photo credit: kyz

This morning I received a private comment from a reader. He gave me permission to repost it here.

Hello Mark

In Europe they have a “no lead policy” based on roHS (Lead Free). All the US components I buy are roHS compliant so that they may be sold in Europe.

I can also sell in Europe by simply documenting my purchases. I can not afford to sell in to the children’s market any longer in the USA as testing costs would exceed the Gross revenue of our children’s products. As of Feb 10th we will no longer make little backpacks for kids.

This is like a dream come true for China and Walmart. In about six months all the kids will be wearing green clothes with little red stars. The toys will have the same color scheme of course the selection might be a bit mundane.

Dave Sisson CEO
Jandd Mountaineering Inc

Hopefully, the pressure that all of you are putting on your Congressional reps and Senators is helping behind the scenes. Likewise, our calls to the CPSC. This situation is sickening and the timing simply couldn’t be worse.

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photo credit: abstract splotcHes

One of these days, my granddaughter would love it if I bought her a little homemade bear like the one in the photo.

Trouble is that after February 9th 2008, it’ll be a violation of Federal law to sell it to me.

Doesn’t matter if it’s sold at a small retailer, a craft fair, a resale shop or in your expensive, high-end, fancy pants, mostly-imported toy store. Bottom line: If you sell or handcraft toys or clothing for kids, it’s entirely possible that you will be out of business as of February 10th 2009.

Read that again. It’s 56 days from today (Dec 15, 2008).

While it would be easy to dismiss this as me overdosing on too much caffeine, I’m sorry to say that isn’t the problem.

CPSIA – A Slam Dunk

Remember Christmas 2007?

Not only were retailers flush with good retail sales, but the news was full of recalls of defective toys from China and elsewhere – in some cases, toys made in the Chinese plants of American toy “manufacturers”. Lead was a prevalent issue.

These problems angered the nation at large and embarrassed Congress. In those circumstances, its just a matter of time before legislation results.

In this case, the result was the Consumer Product Safety Improvement Act (CPSIA). If you’re a craftsperson who makes toys and kids clothing or a retailer who sells these items, the CPSIA is your Patriot Act and you aren’t the good guy.

This law was so well-favored that when you combine the results of the House and Senate votes on the final legislation, it received only THREE “No” votes.

More presidential candidates MISSED the vote than did those who voted against it. 

The Consumer Product Safety Improvement Act (CPSIA), passed on July 31 2008 and signed into law by President Bush on August 14 2008. The Act makes it illegal to manufacture or sell toys, clothing and other items for children that do not meet the act’s testing and labeling requirements. The Consumer Product Safety Commission’s budget has been increased by $620 million so they can enforce this law, whose details were largely left up to the commission.

All it would have taken to help small business owners exemption-wise was to include some common sense testing and labeling exemptions for all natural toys and clothing. That would have left a good piece of legislation in place, without threatening a ton of home-based businesses.

Unfortunately the CPSIA contains nothing like that. Work at home folks don’t have a big lobby in Washington. The handcrafted wooden toy crowd has only the newly founded Handmade Toy Alliance, which at last count had fewer than 100 members. As you might suspect, they aren’t a power player in Beltway circles.

The big boys like Mattel, Wal-Mart and Toys-R-Us are substantially impacted by CPSIA, but quite frankly – if they had been better corporate citizens from the outset, we wouldn’t be having this conversation.

Mostly, this is great news for parents trying to find better products for their kids.

There’s always a “but”

Again, there is nothing in the Act that eliminates or alters the testing and labeling requirements for those that use 100% all natural materials during manufacturing. Perhaps that was considered a loophole that was just too big.

Is petroleum a natural substance? If so, then all plastics must be too, right? And why isn’t lead?

Before you go off the deep end about your cousin who chewed on too much lead paint when he was a kid, I have to say that in general, I am a fan of this legislation. It’s the only way to get large importers and offshore manufacturers to get their act together.

Obviously this law was sorely needed to deal with repeated instances of imported items containing lead, small parts on infant toys, much less the weaknesses in our existing regulations.

Objects in your mirror are larger than they appear

If you think a little harder, the target is much bigger than a bunch of craftspeople selling their wares on Etsy.com (link goes to their open letter to the CPSC re: CPSIA), eBay, craft fairs and small local retail shops.

Anyone who sells this stuff has a new cost of doing business to add to their expense list. Anyone who has these items in inventory has to get rid of that inventory by February 10, 2009 (some can wait till August), or pay to have it tested and labeled per CPSIA requirements.

While the large manufacturer suddenly has a substantial new COGS item, it’s the little guy is the one who is going to suffer the most because they simply can’t afford the testing that is required.

For example, there’s a retired lady here in the Flathead Valley who makes little wooden trains in her garage woodshop. She carefully scans paint manufacturer websites and questions their representatives by phone to be sure there’s no lead or other nasties in the paint she uses on her carefully made toys. Her business is history if the CPSIA stands as written.

I just don’t care…or do I?

You might be thinking that you really don’t care. Maybe you don’t have kids or you only buy toys and clothing from major American manufacturers (er, I mean importers). Or maybe you don’t own a store that caters to kids, so why would you care?

