Don’t care if you already have a Verizon account. Don’t care if you use a Blackberry. Don’t care if you own stock in Microsoft.

And the higher the price of the items you sell, the stupider you are if you don’t get it NOW. Ok, I’m a bit opinionated on these. Stay with me…

Forget all of the other bells and whistles. You have the ability in the palm of your hand to make a personal introduction, followup or product video in minutes using the iMovie app. Easily, professionally and you can email them right away.

Here are four I just created.

One for a nursery talking about their fresh tomatoes for the day:

iPhone4 Example for a Farm Stand with Bob Phibbs, the Retail Doctor®

One for a Buick Dealer following up for a customer:

iPhone4 Example For Buick by Bob Phibbs, the Retail Doctor®

One for any salesperson who has to followup after speaking on the phone:

iPhone4 Example Following Up with Bob Phibbs, the Retail Doctor®

Last one for a landscaper or professional Gardener talking to a client about a problem;

iPhone4 Example Landscaper / Gardener with Bob Phibbs, the Retail Doctor®

Do you see how impressive this looks? How immediate? How out of the ordinary, knock your socks off fantastic this is?

I’ve done testimonial videos for years with my Flip camera. Yes it was convenient but NOTHING like this. I can add titles, transitions and music quickly and easily.

Imagine the look on your customer’s face when it is you talking to them directly right in front of their home before you go back to the office?

Sure I could get hung up with a few clipped words or a few transitions. But the door has opened for anyone to quickly and easily make youself standout.

How could you use it in your business? Think about it and put in the comments below please.

Oh yeah, and don’t worry about your competition finding out, they’ll still be hung-up on the cost of the data plan as you steal their customers right and left!

For more ways to make your business standout, check my new book from Wiley & Sons, The Retail Doctor’s Guide to Growing Your Business.

Since many owners or managers have never taken a course on pricing or they “feel bad about charging too much,” they tend to mark up less than necessary, what I call “welfare pricing.”

As a customer, we love it when you price too low but as the merchant, your apathy towards what you need that widget to produce – profits – is killing you!

Your merchandise should be marked up enough to make the business profitable. An item has value if it is worth the price a customer is willing to pay. Here’s an example.

There’s a deli truck in the park by my house that sells soda for 50 cents. I figure that the vendor can get a six-pack for a buck at the local big-box. She might be telling herself she’s getting three times cost; but what would a customer pay for the convenience? A vending machine would charge at least $1. But she gives you a cup and ice. Would that be worth $1.25? I think so.

Sometimes you have to consider the value you provide to the customer and charge what you think the market could afford, not what you personally would pay.

You also have to consider breakage, spoilage, or other items out of your control before you set a price.

For example, a baker who has to bake a dozen rolls at a time might know they typically only sell seven of a certain roll every day.  So they factor in that five might remain, and price the seven to make the profit of all twelve.  It’s therefore a bonus if they sell out occasionally.

And how do all the coupon programs factor in?  If you price too low to begin with, you often are selling the item for less than it cost to buy and ship to you when discounts are applied.

Any Accounting 101 student can tell you that the profit earned by the average business is only one to three cents on the dollar. This fact flies in the face of a common perception that small business owners are raking in the dough.

So realize when you’re considering giving $10 off an item that you have to sell at least $300 more just to earn back that $10 in profit.

When you analyze discounts, you find that — like a sugary cola drink — they give you an added boost when you’re tired. But like that sugary cola drink, the high is temporary and you eventually crash.  Discounting does nothing for your (or your company’s) long-term health.

Coupled with a broken pricing strategy, is it any wonder so many owners have to dump money into the business rather than taking it out?

To learn more, purchase the book.

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

Instead of saying, “Where’s our handout,” where are the stories of people who realized they have to change or die?

I get there’s a lot of pain out there. I understand business for many is down. But when are you going to do something about it?

You have to radically change your business if you are not making it and want to survive.

