got to keep your customers guessing – a little, anyway. Every Continue reading 7 Ways To Transform Retail Store Displays Into Sales »
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:
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
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.
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 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.
© Bob Phibbs 2009
Writing the manuscript for The Retail Doctor’s Guide To Growing Your Business (being published by Wiley & Sons in mid-2010) is forcing me to examine why so many businesses are not profitable. In years past, it was OK for owners to joke about it. This year, no one is laughing.
Whenever I look at a business that is not making money I find it usually is from owners or managers thinking like a customer or employee rather than a merchant.
It starts with not pricing correctly. ”Oh, I wouldn’t pay that much for this item.” Knowing how much something costs somehow devalues its worth in their eyes. Since most owners or managers have never taken a course on pricing or examined their financials, they may mark it up less than keystone. (One guy at a recent speech sheepishly admitted he purchased an item at $10 and priced it at $15.) But in a declining economy, merch should be marked up keystone (that’s double) + a few bucks so the business is profitable. That’s what merchants do.
It continues with employee flexibility. Instead of a set schedule a manager can knock out in an hour or so, the manger lets employees give them their availability week by week and then try to plug that into a schedule. This results in hours and hours of wasted time with store coverage compromised. Merchants come up with a set schedule based on demand, then fill it based on ability to sell the merch. That allows the managers much more time to train, monitor and sell on the floor.
It shows up in marketing and promotions with endless freebies, 2-4-1s or discounts. One local gift store offered free gift wrapping on Feb. 14. The busiest day of the year for them when people would have paid anything to have someone wrap their gift, they gave it away.
How did they come to that decision? They thought how great it would feel for a customer. As a customer, imagine a florist giving away free same-day delivery on Mother’s Day, a Christmas ornament store offering 2-4-1 on ornaments December 21 or a wine store offering 25% off champagne December 31. Wouldn’t that be great? But that intent to “get” like a customer instead of “lose” like a merchant damages profits.
This problem extends into management when we don’t write people up for being late, rudeness or their inability to perform the job. Thinking like an employee cripples managers from doing their job as a merchant. We want to be “nice,” “liked,” “popular.” I had a boss one time say, “You’re only as good as your last sale.” Brutal. He was a merchant.
Understanding the different mindset of a merchant versus a customer should help you when a tough decision needs to be made, ask: “
Am I thinking like a merchant looking to profitability, or like a customer or employee looking to be nice?”
Be profitable, be a merchant.
Learn how to sell your merch with Sales RX: Five Parts To A Successful Sale
I was in a CVS at the border between Huntington Beach, CA and Costa Mesa early Sunday morning looking for foot powder. I’d been on my feet too much during this trip and figured Tinactin would do the job quickly.
I spotted the CVS with their automatic doors open wide at 8am with their stated hours being 10am-10pm. Were they really open? I walked in.
Now I have to tell you, retail clutter is so prevalent in most CVS stores and their ilk that I usually dislike the experience. From the moment I walked in, this one was different. I could move. There was space. Heck, they even displayed things well.
I moved back to the aisle cleverly signed “Foot” to find Tinactin locked up like it was an expensive digital camera with the words I hate in retail, “Please ask for assistance.” I went back to the counter where Jorge was, “Can you open the Tinactin display for me?” He pleasantly said, “I’ll be right there.”
Shortly we were back and he was unlocking it. I asked, “Do these have a way of disappearing?” He answered, “Yes sir, we stocked it one day and it was stripped in the same day. They took all the products out of their boxes and left the boxes.”
Wow! Looking through the store you could see pride of ownership, even in a high theft market. There was the furniture display that included a host of add-ons including traveling beach chairs, pads, towels and chips. 
There was the end cap for Bounty paper towels with cleaner, a bag for holding the cleaner and disinfectant spray.
Every aisle was well merchandised with plenty of space for the retail displays to make customers pause and consider the picture. Brilliant.
In the cosmetic aisle where you can hardly move in many convenience stores because they are so loaded with product, this store had a simple table with one manufacturer’s sun care products in different heights with coordinated gift bags. Very smart.
Consider the difference between this store in Huntington Beach, CA and the one in Hudson, NY for Lindt chocolates. On the left is the one in Huntington Beach which features cards, Korbel champagne and Lindt chocolate.
HB CVS
And this one on the right, same display unit in Hudson low on product with competitors cheaper products at the bottom and beef jerky taped to the side.
Hudson
Which one do you think sells more product? This is always the dilemma for manufacturers displays – you put this great unit out there but what does it end up looking like in the field? Not to worry in Huntington Beach CVS – these guys and gals should be promoted as great ambassadors for your brand.
The care employees take with you merchandise during a recession can really make a difference in your sales.
Sign up to get monthly tips and tricks delivered to your inbox direct from The Retail Doctor®, Bob Phibbs.
