Categories
attitude Business culture Employees Entrepreneurs Leadership Small Business strategic planning Strategy

Start the right things

A while back, a friend sent me a link to an old blog post called “30 things to stop doing to yourself“.

It struck me that while the list was intended for application in your personal life, the list could also be applied to your business – with a tweak or two.

Rather than talking about 30 things to stop doing, I decided to discuss a shorter list of things to start doing. Yes, lists are old school – but the things on the list require pigheaded determination to keep folks tending to them. A reminder never hurts.

Start spending time with the right kind of people. – This includes customers, mentors or other leaders of the right sort. What’s the right sort? The ones who spend their time trying to improve, grow and bring the rest of town and/or your industry with them. Don’t forget to start being the right kind of people.

Start tackling the things that challenge your business rather than waiting on them. – Few business challenges get better over time. The rest tend to fester like an untreated wound.

Start being transparent. – Not “politician transparent”, but really, truly transparent. Faux transparency is as useful as horse biscuits – yet that’s exactly what we get from most businesses. You’ll be amazed what can happen when you simply stop pretending, stop hiding, stop manufacturing spin and stop playing games. Think you aren’t doing that now? Think about it. Consider what a frank, win-win conversation with your staff, your suppliers and your customers could produce. Opportunity, for one – which will start with the next list item. Worried about the reaction? It’ll be no worse that the reaction if everyone figures out for themselves that the business they know isn’t the real business after all.

Start putting your customers’ needs front and center. – As Zig Ziglar said, if you help enough others get what they want, you’ll get what you want. If someone moves your cheese and you whine about it – you’re focused on the wrong things.

Start being what you are rather than what you aren’t. – Deliver the value you love to deliver and the right customers will love *that* business. I don’t mean the well-worn or often misguided/misinterpreted “do what you love and the money will come”. I mean do what your customers love to get from you. Not sure what that is? Ask them. They know what you rock at and they know why they value it more than anyone else’s. What do they see as the work you have the most enthusiasm and insight for – particularly that which no one else brings? Yes, I know you can do the other 37 things that everyone else in your market does. Remember that “focus on customer needs” thing?

Start making mistakes. – No, I don’t mean start goofing up intentionally. Your customers need your business to stretch so you’re ready for the place they’re going. They either go with you, or without. If you aren’t messing up, you either aren’t doing anything or you aren’t doing anything interesting or new. Your best customers are the ones who will leave you behind if you’re on cruise control.

Start having higher standards. – Seek out customers, employees, products and partners who force you to improve your processes, people, products and services. If you accept what you accept now, you may as well hit the complacency cruise control – which is all too easy when things are going well. This doesn’t mean not doing anything until you can do it perfectly. It means having a constant focus on improvement, including learning from the mistakes we just talk about.

Start accepting that you aren’t ready. – Nobody is. Start anyway. They call it comfort zone, but it has another name – the place your company was before it woke up, before it doubled our sales, before it started working with better customers, before it raised its standards, before it discovered that new market, and so on. The way it used to be that you’d never go back to if you could help it.

All of these things are going to impact your culture, processes and much more. Some employees, customers, vendors and partners will not be ready for that. Plan how you’re going to deal with that and communicate well.

Categories
attitude Employees Leadership Management Personal development Reality? Small Business

Are you a drama queen?

Memories: A Lament
Creative Commons License photo credit: -Jeffrey-

Dan Kennedy is known to say something to the effect of “If I wake up at 2 am thinking about you or your business, you’re in trouble.”

I can relate.

For me, the “are you worth it?” measuring stick is often drama-related.

Drama happens. It’s part of life. On the other hand, if you intentionally generate drama when it isn’t necessary (is it ever?), your effectiveness/ROI aren’t what they should be.

If a vendor introduces unnecessary drama into my life, that vendor is the next one I replace.

If a contractor or staffer introduces unnecessary drama into my life than they are worth, they are the next one I replace.

You may say you’re set in your ways, crotchety, fussy or whatever – regardless of your age. All of those are excuses for things you can change about your business persona.

Keep in mind that no one searches Monster.com looking for crotchety people who are a pain to work with.