I had lunch last week with Roger Leithead, the former CEO of Arrow shirts who told me a story about how Arrow survived the Great Depression. A bit of back-story.

The Arrow shirt concept came about in the 1800’s because men only wore white dress shirts and they all went to work in a suit. Even the blacksmith would work in that white shirt. Well this one guy was a singer and his wife didn’t like him coming home and changing into a clean shirt just to go out – especially since they only bathed on Saturday nights.  The idea of a detachable collar and cuffs made it easy to look presentable without all that washing.

This is the way Arrow built an empire of over 450 warehouses across the US filled with detachable collars and cuffs. It was a recipe for success: find out what the customer wanted and then give it to them.

A competitor, the Manhattan shirt company, had a shirt you could buy with an attached collar and cuffs but it was built like a tent with yards of fabric to tuck in. Also, the sleeve length was a 37.  That’s why guys wore armbands, so their sleeves wouldn’t reach over their fingers – like you see in barbershop quartets. At the time that was based on need, not looks.

Sales were dropping off and the Arrow CEO saw the trend was changing to a complete shirt.  He announced to his board of directors in 1930, “We will never get there doing what we’re doing now.”   That’s when something truly remarkable happened.

He went downstairs and gave instructions to open the doors of their main warehouse on River Street in Troy, New York, which bordered on the Hudson River. “Clear out the warehouse.” Using pitchforks, the warehouse men threw all of the existing collars and cuffs into the river.

Forget the environmental consequences of such an act of over 1 million dozen collars and cuffs floating down the Hudson. He threw out their entire inventory in order to make the changes needed.

They came up with 64 combinations of neck and sleeve lengths so that Arrow shirt fit you properly, not like a sack. They changed from natural ocean pearl buttons that broke easily, to plastic and invented Sanfordizing, which meant a shirt wouldn’t shrink. They again became the leader in men’s shirts because of the CEO realizing they had to change or die.

You think it’s tough to compete now? Imagine going into a retailer in the Depression telling them they needed all this inventory to serve their customers; where three models could capture the market, now they needed 64.

The CEO then had marketing come up with the “Arrow Shirt Man.”  Splashy ads in the best magazines touted how well an Arrow shirt fit.  It created a need for the women who purchased their husbands’ shirts to go into retailers and ask for that “Arrow Shirt.”  Retailers had no choice but to carry them and the rest is history.

When I speak across the country I hear many people quick to tell the story of how business is off, but they themselves are reluctant to change.  It might be like going to the emphysema ward of a hospital seeing people smoking while they’re under their oxygen tents.  The will to change can seem too much even when what you’re doing is killing you.

If things aren’t going your way, what radical change do you need to do to ensure your success?  Are things bad enough to change? Do you have the guts to throw out what you’ve been doing and start over?

Many businesses didn’t make a profit in the past when the money was easy – don’t blame the banks, Obama or someone else. It is your responsibility to make a profit. If you can’t, that’s capitalism.

And no, there is no level playing field – Wal-Mart will always be able to undercut your price, Starbucks will always be able to get a better location, etc.

My message to small businesses today? It’s not whine and cry but change or die. The choice is yours, but the time to act is now!

Learn the essentials of getting a retail business back in shape here

Forget the easy, over-hyped digs about his personal life. At the heart of why he was such an icon was the work. It was dazzling, fun, top-of-his game. During my speeches, I often play the Jackson 5′s “I Want You Back,” after a break. One time a woman said to me as it started, “I can’t believe you are playing something by Michael Jackson.” Another woman jumped in before I could respond, “Why wouldn’t he? I love his music!” Exactly. It was about the work, not the personality.

For your business and employees, it isn’t about what a nice guy you or your crew are.  It’s about the work.

I’m constantly amazed after a speech when people come up and tell me they’ve had someone on payroll for five, six, eight years and they aren’t cutting it. “But they’re so nice.”  It’s about the work.

