Article of the Month
This article deals with one of the concerns I have for the independent small businesses that read the e-retailer newsletter. The article of the month is very relevant today; the purpose of the article is to teach business owners and managers to call their customers to ask them to do business with them.
This is not the old traditional telemarketing that we have all grown to dislike. Instead it is a technique that worked well for a business owned by someone I know. What concerns me is that the story in the article happened over 30 years ago.
The material is very relevant today. If you are a jeweler, the article I wrote for your trade magazine this month was about this very technique and how it affected me last November. As a business person the usage, or lack of usage, affects you and your business every month.
Click on Article of the Month to read this article.
Book of the Month
First break all the rules
by Marcus Buckingham and Curt Coffman
In December, those of us living in the states frequently heard the Roosevelt quote of, "The only thing we have to fear is fear itself".
Reading tells me that the reason youngsters are better with computers is that they are not afraid of breaking them. Perhaps this lends itself to the issue with businesses. I find too many businesses that are paralyzed with the fear of making a mistake.
And as I have said in presentations, "Not to decide is to decide". Take a look at the book suggestion of this month; apply a liberal dose of this book to your business as you plan your business for 2011.
Click on Book Referral to visit this page on our site.
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A note about gift cards
This year we heard even more promotion by retailers for people to buy gift cards. I would expect next year to be even more of the same. As the new year starts, you will hear the chain stores and mass merchants doing a heavy promotion of getting people to redeem those gift cards.
Should you be doing the same for your small business? My belief is that you should not. Allow me to explain. When a $50 gift card is 'sold' to a customer, it is not really a sale. It is simply a business getting $50 and giving the promise to give the customer $50 retail value of merchandise at a future date.
Financially speaking, you are receiving an asset of $50 and getting a liability (actually a deferred liability) of $50. Both of these transactions show up on the balance sheet; not the profit and loss statement.
When the customer redeems the card, there is a $50 sale and the $50 deferred liability goes away because you now have given away an asset (inventory) and received some gross profit. Part of this transaction shows up on the profit and loss statement.
The mass merchant and chain store want the gift cards to be exchanged because they get to 'ring up' a sale. This looks good in the eyes of the stockholders. In the case of the independent business, you are the stockholder. The only one you have to impress is yourself.
You are holding onto the $50 in your checking account with a promise of someday giving merchandise to your customer. Selling a gift card is like a customer giving you a loan with no interest being charged. I am not suggesting you make it difficult for someone to redeem the card; just don't make a big issue of promoting the redemption of the gift cards.
The December e-retailer conversations conference call was well attended. It was a session in which we discussed a variety of games and incentives you can use to engage your staff. The examples can be adapted for your business to get your staff making suggestions, following up on sales, and saying all the right things to customers.
If you missed the live session, you can follow the link below to listen to the session or download it for playback at your convenience.
E-retailer conversations conference calls
January's conference call is scheduled for Tuesday, January 11 at 8pm eastern. We are going to talk about your making 2011 a great year. We are going to discuss how to make the investment in your business work better for you.
Too many people have an attitude that getting to work in the industry they love, and sell the products and services they love is a reason to make less money than they would get by doing something else. Enough of that thought pattern. How about doing what you love and making a lot of money while you do so?
For the January conference call, there will be two invitations sent to you; the first on the weekend before the call and the second on the morning of the call. Join us for the first e-retailer conversations conference call of 2011.
What I continue to see are businesses that are breaking through the clutter of a challenging economy and building their business. As I write the e-retailer for January, I have just visited with a retailer that is having a great year. This independent business just had a showing with a product line in which they outsold every other independent store in the country - including stores in cities that have a population that is 10 times larger.
The length of the challenging economy has shown that no one is going to 'ride this thing out'. The time is now to either grow or simply become a page in the story of failures in the tough times.
Come on. Let's go forward. You deserve a great year.
|Internet Tip of The Month
Pricing strategy calculator
How about a great new year resolution for your business? As I visit businesses, I continue to see way too many businesses leaving way too much of their profit in the customer's hands.
An example is an item you sell for $14.50; research shows that the customer is not going to notice, and not going to change their mind, if the price is $14.99. This additional 49 cents represents a sizable amount of profit for your business. Carry this example through your whole business and you can add substantially to your bottom line.
How about a resolution to try this idea in a couple of areas of your business? See it work there and then begin to expand it to other areas. By the time we get through the year, you will definitely see a difference in your gross margin and your net profit.
The pricing strategy calculator will show you how to use the strategy on all areas of your business.
Pricing strategy calculator
| The Power Promoting Idea of the Month
Mugging your customers
Preparing to write this month's newsletter, I paid close attention to the number of businesses that were utilizing an age old technique of putting something to be enjoyed or used into a customer's hand.
I saw coffee mugs (hence the title of this article), magnets, credit card holders, pens, and other assorted items which customers gladly accepted and took home.
You may have thought of the credit card holder as being unusual, but your customers will thank you when they read about the challenge with the American Express card. This card holder looks to be made of Tyvek with an aluminum lining inside. American Express and other cards may have the RFID information on them. In the demonstration I saw, this information can be easily stolen from the card unless it is in one of these protective sleeves.
With any of these small 'thank you' gifts you share with your customers, be sure to have your business address, website and phone number on the item. And with the phone number, be sure to include your area code. I do not understand why so many businesses insist on leaving off the area code.
In the red power promoting book, the second promotional book I wrote, this is idea #14.
You can find more ideas like this in our promotions books. You can order your copy by clicking on the link below; each book is only $9.95 plus postage.
Profits Plus Resource Center