Are you carrying too much retail inventory?

How much inventory does your business need to run effectively to make your sales plan and deliver the appropriate level of profit to the bottom line?        

This question one of the most difficult for retailers to answer- yet the one that holds the most value to the health and well-being of the business. Why not make 2013 the year you get a handle on your inventory once and for all- and stop spending money you don’t have to in order to deliver the sales you want.

Having too much inventory (or the wrong type) during certain periods can slow your cash flow and can reduce your overall profits (by taking too many markdowns in order to liquidate slow moving merchandise.  On the other hand if you don’t buy enough of the right merchandise (that is, the merchandise that your customers really want to buy) you will miss sales opportunities and thus not make the maximum potential profits from your business. One thing can help you get started- an Open to Buy plan.

A retailer can be sure to stock the right amount of the right products at the right time by using a well-planned as well as a continually updated and well executed Open to buy. (OTB)

OTB can be calculated in units or dollars. (Though our recommendation is to do it in dollars so that you can use the tool when going to market and working with your vendors on a daily basis) The calculations are relatively simple. An OTB is essentially the difference between how much inventory is needed and how much is actually available to be sold at any given time during the selling cycle. (OTB’s are most always calculated on a monthly basis then totaled to quarters, seasons and then finally a year total for the business.) This includes inventory on hand, in transit and any outstanding orders.

While the OTB to buy will tell you how much to spend, the key to managing it effectively is to account for trends- both up and down in a given time period and leaving yourself the flexibility to adjust purchase dollars when and if necessary. To do so, it will be best if you plan to hold a percentage of purchases back in order to take advantage of special buys or to add new products. This will also allow you to react to fast-selling items and quickly restock shelves that your store needs to keep sales moving forward.

You should set up your OTB plan with no more than 10-15 classifications that will roll up to total for your business. (We have managed OTB plans for multi-store national chains doing more than $100 million dollars with less than 10 OTB categories- so we know you can plan your business this way to!) Use the annual retail sales as a guide to setting up your OTB classifications/departments – this will help you reduce the number of classifications you need to plan.

In short, there are many ways to manage an OTB plan. The plan can be maintained on paper, in a spreadsheet or by purchasing one of the several retail software packages available that contain Open-To-Buy programs but the key is to start. Your inventory is the biggest expense you have in your business and managing it on a consistent basis can insure that your business is spending on the right products all the time.

If you need/want more help about how to manage your inventory, contact CBCG today. We can create and manage an annual OTB plan for your business to make sure that 2013 is a year of profit and prosperity.

It's TIME to start using social media for your business

Another survey came out this week talking about business owners not using social media as a marketing tool. The survey shows that more than 47% of small business owners are NOT using social media in their regular marketing efforts. (Hiscox Insurance) The number one reason why: Business owners suggest that they don't see the payoff for the time and energy they invest.

At CBCG, we couldn't disagree more. If we met to discuss marketing for your business, I'm sure we would probably both agree that the goal of marketing for any business - large or small - is to connect with customers and share insights and information about the business. The key to successful marketing is to deliver the message in the right forum where your customers will read it.

If that premise holds true, then I suggest that there-in lies the opportunity for small businesses to use social media as a marketing tool. If your customers are spending time on Facebook, or watching videos on YouTube or Tweeting on Twitter, than you should be there marketing your business and engaging with them WHERE THEY ARE.

Reaching customers today is no different than when you marketed your business 20 years ago. You used the newspaper, put ads on the radio or put an ad in the yellow pages to share because that's where your customers were. The difference today is that some small business owners are not as comfortable using social media as a marketing tool because they know less about it or feel behind the curve when it comes to adoption of social media practices.

That uncomfortable feeling is limiting your success at connecting with customers and driving sales for your business. I promise, the tools are not that hard to figure out and once you decide to jump in, there are many resources available to you to help you create a message using social media that will reach your customers effectively.

The time to start using social media for your business is NOW. Your customers already are.

Are you having fun with your customers?

Retail tip of the day: Develop in-store events to showcase store personality. Create fun, entertaining environment for your customers to keep them coming back.

Who are your partners?

Retail Tip of the Day: Develop partnerships w/local biz like banks or rest. It's a great way to create loyalty w/your cust by offering them added value from their experience with your store.

My Tank Gets 30 MPG - Is That Good?

If I told you my vehicle delivered 30 miles per gallon would you say that was fantastic, average or awful? In order to answer that question you would need to know several key facts. Am I talking about a Vespa or a Hummer? What do cars like mine get for average MPG? What type of gas mileage did I plan to get with my car? Without considering these factors, answering the question would be premature and would have no frame of reference.

As with the car mpg, many retailers deliver marketing programs yet they have no idea about what results they can or should expect to deliver. In essences, there is no goal setting, thus no frame of reference for the results that are achieved. Are the results good? Did I use my resources (time and money) effectively on this marketing program?