It’s time you started caring, but let me help you decide. Here are a few examples of businesses that will be impacted by the CPSIA, otherwise known as “reasons to care”:

• If you make wooden trains in your garage and sell them *anywhere*, you get to pay $4000 per toy to a 3rd party testing lab to assure compliance with the CPSIA.
• If you make sock monkeys at home and sell them at your local craft fairs and tourist shops, you have three choices: sell them in violation of the law, close up shop or pay the fee to have your items tested. Each SKU = $4000, most likely.
• If you own a small toy store, sell items that cater to kids, or you sell antique toys or anything else that comes to you without CPSIA-compliant labeling, you have to pay to test every item, or make sure that it has been tested. Presumably, testing a small sample of the same lot is acceptable, but “presumably” is not a way to stay legal. I suggest contacting a testing lab and/or attorney for more info.
• If you import all your toys from Europe, you have to have them all tested, despite the fact that Europe has for years had stricter toy safety standards than the U.S. Again, the same advice as above regarding testing of items in the same lot.
• If you create or sell science kits for homeschoolers, the CPSIA appears to apply.
• If you’re a school who buys such kits, your vendors may also be subject to it.
• Every U.S. toy manufacturer who actually manufactures items here at home – and likely had nothing to do with the toy recalls from 2007 – still has to pay to test their toys. That part makes sense, unless the items in question are made from 100% natural materials.
• If you enjoy shopping for your kids at craft fairs, online at Etsy.com or eBay, or you like buying used toys and clothing – sales of items that do not conform to CPSIA regulations and that have not been tested will be illegal to sell to you.
• If you sell items for kids on eBay, all your existing untested or non-compliant inventory has to be sold before February 10 or it cannot be sold without being tested. The phase-in starts with larger concerns, but it’ll get to you before you know it.
• Retailers can be held liable for selling any handmade toys or children’s items that are not tested by a CPSIA-compliant lab and labeled per the CPSIA.

If you don’t own a business that has anything to do with kids, don’t think it doesn’t impact you. Think about the owners, employees and family members of the businesses described above. They might not be spending money in your store by the time the CPSIA gets done with them.

Do these artisans buy computer paper, coffee, towels, hamburger, gasoline, haircuts, dog grooming, fine wines, appliances, landscaping, envelopes or tires from you?

What will they buy from you if they are put out of business by this law? Are you in line for a bailout?

Suddenly, it’s time to care, eh?

What do I do next?

First, call your Senators and your Congressional Rep. DO NOT email them. DO NOT fax them. Those things are far too easy to ignore.

Call them and hold their feet to the fire.

Next…Research and legwork.

Remember that your existing inventory falls under this law, whether you are a retailer or a manufacturer, regardless of size. Some of the regulations kick in later in the year, so I suggest you read this coverage at Fashion Incubator for additional details. Here’s additional info on what must be tested per the CPSIA.

You have 56 days as of Monday December 15.

The full text of the law is here: HR 4040 or if you prefer a PDF, here. Check out the CPSIA frequently asked questions (FAQ) list at http://www.cpsc.gov/about/cpsia/faq/105faq.html.

Speaker of the House Nancy Pelosi’s website does a nice job of summarizing this well-intentioned, but incomplete bill.

Download audio file (HeardInTheSlammerHomemadeToys.mp3)

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photo credit: Eneko Alonso

It’s hard to imagine why big national retailers continue to play the fools game, thinking that by discounting their prices 40-50% or more they’ll increase their profit. 

Perhaps they think they’ll make it up on volume.

When you cut prices, the first thing that you give up is a piece (or all) of your profit.

Retailers who spent the weekend falling all over themselves catering to an upscale clientele don’t have this problem, especially if they’ve cultivated and groomed the relationship with that clientele all year long. 

They didn’t have to go to the home of an employee and explain how a young employee was trampled to death, simply by having the misfortune of being the guy who unlocked the front door to his employer’s store.

When price is the only way you have to differentiate yourself from your competition, you deserve any pain you feel on your financial statement at the end of the quarter. 

Is that the only competitive edge that you can find? If so, you aren’t looking hard enough.

Is there a Wal-Mart in Pamplona?

Another “competitive edge” – one that contributed directly to last weekend’s trampling death and injuries at a Long Island WalMart – is the special sale that starts at 0-dark-thirty in the morning and offers limited items at the special pricing.

Our store is better because we can get our people to the store before yours. Woooo, impressive. 

If your competitors’ move their start time to an hour before yours, when does it end? Do you start a Cold War over who can open their doors first? In an ultra-competitive environment, is that really how you want your clientele to choose who their vendor is? 

Do you really have to stir up a frenzy over one (or 10, whatever) $299 plasma screen TV to get people into your store? Is that the only edge you have?

Don’t get me wrong. I’ve told you to read Cialdini and will again. We’ve discussed scarcity and will again. However, we’ve also discussed common sense. Hopefully, we don’t have to discuss making sure your staff and clients leave the store alive.

Is it really worth having 300-400 people stampede over your staff and each other as if their survival depends on it? This isn’t the first time it has happened. Human behavior is not a surprise in these circumstances. 

Yeah, sure. You can blame a small percentage of morons for this ridiculous behavior, but it isn’t just the customers in that store who were in the wrong. But… big retail, in their typical lazy way – they continue to confuse the customer with the sale as the most valuable part of their business.

All this focus on creating temporary insanity among your prospects for one transaction on one day illustrates the lousy, if not non-existent, relationship that most large US retailers have with the buying public.

That’s where the problems really lie. When you commoditize your marketplace by competing solely on price, you’re one of two things: Wal-Mart or crazy.

Wal-Mart can afford to do these things. Their entire business – and the systems that drive it – is built around that premise. They have the logistics, automation, buying power and mammoth size to make it happen.

If you aren’t Wal-Mart or crazy, you have to do something different and better. I don’t mean to suggest that you can just double your prices, do nothing else and expect all to go right with the world. 

You can’t.

Remember, Business is Personal. Build the relationship. Deliver the value. When nothing else matters, they’ll shop on price. 

Make other things matter.

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If you’re competing with a franchise or a box store like Starbucks, WalMart, Costco, Best Buy or similar, one of the best ways to stand out from them is to combat one of their biggest failings: They make it extremely difficult to buy in an environment that built to offer the illusion of easy shopping.

It’s particularly true for higher priced items, or items that require some level of technical knowledge and enthusiasm, such as – but not limited to – handheld HD video recorders, digital SLRs or computers.

Of course, they make it easy for the local computer or video store to differentiate in 100 different ways as long as it isn’t price. Local stores can’t often compete with national box stores and mail order houses on price, so they have to find other ways to do so.

Think about the purchasing environment in these box stores. Despite what they try to make you think, it isn’t laid out to optimize sales. Instead, it’s designed to reduce employee staffing requirements and minimize losses. Sounds kinda like a Presidential campaign:)

Want some evidence?

