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Wednesday, November 18, 2009

Are You Ready and Rarin’ for the Holiday Blitz?

Next week is Thanksgiving - where did the year go? So much has happened this year for sure, but the good news is we can be thankful that the signs of a better economy are everywhere!

Hopefully, this means that every retailer reading this will be busy from Black Friday thru Christmas Day! In fact, you've planned for it to be busy, you've bought the merchandise, you've dressed the windows, you've hired the staff and you've planned unique and sales generating marketing activities. But what if it's still not enough to make the sales you planned for?

This post is filled with last minute sales generating and profit saving tips for retailers of all size.
Whether it's marketing or a markdown strategy to help drive sales and improve your post holiday inventory position, we offer some last minute strategies to help your business thrive this holiday season. We know TIME is of the essence so we urge you to start implementing some of these ideas today!

  • Treat Your Kings and Queens Royally! Host a Private Sale during the two slowest days of December for your absolutely best customers

    • Invite your customers via email, FB etc. to keep marketing costs down
      • Email Subject line: VIP Party- Invitation Only- Please Join Us
    • Provide refreshments and have festive music playing.
    • Offer Special Savings on Key Products – (use this as a chance to sell slow moving products) Target slow selling Christmas merchandise.
    • Give customers a coupon for a future purchase with every purchase made on thE Private Sale night (day) – January 1- 31 when sales are slow
  • Motivate Employees Thru Christmas Day. Run a sales contest at least 2 times per week to keep employees motivated an in line with overall store sales goals. This works great to boost morale as everyone needs money for holiday gifts!
  • Liquidate Holiday Merchandise BEFORE the Holiday Comes. Review your Holiday product selling each week. Review dollar sales by category to make sure you are on track to liquidate it by the end of the month.
      • If sales are slow, start taking discounts by 12/16 –start with 20% off
      • Move to 30- 40% off on all Holiday product (cards, ornaments, red boxed gifts, etc) on 12/23-24 depending on sell thru (the new spending consumer spending patterns no longer suggest to "buy it for next year" so you will have more trouble liquidating holiday merchandise after Christmas this year than in years past.
  • It's not Fine Wine- It doesn't get better with age. Review ALL store selling during December. As we discussed earlier, even though the economy is improving, consumers will not have much discretionary income after the holidays are over. Review on hand inventory and work to liquidate it based on slower sales periods in January and February.
  • Suggested ideas:
  • Negotiate with Vendors to take back slow selling merchandise and trade it for new spring merchandise (since you've already paid for it, your cash flow will improve in the spring because of this!)
  • It's still not too late to call your key vendors and try and get money to help you advertise or markdown slow selling inventory. Trust me, the big box store around the corner is analyzing their selling every single day and they are already making these calls—Find the time to review your merchandise selling- it will pay off in the end.
  • Product Profiling. Review Spring 2010. I know you're busy trying to make Christmas happen, but you've got to find the time to review your January and February on order NOW. The key is to make sure that it's still merchandise you have to have and that you are prepared to pay for in a very slow selling time period. If you still love it and have to have it, review the quantities that you have on order.
    These purchases should be enough to make the store look fresh and transition you to spring, but you don't need a 6 month supply of ANY merchandise that you pay for in January! If you still love the merchandise and are comfortable with the total number of units, see if you can get your vendors to split the shipments- Again, typical January sell thru rates are 3% per week. That's not a lot of customers or a lot of products going out the door. Why tie up your cash and pay for them?

Wednesday, November 11, 2009

Twitter and Facebook aid small firms

Wanted to share this great article with you from BBC News.


Georgetown Cupcake uses social networking site for promotion.
It is the 21st Century equivalent of word of mouth.
From "mom and pop" diners to cupcake shops to technology start-ups, small business owners across America have been thrown an unexpected lifeline in the midst of the recession by social networking sites.
Companies that have jumped on the Twitter and Facebook bandwagon are reporting a surge in customers while others struggle.

With minimal marketing budgets available to many small businesses, social networking sites offer a quick and, more importantly, free means of promoting their wares to a global audience.
In the face of stiff competition and a global economic downturn, it is a route more and more companies are going down.

Sisters Sophie LaMontagne and Katherine Kallinis have been using Twitter and Facebook as a marketing tool since they launched Georgetown Cupcake in Washington DC in 2008.
"Together they work like a virtual focus group, a bulletin board, a marketing campaign and branding exercise rolled into one," said LaMontagne.

As well as posting details of new flavours, specials and events, they are using the social networking sites to promote their new nationwide delivery service together with their new store in Maryland.

For some small business owners, traditional advertising channels such as television, radio and newspapers are prohibitively expensive.
For others, the web is a medium more in tune with their potential customers. "They're not a good fit for everyone, but if you're a small business with a customer base who uses social media, you can't afford not to use them," says Rachael Ritchie, who runs Goodfellas Pizza with her husband in the college town of Athens, Ohio. "It's a great way to interact one-on-one and build a relationship with our customers"

Alice Shin, Kogi BBQ recently asked her Twitter and Facebook followers to vote on whether she should use Coke or Pepsi as a soft drinks supplier. "That real-time feedback is invaluable," she says.

Goodfellas Pizza offers cross-promotions with other local businesses via Twitter.
They include Athens Relaxation Station health spa, which gives Goodfellas customers discounts, a deal which is reciprocated at Goodfellas. "I am a one-woman business in a small town so free marketing is a huge bonus," says spa owner Jennifer Hunt. "And if I get a last minute cancellation I hop on to Twitter and within minutes I've filled the appointment."

"Every day we are seeing businesses using Twitter in more and more creative and exciting ways," says Anamitra Banerji, manager of commercial products at Twitter.
"We've got lots of restaurant and bar owners right through to plumbers and building managers."
Though multinationals such as Starbucks and McDonald's were among the first to realise the potential of social networking sites, anecdotal evidence suggests it is small businesses that have the most to gain.
Twitter, which allows users to post tweets of up to 140 characters, is currently developing products to sell to business users, including software to verify accounts and analyse traffic to Twitter account holders' profiles.
The company recently launched Twitter 101 on its website, which includes advice for new users along with case studies, describing how companies of all scales and in various sectors have used the site to grow their business.
Facebook, which has 300 million users worldwide and recently announced it had become cash-flow positive, offers businesses special pages and the option to buy ads to show to users who like similar companies.

As well as using social media sites to communicate with customers, small businesses are using them to connect with potential suppliers, stockists and other people they can trade skills with, such as accountants, marketing experts and technology workers.

One recent Twitter post from a graphic designer asked other business users for advice on computer software his company was thinking of buying.
Kogi BBQ runs three Korean mobile food trucks in Los Angeles. It has 43,000 followers on Twitter and 3,150 on Facebook and uses the sites to post specials, discounts and details of where the vans will be parked each day. "It's a great way to interact one-on-one and build a relationship with our customers," says Kogi BBQ's creative director Alice Shin. "Customers feel a personal connection, which encourages repeat business."

But experts warn that social networking sites are not without dangers. "You are losing control of your message by inviting customers into a dialogue and that could be problematic if they criticise you," says Arun Sundararajan, a professor of information, operations and management sciences at New York University.
He advised users to think of it as a conversation rather than an advertising space.
"There is a fine line between giving people a steady stream of useful information and bombarding them," he explains. "If you do the latter you are in danger of turning customers off." This view was echoed by Andrew Sinkov, vice-president of marketing at Evernote, a California-based online storage company. "The key is to keep your messages concise, free of fluff or marketing jargon and only convey genuinely useful information," he says.

Evernote has 30,000 followers on Twitter, 12,000 fans on Facebook and has recently begun using Friendfeed, which was taken over by Facebook in August. Evernote directs its followers between all three sites and its company blog, creating a sophisticated, inter-linked online presence. "The days of large anonymous companies are over," declares Mr Sinkov.
"To succeed nowadays your company has to have a personality and it's easier than ever to create that."

Monday, October 12, 2009

YouTube & I Profit: Social Media for Retailers

Co-sponsored by retail marketing and social media experts Lynn Switanowski-Barrett & David Perry “YouTube & I Profit: Social Media for Retailers” is designed to help retailers of all size chart a profitable course through the seas of social networking.
This webinar is at teaching retailers how to use social media for their businesses to connect with customers more effectively than ever (and so much cheaper too!) It’s a MUST attend event for any retailer that wants to stay ahead of the competition and connect more effectively with their customers - starting TODAY.



At “YouTube & I Profit: Social Media for Retailers”you will hear real-world case studies with practical lessons on how you can use social media to grow your brand, business and bottom line. You’ll learn why social media is growing so quickly and how your retail business can and should start participating immediately.