Best practice retailers know that performance assessment on all marketing activity must be done to determine their ultimate effectiveness. If you haven't quite got in that habit yet for your business, June is just the time to review how your marketing plans are performing so far this year. Take a piece of paper and ask yourself the following questions related to your marketing events thus far in 2010:

1. How much money and resources did we invest in each marketing activity?



2. Did we implement this activity optimally?
   



3. How much incremental sales were driven by the marketing activity?



4. How many new customers were generated by the marketing activity?



5. Did my in-store staff capitalize on all the opportunities created by this activity?



6. How much new customer information was generated for the customer relationship management system?
   
   
   


7. Did the activity deliver new insights into customer needs that can be used to increase profits or market share in the future?



8. Did this activity contribute to long term customer loyalty and subsequent repeat sales?



9. How effective was each marketing activity relative to each other?



10. What are the industry leading benchmarks for these activities?

Answers to the above questions can help answer questions about yor marketing planning, effectiveness and about how your business is at implementing programs. If you don't like some of the answers you gave, or frankly, don't know enough because you didn't set objectives for the marketing activity you did deliver, now is the perfect time to re-tool and plan better for the balance of 2010. If necessary, get key stakeholders in the organization involved to help you maximize your success.

Keep in mind that successful marketing for your business is linked to overall goals and objectives that can and should be tied to industry benchmarks for success. After all, a tank isn't designed to perform like a scooter either. Don't let your marketing programs perform like a tank this year.

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.

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.

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

Twitter- Is it right for my retail business?

As retailers, we're time starved on a daily basis. Yet we know we have to find and make the time to do marketing for our business. In today's challenging retail market place, the biggest marekting buzz for businesses of all size is to use social media and social networking as a way to market a business.

Somewhere, between the boxes and the ordering, we have heard that SM can help us improve the marketing reach and help build a loyal community for our business. So how can we manage to find time we need to participate in social networking for our businesses?

Twitter is one of the social networking sites that can help you achieve your business and marketing goals. It's a type of micro blog- no need to write long winded stories here-- Twitter is all about short bursts of characters - 140 to be exact (perfect for busy retailers!) The key to success with Twitter is learning how to manage the time you spend on the site wisely to help you maximze the results for your business.


There are many applications that are available today to help you maximize your twitter experience- and thus your brand exposure - take a look at this great article by a twitter expert @problogger. (If you're on twitter make sure to follow @problogger too!)

10 Twitter Tools that Help You Work Smarter
Posted using ShareThis

Hope it helps you understand some of the possibilities that can help you maximize your Twitter experience.
And by all means, if you're on twitter-- let's follow each other--CBCG can be found at @retailhelper

Postage Costs are Going Up - Do You Know What That Means?

All businesses- retail and otherwise are tightening their belts and looking to save money at every turn during this challenging economy-
As postage costs go up March 11- have you thought about what that means for your direct mail costs? Should you be looking to make some shifts in how you market your business?

Here's a great article on that subject by one of my favorite small business advocates- Anita Campbell. Enjoy-- and think- about what you might need to do differently for your business in the coming year.

Postage Costs are Going Up - Do You Know What That Means?

Modernize Your Marketing – FREE WEBINAR

Presents:
Modernize Your Marketing Today and
Reap the Rewards All Year Long
Thursday March 12, 2009 1- 2 pm EST

Join CBCG founder and President Lynn Switanowski-Barrett as she shares compelling marketing ideas that can propel your store to success all year~

• Discover How Changing Consumer Demographics And Evolving Retail Marketplace Dynamics Are Affecting Your Business; Learn Simple Changes You Can Make Today That Will Have An Effect All Year Long

• Learn Modern Marketing Tactics That Can Improve Sales And Profits At Any Time Of Year; Save Money Using The Internet To Connect With Customers Of Every Age

• Understand What Marketing Activities Will Build A Community Of Loyal Shoppers And Brand Evangelists At Your Store; Create A Community Of Users That Will Rave About Your Brand For You!

This webinar can help small businesses of any size to create a more effective marketing strategy. Learn how Newspaper and Radio were yesterday’s choice, and why today’s choices are so much more compelling to your customers!

Effective Marketing Means Delivering A Message Where Your Customers Can Find It- Sign Up And Learn Some New Marketing Tactics That Will Help You Connect With Your Customers And Drive More Sales For Your Store Today!

Sign up today! Space is limited to 50 people. Join us on March 12 and move your marketing forward this year.

To sign up, Please email us your name and the email address where webinar details can be sent at info@cbc-group.net. (Please be advised, you will need an email address an internet connection to view this webinar.)

For more information about CBCG or it’s founder, please visit our website http://www.cbc-group.net/ or call us at 617 437 9191