Drama isn’t picky

It doesn’t matter whether you’re the leader, the newbie, an employee, a vendor, a contractor or a temp – if you’re creating this sort of environment around you, you will either drive people away from you or you’ll provoke them to “offer you an opportunity to seek work elsewhere”.

Not being a drama queen (or king) doesn’t mean you don’t report/discuss problems or enter contentious discussions. It means that you don’t turn them into an episode of “Real Housewives of Orange County”.

If you manage the drama makers and fail to address the environment they’re creating, you could lose the best people on your team. Not only do they not want to deal with that stuff, because they are your best, they can easily find another opportunity. Think about how it would hurt to lose your key person in any one department *tomorrow*. Now think about what happens if you lose 2 or 3 of them – all because you wouldn’t take action

Real Customers of Orange County

Yes, there are customers who introduce as much drama as the “Real Housewives”.

Ultimately, you can either feed this beast, tame it or slay it.

If you feed it, you’ll repeatedly have to deal with their drama.

Every contact with this kind of customer which goes “untreated” has a cost.

  • Your staff doesn’t want to deal with them, so they avoid calling them back.
  • They get slower call backs than they expect, so this stirs them up even more.
  • They will have less legitimacy with your staff than a typical customer, because your staff tends to be more focused on the drama rather than what’s being said.

That last one is really dangerous. These customers can be more invested in their work than is typical, which is what drives their drama. If their concerns are discounted because of their emotional baggage, you could miss something quite critical.

If you tame the customer’s drama, you’ll get better customer relationships from it. If you keep at it, you can usually change their attitude.

I’ll always remember a classic conversation my support manager (Hi Julie!) had with a frequently cranky customer. He was a nice guy, but he’d get more excited about an issue the more he talked about it. As he worked himself into more and more of a frenzy, she stopped talking about the problem they were trying to solve. In a calm, quiet voice, she asked him if he was upset with her. He said no, realized what he was doing and they resumed the conversation without drama. Without the infection drama brought to the conversation, the situation was quickly resolved.

That customer became one of our advocates, and was someone who referred his peers to us as new customers. Yet he started out as one of the dramatic types. The kind you didn’t want to call back.

That leaves the beast you must slay. Like vendors, contractors and staff, you’ll eventually encounter a customer who must be fired. The cost of dealing with them is too high. You’ll know when it’s time. The benefit of not having them around will far exceed the revenue.

Bottom line: Be the professional who doesn’t make people’s lives more complicated, dramatic or contentious. Even better, be the one who defuses those situations.

Categories
attitude Business culture customer retention Entrepreneurs Improvement Positioning quality Real Estate Setting Expectations Small Business

What surprises say about your business

What does being professional mean to you?

To some, it means “Not being an amateur”.

So how does the public differentiate amateurs from professionals?

In some circles, money is the key. Amateurs don’t get paid, professionals do.  For example, an amateur golfer typically isn’t eligible for prize money in tournaments. Once they decide to go pro, they can’t go back to being an amateur.

If not money, training

For others, amateur can imply (sometimes incorrectly) that someone is less skilled than a professional doing the same task, eg: a pro golfer is surely more consistent and better at their trade than an amateur. Likewise, an amateur welder is more likely to produce cold, poor quality and/or “messy” welds than a professional welder.

In other lines of work, being a professional requires a bit more effort than simply deciding you’d like to get paid. Many professionals require internships, experience, tests and/or certifications to prove their mettle. To become a journeyman (professional) welder, it’s likely that you would first learn as an apprentice with an experienced welder for a year or more.

Despite all of these literal and occasionally artificial steps/barriers that prove something (skills, access to funds, etc), I do not believe that the acts of being paid, taking training, passing tests or earning certifications prove that someone is a professional. Some of these things prove that the local, state and/or Federal government consider the person a professional, but we’re talking more about checking boxes (however legitimate they might be) vs. proving something over time.

To me, a professional is someone who consistently meets goals, avoids (if not eliminating) client surprises and demonstrates an ability to solve problems while encountering unanticipated events – all while dealing with amateurs.