You’ll walk away with the knowledge and the know how to set up a social media strategy for your business and you’ll get plenty of time saving tips to help you execute your strategy more effectively. You won’t want to miss this opportunity.

Takeaways from “YouTube & I Profit: Social Media for Retailers”


  1. Learn why your customers are continuing to move away from traditional media and why your retail business must embrace social media – or risk becoming obsolete!

  2. Learn the key components to a social media strategy that will increase your sales and save you time doing marketing for your business.

  3. Learn a 4 step strategy that will ease your fears- and improve your performance as you begin to engage in social media for your business.

  4. Learn how to approach new media to get you press coverage.Learn how to use Twitter for brand identify, growing your “fan” base and even make money or fund raise.
  5. Find out how to set-up, maintain and establish a blog and a strategy for driving traffic to it.

  6. Get lessons in basic Web 2.0 tactics such as instant messaging, blogs, wikis, and texting.

  7. Develop your own online polls and video page through YouTube, Vimeo and other online sites.

  8. Get a handle on “SPAM” and learn how to put together targeted and personalized email, Facebook, Flickr strategies.

Register at http://www.davidperry.com/you-tube-i-profit-social-media-for-retailers.html Early bird special ends October 19th

Avoid These Common Holiday Marketing Errors

Most retailers get ready for the holidays early in the fall. They ramp up inventory, consider more staff, and plan special deals and marketing for the biggest selling season of the year. By November and through December, when sales turn critical, successful retailers have a good idea what promotions will work....and which ones won't!

To help you learn from their lessons, here are four missteps that marketers often make during the holiday season. Avoid these errors and you’re more likely to celebrate the coming year.
  1. Banking on deep discounts to boost sales - Don’t assume that low prices are the route to buyers’ hearts and wallets. Cheap products are not nearly as attractive to consumers as getting value for the dollar. In addition, if you cut prices too deeply, especially early in the season, you’re teaching year-round customers to wait for bargains. Instead, put appropriate prices on your wares and make sure you’re not merely increasing volume, but actually turning a profit on each sale

  2. Being too casual about e-mail marketing - Provide real solutions for customers' gift-buying dilemmas at the time your customer is thinking about buying. Offer tangible recommendations and promotions tailored to your customers' interests and buying histories. With those goals in mind, you probably need a series of timed e-mails (or, at least more than one). Don’t begin your e-mail campaign with a discount offer (see Mistake 1, above), but do billboard the fact that you will be sending special prices and discounted promotions in a week or two. That gives you a better chance of getting recipients to open later e-mails. Make the subject lines and messaging more urgent as the season heats up.
    Each message should have some call to action to attract the buyer to click onto your site. You might offer special content, gift-buying advice, a loyalty club to join with a late-December payoff, a contest, or a special greeting card.

  3. Overlooking customer follow-up - By monitoring customer online e-mail and queries,and in-store requests, you can quickly take the temperature of your holiday sales. You can, for example, identify which of your products or promotions are hot, and then instantly adjust inventory or marketing accordingly. Set up a system to track all queries, assign follow-up and discuss insights. This systematic connectivity with customers may provide you and your store with the primary consumer research to enable high performance sales this season and it will definitely resonate with your customers in the long term.

  4. Ignoring the last-minute shopper - Every year, it seems, more and more gift-buyers wait until it’s practically too late to purchase their presents. This feet-dragging crowd is probably a mixed bag of bargain hunters, procrastinators, distracted relatives, and overworked executives. In other words, just about everybody out there. Technology, of course, has helped fuel this trend. Just-in-time shopping and delivery is now possible almost everywhere. As a result, shoppers are buying gifts later and later in the season.
    Capitalize on this trend by sending out a late-breaking e-mail that lets tardy buyers off the hook. Send it as late in the season as you can while still being able to fulfill orders. Make your subject line forgiving, saying something like: "It’s Not Too Late to Find Great Gifts." Offer targeted gift suggestions that will make it seem as if they put a great deal of time and thought into their choices. You’ll get credit (and repeat buyers) for making them look good.

Happy Holidays!

Holiday Marketing - Time Tested Ways To Attract Shoppers

Although the economy is slowly recovering, there’s still a long way to go before things are back to normal. For many small-business retailers, the holiday season is a make-or-break mission, representing a significant percentage of their annual sales. Smart marketing during this period is critical.

Typically, the online buying season kicks in on Cyber Monday, which is the Monday after Thanksgiving and after Black Friday, when the brick-and-mortar holiday sales season begins. Still, in recent years, shoppers have also learned to wait further into the season in order to find online bargains and even lower prices. So the biggest online holiday shopping day is typically around December 12, when many online retailers stop offering free shipping.

As with most marketing campaigns, preparation is a key element. Prepare in advance and have your seasonal online site designs and promotions ready to roll in November. In addition, make sure to reserve some appealing offers and discounts for the late-buying crowd.

With that in mind, here are some practical, time-tested ways to attract buyers, boost sales and increase profits during the online holiday selling season.

  1. Price strategically - As the season starts, set prices that offer some wiggle room, so you can lower prices later and still come out ahead. Promote a final-sale event.

  2. Reward early buyers - Send out offers through emails and/or postcards in October and offer percent discounts (or more, if you can afford it) to anyone who purchases before November 15

  3. Partner with other retailers - Forge an alliance with other online marketers or neighborhood retailers to offer two-for-one values or specials that bolster sales and encourage buyers. You can, for example, partner with several local complimentary retailers to send out seasonal e-mail offers across each others' email lists. You might also set up agreements with retailers for mutual promotions or website links. For example, if you sell holiday desserts, you might partner with a holiday ornament company

  4. Share some of your profits - Promotions that give to a charity, support the community or a cause, such as the environment, will resonate with consumers during the holidays. Many marketers donate profits from select, high-margin items to charities. If you decide on utilizing this type of cause marketing, send press releases to news media and customers to let them know about your special promotion

  5. Make your website holiday-friendly - Redesign the home page to focus on holiday gifts and promotions. Rework the page’s look, feel, and messages to reflect the season. Market and monitor your site. Throughout the season, fine-tune your response to Web traffic and visitor navigation patterns

  6. Offer perks or discounts - After retooling your website and store for the season, don’t become complacent. Instead, keep adding or swapping featured products, discounts and promotions throughout December. You might also add holiday content, such as gift-buying advice. The idea is to offer more attractive deals or different kinds of incentives than you provide at other times of the year. In addition, you can motivate repeat visits by creating a timed sequence of promotions, discounts, or frequent buyer points that continues through the season. That way you incent customers into returning over and over again

  7. Go the extra mile - Customer service and the personal touch are competitive advantages for smaller retailers. Make the most of that by anticipating your customers’ needs or by tailoring special offers for repeat buyers and your best customers. For example, you might send an e-mail notice that lets loyal customers know you’re available for special requests. At the end of the day, pick up the phone and call customers to thank them for their business. Likewise, you can arrange for a special expert or gift consultant to answer online or in-store questions during the final shopping days. Then, remember to promote that service in the first few weeks

All in all, you should prepare strategically and plan a series of marketing activities and tactics from Thanksgiving through New Year’s to maximize sales this holiday season.

Monday, September 28, 2009

TV Still Relevant, But Social Media Takes Center Stage

CNBC hosted an advertising summit last week focused on how marketers connect with consumers. Lots of great dialogue about the future of marketing- and where consumers are spending their time today. Is TV dead as a marketing medium? Some interesting opinions were discussed-- Below is a recent blog post about the event- with some thoughts about the future of TV marketing. Let us know your thoughts.
__________________

