Free Advice

It’s what you say and what you do

Would you like to increase your customer traffic and sales? Walk into any major retailer and you’ll get a lesson in how to use physical displays to “lead” people past the expensive, high margin and/or spur of the moment items.

Walk into any retailer, of any size, and you’ll also get a lesson in how not to talk to the customer. I’m appalled at the number of salespeople (or whatever trendy word now used to describe them) who act disinterested or blurt out the old “Can I help you?” Of course I don’t need help, I’m a capable person.

The goal of every business should be to generate loyal, ecstatic customers. How many things do you do that are necessary to keep them coming back? 

Lead them to your higher margins

The last two months my articles have been aimed at outside sales situations. This article will deal with the retail setting. And setting is a good word to use and how your store looks is very important.

Let’s say you’re a small retailer and can’t afford one of the high profile retail consultants. What can you do to maximize exposure of high margin items? My recommendation is to spy on proven winners. Play a visit to upper end stores, national chains and other successful operations.

Here are a couple examples. Let’s start with somewhere we all frequent, the grocery store. In particular, upper end stores like Larry’s Market, QFC, etc. First, where do you find the common items most people use regularly, like meat, milk, beer and wine, seafood, etc.? Usually in the back, so you have to walk past all the impulse items to get there. Second, what do you typically find at eye level? Hint, it’s not the low margin, popular brands. You will find the specialty items that are higher cost and higher margin.

Walk into any department store. It’s like going through a maze. You go right past jewelry, perfume and other displays that are right in the middle of the aisle. As you walk by them, displays of high-end items assault you from the other side. Learn from these stores. They’ve been doing it a long time, they hire the best and brightest in the field and maximize their return on space (remember, open space lets the goods stand out).

Finally, visit stores like Schuck’s or Hairmasters. Note the types of products they put near the doors, by the registers or in their specials area. Getting you (and others) to spend just a few more dollars on something you didn’t know you needed may be the difference between good and very good profits. 

What you say really does matter

Ten years ago I heard a tape that relayed a study about how sales increased by a fairly high percentage (15-20% as I recall) when a different greeting was used (vs. “Can I help you?”). The suggested greeting on that tape was, “Have you ever been here before?”

It doesn’t matter exactly what you say, the object is to catch the customer off guard. Take them out of their element and get them in a conversation. Build a little rapport so they’ll let you know why they’re there, what problem they need to solve or how your services can benefit them.

Do you know how you compete? Are you the price leader or do you charge more because you deliver more? Every day we pay more than we have to for goods and services. Not to waste money, but to get quality, value or status. Tully’s and Starbuck’s coffee is pricy compared to Folgers and a Ford gets you to work and back as does the much more expensive Lexus.

Determine the problem they need to solve. I can’t emphasize that enough. Everyone has a problem to solve when they make a purchase. They need equipment working right, a new color in their house, a removal of stress through a relaxing meal, a hairstyle that flatters their face better than the old one, etc.

Once you determine the problem, make sure you can solve it, put it in perspective and offer alternative solutions. “Our base model will do the job just fine and will last for two years, just like it previously did. However, you should consider the whiz-bang version that is guaranteed to last at least three years, typically lasts four years and only cost 20% more.” Here you’re actually helping the customer and it will generate loyalty and add-on sales.

Keep them coming back

Times are tough in many industries. Customers will switch based on pennies. It’s your job to cater to your customers and let them know you care. This is a big part of marketing. Letting them know you have what they want.

A couple years ago a friend asked me to speak to a business owner she knew. The owner had a retail operation that sold gifts, novelties and similar items. Nothing essential, but things that many people love and that give them comfort. As we discussed the business it became evident she did absolutely nothing to know who her customers were or to keep in touch with them.                 

Her idea of marketing was advertising. Yet advertising is only a small part of marketing. In this day of advancing technology, it is far easier to keep in touch with people than ever before. Here are a few tips, similar to what I offered the gift storeowner.

·        Get your customers to register with you (become “member”) so you can make them aware of specials.

·        Send out regular notices (preferably by e-mail) announcing “members only” sales or pre-sales.

·        Regularly clean out your inventory by offering it to your loyal customers first. This means don’t get attached to things. It’s better to sell something at cost and generate cash flow than have it on the shelves (and on your books) for years.

·        Give your membership list advance notice when hard-to-get items are due in.

·        Send out a regular e-newsletter offering valuable tips (not just specials).

·        Use e-mail coupons.

·        Call your members to remind them of special discount days. (I used to have a discount card for a local store that gave me 20% off on the first Tuesday of every month. They used to call me to remind me that the first Tuesday was in a few days.)

The lessons here are to learn from more large stores, pay attention to exactly what you say to customers (the pros use scripts, why can’t your clerks?) and keep in touch so your customers realize you care and want to be of service.

© Copyright John Martinka 2003. All rights reserved.