Why the “while dealing with amateurs” part? Because most of us are amateurs in the professional’s field when we’re their client.

Getting Real

Due to circumstances within my control, I’ve been involved in a few real estate transactions over the last month or two.

One of these required reviewing some residential rental property.

During one of these visits, I found doors that didn’t close properly, a microwave and disposal that didn’t work, a missing master bath mirror, loose toilets and cobwebs everywhere – along with a raft of eight-legged houseguests.

These things are not unusual. Agents find these things all the time, particularly in places that have been empty a while. The high-performing professionals do their best to make sure these things are fixed before they take a client to a property.

You may remember the story I tell about the real estate checklist an agent uses. The checklist demonstrates a level of professionalism / experience while making it clear that while things come up during a transactions, the agent has seen it all and will handle it.

In other words, there won’t be surprises they can’t handle. Customers really don’t like surprises.

Again, that Holiday Inn thing

Yes, I’m referring to that “the best surprise is no surprise” thing.

Professionals seldom get surprised by normal things like the property issues I noted above. If they are surprised, they take steps to encounter them in time to deal with them and eliminate problems before a client can see them.

Usually.

During my visit, the agent was surprised by the number of easily-solvable problems that rental property had. That’s what provoked this discussion.  This isn’t just a real estate thing – my experience simply makes a good example.

No matter what you do, the most noticeable difference between the amateurs and best professionals in your field is how the pro prepares for and eliminates surprises, unknowns and trouble in general. How they insulate their customers. It’s what people rave about when they recommend you, or grumble about every time they think about the experience they had.

Which of those two discussions do you want to be the subject of?

No matter what

No matter what you do, take a few minutes each week to mull over what “being a professional” means to you, both as a provider of products and services as well as a consumer/client.

Ask your clients what could have made their last experience with you just a little bit better? What would have made it less annoying?

Finally, what can you take from other experiences you have? Tweak and use them on your own business.

Categories
Apple Box stores Business culture Buy Local Competition Creativity Customer relationships customer retention Customer service ECommerce Retail Small Business Strategy websites

Showrooming and the sales prevention department

Last time, we discussed the often forgotten reason for showrooming that happens after price shopping: convenience and time/fuel savings.

Remember Kübler-Ross’ five stages of grief? If you’ve forgotten, they are denial, anger, bargaining, depression and acceptance.

When applied to showrooming, it isn’t much different. Acceptance and the clarity that accompanies it are where the sales live. Even big retail is figuring it out.

Big retail embraces showrooming

Big retailers are starting to embrace showrooming because they’ve realized that reacting to and/or punishing it has proven ineffective. Learn from their mistakes, research and investments. Customers who showroom are likely to be better informed shoppers that you don’t want to lose. Their phone might help them decide that your store is the right place to buy.

Retailers that welcome the smartphone shopper in their stores with mobile applications and wi-fi access — rather than fearing showrooming — can be better positioned to accelerate their in-store sales – particularly with the holiday shopping season approaching.

Shoppers armed with smartphones are 14 percent more likely to make a purchase in the store than those who do not use a smartphone as part of their in-store journey. – Deloitte study for Saks Fifth Avenue

Most small businesses don’t have the resources to embrace showrooming with a smartphone app, or don’t think they do. If that’s the case, what do you do?

The simplest answer is to side with the customer. Do this by making the in-store experience so much better than anything anyone can provide online. That’s where it pays to visit an Apple store – where nothing is like retail as you typically see it.

The last Apple store I visited was in Portland. In an average-sized mall store, there were 28 employees on the sales floor – and all of them were with customers. I thought this was odd, so I tried another Apple store.

Same thing.  There were over 100 shoppers in the store. Almost all of them were in groups engaged in a conversation while they used an Apple device. Many of those conversations included an Apple staffer.

The sales prevention department

Compare that to the shopping experience in a typical consumer electronics store.

Try to test drive a Kindle. It’s locked in demo mode. You can’t pick it up and hold it because of the security device and short “don’t steal me” cable attached to it.

The display of the device is focused on theft prevention. Why is this a bad thing? Because theft prevention becomes sales prevention.