• Selling computers: Computers are all password protected so you can’t begin to see how well they work, much less if they are suitable for the job.
• Selling video and digital cameras: Video and digital SLR cameras are cabled to the countertop.
• Selling video and digital cameras: There’s nothing to photograph, other than a bunch of gear under lovely fluorescent lights.
• Selling video and digital cameras: There’s rarely anyone there who knows a Fstop from a Fbomb.
• Finally, there’s no one who is truly a specialist on the gear they sell, and only a few people who have a smattering of knowledge – if you’re lucky (and if they work that day).

All those things are fine if you have done a pile of research and know exactly what you want. To be sure, many people do just that because they’ve gotten used to the lack of support/help at these stores.

Have you ever asked a question in a franchise or big box retail store and found that the store’s expert on that topic (if they had one) knew less than you did?

Of course, they might just order online rather than waste 30 minutes and $10 worth of gas to drive to the box store. If they do that, you know where they’re going – the cheapest place they can find online that has a reasonably dependable reputation.

Why? Because the stores have already forced them to do all the heavy lifting. After all that, they’re tired.

But there are others out there who want a resource. Need some advice. Want to try the gear out before they buy it, just to make sure.

If this is the best method for selling things and creating a relationship with a customer that lasts and lasts, why don’t you see the following?

• A car dealer who allows test drives as long as you don’t leave the parking lot.
• A jeweler who won’t let the lady try on that big engagement ring.
• A Chanel store that has no tester bottles.
• A camera store that leaves the gear locked in the glass case and expects you to make a buying decision by ogling it through the glass.
• A grocery store that doesn’t allow you to thump a melon.
• A florist that doesn’t let you smell the flowers.
• A bookstore that doesn’t let you browse or sit and read a book.
• A software company that doesn’t offer a downloadable demo or trial version.
• A coffee shop that smells like candles.
• A hardware store that keeps tools and other trinkets locked up like cigarettes at the grocery store (while you do see this at Home Depot, you don’t at Ace).

Yet that’s exactly the kinds of things that many stores do.

They put up a glass wall between the customer and the merchandise. That wall makes it hard to buy unless you know exactly, precisely what you want. They force you to be the expert, offering little or no expertise for prospective buyers seeking advice in their store.

Now think about how some other big retailers who make it easy to get in the mood to buy. Apple stores. Barnes and Noble. Talbots. Nordstrom. Some locally owned stores have picked up on it, but many have not.

Maybe you don’t have a brick and mortar store, but instead have an online store. That doesn’t mean you don’t have similar issues challenging you.

Ever been in an online shopping cart that just makes you want to scream? Sure you have. Now think about the last experience that was so simple and pleasant that you were tempted to buy more.

Whether that experience was online or in a brick and mortar retail store, the rarity of that experience sticks with someone. If they don’t have that experience with your business, they’re going to encounter it somewhere else.

When they do, guess who they aren’t going to visit again?

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Today’s guest post is from Seth Godin. Earlier this week Seth was talking about the choice businesses must make when deciding what market they are going to serve: a passionate group or a mainstream one.

photo credit: sherseydc

Are you the local cafe that serves coffee, or are you the best place to get the best, gourmet coffee anyone can find within 100 miles?

Do you sell any old religious item that can be found in any store, or do you sell only high quality items that aren’t made in China?

Do you sell mountain bikes that someone can find at Wal-Mart, or do you sell only the finest Rocky Mountain custom mountain bikes to people who wouldn’t dream of buying a bike “off the rack”?
It’s an important choice, especially given the things we talk about here.  One of those markets requires you to be a lot more personal, to have a much stronger relationship with your clientèle.

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In the midst of conversation about change (hard to avoid that word these days), the “kings” of business came to mind.

Names like Woolworth, Sears, Wal-Mart, Barnes and Noble. Technologies like fax, Palm Pilot, Walkman and Yahoo.

photo credit: No. Nein

No one could beat Woolworth … until Sears came along.

No one could possibly rival Sears … until K-Mart came along (and later…Wal-Mart).

No one could possibly rival Waldenbooks … until Barnes & Noble came along (and later, Amazon).

No one could break into the big three television networks and become the leader in their bread and butter – the news …until CNN came along (and later, Fox News and MSNBC).

Nothing could possibly rival the fax machine … until e-mail came along? And then RSS, Twitter and blogs.

Nothing could possibly rival the Palm Pilot … until Windows mobile Smartphones and the Blackberry came along.

Nothing could possibly rival the Walkman … until the iPod came along?

The music stores were indestructible, until Wal-Mart came along. Recently, iTunes replaced Wal-Mart at the top of retail music sales.

Yahoo, once the 500 lb gorilla in the internet world, is now garage sale material in the eyes of Microsoft and worse, Wall Street. One thing that is consistent about business is constant change. The power of the internet to force that change is even stronger.

But it isn’t just about big monster Fortune 500 and Inc 500 businesses. It happens in small business too. The long-time leader in the studio software business when I entered it was a DOS program… as late as 1998! A few years later, our software and others in the market had that owner moving into real estate sales. I’m sure you can look around in your market and tell similar stories.

photo credit: paper by design

When Wal-Mart started up, you can bet that Sears thought “Who do those guys think they are???” even though they had made Woolworth feel that way only a few decades earlier.

Rain Man was right about K-Mart, but it still took Wal-Mart to put them in their rightful place.

Do you think ABC/NBC/CBS felt they were unbeatable? Palm? Sony and their Walkman?

Complacency is a great weapon for an upstart newcomer. Complacency is dangerous, often deadly. Kmart is the role model for the “totally complacent, dont get it, have no clue” business.

Are you the big cheese in your business niche? Getting complacent, not adjusting to change (in fact, not PURSUING change) and (here it comes), not pursuing the slight edge CONSTANTLY is what keeps you out of trouble and forces your competition to constantly play catch up.

Yesterday, I was talking with a programmer friend about some new mobile technology. He said “My clients never asked me for that stuff.”

I told him it was his job to show his clients why they need to use the technology – if it really does offer them an edge.