CNBC's Advertising Week summit on how marketers connect to consumers could have been called "No, really, we love TV!" The discussion was intended to be a free-roaming exploration about consumer passion, authenticity, and marketing challenges in a world that has little trust for business. But the gravitational pull of Facebook (whose COO Sheryl Sandberg was, appropriately enough, seated dead center) kept the conversation on social media.
The apparent subtext that TV might need to get its affairs in order wasn't lost on host Becky Quick, co-host of CNBC's "Squawk Box" show, who rhetorically asked more than once whether she would have a job next year.
"Television is still important," said Dan Rosensweig, president and CEO of Guitar Hero. "People have to re-think how they advertise. At Guitar Hero we took 40% of our budget that used to be on TV and it moved to the Internet. Television is wonderful, but when you have incredible sites like Facebook, you have to be smart with what you do, where your consumer is and how to reach them all the time."
He said the change was hard to sell to a skeptical employee base at first. "Guitar Hero was very successful, so I had to sit there and make the case. But if you look at Guitar Hero 5, we have nearly a million fans on Facebook. Where else can you find a million people who say, 'I love your product -- please communicate with me?'"
Pam El, VP marketing at State Farm, was candid about her product's lack of luster compared to, well, Guitar Hero. "[Rosensweig] has the coolest product on the planet; Sheryl [Sandberg] has the coolest way for people to talk to each other, and David [Jones, global CEO of Havas Worldwide, also on the panel] is just cool. But here at State Farm, we sell insurance. It's not cool."
She said that while the company uses Facebook to generate some emotional energy with consumers, "more importantly, we are moving into the community, so you will see us in high school and sports arenas -- so we are not only shifting media out of TV but out of the traditional media period into grassroots sponsorships."
On TV, El said, State Farm is doing fewer 30-second ads and more product placement and integration. Online, she says, the real competition is not other insurance companies, but companies like Guitar Hero.
"Now we are going after younger adults and Hispanics, which makes it that much more challenging. We are using Lebron James in a lot of our commercials," she said, adding that the latest campaign directed at the Hispanic market centers on telenovelas, with branded integration with "Entertainment Tonight." El said State Farm is also doing a marketing campaign that centers around the theme of "being there," starring the likes of Denzel Washington talking about what it means to "be there" for his wife and kids.
David Jones, global CEO of Havas, said the holding company did a survey 18 months ago, wherein 86% of respondents felt companies should stand for more than profit. "One thing that will change post-Madoff and post-economic crisis is -- consumers are going to be passionate about businesses that are socially responsible," he said, adding that 80% of respondents to the company's 2008 survey said consumers should censure unethical companies.

Karl Greenberg, Sep 21, 2009 09:07 PM
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=113981

Thursday, August 27, 2009

Are You Getting The Most Out Of Yelp?

Yelp is a great Social Search tool for businesses of all size- but especially useful for small to mid sized retailers.

By using the "power" of a peer testimonial showcased in a yelp listing, you will see the dramatic positive affect it can have on potential new customers for your business.

Take a look at this great blog posting on how to use Yelp to your businesses' best advantage.

Are You Getting The Most Out Of Yelp?

Wednesday, August 26, 2009

The 10 Commandments of Social Media

Retailers: I just read a great article from the Fast Company Blog. I think it's a great way of looking at your involvement in Social Media. The upshot: Think of it as a commitment you MUST make for your business in order to thrive (perhaps even survive) in today's crowded marketplace.

I agree, the symbolism might be a bit over the top, but if you think of Social Media as religion for your small business-- I'm positive you'll see the results! Enjoy.

10 Commandments of Social Media

Posted using ShareThis

Monday, August 17, 2009

Tweeters - More Value And Less Babbling Please

Twitter is 40% ‘Pointless Babble’: Report



Twitter followers are more likely to hear about what people are having for their lunch than read anything actually interesting or worthwhile, according to Pear Analytics. Fears that the site was becoming overrun with spam and self-promotion from companies getting on the Twitter bandwagon were refuted by the findings, Pear Analytics said.



Only 8.7 percent of messages were found to have pass-along value. Pointless babble was the largest category with 40.5 percent. Conversational tweets were 37.5 percent, but self promotion and spam only grabbed 5.9 percent and 3.8 percent respectively.



To read full article: http://www.cnbc.com/id/32446935

Sunday, August 16, 2009

You Only Have 30 Seconds

Can You Describe In 100 Words Or Less What You Do And How It Is Relevant To Your Prospects – From Their Perspective?

When initially speaking with prospective customers, you typically have 30 seconds or less to not only get their attention, but establish a reason for them to engage in a conversation. During your “30 second commercial” you must let prospects know what you do and more importantly, why it’s relevant to them.

So, what do you say? Have you perfected your commercial highlighting key features and associated benefits of your product or service? When you give your pitch to prospects, do you obtain a favorable reaction? Probably not. At best you may hear, “That’s interesting” – even though they really aren’t interested. You may get a request for information as a way to end the encounter.

Why does this happen? Prospects have seen and heard it all before – radio, email, and direct mail marketing and advertising. Your commercial is just more of the same. Regardless of how unique, timely, and important you believe your message is, it’s just more noise to the prospect.
Unfortunately, your finely crafted commercial hurts you in two ways. First and foremost, it diminishes your credibility. You’re not someone who stands out from the pack, scrounging for your morsel. Second, you waste valuable time – yours and the prospect’s.

So how do you change the prospect’s response from “Send me some literature” to “ We need to talk”? Stop telling prospects about your company and your products or service. Stop telling them what you can do for them. Make it about them. If a prospect is going to invest any time talking with you, he wants to very quickly know “What’s In It For Me?” (WIIFM)

Use your 30 seconds to focus on the prospect’s world. Relate your product or service from the perspective of the problems and issues the prospect is dealing with or the goals the prospect is attempting to achieve. This approach establishes credibility by quickly getting to WIIFM question – distinguishing you from the rest of the pack. When prospects believe that you understand their problems, concerns, challenges and goals, they listen – making it easier to convert your 30 second commercial into a meaningful conversation.

To truly understand your prospects’ worlds, you must do your homework. You must be thoroughly familiar with their problems, concerns, fears, challenges, and goals as they relate to your product or service. You must know that the prospect would lose by not having your product or service. Then, you can create a description of your product or service around those elements, making sure to answer the WIIFM question.

Consider the following “commercial” for a company specializing in marketing and graphic design services for hi-tech companies:
  • We specialize in marketing and graphic design services for hi-tech firms who have a need , but not the resources, for a full-time, in-house department.

  • And, they need a company who already speaks their technical language so they don’t waste valuable time – time they would have billed for – educating company personnel in order for them to produce appropriate and accurate copy.

  • Because our design people have extensive backgrounds and experience in a number of hi-tech fields, we already speak our clients’ language and we’re able to help them develop and implement projects more quickly and economically.

The first sentence describes the type of work done, the companies served, and the reason a company might want the service. The next sentence address a particular challenge a prospect might be facing. The last sentence describes the value the design firm can provide.

It is short, and to the point. It very quickly answers the question, “Who is this person and why should I listen to him?” If your commercial doesn’t answer that question, your prospect will quickly tune out.

Can you describe in 100 words or less what you do and how it is relevant to your prospects – from their perspective? (The above example is 97 words.) Your opening statement will either draw prospects into the conversation or turn them away. So carefully consider what you are saying. Are you quickly answering their WIIFM question? Are you putting your product or service in the prospects’ world and telling the story from his perspective?

Whether you call it an elevator pitch, a commercial, or a position statement, a carefully considered and constructed opening with a prospect – one that focuses on the prospect’s world and the prospect’s issues – can make the difference between a prospect remaining a prospect or becoming a customer. Your 30-second commercial will become an invaluable tool that will help you make more meaningful connections in a variety of situations, including networking events, trade shows, voicemail messages, emails introductions, and cold calls. Crafting this commercial will help you make more connections and make the most of every opportunity.

Sunday, August 9, 2009

Is the Retail Recession Nearing An End?

We’re through another season of earnings reports from the major retailers and there appears to be a bit of light at the end of the tunnel. Most economists are starting to predict a recovery from the recession, but there still exists many differing opinions on when and how rapidly the recovery will happen - such is the nature of economics!


Retail Forward released new data on Thursday regarding July same store sales. Declines in retail same-store sales (excluding Walmart) persisted for the month, but there were encouraging signs as shoppers ease their tight rein on spending plans.


Sales-weighted same-store sales (excluding Walmart) held roughly steady at -4.6% in July for the 32 retailers - most of them apparel retailers - reporting monthly results. That was about the same as the 4.7% decline last month, but down from the 1.8% gain in July of 2008 for the same composite measure calculated without Walmart. Including Walmart, same-store sales were up 2.8% in July of 2008.


“Shoppers are not yet ready to spend freely, but the results reported by retailers provide some signs that shoppers are easing up on their cutbacks. And that’s especially encouraging given the variety of factors weighing on retail sales in July,” said Frank Badillo, Senior Economist at Retail Forward.


Read the entire report at http://www.retailforward.com/pressroom/pressreleases/080609.asp

Can Social Networking Really Make a Small Retailer Any Money?

After spending time this week at a social media conference, it's pretty clear that many “business gurus” have social networking on the brain. It's Twitter this and YouTube that, yet, when I walk down Main Street, I don't see YouTube videos or Twitter names. I see retailers trying to make ends meet, whose hours are already chock full to the brim and who don't comprehend how such online promotions can help them. Sound familiar?