Forget the personal traits. Heck, I had a guy who I had nothing in common with, the only reason we continued to work together is he got the sales. At full price. To 70% of the people he spoke to. With a smile and a repeat base we were all jealous of. Because of that, we could talk about business, how to do the sale better, what the next trend would be, how to close a hard sale. That’s what consumed his mind when he was on the clock.

He had moved out from Arkansas to southern California. He couldn’t find construction work and was sleeping in a gal’s back office at night; one step up from when he was sleeping on the street. He had used that address on my application.  He’d shower at the YMCA and walk to the mall.  He’d do his laundry at the local laundromat – he never looked out of place. He did this for about a month until he could afford an apartment.  I never knew until much later, he was strictly business.  It could have been easy to take his hard-luck story and make excuses if he hadn’t been able to sell. Could that be your crew?

My message today, in the wake of such an icon as Michael Jackson passing is to remember the work. His work; leave the personality out of it.  Is your employees’ performance memorable? Is yours?

Instead of addressing the fact they were not apparently very profitable businesses and prioritizing what they needed to do to survive, they chose to waste a month of time suing to stay with a company about to close all of its plants for a minimum of three months.  Be careful what you wish for.  What if they had remained open with sagging demand and old products?

A few years ago a southern California deli called me in for a consultation. Sales were slipping, they’d invested thousands in a renovation and the owners were worried. After we got a cup of coffee and sat down in one of the booths the owner took a sip and started to speak. I figured he would be asking where to look first or a spreadsheet would be bought out to show details of the sales collapse. He began, “We’ve contacted our attorney with a cease and desist order for a similar concept stealing our ‘look.’” I couldn’t believe my ears.

The owner went on at length to say how they were stealing his logo and concept and how he was prepared to fight them in court.  Meanwhile, I had to keep bringing him back to reality – he was losing money with this concept he wanted to protect so badly.

Like some wronged hero in an action movie, sometimes small business owners or managers get so personally vested at being wronged that they lose sight of their priorities. Many times that is because it is easier to get worked up about someone else than taking responsiblity to change.

The lesson? Keep your eyes on the big picture, don’t get caught up in the vendettas with vendors or competitors.

Truth is, many never have but it took the economy to pop like a balloon to bring them back to earth.  It was a crash course in reality. But why does it persist?

Is it that the owners are enamored with being “the boss?”

Does their wife have an endowment she is supported by, so their business hasn’t really had to make a profit?

Do they have a husband who has another job and this has been a hobby?

Do they like to buy pretty things regardless of whether they sell?

Maybe they own the building so rent is cheap. But the reality is you have to pay attention to your business fundamentals before it is too late.

You’re either taking out a profit or you’re putting in money.  Period.  When you continue to pump money in with no letup, you have to ask if this is a viable business or not.  Many owners discover they’re subsidizing their customers by not pricing correctly, being over-bought or staffing so their friends have jobs.

I heard a speaker last week say you could double sales by just asking more people to buy.  If you believe that or you think saying, “I refuse to participate in the recession” will result in more sales, I think you’re delusional.

Much like after 9/11, we are in a different environment than many of us have ever faced.  We can’t hide from the truth – business is work.

A marriage is work. Raising kids is work. We see what happens when people don’t take care of those things.

When you’re in denial about your business, the financial results can be devastating.  When it closes, everyone sees what the owners should have seen.

Some business owners I read about in the papers and online seem OK with hoping for better days, not working on them.  But isn’t that fairly naive, almost child-like? For them I’d suggest now is the time to take off the bib and put on the apron.

Put another way, if you’re happy being in denial and driving blind in the car, you are on a collision course with reality.

If you want to know what you can do about it, get a copy of Phibbs book, You Can Compete: Double Sales Without Discounting. It is the backbone of scores of businesses’ training programs because it teaches his methods for making a business successful. Download more free tips at his website. Follow him on Twitter at http://www.twitter.com/theretaildoctor.com

You can watch a local TV report of it on YouTube here. Get past the racial nature of all the clips’ comments which are numerous and disgusting.  As retailers or small business owners you should recognize damage when you see it.

