Archives for March 2007

Lifetime Learning

“If skills could be acquired just by watching, every dog would be a butcher.”

– Turkish proverb

Here is another “take-away” from the professional association conference that I attended last week in Tucson, AZ. Several of the sessions were devoted to establishing and maintaining your “Corporate Culture.” In the world of music products retailing, no one does this better than George Hines, the President of George’s Music – an eleven-store chain with locations in both Pennsylvania and Florida. George presented a session titled, “Company Culture & Success in an Ever-Changing Industry.”

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An Engaged Workforce Delivers Extraordinary Results

“People today are saying, ‘teach me, grow me, and if you won’t teach me and grow me I’ll go someplace else.'”

– Sharon Jordan-Evans, Executive Coach

One of the themes at the conference I attended last week was “The Engaged Employee.” Jackie Freiberg, co-author of the business book best-seller “Guts!,” was the keynote speaker. She taught us how to “Blow the Doors Off Service-as-Usual.” The essence of the talk was that you will never be able to provide extraordinary service to your “external” customers (the ones whose business allows you to pay the bills) until you start to grow, teach and empower your “internal” customers (the ones who do the work.)

Employers who are unable or unwilling to “grow, teach and empower” their employees can not remain competitive in the marketplace. Both customers and your workforce demand that you do so. It is expected. They must be “engaged” with you and your business. Otherwise …, as the opening quote states, “(they) will go someplace else.”

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A Week Working On My Business

I just returned from a week of meetings, educational sessions, networking and fun! I was attending they annual National Association of School Music Dealers Association (NASMD) convention in Tucson, AZ. For all those who attended it was a worthwhile investment – time spent working on your business. Taking time away from working in your business in order to learn – from peers and professionals – how to do a better job running your own business.

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The Full-Service Mentality

I had a very pleasant experience yesterday – at a Gas Station, of all places!  When is the last time that you ever pulled into a full-service pump?  Rarely, I am sure.  Like most of us, you probably couldn’t afford to pay that premium price per gallon.

So imagine my surprise – shock, actually – when I saw two service attendant rush out to my car when I pulled up to the pump!  I quickly said, “Oh, I must be at the wrong pump, I want self-service.”  One attendant said, “No, you ARE at the self-serve pump, but would you like us to check your oil, water and tire pressure?”

By the time I recovered my composure, I saw that the other attendant was washing my windows.  Gosh … I haven’t experienced this level of service at a gas station since the price per gallon was well-below $1.00.

Why were they offering this premium service at the discounted price?  “Because it is our pleasure, sir!”

Expect the unexpected!

Now, this particular Gas Station is one of several along along side Interstate 5 in Oceanside, CA.  The station next door is undergoing a renovation – so the closest competitor, isn’t – for now.  So why are they offering such great service now?  When they don’t have to.

Simple!  Great service is a mind-set.  It is an attitude.  It is a habit.  You can’t just turn it off and on when competitive pressures build or let up.  Companies who deliver great service do so consistently.  It is their DNA.  They work hard at it.  Yes, they train their employees to deliver great service.  But, more important – they live great service.  Their actions – how they treat their customers, how they behave when no one is observing – that is the model.  A model for success.

You can bet that the next time I am down in Oceanside, CA I will choose the Gas Station that gave me the great service yesterday.  I want to reciprocate – I want to give back in return.  And return I will, again and again!

And I will tell others to patronize this gas station – they have earned my referral. They deserve the business!

I Recommend

“You're not recruiting people just to do tasks.  You're recruiting people to engage and maintain relationships.”

– Tom Wilzius, Management Consultant

As a traditional retail store, your competitive advantage is your ability to establish and nurture strong relationships with your best customers.  In order to be successful in building these relationships, you and your staff need to change your perspective from being “product-focused” to becoming “customer-focused.”  Here is a great tactic to get you moving in that direction:

1) On a regular basis, have each staff member in your department pick out a particular product (or small list of products) that they like – and would recommend to others.