While listening to a seminar on how to demonstrate a return on investment for social media activities, I couldn't help but wonder to myself, "What can my retail clients get out of Twitter or YouTube or Facebook?" For some, a lot of their clientele is outside the tech-savvy demographic, so what good can they possibly get out of investing countless time, effort and resources into these technologies?


If you want to actually make social networking cost effective and productive for your small brick-and-mortar business, here are several ways to do it:



  1. Don't duplicate effort. Many retailers feel like they need to be on several platforms at once - and that takes a lot of time. Instead, I recommend signing up for a few services - like, for example, Twitter and Facebook - and then centralizing most of your participation. For example, you can post things on Twitter and have them automatically appear on Facebook by logging onto Facebook and setting up the Twitter application there. Also look into Friendfeed as a tool for leveraging content.

  2. Make it really easy for people to find you. Put your Twitter or your Facebook ID out there so people can find it. Put it in your ads, your website home page and on your business cards. Sign up for these sites with the same account name now so you have them registered for when you may want to use them – remember when someone started tweeting as Shaquile O’Neil under the @shaq account at Twitter. Secure your account name now.

  3. Participate in the conversations that you find. Once a day or so, visit these sites and see whether or not any conversations are going on that are related to you - and participate in them. Offer what you know - and be honest about it.

  4. Offer up deals. Go on Twitter and offer up a coupon code for your business. If they come in and say they're using the "August Twitter coupon," they'll get 15% off their next item or maybe get a voucher for a free design consultation. If you have things set up right, you don't have to duplicate effort - just post it in one place and it'll propogate out everywhere.

  5. Be focused - keep in mind why you're doing this. For a retailer, the reason to get involved is to retain existing customers and attract new ones to your store. The best way to do that is to be human and to be responsive. Answer questions and be lighthearted, but don't obsess.

Social media does not have to be a big time drain at all. Instead, it can be a very inexpensive and very simple way to retain customers and perhaps find a few new ones with little effort and almost no cost at all. Keep it simple, tell your customers about it, share what you can and start today.


So, can social media really make a small retailer any money? Yes!

Wednesday, August 5, 2009

Monday, August 3, 2009

42 Social Media Tips For Retailers

Below are 41 tips to help grow your Social Media Presence. Knowing that all retailers need an extra push when it comes to marketing-- #42 is all mine! Good luck and have fun. Start growing your network today!
  1. Be remarkable - somebody worth making a remark about
  2. Become a resource to others- always
  3. Have your own unique personality
  4. Be vocal and opinionated – politely- within the community
  5. Don’t continuously push the envelope by flooding them with requests
  6. Invest time into social media – have a strategy and stick to it!
  7. Produce and share content that YOUR AUDIENCE will love
  8. Monitor what’s being shared about you
  9. Become a real member of the community
  10. Ask questions and then ask more questions
  11. Answer questions
  12. Provide value to the community
  13. Be controversial when appropriate- Get people thinking- and talking.
  14. Don’t be another “me-too” voice- create your own - and use it wisely
  15. Automate carefully - it’s about people not robots
  16. Don’t be negative—or a jerk. Neither one works in social media.
  17. Make it easy for people to share and bookmark your content
  18. Listen to the community
  19. Make at least one new connection every day
  20. Engage yourself in conversations
  21. Become the conversation
  22. You’re there to make relationships, not hard selling
  23. Take time to focus on building a loyal following
  24. Give, Give, GIVE!
  25. Treat social media like a cocktail party
  26. Be supportive
  27. Syndicate your content across all social media platforms
  28. Encourage others to syndicate your content onto their sites
  29. Fully research the community to understand your market
  30. Be fun
  31. Get to know the unwritten laws of the community
  32. Create an attractive, unique and professional profile
  33. Use a cool avatar/picture
  34. Use the same avatar for each social media service
  35. Don’t disparage others ( No trash talking allowed)
  36. Know what your followers/friends want and give it to them
  37. Form reciprocal arrangements with others
  38. Monitor your noise level
  39. Never cheat the system
  40. Help others unconditionally
  41. Be yourself
  42. START TODAY

Good luck-- we look forward to watching you grow your Social Media exposure!!! Keep us posted!

Tips reprinted courtesy of StanleyTang.com

Wednesday, July 1, 2009

Turning Facebook Fan Pages into Improved Business Finance!

Arguably, Facebook is a great way to follow your friends' activities, connect with old friends (and see what they look like today), and even to see what your friends are interested in and who they are connected to- (including the businesses they follow) . But what about Facebook for your business? Is it worth the investment of time and perhaps money when it comes to business? My answer is yes! 1000 times over yes.

Want to know why? It's where your customers are! We already know about the large number of Gen Y'ers who inhabit the Facebook space, but over the last 12 months, the largest increase in Facebook users is coming from the 35-55 years old set!

This I believe, makes Facebook a great opportunity for retailers across every classification of business. Think of it this way, if my customers are on Facebook, then why aren't I?

So--- now you see the benefit to participating in FB for your business. What is next?

The first step is to create a FREE fan page for your business. This will be another way for people to find your business on Facebook besides your personal profile that might mention that you own a business. Need another good reason to set up a Facebook Fan page TODAY? Fan Pages are indexed by Google thus making your Facebook efforts help your other web efforts! To make this work most effectively, take special care in creating a fan page that will have many incoming and outgoing links to your website and other places where your business is mentioned.

Here are some suggestions for what to include on your Facebook Fan Page.

  1. Add key application boxes
    1. You Tube Box
    2. Simply RSS (import RSS feeds)
    3. Others that may be relevant to your specific industry or business
  2. Your Company Blog
  3. Photos
  4. Videos
  5. Share Posted Items
  6. Have a contest
  7. Start a thread on your discussion board
  8. Acknowledge fans
  9. Make sure YOU Become a fan of your own page

Once your page is built, the next stage is to market it effectively and gain fans who will follow your store. Don't forget to put a sign up in the store and direct customers to your fan page. Perhaps you could print a link to your facebook page on your register tape? Counter signs are another effective way to communicate your message. And of course, include a link to your facebook fan page on your website and all electronic mail you send out to customers.

With time and thoughtful content and participation, you can turn a Facebook fan page into a fun and financially lucrative marketing tool for your business. Do you want help setting up a Fan Page for your retail business? Contact CBCG today for more information at info@cbc-group.net.

Marketing Your Retail Business in a Tech Crazy Time Starved World

Marketing a retail business today is more complex than ever. As consumers find more ways to get information about products and services via the internet, this means a more complex decision making process for retailers when deciding where to market for customers.



Today's marketing has gone thru an evolution thanks to the internet. In the past, savvy marketers used the 4 P's as their guiding principles when making marketing decisions. Deciding what the right product should be, at what price, promoted in the right way and put in the right place was a sure way to garner success in reaching consumers.

In today's business arena, marketing uses the 4 P's as a baseline, and then takes it to the next level by incorporating the 4 Cs of marketing. This means adding tons of relevant, education-based, and user-generated Content that is filtered, aggregated, and delivered in a Context that makes it useful for people who are starving to make Connections with people, products, and brands they can build a Community around.



In simple terms, it's: Content + Context + Connections + Community = Social Media Marketing



Duct Tape Marketing, John Jantsch



So what does all this mean for your business? It means that your overarching goal as it relates to marketing is to find means and methods that connect with your customers where they are and in the context that they want to be talked to—not where you want to reach them.



In essence, marketing is becoming more "social." There is a new form of media to use for marketing. It's called Social Media. The key to social media is that all of the content involved revolves around the users (in this case, your customers) participating in the conversation and in some cases, having your customers actually create the content that your business provides!) The goal of social media marketing is to keep consumers talking about your brand in the marketplace.



As many of you may be just starting out, I am going to highlight 5 different categories of social media that you can use to help market your business. Some are more complicated than others to implement, then again, I'm sure many of your sales associates (or maybe even you) use some of the techniques in your personal lives. Why not think about using some of them to grow your business in 2009?



1) Blogging – For most small businesses blogging is the first step into the world of social media. It is the best way to take advantage of a set of powerful business tools while gaining a relatively quick return on your time investment. Want to try blogging for your business?

  • Begin by reading blogs (industry blogs or perhaps blogs by influential industry members or trendsetters)
  • Once you understand how people are participating and how the conversation continues, it's now your turn to begin to comment on what you are reading in the blogs. (Blog etiquette: Don't be a "know it all" or a self promoter, just like face to face conversations, this can and will turn off people in the blog community you are speaking with)
  • Begin your own blog. Now that you have people interested in what you have to say, it will be easier to get them to head over to your blog (where down the road you can shamelessly promote and market your own business!)