If they have to ask for the new tool, it’s likely because a competitor is already there. Someone else is teaching clients about new tools in that market. That’s the player you want to be.

Dont play catch up. Be the lead dog with constant change, constant improvement and pursuit of the slight edge.

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The news is full of stories talking about the things businesses are doing to try and get their paws on your U.S. Federal tax rebate check.

Wal-Mart is cashing the Federal tax rebate checks for free, making it easy to spend the money in their store.

photo credit: skippy13

Kroger, Sears and others are enticing consumers to sign checks over to them, offering a 10% bonus on the face value of the check to do so. Sears shoppers get the bonus when they convert the check into a Sears or K-Mart gift card.

So how do you compete with that?

Here are 5 ways to compete with big box retailers who want to keep your clients’ tax rebate check all to themselves.

• Have a special tax rebate shopping event. Perhaps once a month from May through the summer until most people have their checks. Really want to push it? Make the ticket to gain entry to event be the check itself.
• Offer a big box retail type discount, but ONLY for purchases made with the tax check. You’ll note that I don’t talk much about discounts here, but this is a special circumstance, not a weekly habit.
• Position the purchase as an investment. For example, if you own a home improvement or hardware store, using the tax rebate check as an investment in energy efficiency for your home is a good play. You might even combine this with the tax rebate shopping event, call in some manufacturer’s reps and make it a big deal.
• Focus on the transaction size. The checks are in various amounts, typically increments of $300. You can assemble a $300 catalog, a $600 catalog, and a $1200 catalog, for example. If you have information on family sizes, mail a “tax rebate gift catalog” of the appropriate price level to families of each size. People who get a $300 check in the mail aren’t going to be looking for “What costs $125?” Instead, they’ll be looking at what they can get for $300. Think about it. You do the same thing when you get a gift card as a present.
• Offer to cash the tax check – yes, it’s a simple, obvious ploy to get them into your store. Big retail wouldn’t be doing it again if it didn’t work back in 2003. Note that at times your bank will downgrade your account if they find out you are cashing consumer checks (ie: like a pawn shop or money store), so be sure to consult them and make sure they understand it’s a one time deal).
• In your marketing for the 5 items above, encourage consumers to spend the check locally - even if it isn’t in your store. Economic stimulus, the alleged reason for the checks, is going to be far more impactful when spent locally, rather than at a big box retailer. You could even put together some co-op advertising with the other local stores in your area – and even in your market niche.

Yeah, that’s 6 strategies, I figured you deserved a bonus. And I’ll be happy to cash your tax rebate check:)

What others are saying about the rebate:

Tax rebates dates
Tax rebate checks coming
Make Money on Your Tax Rebate Stimulus Check II
Printed Gift Cards Target Tax Rebate

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Just a few days ago, I was talking about iTunes passing Amazon and Best Buy in 2007 total music sales.

That’s all kinds – CD and downloaded music.

Didn’t take long for that to become old news. On Tuesday, a leaked Apple memo shows that January 2008 music industry numbers from NPD indicates that Apple has now passed Wal-Mart in total music sales (and remember, this includes Walmart.com’s music store).

Goliath has an Achilles heel. You simply have to look a little harder to find it.

Woolworth had one. Sears had one. K-Mart had one. Now, it’s become clear that Wal-Mart has one as well.

How closely have you looked for cracks in the armor of your market’s Goliath?

If YOU are the Goliath in your market – what would you attack, if you were David?

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photo credit: JasperYue

In 2007, $60 billion in gift cards were purchased, amounting to 12% of gift sales during the holidays, according the retail industry sources that track this sort of thing.

$26.3 billion worth of gift cards were sold in November and December 2007 alone.

How many did you sell?

Some Wal-Mart stores have express checkout just for gift cards.

The big reason not to offer them, despite what everyone else says:

• Breakage, which is a fancy word for “people wont use them”. This is the ridiculous reason that many analysts tout as the best reason to sell them. Obviously, they don’t own a business.

How would you like to sell something one time and never sell something to that customer again? Does that make ANY sense?

Breakage is the LAST thing you want from a gift card customer. You want them to come back and empty that card because… you want them to come back.

The gift card is really a gift for you from whoever buys it. They’re telling their friend or family member, “Hey, shop at this store, I trust them.” and then send them to you, pre-sold on your business’ ability to make them happy.

Once they visit with that gift card the first time, find a way to get their contact info into your store systems. Why?

Because you want to be the ONLY one who reminds them that they still have a few bucks on their card. In fact, that alone is a good reason to ask them for that info.

Who wouldn’t want to be reminded that they have a gift card with money on it? Even better, if they lose the card, wouldn’t you want to be able to deactivate the old card and move the remaining value to a new one?

Communities can put these things in place so that a card is good all over town, but you can just as easily get them that work only on your point of sale systems. Consumers love em. One size fits all:)

RELATED: What to know before selling gift cards in your business

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photo credit: pingnews.com

People continue to have this idea that companies like Wal-Mart, Amazon, Apple, IBM, Starbucks and Microsoft are bulletproof.

Folks, it just isn’t so. You might also have thought that UCLA was bulletproof Thursday night against Western Kentucky in the NCAA Tournament, except that no one told WKU about it. Top-seeded UCLA pulled it out in the last 4 minutes, after leading 12th seeded WKU by only 4 points with 5 minutes remaining.

David and Goliath plays out every day, if David is clever enough.

These big companies that small business owners love to complain about are great at building giant customer lists and then turning right around and crapping in their corn flakes. They do it everyday. All you have to do is look around (one of the reasons I mentioned the Google Alerts thing yesterday).

It’s Amazon’s turn. They just got punched in the word of mouth.

What am I talking about?

The Amazon print on demand (POD) story at WritersWeekly.com.

And the Wall Street Journal, TechDirt, Washington Post, TechCrunch, Computerworld and Publisher’s Weekly. And so on.

Before you think that this only affects big print on demand publishers, don’t forget that little (and some not so little) independent authors sometimes see the bulk of their sales via Amazon and POD.