2) In you store, set aside a display area where you stack the products (for sale) and prominently feature the staff member- a short bio – and their written recommendation – why I like this book or gadget, and why I think that you will too.  Make it attractive – but be sure that it is “personal.”  This is the key.  You are not promoting a “product of the month” – that is a “product-focused” attitude.  Rather, you are starting to view your store from a “customer-focused” viewpoint.  The point being, that a personal recommendation is a powerful sales influcencer.

I have been reminded of this marketing tip twice in the past few days.  Yesterday, I received my monthly e-newsletter from Rhonda Adams of The Planning Shop.  She mentioned that her best selling book, “Business Plan in a Day,” is featured on a special “staff selection” table at all Borders Bookstores from now until April 12.

This tactic works – trust me.  Last month, I went into a Borders Bookstore and purchased 4 of the 8 “staff selections” in the business book department.  Who has the time to search through hundred or thousands of titles?  We welcome a recommendation from a trusted adviser.  I admit, I did not develop a personal relationship with any of the staff at this particular Borders store – they are simply too large an enterprise for this to happen.  But … for you, The Independent Retailer who has a local customer base, this is a “golden opportunity” to try out!

The other reminder of how effective this “staff selection” tactic is came from Bob & Sue Negen's terrific new book, “Marketing Your Retail Store in the Internet Age.”  They recommend that you put these “staff selections” on a prominent page on your website.  This is especially appealing to a small retail business – don't try to list every possible product available (in your store or in the catalog) on your website.  Just list – and sell! – a few featured items.  And be sure that your say “Our staff recommends.”  Possibly an even more effective headline would be, “Our customers recommend.”  In either case, be sure to write out the reasons why they like – and recommend – the products.

To illustrate the difference in positioning, compare these two headlines:

“On Sale This Month!”

“Our Customers Recommend!”

The first headline implies that YOU want to move these products.  Perhaps you got a great deal on them or maybe they have been sitting on your shelf for too long.  But the message that you convey is “I, I, I” or “We, We, We.”  In the second headline the message implied is “people – just like you – have purchased these products and they think that you will like them also, because…”

Which is the more effective approach?  Which one is “customer-focused?”  Which will generate more sales and excitement?

Try it! Write me and let me know if this works in your store –



When Customer Relationships Cease

Here's a short story from a terrific new book, Marketing Your Retail Store in the Internet Age,” by Bob & Susan Negen:

“Bob recently spoke to a musician who told him about the store where he bought his first drum set.  He went on to become a professional musician and of course bought more drums, sticks, and all the other accoutrements of a professional drummer.  One day he went into the store and although the owners greeted him by name, they never left the work they were doing to help him.  He left, went to the music store down the street, and never went back.

His statement was, 'They acted like they didn't care.  They knew I was going to buy something, so they didn't bother helping me.'  Not only did they lose a good customer, but their competition down the road gained a great new customer.”

Have you ever done that?  If you run a business, do you simply take your customers for granted?  Does your store have this mindset, “Where else are they going to go?  We have the best (selection, prices, etc.)  He's going to buy it anyway.”

Let's turn the perspective around.  When you are shopping, how do you feel when a store's employees ignore you?  Doesn't it drive you crazy when you see store staff chatting on the phone or performing clerical duties while you try desperately to get their attention and assistance?  That behavior irritates me.  At best it leaves a sour taste in my mouth.  At worst, I abandon my shopping – in that store – and go somewhere else to find it.

We are witnessing Divorce: Retail Style.

At the very least it is abandonment.  At the worst, it is a messy divorce where the aggravated party makes headlines and tells everyone how your store stinks and that the people who work there are creeps.

Don't let this happen to you.  Don't take your customer relationships for granted.  If you do… they will cease or break.

Customers have choices.  And in the Internet Age, they have a world of choices.  Their choices come in all colors and sizes and at multiple price points.  Romance your core customers.  Keep the relationship fresh.  Keep them coming back to your store for life.  Give them reasons to prefer to shop at your store.  Don't let your relationship with your customers grow stale.