Again, how you participate and generate content for blogs will be the cornerstone for your social media programs. Always think about your posts as adding value to your customers in some way. Teaching them something they may not know (but are interested in) or sharing useful information are great ways to become a relevant part of the blog community in a short time. Blogging is the cornerstone to your social media marketing efforts. Make it a good reflection of your business!

2) Social Search – A social search engine is one that lists small businesses and allows people to rate and review them. This works perfectly for retailers as customers always have something to say about a business. Using social search, customers make comments about particular products, services or businesses that they have visited. The key to social search in today's marketing world is to harness feelings (hopefully positive) that customers have about your business and share it with a larger market than your marketing could ever reach (or that you could afford to reach on a small business budget!) If your customers are saying great things about your business, where others can see it, will help build your brand and boost your businesses' credibility. Some of the more popular social/local directories include: Craigslist, Trip Advisor, Yelp, Smalltown and Insider Pages

3) Social Networks – Networking has always been an important marketing skill. Think of social networks as online networking. Facebook is one of the most widely recognized names of social networking, however, you may have heard of others like the photo sharing site called Flikr or the video sharing website You Tube. Social network also provide business application with sites like Linked In where you join and share discussions, questions and business connections with others in your network. Joining these communities and building a presence for your business can help you connect with other bike minded enthusiasts which in turn will help you grow your brand and store reputation.

4) Social Bookmarking – This one is a bit more complex, but it does work. Social bookmarking is a method for Internet users to store, organize, search, and manage bookmarks of web pages on the Internet with the help of metadata. Tagging content and participating in social bookmarking communities can be a great way to open up more channels to your business. It can also generate extra search traffic, but it takes work.

5) Micro Blogging – Micro blogs are short bursts of content that reach users in real time. Using Micro blogs allows users to send brief text updates (in the case of Twitter, updates in less than 140 characters) or micro-media such as photos or audio clips and publish them, either to be viewed by anyone which can be chosen by the user. Another important key to micro-blogging is the ease and flexibility of how messages can be sent. Traditional desktop or lap top methods to type messages can be chosen, or messages can be submitted via text messaging, instant messaging, email or by using MP3.

The key to micro blogs is that you build a community much like a social network, but you do with short bursts of content. (Want to try it out? Follow me on twitter. I'm @RetailHelper)

So now that you know just enough to be dangerous (or talk to anyone under 25 as it relates to social media) let's talk about how you can use some of these tactics for your business. My suggestion is that you walk before you run with these new marketing tactics and that you don't start using them until you are committed to keeping them active and vibrant.

Do you have questions about how to set up a social media program that will work for your retail business? Contact CBCG today at
info@cbc-group.net.

Monday, June 8, 2009

Not All Customers Are Created Equal; Understanding Customer Profitability

Although Customer Profitability is nothing more than the result of applying the business concept of profit to a customer relationship, measuring the profitability of a retailer’s customers or customer groups can often deliver useful business insights. Quite often a very small percentage of the retailer’s best customers will account for a large portion of the retailer’s profit. Although this is a natural consequence of variability in profitability across your customer base, retailers can benefit from knowing exactly who their best customers are and how much they contribute to the retailer’s profit.

At the other end of the distribution, retailer’s sometimes find that their worst customers actually cost more to serve than the revenue they deliver. These unprofitable customers actually detract from overall profitability. The retailer would be better off if they had never acquired these customers in the first place.

The analysis of customer profitability is a useless exercise unless the retailer utilizes the insights derived to modify business strategy. For example, segmenting customers based on nominal or percentage profitability may direct marketing efforts to higher profit segments resulting in increased return on marketing investments. Additionally, the analysis may identify unprofitable customer clusters that drain customer service resources, thus limiting the service levels delivered to the most profitable customers.

The biggest challenge in measuring customer profitability is the assignment of costs to customers. While it is usually clear what revenue each customer generated, it is often not clear at all what costs the retailer incurred serving each customer. Activity Based Costing can sometimes be used to help determine the costs associated with each customer or customer group. For components of cost not directly related to serving customers, the calculation of customer profit must use some method to fully allocate these costs to customers if the total of customer profit is to match the operating profit of the retailer. If the retailer decides not to allocate these non-customer costs to customers, then the sum of customer profit will be greater than the operating profit of the business.

Like other profit measures, customer profitability is historical. It is a financial summary of what happened in a previous period. And although the past is often indicative of the future, it is easy to imagine situations in which relationships that were unprofitable in the past might become profitable in the future (and vice versa). The forward-looking measure of the value to be derived by serving a customer is called customer lifetime value. Unprofitable customers can have high customer lifetime values (and vice versa).

Those retailers who recognize the value of customer profitability and customer lifetime value and make the investment to analyze their customer base on a regular basis will have a durable competitive advantage. The insights derived will enhance strategy development and enable improved return on marketing investments. The results, a more strategic approach to cost management, more operating profits for the retailer and improved retention of key customers.

Understanding Product Profitability

If you’re like the majority of retailer’s you have a pretty good idea of your business’s gross profits and the grow margin and/or markup of each of the products you offer for sale. Unfortunately, if you’re like most retailers you do not have an accurate understanding of the profitability of each product taking into account ALL expenses related to the operation of your retail store. How do you allocate rent, utilities, sales staff, back office personnel, advertising and promotion, capital expenditures and other overhead expenses? If you’re smoothing those expenses across all products by revenue generated, the accuracy of your product profitability picture is suspect.

A more detailed analysis of your product portfolio and the allocation of ALL business expenses to each product will provide valuable insights into resource allocation and product portfolio optimization. You may be selling products that are not as profitable as you think. You may be allocating floor space, inventory space and advertising dollars to the wrong product lines. Your overall store profitability is likely under-achieving as a result of a limited view of your true cost structure and an inaccurate methodology of cost allocation.

Now before your eyes roll back in your head and you start to dose off, remember this is about a more strategic approach to product management that delivers money directly to your pocketbook. This is not just a boring accounting exercise, but a laser like approach to identifying the winners and losers in your product selection. Some basic activity based cost accounting is required to be applied, but if you don’t have the skills yourself, seek out professional help. An objective outsider, with an understanding of retail principles and the ability to ask the right questions will rapidly be able to create a product profitability picture of your business. The application of cost pools, drivers, allocation methodology and volume variance analysis are some of the steps required to accurately assess product profitability to aide your strategic decision making.

In the end, a deeper, more robust understanding of product profitability will allow you to make the correct strategic decisions that enhance bottom line results, generating incremental profits you can take home or reinvest in the business. Embrace the numbers, don’t fear them. The ability for you to approach your retail business from a disciplined quantitative perspective will allow you to make better strategic choices, improve customer satisfaction and retention, increase competitive advantage and drive profitable growth.

Increasing Profit, One Penny At A Time

Let's face it. We've entered some very tough times around the entire globe. Profits in tough times can be enhanced with reductions in overhead.

The initial lens to assess overhead is the customer's. Classify expenses that contribute to the customer experience and those that do not. Obvious examples of the former would include store signage and merchandising strategies. An expense that would not enhance the customer experience might be an expensive subscription service to a specialized newsletter that comes month after month that everyone stopped reading a long time ago. If you look around your store or chain, you'll find many things that may be reduced or eliminated to cut costs without compromising the customer experience.

Here are some examples:
  • The watering service that comes weekly to water your plants in the stores and the office
  • The collection of subscriptions to trade magazines and newsletters that no one bothers to read any more
  • The delivery costs you pay for to get your office and store supplies delivered
  • Your courier account that everyone uses for all those emergencies
  • The high premiums you pay on your company vehicles because of your low deductibles
  • Hiring professional painters to paint the staff area when perhaps some employee or employee's spouse can paint it for a third of the cost
  • Equipment that racks up unnecessary electrical expenses such as the shipping terminal that's on all the time, the terminal in the manager's office and the stereo system that runs all night after the store is closed
  • The window washing service that could be done by a staff member in 10 minutes
  • Buying a new printer cartridge for $45 every month when you can refill the current one up to 20 times for about one quarter of the cost
  • Adopting a cheaper third party long distance service to replace the pricy one attached to your current phone
  • Evaluating your current store cleaning schedule and changing the frequency to cleaning every other day and carpet cleaning to every 6 weeks instead of monthly

Opponents to trimming costs can rationalize that every expense enhances the customer experience. Today's retailer can trim many expenses like the examples outlined that really don't affect the customer experience directly. What does it all mean?


