Archive for May, 2008


Friday, May 30th, 2008

Idiom: Price

You say, “We’ve got the best prices in town!”

She says, “That’s still too expensive.”

Your customer will always try to use PRICE as her first line of defense, hoping that this seemingly ironclad excuse will stop any salesperson in their tracks.

“It’s pretty, but it’s just not in my budget.”

But she will buy that very same item when her PERCEPTION exceeds your PRICE. Of course her perception includes the facts about the product itself, but it also includes a lot of intangibles, like…

Will I like it when I get it home… or am I stuck with a white elephant?

Will it last… a good long time, but not so long that I’m buried with it?

Is it the right brand… or a good enough knockoff?

Do I like my salesperson and this store… am I having fun shopping here?

Can I explain why we need it… why it’s better than the cheaper one?

And, oh yeah, “How much is it?”

How do you shape her perception of your price?

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Thursday, May 29th, 2008

Quicksand

Working with a very important client this week to ‘Discover’ their untold story, I saw surprise on the face of the business owner when we stumbled upon the area causing his business to grow at a snail’s pace.

Does it feel like quicksand? Is your business growing slower than the interest payment on your line-of-credit? Have you begun the entrepreneurial dance of assigning blame? Do you suspect this might have something to do with ineffective marketing?

Typically, business owners feel their business should be growing faster, but few isolate the problem. The elements affecting the growth of your business fit into four distinct categories.

Personal Experience (PE) Are you meeting your customer’s expectations or falling short of them? Do you have policies and procedures that work for you, but make your customer mad? Does the person answering the phone make you customer excited they called, or are they made to feel like the tag on Mini Pearl’s cheap straw hat? Does each touch point justify your prices higher or do you only compete on low price?

Impact Quotient (IQ) How does your offer meet the felt need of the reader or listener? Yelling, “Fire!” from the 50th floor of a downtown skyscraper has maximum impact – and it only needs to be said once. How often are you screaming at the top of your lungs and feeling like you’re howling at the moon? There is no such thing as the wrong customer, there are only wrong messages. Get your message right and customers will come in droves.

Share of Voice (SoV) Is a function of budget. How much money are you willing to spend in your marketplace? If you’re the only store in a small town your SoV can be very high for on a little amount of money. However, if you’re trying to compete nationally via the web you’ll find the formula far more difficult to balance. You don’t want (or need) every Tom-Dick-or Harry visiting the site or your store. You only need to spend enough to get the right number of customers into your business. Most advertisers try to reach too many people.

Market Potential (MPo) How big is the lake you’re fishing in? What percentage of business are you currently reeling in? How much business is available in your category? Is there sufficient room for growth? Once these questions are asked and answered you’re simply dealing with numbers. The smaller your percentage of market share the greater your upside potential.

Your industry experience is the simplest way to estimate your MPo. You know how much business you’re doing with, how many employees you have and how many delivery trucks. Now look around. Visit you competition and figure out their employee count, etc. You’ll be surprised how close your estimate will be. Next ask your trade association for research. They often know what percentage of business each store is doing in each trading area.

If you have decided your lake is the right size then it is time to use the formula for problem identification.

PE x IQ x SoV x MPo = Topline sales

Once you have seriously looked at each element and done the math you’ll often find there is a pot of gold waiting to be carried off to the bank. And the heavy lifting becomes more pleasurable because it is aimed at real problem solving, not just the vague complaint of bad business.

Writer’s note: The information here has been gathered over the past 11 years studying at The Wizard Academy in Austin, Texas. If you’re feeling drawn to learn more and want to get it straight from the horse’s mouth, check out the Magical Worlds Communications Workshop. For $3,000 plus travel you’ll be able to experience this study for yourself. I’ll tell you one thing, life sure begins to look different once you understand these principles.

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Monday, May 26th, 2008

Refiner’s Fire and Change

When your pain exceeds your fear of risk, you will begin the process of change.

At a key crossroads of your career, ownership must ask, “Why does every day feel like a battle? What causes my frustration to occur? What standard is missing (or isn’t being followed) that is allowing these frustrations to keep happening?” As the owner you’ll need to stick to searching for the cause of the problem, rather than fixing blame. This will keep you on the path toward building a system to predictably solve problems. If not, you’ll continue to be reactive and the frustrations may temporarily subside… but they will always return.