In an Apple store, nothing’s locked down. Sure, there are lots of people around to make sure you don’t walk out the door with that fancy MacBook – but the products are presented in a way that is clearly designed to encourage you to pick them up and try them out.

Unlike most stores that sell laptops and tablets, the devices aren’t cabled down, nor is there a password protected screensaver that prevents you from doing any real examination of the machine.

They make this happen because no matter what you do to the device, at the end of the day, they have systems in place to “wipe” them and reset them to out-of-the-box new condition, software-wise. This assures that the next day’s sales aren’t impacted by what someone might have done to a device. They can also reset them during the day if someone went really crazy.

It’s almost unfair to sell against a setup like that. Perhaps that’s why Apple’s retail sales per square foot are higher than anyone else’s – over $6000 per foot.

What’s different?

If you’ve ever visited an Apple store, you’ve never seen a dead machine, much less one with a message that tells you it needs attention from a technical person. You won’t see a locked screensaver.

Now think about other electronics retailers. Their sales floor machines are locked down that you can’t do anything and there’s almost always one that’s off in never-never land, waiting for some tech help.

Step back a few paces. This isn’t just about Apple, laptops or tablets. It’s about encouraging someone to engage with your product, thus *enabling* a purchase.

No matter what you sell, ask yourself these two questions:

  • Are your displays focused making it easy to fall in love with a product and buy it?
    OR
  • Are your displays focused on controlling the sales process and preventing theft?

Making it easier to buy is something every one of us can do. It’s price-based showrooming’s Kryptonite.

Categories
Automation Box stores Business culture Competition Customer relationships customer retention Customer service ECommerce Retail Setting Expectations Small Business websites

Forgotten: What happens after they showroom?

Plastic supermarket carts.
Creative Commons License photo credit: Polycart

The last time we talked about showrooming, I referred to a Harris Poll that exposed a conflicting behavior among shoppers.

The behavior? “Most” people (70%) say they showroom because of price, yet they often buy locally even if it means having to pay a slightly higher price.

That’s right, 70% didn’t choose solely on price. Once again, buyers say one thing, but when convenience and access to local expertise enter the picture, they often behave differently at purchase time.

The survey’s findings echo my buying tendencies – which surprised me a little. Shopping is not an endorphin releasing event for me. I’ll *always* buy from a store that is easier to get in, find what I need and get out of, even if it’s a little more expensive than a competitor whose shopping experience is cumbersome, time-consuming or just plain difficult.

Do you feel the same way about the brick and mortar stores you visit? If so, why would you expect your customers to feel any different when they compare shopping locally to shopping online?

In the last piece, I didn’t mention that the WalMart moving boxes were cheaper. What I did tell you was that they couldn’t tell me if they had them in stock unless I placed an order and waited “a few hours” for an email or a text message. Not convenient.

Claiming that price is the sole or dominant cause of showrooming appears to align with how people shop early on, but it seems research “forgets” to follow behavior all the way to the actual purchase. Recent research is showing that showrooming starts because of price but continues for convenience – so be careful about discouraging it.

That good shopping experience

Can shoppers have a “good shopping experience” at your online store? Can they buy and have it delivered? Can they have it reserved and ready to pick up?

You might be thinking “What a hassle. I never had to do this before. Why should I start now?“ While you’re probably right, that’s exactly what big box online stores hope you’re thinking.

Have you asked your customers if they have a smartphone? Have you asked them if they use it to visit your store? Have they ever walked into your store to buy something and found you didn’t have it in stock?

What seed does that plant in their mind? What will they think about coming to your place the next time?

These things matter everywhere, not just in urban locales. Fuel and time are costs people like to avoid. When your store or website causes them to waste either one, it doesn’t help you to become (or remain) the main place they shop.

The moving boxes again

Remember that cumbersome moving box shopping experience I mentioned earlier? What happened *before* I drove to Home Depot?

  • I ran out of boxes…but it was more complex than that.
  • I ran out of boxes in the evening when my local stores were closed.
  • I ran out of boxes on a holiday weekend when the local UHaul stores were closed.
  • I shopped at another big retailer’s site that couldn’t tell me if they had boxes in stock.
  • I shopped at Home Depot’s site, which told me exactly what they had (and didn’t).