I can't find the source, but I remember reading a definition of a relationship.  It stuck with me and I use this quite often during my training and speaking engagements:

“A relationship is initiated by similarities.  It is built on common interests.  But it can only be sustained through a mutual benefit.”

When the relationship becomes one-sided…  When a mutual benefit no longer exists… the relationship is terminated.

Sam Walton – the founder of Wal-Mart – was guided by this philosophy:

“There is only one boss – the customer.  And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”


The coffee didn't taste as good

Yesterday morning, I stopped into my local Starbucks cafe before starting a two-hour drive to a client meeting.  I was looking forward to a relaxing drive on a beautiful Southern California day and listening to some new music.  I was expecting to purchase an Audio CD along with my Vente Coffee of the Day at Starbucks. 

Instead … what did I see?  A forlorn spinner rack standing right in the middle of the store with only two Audio CDs left on display.  I was surprised and disappointed.  I was expecting to browse the rack and purchase a new CD for my drive.  I did buy the coffee.  But it didn't taste as good as it usually does.  My expectations were not met.  Therefore everything else didn't seen so satisfying.

Over the past few years Starbucks has produced some innovative recordings on their Hear Music label.  I have particularly enjoyed their “Artist's Choice” series – the music that influenced popular artists like Joni Mitchell, Tony Bennett and Norah Jones.  I really wanted to acquire a new album – and at Starbucks you pay full price for the music.  It would have made the drive even more pleasant, it would have made the coffee taste even fresher, it would have engaged all of my senses … instead, I walked away unsatisfied.  The coffee didn't taste as good.

If you operate a retail store you must meet the expectations of your core customers.  You must engage them and delight them.  When a customer walks into your store he or she has a certain expectation – to find something specific, to browse, to ask for your advice or help in making a selection.  They want something, even if they can't quite articulate it.

But … they primarily judge your store by the first impression that you make on them.  Yesterday, Starbucks mad a terrible first impression on me.  And, I still have a bad taste in my mouth because of it.  I wanted to buy a CD – I did not want to see an abandoned CD spinner rack taking up prime floor space! 

For me, whenever I walk into a store and the displays look “picked-over” or disheveled, my first impression is – “This store doesn't care.  The employees don't care enough to re-stock and re-merchandise the shelves.  The management does not care what impression they make on their customers.”

I always felt this way when I walked into a CompUSA store.  And look what has happened there – half the stores in the chain are being closed.  It happened to KMart – the largest retail store bankruptcy ever.  Can it happen in your store?

Let's go back to my Starbucks experience.  That rack did not become depleted over night.  I was in the store a hour after they opened so I doubt that there was a rush of record buyers in the store at 6:00 a.m.  No … that rack has been standing there like a tree that has lost all but a few of its leaves for several days – if not weeks.  Where was the manager?  How could he or the employees tolerate that?  If they didn't have replenishment CDs to fill the rack the solution was simple – simply move it to the storage room.  Don't let your customers see an eyesore when they first walk into your store!

Learn to see your business through the eyes of your customer.  That eyesore left me with the sense that perhaps the beans were not freshly ground.  That the pastries were a few days old and stale.  That the restrooms might not have been serviced.  That I might not go back to Starbucks as often as in the past.  All because of one abandoned Audio CD spinner rack.  I felt as abandoned as the two CDs left in the rack.  I felt cheated.  Starbucks took more than my money yesterday.  They robbed me of my expectation – to enjoy a new CD while driving on a beautiful day.

I remembered a passage from Jaynie L. Smith's book, “Creating Competitive Advantage.”  She talked about her days working with Pan Am Airways:

“If the flights left and arrived on time, passengers felt generally positive about things like food, service, and comfort.  If the flights were delayed, however, passengers gave us low marks for everything, from check-in to after-dinner coffee.”

That's what airline passengers want – to take off on- time and to get to their destination safely and on-time.  Herb kelleher started Southwest Airlines with just that in mind:

“If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline.”