When you feel frustrated, stop and notice what is going on in the business. Consider exactly the circumstances and write them down.

Do this for few weeks, reflect on you notes and deal with them strategically. The common themes will become clearly visible, such as multiple occurrences in one department, sales trouble at the beginning of the week, issues with particular collections or vendors, etc. Once common problems are identified and analyzed, it becomes easier to pinpoint what has to change and to document standard procedures to deal with the issues.

Awareness of system problems will help you prioritize change and develop systemic solutions, versus blaming people and patching with short-term fixes. The most important element of change management is complete focus on the outcome. This happens in three phases.

The first is melting the company down to overcome the existing mindset. This is the beginning of cultural transition that must take place. Inertia and defensiveness have to be worked out of the system and the people. In phase two, everyone is “dazed and confused.” They are aware that the old model is being transformed but there is no clarity as to what the new model might actually look like. The third phase happens only after the impurity of the meltdown has been cleared. The dross has been removed, so to speak, and the new culture and mindset will begin to crystallize and daily organizational life returns.

Look closely at what is causing you pain. Assuming you’ve hired decent people, stay focused on systems and not people as the cause of problems. Otherwise, you may begin to feel that your business is stagnating, and so are you. “Sales are down, deliveries are late, quality is bad… and so is my patience from yelling at the staff. Management shouldn’t have to look over everyone’s shoulder all the time,” you lament.

If you have to be there every single day to oversee every little thing, then your people don’t understand what they’re supposed to be doing.

This is classic managing by assumption: leadership assumes that each employee knows what to do, while they assume someone else is responsible, and, ultimately, all accountability falls with a thud at the feet of the owner. Remember what ASSUME stands for.

The flip side of management is agreement and exception, when management and employee understand and agree on the terms regarding the work that will be done in position or on a specific project and communicate any exceptions.

The agreement component requires the employee to sign a written job description accepting full responsibility for performing the required work and achieving results. Ownership agrees to provide the employee with resources. The manager can then assume that all work will be done as agreed. The goal, besides obtaining the stated results, is to avoid unpleasant surprises.

This sounds nice in theory, but the reality is often different. There are breakdowns and wrong orders, missing in action employees and any number of retail snafus. And by damned will you be caught unaware.

When your staff has agreed to the performance standards in advance, they must let you know the moment they realize a task won’t be completed on time, whatever the reason. This is often handled by an exception report that states the original commitment, the reason the commitment won’t be met, and a proposed alternative solution.

Because not all retail situations deal with issues of national security, knowing in advance that something isn’t going to happen allows time to make adjustments before it becomes a crisis. This keeps management in control to decide whether the reason for missing the deadline and the alternative solutions are acceptable. Regardless of the outcome, communication channels are kept open, chain of command is in place, and management maintains the ability to act strategically. These are all things ownership is truly looking for.

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Friday, May 23rd, 2008

Idiom: Construction

You say, “We have 8-way hand tied cushions!”

She says, “So what?”

The closest your customer ever came to building a piece of furniture was a paper towel rack she made in 8th Grade shop class. Do they even teach shop class anymore? Respectfully, her experience with furniture construction is limited to cramming one more pair of socks in the overstuffed drawer and setting the table.

She most likely does not understand the difference between French and English dovetailing, or between 8-way hand tied and hogtied. She certainly does not walk in the door knowing the difference between Grade A and Grade D fabrics.

How do you teach your customer about what she’s buying in a way that makes her appreciate its construction, strength and durability… and its price?

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Friday, May 16th, 2008

Idiom: Delivery

You say, “We deliver!”

She says, “I’m excited about my new delivery, but…”

“But… I’m not looking forward to staying home all day to wait for it. Or what if I have to work that day? It will be a huge pain in the neck to take time off to come home and let them in, and Bill might be out of town. I certainly don’t want my nosy neighbor to let them in.”

“But… my home is probably going to look worse before it begins to look better. I mean, what am I supposed to do with my old stuff? It’s going to have to be moved somewhere in order to get the new stuff in… which I’m sure will reveal a colony of dust bunnies. Will the new stuff even fit? Will I have to rearrange the entire room?”