My experience online reflects some of the complexities and frustrations of your customers’ lives when they shop in your store.

That frustration is also what drives people online – where they are often frustrated by your web store.

Take everything away that a local store can provide that online shopping rarely provides – and you’re left with the local equivalent of Amazon.com, without reviews and (probably) with a slightly higher price.

Is that what shoppers want? What aren’t they getting *prior* to making a buying decision?

Just looking

Think about why we say “Just looking” when we enter a store. Sometimes it might be because we’re just looking, but we often say it by reflex. If you really are there to buy something, I’ll bet “Just looking” pops out for one of these reasons:

  • Because most of the floor employees know less about what we came there to buy than we do.
  • Because you’ve already done your research and made up your mind.
  • Because you don’t want someone following you all over the store.

Is that why your customers say it?

Categories
attitude Business culture Customer relationships Customer service Employees Hospitality Leadership service The Slight Edge

The most important little thing we do

When you’re on the road, little things matter. In fact, they matter all the time. Every. Single. Day.

That extra comment or tip from the lady at check-in. The friendly suggestion from the dude who drives the shuttle. A restaurant recommendation from the parking/cab attendant that turns out to be amazing and a good bargain all in one.

When delivered consistently, they can grow well beyond the sum of each act.

Think about the little things your people do and how your business handles them.

They matter, but they’re almost impossible to put into place with a training program. More often than not, you get them when you hire.

Hire well. It’s the most important little thing you do.

Categories
Business culture Creativity Entrepreneurs Improvement Influence Leadership Personal development Resources Small Business strategic planning Strategy The Slight Edge

Who needs a mentor? Not me!

Note: I am blogging on behalf of Visa Business and received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa’s. See full disclosure at the bottom of this post.

Thanks to the kindness of a few people and a good mix of intent and luck, I’ve been fortunate to meet a number of people that I consider mentors or significant influencers.

In several cases, I’ve managed to work with them in person, via email or phone calls.

More often than not, I meet them at conferences – but not at conferences related to the industries I work (or have worked) in. That’s where the intent and luck take over.

Who are mine?

For me, the list is easy: Jim Rohn, Dan Kennedy, Peter Drucker, Tom Peters, Dan Sullivan and Chet Holmes.

Each of them have something in common: Without hesitation, they can name a mentor who was instrumental in getting them on the right path in their earlier years. They all struggled, and in some cases, did so mightily and more than once in their lives.

At their level of achievement, the fact that they can point to a mentor who was instrumental in their success is a critical lesson. It’s one each of us should take away from observing what makes high-achieving people tick.

None of them claim to “figure it out” on their own – even though they specialize in a particular area of business and have substantially raised the level of “play” in their respective specialty.

If these people managed to find and learn from mentors, shouldn’t all of us?

Why do entrepreneurs need mentors?

You might be wondering why you even need a mentor.

A few reasons…

  • We can all use a dose of clarity now and then. Sometimes more often.
  • We need to hear a perspective that we don’t have about our challenges .
  • We need a fresh set of eyes on something we’re about to do, already doing or failed at doing.
  • We need someone to be honest with us when no one else will.
  • We need advice from someone whose experience and knowledge is far beyond on own.
  • We need to be asked the question that will transform what we do.
  • We need the counsel of someone who will provide a stern correction before we make a ridiculous mistake.

Where do you get these things now?

How do I choose mine?

I’ve found that you don’t often choose them. In fact, sometimes they happen to you or someone brings them to you. There’s a lot of “when the student is ready, the teacher will appear” going on when it comes to mentors.

It can take serious effort to find a mentor. You might have to pay them. Don’t cheat yourself on this – the results from working with the right mentor can (and should) be worth at least 10 times your investment – hopefully more.

Here’s the things I look for:

  • A history of success that’s 10-100 times beyond where I’ve been – in any field. Recurring success, preferably.
  • Someone who can see through me and isn’t shy about doing it.
  • An ability to ask simple questions or make simple suggestions that floor me or make me rethink my angle on something. You can find this most often through their writing (books, blogs, etc).
  • Someone who asks questions about myself or my work that I can’t immediately answer.