If there are fewer authors able to sell on Amazon (because of their demands), what happens? Does the record industry try to do this next? They’ve already lost control, but there is leverage out there if they want to use it (movies, for one).

What about your ISP? Perhaps they will require that all websites updated from your DSL account must be hosted with their web hosting services. They can easily control this.

The upside is that the market always has a way of sorting this stuff out. Somewhere out there, there’s a little print on demand house just rubbing their hands together.

Oh yeah, and I just realized that my Google Alerts are not covering enough bases.

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According to a story in this week’s Bitterroot Star, Wal-Mart has withdrawn their SuperCenter project in Hamilton.

Per the Greg Lemon story, company officials indicated that pulling out of Hamilton was due to a company-wide restructuring and slowdown of Wal-Mart SuperCenter expansion plans.

“We’re just taking a step back and kind of withdrawing for now.” – Wal-Mart spokesman, Josh Phair

Perhaps they’ll be back, perhaps not.

Regardless of what Wal-Mart does, it’s clear that Hamilton-area retailers have a little more time to make their businesses…personal. Let’s see what they do with it.

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No, I don’t mean the collapse of the global economy, oil prices over $150 a barrel, or even worse, Starbucks closing for three hours.

I mean truly disruptive things in your business. The easy example is fuel.

Increased fuel prices are similarly disruptive to a multitude of businesses, but that has been analyzed to death so I’ll leave it alone.

Instead, let’s look at apples.

A few years ago, McDonald’s started selling apple slices and some sort of caramel-like substance made of high fructose corn syrup and caramel coloring. And they started selling salads with apples in them. And a few other menu items have apples.

This all started at about the same time.

Almost overnight, McDonald’s became one of the largest, if not the largest, U.S. consumer of apples. Billions of apples are suddenly in play that were previously happily shipped to anyone who wanted them.

Disruptive, wouldn’t you say?

If you buy apples for your business, what just happened to your business model, much less your future?

If you sell apples, what just happened?

Now let’s look at Apple.

Late last month, the NPD Group announced that iTunes had passed Best Buy and had become the nation’s second largest retailer of music, only eight months after passing Amazon to become #3. That’s music in all forms, CD or otherwise. The only one selling more than iTunes is Wal-Mart, who has to be looking over their shoulder.

Wal-Mart looking over their shoulder. Bet you never thought you’d hear that. Course, neither did Woolworth or Sears.

Disruptive.

Certainly, the music industry has been in turmoil for years because they have their head stuck up where the sun doesn’t shine, but despite all that, think about how disruptive – even to Wal-Mart, Amazon and Best Buy – the iTunes model and implementation has been.

Finally, let’s look at corn.

The ethanol craze has turned farmers to corn (despite the fact that most grains are way up in market price). Despite the fact that other plants have proven to be more productive for ethanol creation, and easier on the farmland than corn, corn is the industry shining star for ethanol production.

Until you realize that this same corn is no longer going overseas to feed third world countries.

Until you realize that other crops are being supplanted (no pun intended) to plant corn – and again, many of those items either go overseas or cause fewer crops of other kinds to be planted, ergo the higher prices for wheat, etc.

Disruptive.

What kind of disruption could totally change your business? And perhaps more importantly, what kind of disruption can you be the architect of in your market?

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Brian Clark over at Copyblogger called out bloggers today, asking them to take a headline from the metrosexual magazine “Details” and rewrite it (along with a blog post) for something that works on your blog.

He did this not long ago with Cosmopolitan headlines, and that was fruitful for anyone who writes their own blog, ad copy, etc.

I chose “Worry Nation: Is anxiety taking over your life?” and rewrote it to the subject you see above re: Wal-Mart.

Worrying about box stores is like worrying about that giant meteorite that is going to strike the Earth someday. There’s not a damned thing you can do about either one.

If you are a small business owner in a town that is expecting to get a new box store, DO NOT waste your valuable time, energy and brain cells doing anything other than working to position your business to take advantage of the new store.

For example, if you are a small retailer in Hamilton MT dreading the incoming Wal-Mart Superstore groundbreaking this summer, fighting it is most likely fruitless given the zoning situation in Montana.

Instead, use all that hand-wringing, forehead-wrinkling, can’t-sleep-at-night energy to figure out what products to pitch, what products to upgrade (Wal-Mart doesn’t do premium, remember?) and how to make sure that their arrival is a boon to your business.

Having a Wal-Mart next to your store is like having an inbound link from WSJ.com. Traffic, baby. Is it possible for you to move your store into the most advantageous place next to the new Wal-Mart? Or is it better to open a new location in addition to your current one on the main shopping district?

Let Wal-Mart have the price shoppers. Let everyone else worry about them. Spend your time being strategic, planning BEFORE they arrive and take advantage of every possible bit of publicity to draw attention (and buyers) to your store.

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Unbelievable.

I received my DM News (Direct Marketing News) this week and right on the front page, above the fold, is a story about the National Retail Federation board of directors lobbying government officials to “provide a relief package for retailers”.

Eh? Why in the world would retailers need their own relief package?

Regardless of the why, DM News reports that at the NRF’s recent NYC convention, they voted unanimously to petition the government “emphasizing that consumer spending represents 70% of the economy and calling on lawmakers to act quickly”.

I guess taking responsibility for your own success is just out of fashion these days. I wonder what would have happened if they had spent that convention time actually trying to do things to help member retailers to be more successful REGARDLESS of the current economy.

NRF, rather than distracting Congress with your lobbying for retailers at a time when they just might have something more important to ponder (doesn’t mean they will, but I digress), another thought might be:

• Provide large retailers with a mental “kick in the shorts” and remind them that they already have the management experience and strategic tools needed to position them to not only survive the “upcoming recession“, but to come out of it a stronger company. Do Target, Wal-Mart and Costco really need every American to get another government check to figure this out? They’ve seen it all before.
• Provide small retailers with a simple, achievable list of strategies for thriving, not just surviving, in times where retail sales might be down.