It means that in these tough times, a little extra effort by everyone on your team can go far to trimming unnecessary expenses without compromising the customer experience or the motivational level of the employees. Trimming those trivial expenses that have crept in over the years can help ensure survival and prosperity in these tough times. In the short term you’ll see an immediate improvement in your bottom line profitability with no negative impact on revenues or the customer experience. In the long term, your business will operate more leanly and provide positive incremental profitability on an ongoing business as wasted overhead is permanently removed from the business.

Take Action Today

  1. Develop a list of those unnecessary expenses that have crept into your business at all levels
  2. Brainstorm with all staff and build a prioritized list of expenses that can be eliminated; focus on big rewards and ease of implementation in your prioritization exercise
  3. Offer rewards to staff that suggest additional unnecessary expenses that can be eliminated thus improving the bottom line; be careful to emphasize that the cuts cannot negatively impact customer experience
  4. Get staff to put in the extra effort when these expenses are eliminated by setting an example yourself. Roll up your sleeves!

Sunday, April 19, 2009

LET’S MAKE A DEAL – Learning to NEGOTIATE in tough economic times

As the owner of a retail business, you already know it’s tough out there, and it’s only going to get tougher. This economic slump is affecting your business. What can you do? I say-- let's make a deal.

In these times, you need to be especially focused on our bottom line in our negotiations with vendors, customers and everyone else. So how should we negotiate differently in this economic environment?

You're not the only one who's having trouble. Your suppliers are also trouble and they too are searching for ways to stop the bleeding they are experiencing. As a retailer consider how many suppliers you impact and how your existence ensures theirs in some way. Step out of your business for a moment and look at the world through their lens. By being objectively aware of their perspective and you’ll be able to successfully negotiate potential savings for your business.

RENEGOTIATE GOOD DEALS: Take advantage of the current buyer’s market to strike advantageous deals with landlords, suppliers, creditors and others. Just about everything is up for negotiation these days including existing agreements. Suppliers may be willing to exchange price reductions for longer term volume commitments, landlords may be willing to lower rents rather than face vacant store fronts, banks may lower credit card rates and vendor transaction fees, cell phone providers may lower rates rather than face high customer acquisition costs or loss to Voice over Internet Protocol services (such as Skype). It’s crucial to ask all your vendors and service providers what they can do for you and your business. If it’s not the right price, shop around. “People are cutting deals all over the place.”

BARTER: This time-tested mode of exchanging goods has a place in the modern market especially when cash flow becomes a problem. From Santa Barbara to Miami, barter is catching on. Does your web site hosting service require apparel for their staff? Did your graphic designer just have a baby and have a need for your products? Be creative and ask how you can work together and collaborate on ways to help each other. “It’s a ‘win-win’ with no cash either way”.

REVIEW YOUR ACCOUNTS RECEIVABLES: When things are starting to turn down, you want to keep a sharp eye out for someone who is in to you for quite a bit, because if they go under and cash is tight that could have a huge impact on your small business. Think about how you can help them get back on track. Be proactive but understanding – they will be more likely to take your call. Similarly, review your agreements with suppliers. Maybe you don’t have to pay in 30 days; maybe you can pay in 45…or 60. Negotiating your payables will help with any potential financing gap created by a delay in payments from your receivables.

This is just the beginning. Consider evaluating all aspects of your business for opportunities to negotiate better rates and terms that directly lead to bottom-line profit improvements. This diagnostic will help you develop an improved understanding of your suppliers’ capabilities to service your business needs and permit your business to be more competitive in your market every day. Come on - Let’s Make A Deal!

Friday, April 17, 2009

PARTNERSHIP PROFITS Every Business - Especially in a down economy

Despite today's economic uncertainty, one thing is sure: we all need more sales! In pursuit of the next business opportunity or sale, we have to be vigilant in how we spend our time. Using partnerships is a tremendous method of leveraging your time and utilizing others to help drive your store’s sales. In fact, strategic partnering is no longer an option, but a must.


The whole idea behind partnership brand marketing is to find customers where your company and brand do not compete: It not only provides your brand with additional credibility in aligning with another company but also opens up distribution channels, allows you to reach and market to customers that may not be aware or thinking of your brand, and—most important—it captures the attention of new potential buyers who may not have your brand top of mind.


Find companies who sell non-competitive products or services into the same vertical and form a partnership to mutually increase one another’s distribution. Joint Ventures, strategic alliances, corporate partnering, licensing and distribution agreements, and numerous other collaborative business arrangements provide an exceptional opportunity to catalyze sales growth. In addition to rapidly generating new revenue channels, the formation of key partnerships can provide the additional advantage of creating competitive barriers to entry into certain markets or product lines.


There is no better time than now to evaluate the state of your current partnerships. A smart and cost effective strategy ensures that your current business partnerships are providing what I call "high performance and high impact" to your customers, partners and to you.



Start by objectively evaluating all your current partners (if any) and then drop those that don't align with these two categories that drive incremental value to your business. Or find some new ones in which your capabilities, combined with those of your potential partner, will differentiate your offerings from those of your competition, and drive more business.


It is important to be involved in strategic partnerships to help drive sales in these difficult times. Be careful not to invest too much valuable time and energy into partnerships that don’t maximize the return on investment for your business. Work smart, not just hard, and you will successfully utilize partnerships to grow your business.

Boom! Twitter More Than Doubles Unique U.S. Visitors To 9.3 Million In March

So you're not really sure that this "Twitter thing" is going to stick around - and how it might have applications for your retail business, right?

Well, it's clear that lots of people-- including potential customers for your business, are catching on -- and signing up for Twitter. Now it's time for you to look into it, and get started for your business.

Check out the article below. More than double......wow...
Boom! Twitter More Than Doubles Unique U.S. Visitors To 9.3 Million In March

So the question must be-- how can I use/adapt Twitter for my business. It's not going away, and it's becoming a powerful tool to spread the word for businesses of all size. Your's included.

Monday, March 30, 2009

Does your business have a "Facebook" Strategy?

Facebook is certainly a media darling these days. And in my opinion, for good reason. There are so many applications for both personal and business use that everyone should be using it.

I recently found this great article that explains a simple 5 step strategy for using Facebook for your business.
Enjoy.
Let me know if you have any other ideas-- we add our own steps.

Basic Facebook Strategy ; 5 simple steps

Friday, March 27, 2009

Why Business Blogs Fail & Succeed

This is a great presentation from Lee Oden from this weeks Search Engine Strategy Conference. The how to's are easy to follow for business of any size!
Enjoy.

Wednesday, March 25, 2009

Spreading the Word; Change Your World

These days, any size retailer or small business has a lot on their minds-- and so do your customers. It's as tough as ever to get people to spend money in your store, let alone talk about it to other people.

How can you get them to spread the word for your business today? In a word: Creativity.
Saw this great article that shows you how.... by Marketing specialist Jim Connolly.
word of mouth marketing how to Jim's Marketing Blog

He's got a ton of other great content- and a marketing newsletter too! Great stuff. Hope it helps.

Tuesday, March 24, 2009

OFFENSE OR DEFENSE? MAKING A KEY DECISION IN A DOWNTURN

Look at any of the grim economic news – consumer confidence and manufacturing indexes are at 25-year lows, major stock indexes declined by more than 30 percent, storied companies such as Lehman Brothers, Bear Stearns and AIG have succumbed to the credit crunch – and it’s easy to see that the world is in a significant recession. Governments around the world are scrambling to save the financial system, led by the United States, which has stepped in with roughly $8 trillion in bailouts, stimuli and other guarantees—an investment worth half the size of the entire U.S. economy.



In an economic downturn, decision-making is distilled in to a clear-cut choice: Do you go on the offensive, aggressively pursuing growth, or do you become defensive, protecting your revenues and profit margins? In CBCG’s experience, the decision is determined by a firm’s competitive position and ability to counteract income-statement and balance-sheet stresses caused by the downturn. Imagine then that you’ve just won the coin toss. Should you receive or kick off?
Lessons learned from the last recession, the dotcom bust of 2001 and 2002, provide hope for survival and some guidance for success. They show that while the impact of economic downturns is wide-ranging across industries and companies, it seldom creates a level playing field: in a downturn, some companies clearly outperform others (see Figure 1).