That is a winning business plan – and it works for any industry.  it doesn't matter what products you sell or services that you offer.  “If you focus on the things that your customers care about most, they will keep coming back.”  I urge you to purchase “The Competitive Advantage” and take its principles to heart.  To come out ahead today you MUST have a competitive advantage – and your customers must see how it benefits them to do business with you.

As a footnote.  For years, passengers consistently rated Southwest Airlines food service the best in the industry.  And they NEVER served food – just nuts!  But they got passenger off on-time.  And they made sure that they go to their destination safely and on-time.  They met their customers expectations. 

And the coffee tasted great!


Was it Internet Pricing? Or "Soulless" Stores?

Yesterday, in his New York Times column – and on his blog – David Pogue wrote about the gutting of CompUSA.  They are closing half of their stores.  Pogue's article caught my attention for several reasons:

1) I advise several retail clients in the music products industry.  And if an established store operation like CompUSA can fall to the rise in competition – or its own irrelevance – what does that bode for for the future success of my clients?

2) Pogue speculated that the main reason CompUSA was forced into this severe downsizing was low-ball Internet pricing.  Actually, CompUSA's  pricing policy was not even competitive with other retail stores – e.g. Circuit City or even Target.  Even now, as they close the stores, they are only offering a token 10% discount on a “no returns / final sale” basis.  Big deal!  Or rather ,,, not a big enough deal to attract anyone's attention or dollar bills.  Many of my potential clients are scared and clueless when it comes to setting  – and sticking with – competitive prices.  This development is not giving them encouragement.

3) Later in the article, Pogue lamented the disappearance of the the “local” computer store at a time when many people find themselves crying out for help – because they feel so “technologically helpless.”  The complexity of setting up home networks, integrating computers and home theater systems, changing operating systems, fighting viruses and spam – you name it – it is all so complex (for a time-pressed population.)  What lessons can my music products industry clients take away from the (partial) demise of CompUSA?


Let's start with pricing, service, selection and then move on to building relationships with your customers.

Pricing:  Your pricing must must not only be competitive – it must be “dynamic” – you must have the ability to both raise and lower your prices to meet the ever-changing demands of your customers.  Some of the products that you sell are truly commodities and therefore they are extremely “price-sensitive.”  You should not try to “beat” Internet pricing but you can not afford to be “out of line” either.

Other product lines can be priced higher.  These are not commodities.  They are “desirables.”  They either have a certain “cache” or they are not available everywhere else or … they require more sales assistance in making the sale or more service opportunities (installation, check-up, etc.) after the sale.  These products deserve and can command a higher price.

Service:  Pogue's article was right on target when he described the shopping experience in a CompUSA store.  (Click here to read it yourself.)  Here is what Pogue said about the CompUSA staff:

“The company’s corporate spokesperson at the time acknowledged, 'Getting staff is a problem across the board. We need specialized talent; finding it can be a challenge.'

Between her lines, you could read the truth: technology experts are in demand everywhere. At $6.50 an hour (what CompUSA was paying at the time), you’re not going to attract many people who, ahem, excel in both personal and technical skills.”

Perhaps a better model to follow (if you are a retailer) is Best Buy stores and their crack service and systems installation team – “The Geek Squad.”

The dilemma for many music products (and electronics) dealers is: 

1) A significant part of my sales come from prices that are considered “commodities.”  I can't afford to pay good wages to my staff and remain competitive with Internet pricing on these “commodities.”

Hint:  You don't sell these “commodities” – competitive pricing sells them.  You don't need skilled and higher paid staff to sell these products.  Just price them right and let them sell themselves.

2) I can't train my staff to acquire the skills (product knowledge and people-skills) necessary to sell higher-end products.  I am also having a hard time retaining the staff that I have – there is a high turnover ratio.

Hint:  Take a close look at what Best Buy does with their electronics.  The higher-end products are in their own retail space – sometimes in their own store (Magnolia)   The sales staff is not a Best Buy clerk.  These are sales professionals.  They know the product.  But they are really trained to understand the needs, desires and the requirements of this customer.  And … they have the services of “The Geek Squad” to ensure customer satisfaction – i.e. “No wires showing!”