“But… I don’t even know these people! I teach the kids about stranger danger, yet here I am inviting a couple of burly guys into our inner sanctum.”

“But… and this is my biggest BUT… what if I don’t even like this stuff I’ve been waiting for all these weeks? Will it look pretty, will it work properly, will it make me feel good?”

“What are my options if my mother-in-law raises her eyebrows at it?”

How do you answer your customer’s “But’s…”?

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Wednesday, May 14th, 2008

“Facts is facts. I run a business here, I’m cleanin’ house.”

If we simply stay focused on bad news we will continue a self filling decline into the retail abyss. Yes business conditions are difficult. Possibly as difficult as they have been in the last ½ century, but retail furniture remains a numbers business.

Is your inventory at the proper level? The industry average for inventory turn is 3.2, what’s yours?

The equation: COGS / Average Inventory = Inventory Turn.

During recent performance group meetings we spent significant time discussing this topic. The question is simply; would you rather have furniture in boxes in the warehouse or cash in the bank?

Back in 1986 one of the smartest retailers I have ever known explained to me during difficult times the key to weathering the storm is to control your inventory. “Spread the floor, decrease density, make each display more attractive, and put the money in the bank!” he’d say.

22 years later I believe this to be the best advice I’ve ever received.

Maybe some of you can use it in 2008

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Tuesday, May 13th, 2008

Cartoons and children’s stories explain these best.

Archetypes are based in the observation of differing but repeating patterns of thought and action that re-appear time and again across people, countries and around the world.

Jung’s main archetypes are not ‘types’ in the way that each person may be classified. Rather, we each have all basic archetypes within us. His four main forms of archetypes are: the shadow, the anima, the animus, and the self.

Jung said that there are many archetypes. These are often linked to the main archetypes. They also overlap and many can appear in the same person. Examples are:

Family archetypes

  • The father: Stern, powerful, controlling
  • The mother: Feeding, nurturing, soothing
  • The child: Birth, beginnings, salvation

Story archetypes

  • The hero: Rescuer, champion
  • The maiden: Purity, desire
  • The wise old man: Knowledge, guidance
  • The magician: Mysterious, powerful
  • The earth mother: Nature
  • The witch or sorceress: Dangerous
  • The trickster: Deceiving, hidden

Animal archetypes

  • The faithful dog: Unquestioning loyalty
  • The enduring horse: Never giving up
  • The devious cat: Self-serving

Tonight watching 33 different K- 5 acts at my daughter’s school talent show reminded of the beautiful differences in life. It also made clear what Jung apparently understood when he developed his theory of personality archetypes.

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Friday, May 9th, 2008

History Repeats Itself

The world-changers who are drinking Heineken on America’s college campuses today weren’t a speckle in their mother’s eye when Coke taught the world to sing. But almost one generation later (37 years, to be exact), these two ads are mirror images of each other. Funny how that works, isn’t it?

Of Millenials, the New York Times (2000) said :

“In some ways, they are as wholesome and devoid of cynicism as the generation that wore saddle shoes.”

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Friday, May 9th, 2008

Idiom: Time

You say, “This weekend only!”

She says, “Not on my calendar!”

There are many demands on your customer’s time.

There are things she has to do, like go to work and get groceries and take the kids to the dentist.

There are things she needs to do, like read bedtime stories and go out to dinner with her husband.

Then there are things she wants to do, like read a beach novel or go on a cruise.

If you could sell time in a bottle, she would be willing to pay any amount of money for it.

But since you can’t, how DO you meet her need for time?

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Friday, May 9th, 2008

Idioms

No, not “idiot.” Idiom. It means:

1. an expression whose meaning is not predictable from the usual meanings of its constituent elements, as kick the bucket or hang one’s head, or from the general grammatical rules of a language, as the table round for the round table, and that is not a constituent of a larger expression of like characteristics.

2. a language, dialect, or style of speaking peculiar to a people.

3. a construction or expression of one language whose parts correspond to elements in another language but whose total structure or meaning is not matched in the same way in the second language.

Does it ever feel like you’re speaking a different language than your customers?

In these “Idiom” posts, you’ll learn to speak your customer’s language. She’s a very selfish gal, really. It’s all about her. Let’s figure out who she is and what she wants so we can give it to her.

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