Tips for a challenging time
Experiences of businesses during a rough economy
"It's time for Americans
to go back to their shops and get to work", was the quote
accredited to President George Bush some two weeks after the terrorist
attacks on New York City and Washington, DC.
And how appropriate
that in his comments, the first group he mentioned was the retailers.
For if your business is like most others, in the first 10 days
or so, it was difficult to have a conversation with a customer
that was not dominated by the events we were being exposed to
by the various media.
Add to the conversations the
fact that the media was bombarding the public with quotes from so
many individuals, each telling of how they would stop spending until
they could feel comfortable. Of course, the press had already been
busy for the past 10 months telling us how we were entering a recession.
Combine all of this, and it
might make you think twice about being a retailer. What are you
supposed to do? One option is that you could resign yourself to
riding it out. However, as the old saying goes, "When you resign yourself to fate, you will find that
fate will gladly accept your resignation."
Music, Inc. went
looking for retailers from around the country who have decided
to take matters into their own hands. With most of the progressive
retailers we spoke with, they had already put a plan into action
earlier this year. And with the events of September 11, and subsequent
happenings and rumors, merely tweaked their efforts to make the
best of a bad situation.
Ask Eddie Hancock of Alpha Music
in Virginia Beach, Va., about business and he will simply say, "Unbelievable!",
with a strong and upbeat sound to his voice. Eddie concedes that in the days immediately after the 11th, business was slow. But
in keeping with his upbeat business approach, he tells his staff, "If
we aren't busy, then let's get ready to get busy."
Eddie
is also maximizing the advantage that his store is merchandised
complete vertically as compared horizontally. While no store can
be all things to all people, Eddie specializes in combo instruments.
For example, you can buy anything from the beginner expensive
to the best quality guitar from Alpha Music. And when you make
a purchase of any instrument, Alpha Music offers free lifetime
adjustment to the original owner.
In his guitar room, Eddie
has added a shop for his guitar technicians so customers can watch
the work being done on instruments, thus exposing repair customers
to all of the new instruments.
Elaine Ostrander of Colonial
Music in Mount Vernon, Ohio noticed a change in business immediately
following September 11. Entire families were attending the parent
meetings for beginning band and orchestra. Kids sat with their
parents instead of in groups by themselves. And parents were genuinely interested in what was going on with their kids, instead
of being distracted by cell phones, beepers or conversations with
other parents. Elaine sees people getting back to a family oriented
society, and the feeling of patriotism as being a real positive.
Elaine is jumping into the cause
and helping to sponsor a free professional band concert to honor
fire fighters, police and safety personnel from Central Ohio.
Colonial
Music sees an opportunity to spend more attention on the home school
market. When the time allows, Colonial plans to create an adult
beginning band. Fortunately, the month of September saw a 20%+ increase
in sales.
In Memphis, Tennessee, Chip
Averwater of Amro Music sees this as an excellent time to make improvements.
While business was down for the two weeks after September 11, their
sales are up for the calendar year. What other people see as layoffs
and lower interest rates appears to Chip as the opportunity to find
some great sales help much easier than for the past several years,
as well as contractors and tradesmen more competitive and eager
to work.
Amro used the lull in business
to complete some projects that have been on their to do list for
a long time; redesigned their price tags, some literature, and displays.
They have also cleaned up their customer contact list and done a
better job of following up. Chip is determined to fulfill the old
adage of, "Never forget
a customer. Never let a customer forget you."
And Malcom
McFadyen of the McFadyen Music stores in North Carolina has improved
his business as they have stepped up their efforts to educate
their staff and work on their customer skills. "We are treating
the customers as if they were 24k gold instead of the usual 18k
gold."
Their staff is working harder
to focus on their core customers and core products while concentrating
on closing the sale now instead of waiting for the customer. By
getting the customer's personal information, McFadyen stores are
also calling back the customers more now to follow up on their sales
opportunities.
There are several other ideas
that we would like to share with you.
#1. If you utilize an
outside sales staff, you have probably noticed that your competition
has cut back on their calling on customers. The smart logic is not
match them with cutbacks, but instead increase your efforts as customers
will continue to respond to those who ask for the business.
#2.
Make sure the store looks full of merchandise. If your situation
requires you to decrease your inventory, spend time making the place
look full. You can do so with several techniques. The first is to "face and
front" all of the merchandise. This means to pull all of
the merchandise to the front of the shelf or peg hook, and make
sure the most saleable side of the product is facing the customer.
The second technique is to change
the length of your peg hooks. If your merchandise is hanging on
12" hooks, and a 4" hook
will do, change to the 4" hook so your customers do not see
the empty hang space. This idea also works with your shelving. While
you have fronted your merchandise, by changing to shelves that are
not as deep, the inventory you have will require more "fronts",
thus making the shelves look fuller.
The third technique is
to put the larger items on the higher shelves. If the display
racks are 5' tall, and you place tall merchandise on a shelf that
is near the top, you have now made your shelves look as though
they are 6' or 7' high. This allows you to have a store that looks
as full as a mass merchant's store.
#3. Call your old customers.
A merchant this writer has known for many years had the habit
of calling 10 customers a day. The conversation went something
like this, "Hi this is Jack from the music store. I remember
selling you a guitar some four or five months ago, but I haven't
see you in the store lately. I just wanted to check in to see
how you are enjoying your new guitar."
Consistently, his
results were this: Of 100 calls made within 10 days, 2 people
would express their displeasure with Jack's shop. Jack would apologize
and ask if he could correct the situation. Research has shown
that when the situation is corrected, the once unhappy customer
becomes tremendously loyal and outspends the average customer.
Of
the 98 remaining calls, 16 people would walk in the door of Jack's
store within 2 weeks and make a purchase. Remember that your advertising
probably gets a 2% response; Jack's efforts achieved a 16% response
and there was no advertising costs involved!
#4. Tell the media
the good that is happening with your business. You have undoubtedly
heard some retailer on the radio or television telling the media
person how their sales have decreased, and how they hope customers
will return.
While this retailer is getting
publicity, it is the wrong kind. He is telling the audience that
his store is losing. No one wants to shop with a loser. And on top
of that, he has helped to fuel a recession because he is telling
the public that he is witnessing a recession first hand.
Find something
good about your business and don't wait for the media to call you.
Tell them you have a story that goes against the grain and that
you are doing great! If you can't find something good to say about
business, say nothing at all!
The bottom line of this story
is our answer to the question, "Are we
going to have a recession?" And the true answer is, "Only
if you decide to participate."