What would you look for?

What about other influences?

Other influencers come from outside the business world, or their influence has little (if anything) to do with business. For example, Hildy Gottlieb has a habit of making comments that provoke me to think differently and before long, that thought bubbles up and provokes some of my sharpest clarity in discussions that end up helping her. While our relationship is not at all about business, business tends to be the context where I process our conversations – at least initially.

What about you?

You might think you don’t have any business mentoring someone, but that just isn’t true. There are always people who need advice, a little wisdom, some clarity and an occasional poke in the ribs. Make yourself available to someone – it’s likely to improve far more than their life. More often than not, it’ll make you reconsider some of your own struggles, even if they are worlds apart from the person you’re mentoring.

Mentorship and influence isn’t just about dollars and cents. It’s about dollars and sense – and a lot more.

 

DISCLOSURE: I am blogging on behalf of Visa Business and received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa’s. Visit http://facebook.com/visasmallbiz to take a look at the reinvented Facebook Page: Well Sourced by Visa Business.

The Page serves as a space where small business owners can access educational resources, read success stories from other business owners, engage with peers, and find tips to help businesses run more efficiently.

Every month, the Page will introduce a new theme that will focus on a topic important to a small business owner’s success. For additional tips and advice, and information about Visa’s small business solutions, follow @VisaSmallBiz and visit http://visa.com/business.

Visa Business_September Infographic_600

Categories
Box stores Buy Local Competition Customer relationships Getting new customers Retail Small Business strategic planning Strategy Wal-Mart

The big showrooming lie: “It’s all about price.”

Last time, we talked about how showrooming is impacting the retailer, briefly discussed what causes it and covered how a home store’s effective website selling experience helped me save time by avoiding a trip to a store that couldn’t decide whether it could help me.

All the retailers say it’s about price and the research agrees.

Since everyone’s in agreement, let’s dive in.

What makes people showroom?

Piles of research make it hard to argue that showrooming is about price. A recent Harris poll indicated that 96 percent of showrooming was at least “somewhat about price”, while 82% said price was “very” or “extremely important”.

Ask anyone why they showroom and they will almost always say “price”. What reason do they have to lie? It must be about price.

So how should retailers react? Let’s look at a few real-world reactions.

What Best Buy did

Two years ago, showrooming was hammering Best Buy and their financial performance showed it. While it might not have been the sole cause, it’s tough to argue that it wasn’t a factor – particularly since their stores are reported as “most often showroomed”.

They first took an “us vs. the customer” stance. They blocked out shelf barcodes so customers couldn’t scan them. They required that manufacturers provide Best Buy specific product codes (SKUs). These SKUs appear in package and shelf barcodes. Since they’re unique to Best Buy, consumers couldn’t easily price check an item vs. prices at Amazon.com.

These strategies weren’t particularly effective, nor did they improve customer relations.

Since then, they’ve had success using these strategies:

  • Price matching vs. Amazon.com
  • Improving their website shopping experience
  • Offering more in-store promotions and discounts
  • Improving their on-floor knowledge about new products.

Half of these strategies rely on price. For now, Best Buy has the resources and buying power to price match Amazon and WalMart, but I think you’ll see this backfire in the long term.

Using discounting to make a sale breeds a relationship that’s easily broken. All it takes is someone else’s lower price to “steal” your customer.

I’m not saying price isn’t important, it’s simply a poor long-term relationship builder. The easiest customer to lose is a customer you gained solely by having the lowest price – so that better not be your only edge.

What WalMart did

Rather than fighting the price checking that built them, WalMart leverages having the customer in store – even when there to showroom.

They have an app that produces a list of items that are on sale that day, which is displayed on your phone when you enter the store. The app also lets you scan barcodes and keep track of what you’ve decided to buy.

They embraced their customers’ behavior to their advantage. While people might enter the store to showroom, they’re likely to buy something else they need if they’re made aware of on-sale items while in the store.