Just last week we saw Amazonfail where “someone” mysteriously removed gay and health titles from Amazon.com.  Then Domino’s in Conover, NC with the employees boasting on camera how they put food up or wiped it on various parts of their body and then served it.

Now comes the spectacle of franchisees not buying enough chicken to support a major ad campaign of their core product.  It would be like Starbucks saying, “sorry out of coffee.”

I mean, how stupid do you have to be to not go out and buy more chicken from your distributor, Costco, or even several grocery stores to save the day?  Pretty stupid if you are a customer.

I ran into this on a small scale at the mega-grocery store Pavilions in Newport Beach, California.  I’d ordered a pastrami on rye at the deli.  The order taker came back to me, “Sorry, we’re out of rye bread.  You want it on sourdough?”  “Um, can’t you just walk over and get some rye from the bread aisle?” “Sorry sir, we’re not allowed to do that.”  Who eats pastrami on sourdough? I walked out and never came back.

Were Popeye’s franchisees’ thinking, “We’re not going to be making any money on this so we’ll just run out?” Was this was an “accident?” Restaurants know their numbers.  The deal was $4.99, not free.

Some franchisees complained in the press of people “trying to make multiple orders when it clearly said, ‘one per customer.’” Customers hate exceptions – people driving home on a Friday night, tired and looking to feed their family would OF COURSE want to buy more than one.

Did Popeye’s CMO Dick Lynch not have a clue as to how this could play out? I doubt it. They wanted buzz and a “killer promotion” and got it while angering people along the way. Not just anyone but their loyal customers.

The right thing to do would have been for the owner to have been personally handing out rainchecks for another day.  That would have taken guts and saved the sale and the relationship with loyal customers, rather than those franchisees who took the easy way out by taping a sign across the drive-thru speaker and closing early, some in mid-afternoon.

It reminds me of the old days at Sears when they advertised a washer for $99.  The salesmen on the floor called it the golden stake.  It was to lure customers in but if you sold it you were gone.  I believe the words then were, “bait and switch.”

With Popeye’s you just got “bait.”

If you want to create a promotion, you have to plan for what happens when it fails – like we’ve all had with boxes and boxes of widgets to giveaway clogging the back room – and what happens if it is a runaway.

Clearly, something went wrong with Popeye’s promotion and now it is all over the Internet with friends telling friends, “can you believe Popeye’s chicken ran out of chicken?”  Just like I just did to all of you.

I am so tired of the words “crisis”, “fear,” “downward spiral,” “worsening economic news,” etc., that I’ve become numb to whatever words follow. One word that gets used over and over again that really gets my goat, as if it were something fresh and newsworthy is the word “discount.”

Every dire prediction for holiday 2008 has to talk about retailers having to “discount.”

Extra! Discounts!

This is not news and hasn’t been news for a long time. Take a look below from the past five years:

From the Boston Globe, November 23, 2008, “Consumers will look for bargain-basement prices to help meet austere budgets, while retailers from Wal-Mart Stores Inc to Saks Inc learn if they have the right products at the right prices.

From the Chicago Tribune, October 29, 2007, “According to a new study by BDO Seidman, LLP, one of the nation’s leading accounting and consulting organizations, almost three-quarters (73%) of chief marketing officers at leading U.S. retailers believe discounting and promotions will be more plentiful this holiday season compared to 2006 due to the current credit crunch.

From CNN, December 11, 2007, “In some instances, consumers say they’re simply turned off by poor customer service or not enough discounting.

From Bloomberg, November 25, 2006, “Holiday discounts this year seem to be locked in a range between 20 to 60 percent.”

From the New York Times, November 28, 2005, “The disparity, analysts said, could indicate a tough season ahead for clothing retailers like Gap and Aéropostale and even deeper discounts for shoppers as the chains scramble to build momentum in the crucial approach to Christmas.