For example, in retail, while thousands of stores closed across the United States in 2001, and companies such as Kmart and Ames filed for bankruptcy, retailers such as JCPenney and Kohl’s outperformed the competition.
Given that there are such opportunities to outperform even during severe downturns, in 2009 most retailer’s are facing this crucial question: How do we approach those decisions that will allow us to outsmart our competitors?
The choice: Offense or Defense?
Severe economic downturns cause numerous stresses on income statements and balance sheets, led by declining revenues and margins, productivity problems and cash shortages, among others. The current downturn certainly has its own unique DNA, with credit contraction, bank failures, rapid declines in housing values and low consumer confidence impacting nearly every aspect of business. Given this challenge, CEOs looking to the future face a difficult question: Should they go on the offensive, taking advantage of the downturn to buy struggling competitors, or are they better off playing defense, hunkering down and protecting existing revenues and operating margins?
The question does not have a simple answer. The right choice between defense and offense may differ for each particular problem. In some cases, offensive strategies such as pursuing revenue growth in a key market segment or strategic investment in a particular business unit may be the right choices; in others, aggressive protection of revenues, profit margins and the balance sheet may be the correct.
With limited resources available during times of economic distress, the key question is which option to pick and how to plan the execution.
Going on the offensive is a restricted option
Several factors determine a company’s ability to go on the offensive during downturns. First and foremost is the ability of the core business to withstand the stresses created by the downturn. For example, countercyclical revenue streams can allow a retailer to withstand a downturn in one product category if it is successful in another; strong innovations can help to maintain pricing power; sufficient variability in cost structure can help protect margins, and a sound capital structure can give a company the financial flexibility to expand or acquire competitors. Companies that developed these traits in boom times are generally in the best position to take the offensive. Moreover, these traits have been in place for some time before the economic downturn and the related headwinds began.
In some cases, luck or timing can have a significant impact on the ability to get aggressive on go on the offence. Consider this: What if Microsoft had succeeded in buying Yahoo! in February, 2008 for $45 billion, a premium of 62 percent at the time? By the end of the year, Yahoo’s stock had fallen an additional 50 percent, leaving Microsoft in a much better position.
In other cases however, the ability to go on the offensive is purely a result of prudent business strategies put in place prior to the downturn. Before the recession of 2001 hit, Kohl’s focus on a low-cost structure, a unique merchandising philosophy, lean staffing levels and sophisticated management of information systems led to growth that significantly outpaced the retail industry (see Figure 3). When the downturn began, Kohl’s was strongly positioned for an offensive strategy. While other competitors, such as Ames and Kmart, were declaring bankruptcy, Kohl’s step-by-step expansion included organic growth and a series of acquisitions. Eventually, Kohl’s emerged from the downturn with 50 percent more retail space and access to numerous new major metropolitan areas.
Figure 2: Kohl's Goes On Offense And Successfully Outpaces Industry Throughout The 2001 Downturn

Kohl’s Continues its methodical, step-by-step expansion strategy throughout the downturn:
· 137 new store openings, with the total square feet of selling space increasing 46% to 34.5 million ft.²
· 40% growth in number of employees
· Acquisition of existing locations from Bradlee Stores and Caldor Stores as an entry strategy into new markets
· New market entry into major metropolitan areas such as Houston, Phoenix, Boston, Los Angeles etc.

Going on the offensive, however, is not for everyone. While the success stories of pursuing growth during downturns appear seductive, companies with a weak competitive position going into a downturn have little possibility of forming an offense strategy.


A Solid defense: Protecting the core business
Companies facing significant income statement or balance sheet stresses during a downturn will find that its best strategy is to protect its core business by strengthening its defenses. Such a strategy can protect revenue streams and profit margins, or preserve the balance sheet. For example, revenues and margins can be protected with targeted or segmented pricing incentives, strategic sourcing or SGA reduction; balance sheet strength can be preserved by restructuring assets or managing working capital more effectively.
At first glance, defensive actions such as cost-cutting might sound like weaker strategic alternatives compared to offensive moves such as acquiring a struggling competitor. However, analysis indicates that a well-executed defense can in fact present an opportunity to clean house in the short term, and prepare the company for potentially significant growth down the road. Operational strategy and cost transformation highlights two priorities a retailer needs to have to ensure a successful defense during a downturn: 1) Be aggressive with cost-transformation initiatives, in order to step ahead of the downturn, 2) Prepare the business to go on the offensive at the end of the recession.
1. Aggressive targeting of costs
To be successful in the short-term and create longer-term strategic advantages, retailers have to look beyond the “low hanging fruit” for cost transformation and develop an all encompassing strategy. Instead of simply targeting headcount or minimizing inventory, retailers should seek a comprehensive set of changes that can drive success both sooner and later.
Finally, aggressiveness also relates to the velocity of action necessary to implement cost-cutting initiatives. Severe economic downturns create a need for long-term realignment in the way retailers do business. The speed with which owners respond determines how fast they emerge from the downturn.
2. A strong defense means preparing to take the offensive
While the short-term objective for CEOs may be to halt the decline in revenue or margins, the best defense prepares the company to go on the offense when the downturn ends. The strategy adopted by the executive team at JCPenney during the 2001 economic downturn is an outstanding example of such an approach.
As shown in Figure 3, JC Penney sputtered into the economic downturn following a history of several years of declining profitability and operating margins at levels below most of its competitors. JCPenney had missed the “retail wave” of the 1990s because of a host of problems, including poor merchandise selection, an unproven marketing message, and a decentralized operating model. Furthermore, management’s lack of faith in its retail assets led it to use the company’s capital to diversify into the drugstore business with the purchase of Eckerd, which became a drag on profits. Under the leadership of a new management team, a five-year turnaround strategy was launched to turn the ship. The early initiatives were classic defensive moves: staff reductions, the closing of unprofitable stores, the introduction of more effective inventory management, and the eventual sale of non-core assets, such as Eckerd.
Figure 3. JC Penney’s Defense Strategy Led To A Remarkable Turnaround
However, JC Penney’s defensive strategy also focused on the creation of long-term strategic advantages that would eventually enable the company to go on the offensive. The company invested in a new distribution system to decrease long-term transportation costs in the supply chain, a costly move but one that was critical to its long-term growth. After almost 100 years of decentralized store management, JC Penney transformed itself into a centralized company that included a unified marketing message, more targeted merchandising, updated technology, new store layouts and improved store operations. All these initiatives, coupled with a renewed focus on consumer preferences led to a remarkable transformation in the years following the recession.
The lesson for retailers who choose the defensive option for withstanding an economic downturn is crucial: Be aggressive with the turnaround plan, but also ensure that any plan for remaining on the defensive includes details for switching strategies and going on the offensive once the downturn shows signs of coming to an end.
Putting the plan in place
There are significant opportunities to improve competitive position during a downturn, regardless of the strategy chosen. On the one hand, companies that go on the offensive can either continue to follow their existing growth strategy or leverage their strong competitive positions to adopt even more aggressive strategies, such as acquiring weaker competitors at a discount. On the other hand, an aggressive, well-executed turnaround plan can create a sustainable advantage for a company and potentially position it to outperform even its stronger competitors by the end of the downturn.
No one knows how deep and long the current recession will be. Competitors could fail, creating unforeseen opportunities, consumer confidence could sink even further, or the balance sheet could be in worse state than previously thought. Retailers are hearing about the choices and challenges of this environment from every direction—family, friends, lenders, investors, the media and others. Meeting these challenges requires any retailer to answer this important question: Do I choose to receive the ball and start with the offense or do I kick off and put my defense on the field?

Source: Ivey Business Journal, CBCG and ATK

Monday, March 9, 2009

Marketing Strategy Rules to Improve Effectiveness of Your Campaigns

A good marketing technique is one part of the business that is absolutely essential to its success. In fact, the ability to properly market a product or service is actually more important than the product itself. Even an inferior product can be a financial success if marketed properly.

Regardless of the nature of your business, the managing of the marketing function will demand more creativity and more astute judgment than any other single phase of the business. The end purpose of all the activity – e.g. inventory accumulation and production – is the accomplishment of those exchange transactions called “sales.” A smart entrepreneur designs the firm’s organizational structure so as to give the marketing component its deserved prominence. Below are some rules to increase the effectiveness of your marketing strategies.

Consider the "80/20” rule
Do you know that but 80% of your marketing efforts are often spent on the customers or clients yield­ing only 20% of the annual revenues? A practical rule of thumb that you can apply to your marketing planning is the eighty-twenty principle. Look at your client list and identify those customers that were taking up all of your time and not producing results. Some of your prospects may recognize their need or problem and understand that you have a solution, but are not ready or able to pay you. Find customers who will pay you to meet their needs or solve their business problem. Shift your focus to the more productive clients and less time-consuming with long-term growth potential.