So why the “selling by price is bad” conversation for Best Buy and “selling by price is good” for WalMart? Simple. Their business models are much different. Unlike Best Buy, WalMart’s business model is designed around “Lowest price. Always.” and driven by world-class logistics.

The takeaway from WalMart’s showrooming strategy? Taking advantage of customer behavior you can’t change is much easier than fighting it.

What an Aussie retailer did

Earlier this year, a Consumerist story told of an Australian retailer who battled showrooming with a “Just Looking” fee.

Their strategy? Charge everyone who enters the store a five dollar “Just looking” fee and refund it when a purchase is made.

Is this really how you want to make a first impression with a prospect, much less engage a customer? I think not.

Consumers: “It’s about price, but it isn’t.”

So…what’s the big lie?

Remember the 82% of consumers who told Harris Polls that price was “very/extremely important” and the 96% who said it was “somewhat” important?

Despite those big numbers, 70% of the same respondents said that if they had a good shopping experience at an online store, they would be less likely to buy the item elsewhere, even if it was cheaper.

The same goes for local retail.

Showrooming is more complex than just price. A small retailer can address the problem in ways big retail can’t or won’t.

Next time, we’ll drill down on what’s really behind “It’s about price, but it isn’t”.

Categories
Amazon Automation Box stores Buy Local Getting new customers Marketing Positioning Retail Small Business Strategy systems Technology Wal-Mart

Are you being showroomed?

Multi-Touch
Creative Commons License photo credit: DaveLawler

If you have a retail store, you’ve almost certainly had people showrooming in your store.

If you haven’t heard the term,”showrooming” can be summarized as “shopping at local stores to check out an item before buying online.”

Showrooming takes different forms and includes:

  • Price checking items on the internet while walking through a store. That bottle of foo-foo shampoo is $28.99 at the local grocery. Maybe it’s cheaper online, so people use the barcode to find a price at Amazon. A showroomer might even order right there in aisle five before they forget.
  • Going to a local store to check out a product you plan to buy online.

Electronics stores and retailers who sell complex, expensive items like cameras are most often showroomed.  Seems harmless until you consider that the local retailer is paying rent, salaries and other expenses to provide you with a free way to make sure that thing you want is really what you want – so you can leave their store and buy it at Amazon or B&H.

Internet-ready smartphones didn’t create showrooming. It’s just easier now. The same thing happened to retailers during the catalog mail order era.

Rather than complaining about it, let’s take a different tack.

One antidote to showrooming: A decent website

Showrooming isn’t just about checking out products and then going home to order them. The good kind happens too – meaning your website shows what you have in stock that’s ready to pick up today or when you can deliver it.

I’m in the process of moving to a new place. One of the unbridled joys of moving is packing your stuff. With the long weekend in front of me, I figured I’d knock out a bunch of packing. Silly me – even though I started the day with 40 boxes, I ran out Saturday evening.

Thus began the battle. U-Haul places are closed because of the long weekend. Most home stores and some box stores carry moving boxes, but it was after six, so that meant I was out of luck locally and would have to drive to town. I don’t “drive to town” for giggles, so I started surfing in hopes that someone had them in stock. If not, then my weekend plans will change (yes, a little of me was hoping I’d come up empty.)

Call it reverse showrooming, but I want to find what I need before I go chasing all over the valley for no reason.

The first box store site shows that their stock is online-order only unless I want to wait a few hours to find out what they *do* have – and then only after placing a “pick up and wait for a call/email/text” order – which felt more like betting on horses.

Some sites make searches like this easy.

For example, Home Depot has a filter on their website that eliminates anything that isn’t in stock at my “home store” (the store that I’ve told the site is closest to me). That works well, since I want immediate gratification – if you can call a shopping trip for boxes “gratification” (doubtful). Anyhow, if I can see what’s in stock, then I don’t have to take a chance at a 36 mile round trip for no reason. Finding up to date store inventory info on their site means they help me avoid wasting time and money – even at full price.

In Home Depot’s case, they also have tabs showing “All products”, “In-Store”, or “Online” – plus the filter I mentioned above.