From The Associated Press December 2004, “Retailers are expected to increase discounting before Christmas after a late-buying binge failed to materialize during the weekend, fueling worries that industry profits could be hurt in the fourth quarter”

From CNNMoney, November 28, 2003, “ Despite signs of a pickup in the economy and an improving labor market, consumers don’t appear to be feeling the Yuletide cheer.  The Conference Board in a survey Monday said U.S. households on average are expected to spend $455 on gifts this year, down 5 percent from 2002.  “The 5 percent drop is shocking,” said Delos Smith, economist with the Conference Board, a New York-based business research group. “It indicates that perhaps the consumer tax rebate stimulus that benefited retailers during the back-to-school season has petered out.”  Analysts say it’s the discounters such as Wal-Mart and Target that are expected to ring in the bulk of holiday sales, while department stores will offer the most aggressive promotions.”

Does all of this sound too familiar?  It should – its an easy story to tell every year at this time of the year. That won’t stop any number of news sources from touting retailers “aggressive discounts needed to lure customers this holiday season” and how they aren’t working.  Look for those stories this Thursday, Friday, Saturday, Sunday and Monday. 

I’ll continue my thoughts on discounting in my next post about why people discount. Stay tuned!

There Are Lessons For Mom & Pop Businesses In Wall Street’s Tumult

It’s no mystery how Lehman, Behr Stearns, Fannie Mae, Freddie Mac and now A.I.G. have ended up – referencing the old Smith Barney commercial – they didn’t earn it.  Through manipulation and company executives’ hubris, those failed firms are now wrecking havoc on the world economy.  But make no mistake this didn’t come out of left field – many people could see what was happening beginning in 2005.

Anyone else feel like we’re watching reruns of Enron’s Smartest Guys In The Room? This time they aren’t just jacking California but the world. 

We’ll get through it, even if your grandchildren’s grandchildren will have to pay the cost.  The Federal government sees the cascading effect of letting a disorderly breakup of these major financial players continue and have stepped in.

If somebody had told economists a year and a half ago what was about to befall Wall Street and then asked them to predict the economic impact, they almost certainly would have forecast a steeper downturn, with many more layoffs, than has occurred. Lehman could have taken steps to correct their problems months ago – they went out and consciously purchased more of the toxic junk they were already holding thinking they wouldn’t get burned. 

The U.S. economy has now punished those who chose to bury their heads in the sand.

The lesson for mom & pop businesses is two-fold.  First, Wall St. is not Main Street.  We couldn’t leverage ourselves into such a predicament.  Or could we?  (See my post about Poka Dott last week.)

The lifeblood of the U.S. is the 22 million businesses with five or fewer employees.  Commonly referred to as “mom & pop” businesses, together they produce more than $1 trillion in annual revenues. 

Second, we as business owners have got to make a profit.  The days of taking out a home equity loan to support a failed business model should be done.  The days of starting a business because your husband/wife “needs something to do” are done.  So too are the days of hiring your friends because you are comfortable with them.  If you can’t fire them, you shouldn’t be hiring them.  You have to make a profit.

The lessons are clear for independent businesses – don’t assume things will magically turn around.  Sure the government swooped in and saved these giants but there’s nobody going to save you but you.

Do you have a mission to make people’s lives better by using your products or services rather than just a way to make a living?

Then get out there and compete!  Walk your neighborhood and introduce yourself.  Call your best customers.  Don’t just sit there and stew about your 401K or mortgage or get into mindless chatter about lipstick, Britney’s comeback or how awful the hurricane was.  You don’t have the luxury of a negative thought right now.

The ones to lead America now are you, the small business owners, the ones who don’t play games with other people’s money, who show up and work the long hours and who make a profit. 

We need you to do better than ever. You have to earn it. 

Don’t forget, you can always bring my positive sales tools to your next meeting, just come over and take a look at some of my clips.