Those strategies might include:

Fix your advertising: Alter your advertising enough to be able to see which ads work and which ones don’t. Use only those advertising methods that you can track. Track every ad. Take action on the results of that tracking, ie: cull the loser ads and the loser media. The newspaper, radio and TV ad people are not your friends, they are selling tools to help you improve your business. If they work, keep using them. If they don’t, tell them they aren’t delivering and move on.

Fix your customer service: Rather than spend a month identifying every touch (or having me do it), look at the 5 most frequent customer contact points. Fix them, improve them, polish them.

Fix your customer retention: Get a newsletter going. Start with print, add email next month or next week. If you don’t have customer contact info, then fix that starting today. Put a process in place to collect it. Give your clientèle a valid reason to provide it to you, don’t just say “gimme your stuff”. No one else in your market is doing these things. Even if you start doing it, they won’t emulate your tactics because they don’t get it. They’ll look at the minuscule cost and blow it off. You will look at the improvement in customer retention and repeat customer transactions, and wonder why you didn’t do it before now.

Fix your positioning: Look at everything you do. It defines who you are. Do people really know what you do, what you sell, how qualified you are to provide that service? Do they have a pile of real testimonials available to them to reinforce what you say, but in other people’s words? What have you done to put your business in the position to be the first one people mention when someone asks them for something you do or sell? Do more.

Fix your sales processes: Almost every business has holes in its sales processes. Some are manual. Some are process-driven. Some are personality-related. Some are simple advertising problems. Train your sales staff regularly (that doesn’t mean annually). Reward great performance and provide the tools and training necessary to help each member of your sales team improve their results.

Remove the box stores from the equation: Look, Wal-Mart isn’t going away any time soon, and you aren’t going to beat them on price. Add more upscale product lines. Add more upscale services. Beat them on the things that you can beat them on and keep looking for more. Service. Customization. Installation. Personal Touch. There’s a reason why I hound you about these things regularly…it’s because they are effective.

Of course, none of this addresses the real issue with the idea to give everyone a big check and ask them to go shopping in order to save the economy. The real issue, while mostly outside the scope of this blog, is the debt load that is crushing many Americans, much less our government.

The NRF and Congress seem to think it’s easier to just give everyone a cookie, pat them on the head and tell them it’ll be OK. Small businesses just need to take care of business using the strategies we talk about every day. You don’t need a cookie.

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Remember back in the “old days” when getting a Krispy Kreme was a rare event that you could only manage by being in a town where one of their stores were located? Not only would people would drive across town get some, they’d drive several hours each way to grab a bunch of boxes and bring them back for a fund raiser, or a special event.

Folks, these are just DONUTS, but they turned them into a drive-across-town experience.

Not anymore.

Nowadays, you can find Krispy Kremes at Wal-Mart, in the back of a soccer mom’s minivan on the side of the road (as a fund raiser), or worse yet, on the counter at the dirtiest gas station convenience store in town.

It’s no longer an experience that you’d drive across town for, it’s JUST ANOTHER DONUT.

I can assure you that the last thing that Krispy Kreme wanted to be was just…another…donut.

They completely forgot that the hot-donut-experience (snicker) as well as a reasonable level of scarcity (please read Cialdini) is one of the things that got them to the must-experience donut party and made their product a premium brand.

Don’t let your product become the “dirty store donut”.

Thanks to Andy Sernovitz for bringing up yet another example of what happens when you lose focus and stop giving people a reason to talk about what you do.

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If 100,000 potential customers were brought to the “doorstep” of your Web site – right now – how would you capture and hold their attention? Ok, maybe 100k in one day is a little much for you.

How about 12 people every hour, all day today? Could you keep the attention of that trickle of people?

Do that for 364 more days, and you’ll have an idea how to keep the attention of 100,000 visitors.

How long do they stay on your site now? How do you get them to come back? Of the ones who did return, what made them want to come back? If you don’t know, isn’t it time to get to work on finding those things out? The reasons are obvious.

Which reminds me. Yesterday’s post was my 400th blog post at Business is Personal, and we’re not even 3 years old yet (awww, isn’t it cuuuuute?)

If you’re keeping score, the post count looks something like this…

121 relating to marketing
82 on competition
66 on management
57 on entrepreneurs
53 on corporate America
47 relating to continuous improvement (aka the slight edge)
45 on strategy
38 on customer service (Glenn, how you let me get away with that?)
35 on getting it (as in, people/businesses who “get it”, it being how to run their business well)
23 book reviews (way over due on these)
22 on Wal-Mart (seems like more)
20 on media
17 on automation
16 on Montana
14 on software
14 on politics (related to business)
12 on technology
12 on sales
12 on good examples
10 on employees

and a smattering of others elsewhere. The totals don’t add up to 400, as many posts are tagged with multiple categories.

I’d be interested in what you’d like to hear more about, or if the current mix is about right for what your business needs.

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Man, I just love the savory aroma of heavy metals with my seafood.

Last Sunday night, I bought some shrimp at our local market for my youngest son (aka the “Master Chef”, a play on his chef aspirations mixed with Halo’s Master Chief as seen above). He was planning a fondue for my wife’s birthday, and the shrimp was one of the things he wanted to serve for dipping.

In the cold case at the meat/fish counter, 4 different kinds of shrimp and shrimp like critters, described as follows:

“41-50 shrimp, farmed, China. $4.98/lb”

“41-50 shrimp, wild, USA. $7.98/lb”

“large (size forgotten) prawns, Wild, Vietnam, $7.98″

“large (size forgotten) fresh water prawns, Bangladesh, $7.98″

Farmed. I wonder what that means…

In your mind’s eye, visions appear full of happy made-for-TV cows, smiling free-range chickens and cute little shrimps all co-existing, well-fed, not having to hide from the critter who is the next rung up on the food chain (except for us), and so on.

Gee, farmed doesn’t sound that bad, and hey, it’s a lot cheaper.

• Unless you’ve read about artificially colored “Atlantic” farmed salmon. Note: Wild Alaska salmon need no such artificial coloring, they bring a red that you can’t fake. Plus they’re actually good for you, unlike the farmed stuff.
• Unless you’ve read about Chinese shrimp farming, such as this NY Times article.
• Unless you’ve seen reports of slave labor coming out of China, India, Mexico and probably southern California.