I drove the 40 minutes and spent the 40 bucks because my local retailer was closed (which is OK) and because Home Depot’s site had enough information to allow me to make a solid decision.

Why do people showroom?

One reason is price, but for many products, the online merchant has done a poor job of selling the item. As a result, the prospect has to invest additional time to find the product and make sure it’s really what they want/need.

Why can’t your store site do that?

TIP: Big corporate stores often use automatically collected product data pulled from manufacturer data feeds (I’ve worked on these systems). Want some evidence? Look at a nationally-sold item at several large retail websites. Is the description identical? Is the picture?

You can do better. Next time, we’ll dig deeper on the causes of showrooming and discuss some solutions.

Categories
Business model Getting new customers Improvement Lead generation Marketing Positioning Small Business strategic planning Strategy

Should your business grow horizontally or vertically?

When I see a business focused solely on a horizontal or vertical market, it’s hard not to wonder if that focus is what’s really best for them.

What do I mean by “vertical” and “horizontal” markets?

A vertical market serves a certain type of customer, even if the work performed for them is of broad use across many types of customers.

Welding isn’t really a vertical market, but underwater or aluminum welding could be. Narrowing that further might identify a business that specializes in aluminum component welding for recreational boat manufacturers.

A horizontal market is one where “every business” could be your customer. Their needs include technology, accounting, legal, taxes, insurance services and public relations, among others.

A horizontally-focused public relations firm might serve businesses in retail, hospitality, legal, manufacturing and other sectors, while a vertical PR firm might focus on a single type of client, like PR for the outdoor recreation equipment market.

A combination of horizontal and vertical might result in a firm that offers PR services to many types of customers, but only for a certain type of media, such as periodicals (magazines and newspapers).

Whether you’re positioned horizontally or vertically, you’d better be focused on your core customer.

What’s a core customer?

A core customer is one whose needs fit your business’ sweet spot – the customer that’s ideal for what your business does. Revenue from customers like these usually make up the majority of your revenue, perhaps 80% or more.

A law firm who specializes in transactional business might see their core customer as “local business owners with five to 20 employees”. These customers generate transactional legal work related to real estate, employment, business transfer and related activity.

It’s easy to identify them because of the nature of their business structure and activity. They hire and fire, they buy and sell business assets, and they build, buy, sell and update facilities as they grow or change what they do.

How you identify your core customer is critical if you’re going to continue to improve how well you’re serving them, how many you retain over time and how many new ones you acquire.

Expanding your market with a question

Ask yourself this: “Could a little adjustment radically expand what you accomplish – without abandoning your core customer?”

Looking back at the transactional law firm… many of their clients could’ve started out with one person doing everything. If the transactional law firm looking for new customers ignored those solos, they’d miss a fair number of future core customers who matured from a solo into that desirable employer/client of five to 20 staffers.

One of the things business owners tend to avoid is change, unless we can’t avoid it. If your attorney has served you well as you’ve grown, you’re unlikely to switch firms unless they really mess up.  That makes it even tougher to get new clients who are already perfect for you. Without significant differentiation, a special “mojo” or something that screams “You have to use US!”, where are your new “ideal customers” coming from?

Given the tendency to avoid change and the thought process that some solos are future five-to-20 employee businesses, the natural thing to do is get more of those solos and do what it takes to keep them as they grow into the core customers you wanted all along.

Your challenge is to figure out (at least) three things:

  • What the solo needs and wants NOW
  • How you can serve them as they grow
  • How to tell which solos will become an ideal customer.

This isn’t just about law firms – they’re just today’s example. “The question” applies to your business as well…I promise.

Everything or nothing?

Many vendors sell the same products and services in the same packaging (real or virtual) to everyone. Being everything to everyone usually means you’re special to no one.

Horizontal vendors can stand out by customizing what they do for a certain vertical market – rather than selling the same “box of stuff” to everyone.

Vertically focused businesses can seek out customers whose needs are similar to their core customers’. Dentists and energy companies couldn’t be more different, yet they both use scanning technologies to find correctable defects. Is there a sweet spot there?

Whether horizontal or vertical, you can grow without abandoning what you do and how you do it.