Get close to the customer
In today's marketplace, getting close means treating customers and clients (and in certain cases, even vendors) as if they truly are your strategic part­ners and you truly care about them and their employees. It is important to try to satisfy them with the right products and services, supported by the right promotion and available at the right time and location. Customers can easily detect indifference and insincerity, and they simply will not tolerate it. Long-term client and customer loyalty is a long-term challenge that you must earn every day and with every transaction. Building customer loyalty is particularly difficult for e-commerce businesses, where competitors are but a mouse click away. Small business, in order to compete with big conglomerates, should strive to establish a culture of customer service that aims to delight the customers.

Work smarter
Often the most effective marketing strategy or campaign is not necessarily the most expensive or the most complex. Traditional businesses – from the emerging growth companies to the industrial giants -- are getting better results by focusing on simplification. Simplification is achieved by reducing unnecessary product and service lines, outsourcing post-sale functions such as training and support, cutting back on trade promotions, easing up on coupons, trimming new product launches, spinning off marginal brands, and using old-fashioned face-to-face meetings for maintaining relation­ships with clients and customers.

Take advantage of advancements in technology
More and more firms are setting up web sites and learning how to use the Internet as a marketing tool. The Internet has allowed even small entrepreneurs to reach a much wider market, providing information about the company and serving customers’ needs 24 hours a day, 7 days a week. Some traditional companies use the Internet as a powerful complementary marketing tool, while some small businesses start directly on the Internet.

Reach out to the global markets
The World Wide Web has allowed every e-commerce web site to make its offerings globally accessible. Small businesses therefore need to expand their marketing and sales efforts beyond the domestic markets. Take the time to learn the challenges of doing business overseas and how to serve foreign customers well. Many small and growing companies that have ventured abroad as pioneers of doing business in the global village have discovered lucrative and receptive new markets. Remember, if your business is not yet global, then you are missing the opportunity – and the point – of conducting business on the Internet.

Keep your eyes open
A growing small business needs to constantly have their eyes and ears open to emerging trends in their markets, technological develop­ments, and steps taken by their competitors. To keep you informed, closely monitor the attitudes of your employees and the opinions of your "stakeholders" such as vendors, customers, staff, landlords, lenders, directors, and stockholders. Successful entrepreneurs are focused 24 hours a day, seven days a week, on how to get new customers and clients as well as how to keep existing clients happy.

Take care of existing clients, while getting new ones
While small businesses need to constantly capture new customers, the priority should be continue pleasing the existing customer base. Companies that fail to nurture their customer base ultimately fails. Your ability to attract new customers will be limited and eventually impossible if you can't hold on to, and delight your existing customers and clients. It costs twice as much to get new clients rather than maintaining your customer base. Remember, one of the keys to marketing and growth is getting more business from existing clients and customers.

Prioritize your relationship with customers
This old adage is also applicable to marketing and customer service. Too often growing companies’ focus on the customers only, not on where the customers come from. The sources of client and customer referrals are relationships that must be coveted and maintained just as effectively as direct client and customer relationships. This is particularly true on the Internet, where it is important to build, enhance and maintain relationships that direct traffic to your site, by reciprocating wherever possible and refining the relationships as they evolve.

Think outside the box
The traditional solutions to sales and marketing problems yield traditional results. Putting your company on a rapid growth track means being willing to break through old paradigms, engage in street fighting with your competi­tion, and approach marketing and promotion with fresh ideas and approaches. For example, instead of focusing on lowering prices to meet the competition, retool your strategy around adding value and enhancing the customer's experience. Nordstrom's strategy of focus­ing on the quality of the customer's experience and not on the price is very effective. The old adage "Quality is remembered long after price is forgotten" is true in many types of industries and can be a much more profitable strategy in the long run.

Marketing is as much about perception as it is about reality
Marketing is the art and science of moving the image of your business to the forefront of a prospect’s mind. In the mind of the customer, a product or service has an assured baseline level of quality. Hence, small businesses need to emphasize the intangible and often elusive “value added.” The task of the marketing plan, therefore, is to advance the image of your product – preferably one that emphasizes customer benefits and your “distinctive competency.” Entrepreneurs must strive to build brand image and loyalty as well as establish market leadership. In several instances, market leadership and consistency in the customer's experience can often triumph over quality. For example, the market leadership and world­wide consistency of McDonald's keeps sales growing, even if its hamburgers are not the best on the planet.

Remain focused on your core products
Most success­ful companies have stayed focused on a particular product or service category, even if it meant the sacrifice of ancillary sales or the loss of certain customers. For example, when you think about Blockbuster, you think about video rentals. Over the years, Blockbuster has also inched its way into video game rentals and a limited line of candy and merchandise, but the focus has remained on video rental. The key point is that Blockbuster could have tried to sell other products and services to the "captured customer" who spends 15 or 20 minutes choosing a video in its stores, but it had the discipline to stay focused on its core business, which has propelled its growth worldwide.

Source: Powerhomebiz.com

Tough Times Call For Bright, New Ideas

It's a scary time to own a business, and the knee-jerk reaction may be to just keep chugging along and wait out the financial storm. But that's a risky decision.
This recession is expected to be longer, deeper and deadlier for businesses than any this nation has seen in decades.

The savviest entrepreneurs right now aren't hunkering down. They're rethinking their business models and hunting for new strategies based on the assumption that consumer spending won't be rebounding to prerecession levels and that the types of products and services people want will be much different from before.

For a business owner, this can mean finding new sales channels, trying new marketing tactics and promotions, forming strategic partnerships and introducing new products that appeal to frugal shoppers. "Unfortunately, bad news has this huge ability to paralyze people," says Victor Cheng, a San Francisco business consultant. "I think it is very important for a small-business owner to be fast and nimble" right now. He suggests businesses do a hard evaluation of all segments of their businesses and focus in only on the ones that seem to be faring well in this economy.

New Outlets
Many businesses have already started making changes big and small, sometimes with benefits they didn't expect.

Stone Hearth Pizza, an organic-pizza chain with three small restaurants in the Boston suburbs, considered opening a fourth restaurant last fall. But founders Chris Robbins and Jonathan Schwarz were then approached by natural-foods grocery chain Whole Foods Market about selling prepackaged pizzas in the stores' refrigerated-foods section. After evaluating the idea, the founders decided that starting a wholesale channel would diversify their business at a time when consumers are dining at home more because of the weak economy. Sales at Stone Hearth's restaurants have fallen about 6% to 7% since early December, but grocery-store sales nationwide are increasing, Mr. Robbins says.

Later this month, Stone Hearth will begin selling its pizzas in 26 Whole Foods stores across New England. The company is also reaching out to other grocery-store chains and major commercial food-services providers in hopes of expanding its wholesale channel.
What's more, the founders stumbled across another benefit to selling wholesale: It's much cheaper to prepare and package pizzas from a commissary kitchen than it is to run a full restaurant, hiring wait staff and leasing the space. "We'll be able to do significant volumes with one shift, 9 to 5, Monday through Friday," says Mr. Robbins.

Expanding Services
For other entrepreneurs, now is a good time to focus on better serving loyal customers and offering new services to make them even more loyal.

Heather Becker, owner of the Chicago Conservation Center, which restores artwork and antique furniture for private collectors, corporations and small museums, recently launched a free email newsletter with tips and information about conserving artwork. She sends it to about 20,000 previous customers every other month.
She is also promoting free in-home consultations for area residents with questions about conserving their collections, and will provide advice to collectors who email photos. She recently leased a 20,000-square-foot building so she can rent out storage space to art collectors -- something several collectors have inquired about in the past.

Ms. Becker hopes that expanding consulting and educational services will garner more trust and appreciation among her customers, leading to new revenue streams as she shows how passionate and knowledgeable she is about art preservation. She has also been giving lectures on art preservation. "If clients really perceive you as a resource for knowledge, I think they can more rely on you when they really need help with something," she says.

Hitting a Wider Audience
Some small businesses are coming up with lower-priced options and forming strategic partnerships with other businesses that can help their own.

Parties That Cook, a San Francisco company that hosts cooking parties as corporate team-building events, typically sells packages for $75 to $115 per person -- ranging from appetizer cooking classes to an "Iron Chef" type of competition where employee teams are judged on concoctions they prepare. But more companies are slashing their events budgets this year, and sales fell 50% in January from the previous year.

Chief Executive Bibby Gignilliat and her team recently introduced a new offering: For $45 per person, companies can bring employees for a cooking demonstration rather than having employees fix dishes themselves.

The company also began partnering with other food businesses in the Bay Area, including an urban winery and a sustainable-agriculture organization, and in coming weeks is hosting an array of cooking classes for the general public. Though these don't generate as much money as corporate events, Ms. Gignilliat feels they're more marketable right now. "We're trying to get into budgets that aren't going to be eliminated in this economy."


Source: Kelly K. Spors, Wall Street Journal