You get the picture.

If you are the local vendor of wild USA seafood, or non-Botoxed meat (etc) and you are struggling to compete with Wal-Mart priced seafood and meat from places that are sending tainted food, toys and other goods onto the global market, isn’t it rather obvious what you need to do?

You might compare your clientele’s vision of farms (photo of smiling Green Acres-esque farmer, crops in hand) with the vision describe by the NY Times article above. And of course, a photo from the article, and from the farm that produces your food.

A quote or two from the articles never hurts, just in case shoppers don’t have time to read the whole article. Like this one from the NYT article:

In recent years, the European Union and Japan have imposed temporary bans on Chinese seafood because of illegal drug residues. The United States blocked imports of several types of fish this year after inspectors detected traces of illegal drugs linked to cancer (emphasis mine).

Fuqing (pronounced foo-CHING) is at the top of the list this year for refused shipments of seafood from China, with 43 rejections through November, according to records kept by the United States Food and Drug Administration. All of those rejections involved the use of illegal veterinary drugs (emphasis mine).

Of course, you might have to include an article or two about the efficiency of the USDA and FDA food inspection programs. They’re mind numbingly easy to find. If they found 43 problems, they may have missed 430. And 1 of them might be sitting on your plate.

Yes, I bought the wild USA shrimp, despite the roughly 60% higher price (3 bucks difference, was it really even a choice?). If I want to give my wife heavy metals for her birthday, jewelry is a better choice.

This isn’t limited to seafood, of course. Coffee, lawn mowers, toys, clothes, religious goods, dry cleaning, cell phones, steaks, golf clubs, you name it.

Remind your clients why your products and services are better and why the other vendor’s might even be dangerous.

Give me one good reason why you aren’t ruthless about exposing these issues to your clients. It *will* resonate with some of them, and they will respond by buying a higher quality product that doesn’t leave them wondering what they’re doing to themselves and their family.

If nothing else, take a look at how Ian does exactly what I’m speaking of in the blog that accompanies his Catholic goods store. If the concerns he blogs about coincide with his Catholic beliefs, they are also likely a concern to his Catholic clients, and thus it’s very smart positioning job for his business vs. his competition.

Before you go spouting “xenophobia“, it might help to know the definition of the word:

Xenophobia is a fear or contempt of foreigners or strangers and people. It comes from the Greek words ξένος (xenos), meaning “foreigner,” “stranger,” and φόβος (phobos), meaning “fear.” The term is typically used to describe fear or dislike of foreigners or in general of people different from one’s self.

I don’t care if your product source is North Carolina, China, Jupiter or Lower Manhattan. I’m simply suggesting that you ask your customer to consider whether or not a question about your goods / services is important to them: “Does your current vendor’s product source poison your food, mistreat their people?” (fill this in with the appropriate issue, they will vary widely)

If the answer is yes, then ask them to consider buying from you instead (assuming of course that your products and services don’t have those flaws). In fact, you don’t even have to ask. Just make the information available.

If your prospect doesn’t care about those kinds of things, they will likely pay the cheaper price and buy elsewhere. If they are that price sensitive, they aren’t going to be loyal anyhow. Let em go and focus on the good clients who appreciate the quality goods and services you offer.

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According to a September 2007 Eweek.com retail update, consumers spent $137 billion at self-checkout stands in 2006, mostly at superstore-type businesses (Wal-Mart, Costco, etc).

That’s an increase of 24 percent from the year before. At first glance, it seems like a success in the making.

One of the reasons they feel that self-checkout use is growing is familiarity, as noted in this quote:

The survey broke consumers down into geographic and income categories, finding that Southern consumers are slightly more inclined to embraced self-checkout, as are consumers earning more than $100,000 a year. The report theorizes that higher-income consumers travel more and are therefore exposed to self-ticketing kiosks at train stations and airports. In this case, the theory goes, familiarity breeds acceptance.

A lot of possible conclusions were left out of this theory. I think they simply chose the one that they wanted to hear.

I think what big retail won’t admit is the real reason why this growth is occurring:

Fewer and fewer people have the patience to deal with their often surly, undertrained checkout staff and their understaffed checkout area. As a result, they are willing to annoy themselves by using these machines just to get the heck out of the store more quickly.

Isn’t that a wonderful mindset for your customer to have as they leave your store? Positively makes you want to go back next week, doesn’t it?

I admit it – I use them. I use them because there is always a line – a line that is longer than it should be (5-6-7 shoppers or more in each line).

Thankfully, these sophisticated self-checkout machines are rather expensive, and probably more than any small retail or service business would spend on them. That’s a good thing, so you won’t be tempted to buy one.

Let Wal-Mart and Costco keep their self-checkouts. Your customers’ last thoughts should be “Could you believe how nice that store was?”, not “Man, I’m glad THAT’S over.”

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Show me. Post a comment and tell me of acts that you’ve experienced (or given someone else) that are even remotely like the one described below. Imagine if you thought about them just a little tiny bit more than you do now.

How many pairs of shoes do you think the two small acts described in this post are going to sell over time?

How many clients will they get, simply because they were …. thoughtful?

If you’re the small shoe shop in town, I’m sure you’ve wondered how can you compete with this “big impersonal internet shoe company with no overhead and low prices”. (See, I knew you were thinking “Wal-Mart for shoes”)

They don’t sound so big and impersonal now, do they? See, behind that website, there are entrepreneurs. People. They have parents too.

Maybe it’s time to stop thinking “I’m the only shoe store in town, bring me all the money!” and maybe, just be as nice as they are, or maybe even nicer, since your clients are your neighbors and the internet shoe store never gets the privilege of meeting their clients face to face.

How difficult is that? Costs little or nothing. Pays off big time.

Do people talk about you and your store like this?

It starts with good people, but without the right management in place to train and set the example and let people know they have the latitude to be thoughtful, this kind of stuff won’t happen.

Make it happen. Be like Zappos.com. Or better.