3) Selection:  You can't be all things to all people!  You can't possibly stock and sell every brand available.  Leave that to and other “Long Tail” retailers.

Hint: Offer your customers a choice – but make it limited and focused.  A proven strategy is offering a “Good, Better, Best” product line-up.  Do not confuse the customer with too many choices – the result … no choice!

4) Relational vs. Transactional Sales:  You can concentrate on the “transaction” – the customers who know what they want and they demand the lowest price or else …  If you choose to remain in this rut – well, just read the CompUSA story once more and this time insert your own store's name.  Or … you can focus your energy on building a strong relationship with your “core customers.”  Don't just make one sale.  Sell yourself and your interest in earning the next sale to that customer and … sales to the friends, family and neighbors of that one “satisfied” customer.

It can be done.  Local dealers can learn to thrive and survive.  Learn from the mistakes that CompUSA made.  Find your niche.  Grow your market.  Be different!


Meeting "Nay-sayers" Head On

While I was preparing to facilitate a meeting for a client, I came across an interesting sidebar article in the January 2006 edition of The Motivational Manager“Bite your tongue before uttering these creativity-busters.”  This is a list of typical negative comments that you hear in the office or at meetings.

A major portion of the meeting that I am about to facilitate calls for “brainstorming” ideas.  The client is most interested in hearing the ideas that each manager has on a selected topic.  The purpose of a “brainstorming” session is to get as many ideas from as many participants as possible in the allotted time. 

“Brainstorming” sessions are not strategy sessions.  Nor do they call for decisions to be made.  Strategy and decision-making are different types of meeting.  They should be held separate from a “brainstorming” meeting.  What you want to be careful to avoid are the following comments (as written in the article I quoted):

Senior management will never go for it.

That's not how we do things.

Let's think on that for a while.

Be practical.

Let's form a committee to study it.

We can't afford it.

It will be too hard to administer.

If it's that good an idea, why haven't our competitors thought of it?

It doesn't do anything for me.

It sounds good, but …

Have you heard these comments before?  I'm sure that you have.  But … they are not appropriate for a “brainstorming” session.  Each of those comments  might be appropriate in a strategy or decision-making session.  Although I think that the phrase, “That's not how we do things…” should be permanently banned from any business meeting!

I am looking forward to facilitating this meeting.  I think that we will collect a lot of great ideas.  I think that the participants will enjoy throwing out their ideas.  And I am looking forward to helping the client select the ideas that they want to pursue.  It will be fun for all!

Communicate Effectively and Quickly

“If you can’t state your position in eight words or less, you don’t have a position.”

– Seth Godin

It is difficult to be brief. Try it! State your opinion in a few words as possible. How do you explain your business or service to a total stranger in just a few words – words that the stranger can easily understand? It is a tough task, isn’t it? And yet, increasingly that is what we have to do to retain current customers and to attract new ones. To be noticed – to stand out from the crowd – to move people to take action we must master the art of brevity.

One of the best business summaries I know came from Charles Revson, the founder of Revlon Cosmetics. He said:

“In the factory we make cosmetics, in the store we sell hope.”

Brilliant! All in twelve words. And they are the “right words” because they work. The listener can clearly understand the process and visualize the outcome. The outcome for each customer will be unique because each will define “hope” in their own way.

Will that “hope” renew, revitalize, rejuvenate, restore, rekindle or reinvent? Each customer will choose one or more of these answers – and probably one or more of Revlon’s cosmetics. Being brief, concise and “on-target” has a real payoff.

A few days ago, I wrote an article titled, “The Long and the Short of It.” I commented on the enjoyment and benefit I got from a new book by Dr. Frank Luntz“Words that Work: It’s Not What You Say, It’s What People Hear.” Buy this book! Put it’s principles into practice. Reap the rewards! “Renew, revitalize, rejuvenate, rekindle, reinvent” is one of Luntz’s “Twenty-one words and phrases for the Twenty-first Century.” They work.

How am I planning to put this principle into practice? Follow this scenario: Continue reading “Communicate Effectively and Quickly” »