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Sting sang those words quite a while ago.

While the official line on the song is that it was about the breakup of his marriage, it’s also something that you should be doing with your staff.

Not so much to be a spy or Big Brother, but to help them perform their jobs with more efficiency and productivity. Secret shopping is one way to do it, but for some odd reason, business owners just don’t like having people do it.

Every time I just sit and watch a business work, I come away with a yellow pad full of notes. And no one else seems to be paying attention.

Not long ago, I ordered a take out pizza from a local shop. I walked in to place my order, one other guy was waiting – and he had entered only seconds before I did.

No one acknowledged our entrance. A couple of minutes later, someone in the kitchen – which has a clear view of the counter – turned and said they’d be with us in a few minutes “we’re trying to catch up”.

I had plenty of time, so it wasn’t a big deal, but it sent the message that it didn’t matter whether I was in a hurry or not – something the pizza staff had no way to know.

I spoke about this the other day in my post about Wal-Mart trying to go more upscale with their service and noted that until you are either trained to recognize the situations and act on them, it’s not likely that you’ll know when and what outstanding service is.

This is why Pizza Hut hammers the “Ten Points of Customer Service” into EVERYONE. The cooks, the wait staff, the guy at the drive-in window. More on that later.

Meanwhile, of the 4 people I can see at this place, two are busy making pizzas, one is pulling pizza from the oven and “managing stuff” and the other is walking around in a daze. Finally, the manager asked the Dazed One if they were done doing whatever it was. “Yes”, came the reply.

“Go take their order”, instructed the manager.

Interesting that taking the order required explicit instruction, but it did. The Dazed One took my order and told me 30 minutes, which worked out fine because I had an errand to run.

25 minutes later, I walk back in and I’m told that it’ll be another 10 minutes. I hear one of the cooks say “We haven’t made it yet” as his long hair flutters and swings around over the pizza he’s making. A few summers at Pizza Hut is enough to know that 10 minutes is a no-brainer. Most of them are in the oven for about seven minutes. So I go outside to wait.

My car is parked right in front of the door. I get in and sit there (there are 2 seats to wait at this place, but they were taken with someone’s coat and laptop – an employee’s?).

10 minutes later, despite sitting in full view of the door and having the staff watch me get in my car, I come back into the store. The pizza is already in a box, and on top of the oven. Never crossed anyone’s mind to just bring it out, since I was waiting for it.  Pizza guy hands it to me, barely makes eye contact and DOESN’T SAY A WORD as he turns back to the make table (what we pizza guys call the place where the pizza is assembled).

Off we go, to take our pizza home. The pizza, by the way, is almost always good at this place. The service, well, that’s another story.

So let’s talk about what should have happened.

When I arrived, I should have been greeted immediately – even if only to acknowledge that I was there, that they knew it and to perhaps tell me that they’d be there shortly.  I don’t need to be told that they are catching up, implying that they are one or more of behind, understaffed, rushed, mis-managed, or simply short-handed for good reason in the middle of a rush.  It is, after all, Friday at 6:30pm. Prime time in the pizza business.

At 6:30pm in the pizza biz on a Friday, you should expect to be hammered. If you aren’t, take a good long look in the mirror.

During the greeting/acknowledgment that they saw me, I should have been asked if I was picking up a pizza or ordering (there are only two choices at this place).

If I was picking up, taking two minutes to get my pizza, take my money and send me on my way does several things. It gets me my pizza as fresh as I can get it, it gets me on my way and it gets me OUT of the store so I’m not hanging around and making the possible impression of a line forming – the kind of thing that makes other potential customers leave.

The Dazed One is dazed because she wasn’t properly trained. That is primarily management’s fault, though common sense should have told her to attend to the front counter rather than stand around doing nothing and staring at us as if we were a plasma screen.

She did a fine job of taking my order, but didn’t ask if I needed anything else, additional purchases, frequent buyer card (which I don’t believe they have – sinful), drinks, salads, etc. If McD’s thinks it’s worth asking if you want fries, at 99 cents a bag…is it worth it to the pizza joint? Yes.

Another angle on this: I’m an old guy at the end of a long work week. What my wife says sometimes goes in one ear and out the other – maybe I’ve forgotten something. Asking for the upsell just might save me an earful, or a return trip. One convenience store I go to around here has one guy who always asks if I want something extra with my Diet Coke. He never seems to ask the same thing. Donut, Snickers, newspaper, corn dog, lotto ticket, you name it. He’s just asking and he makes eye contact and smiles when he does it. And he does it to *everyone*.

The Dazed One should have been trained to do this.

When I arrive back for my pizza (5 minutes early…), telling me that it hasn’t been made yet is fine, even though they did so inadvertently (I overhead them).

Imagine if he had said “Sir, I’m just about ready to put it in the oven, but it’ll only take 7 minutes to cook so I’ll have you on your way home in no time. Can I get you a drink while you wait? If you want to wait in your car, I’ll be happy to bring it out to you.  Do you want forks, napkins, peppers or cheese with it when I bring it out? (and he writes my request on the box just in case).

IE: Setting expectations. Making it clear that I’ll have the pizza in just a few minutes, fresh and hot.

Ideally, he would also be dressed in uniform, have his hair under control (I don’t care if it’s long, but I don’t want it on my pizza). Management/training issue.

When the pizza comes out to my car, he says “Here you go, I made it just for you guys. It’s really hot and fresh so be careful. Here’s the cheese and napkins you asked for (in a little bag or zip lock baggie so they don’t end up all over the car). Can I get you anything else? Ok, drive safely, we want you to come back next week.”

What a difference in the experience that would have been … from a take out place – and none of that cost a dime more than what was provided in reality. Which place would you rather go to?

Ok, I promised I’d get back to the Pizza Hut thing. The “Ten Points of Customer Service” is taught to every employee at every Pizza Hut in the Southwest Missouri/Southeast Kansas area. I have no idea why it isn’t a corporate thing, because it is a great intro to proper customer service for someone taking their first job in a customer-facing environment.

What are you doing to make sure your young employees get the proper training in customer service?

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