Retail Contrarian

Building Advocacy Before the Purchase

Most companies and experts look at the relationship businesses have with their customers in three steps with seven stages. Known as the Customer Relationship Lifecycle. (CRL) the three steps and seven stages are:

Pre-Purchase
1. Awareness
2. Knowledge
3. Consideration

Purchase
4. Selection or trial

Post-Purchase
5. Satisfaction
6. Loyalty
7. Advocacy

Too bad so many companies take this approach because it has a fundamental flaw. What's wrong with it? Advocacy should be in the pre-purchase step.  Most companies think that only buyers can be advocates, but the fact is that some of your best advocates may not have made a purchase yet - and maybe they never will.

Smart retailers focus on building advocacy during the pre-purchase step for three reasons:

1. To potentially turn non-buyers into advocates.
2. To lead more buyers into becoming advocates.
3. To use the advocacy elements to influence the consideration stage and improve the purchase potential.

To focus on creating advocates in the pre-purchase stages, consider the following:

1. Teach your employees that some non-buyers actually create a lot more revenue than the average customer spends. As a matter of fact, some studies have shown that in some businesses the highest spending customers are not the most effective advocates.  This is why we like to teach all retail employees to never label a customer as "just a looker."

2. Make it a company goal to deliver an amazing and delightful experience to every single customer. I love the retailer who told me that her goal is to have every customer who leaves her store feels better than when they came in.

How the experience is delivered varies from retailer to retailer but what doesn't vary is that retailers who deliver a superior experience have identified the steps to delivering the experience. It's usually a combination of activities including a warm welcome, a drink or some other gesture, and may include a surprise that delights the customer. The easiest way to get customers to advocate your store is to give them something to tell others about. What happens in your store that your customer will most likely tell a friend or family member about?

3. Capture contact information for all visitors.  Retailers who only capture the contact information at the point of sale are losing revenue opportunities and potential advocacy by non-buyers. Give the customer a reason to give you the contact information in the pre-purchase phase and you'll increase the number of post-purchase people.

So let me ask, is building advocacy in your pre or post-purchase stage?

You're Never a Long Shot

Did you see the Kentucky Derby?  WOW!  It usually lives up to it's billing as the most exciting two minutes in sports but this year it was off the charts.

As you probably have already heard, 50-1 long shot Mine That Bird absolutely blew away the field.  A horse that was purchased for a mere $9,500 and was racing against animals valued at millions of dollars is not supposed to win.

But win he did.  Mine That Bird was dead last at the ¾ mile marker, in twelfth place at the mile marker, and by the time jockey Calvin Borel got him to the straightaway he had flown by the field to take the lead and win by over six lengths.  Love it!  For Borel in an emotional post-race interview to dedicate the race to his deceased parents was icing on the cake.

Obviously I couldn't help but think of all the lessons we could take away from Calvin and Mine That Bird.

1. You don't have to be the biggest or the richest to compete but you do have to be in the race to win.  Some of the horses that Mine That Bird beat were purchased as foals for over $3,000,000, are owned by very wealthy people and are trained by the most prominent and successful trainers in the business.  Mine That Bird's trainer is an unknown out of New Mexico.  While your competitors may have deeper pockets than you do, the one who executes the best will still win.

2. Seize the opportunity when it presents itself.  One of the keys to Mine That Bird's victory was the ability to not only get to the inside rail, but to get through two openings between horses to get to the lead.  Any hesitation by jockey Calvin Borel and Mine That Bird may well have been caught behind the pack, unable to break through.  We are presented with opportunities every day but they'll pass us by if we're not a) looking for them and b) willing to act quickly and decisively to maximize them.

3. Pedigrees and experience are great but never underestimate hard work and a big heart. Mine That Bird came into the race as, the Boston Globe said, "An extra in a 19-horse race of stake winners owned by bluebloods." Jockey Calvin Borel is described by Sports Illustrated as ". . .not often thought of in the first flight of today's top riders even though he has over 4,000 victories and a Derby win in 2007."  It reminded me that some of my best employees never went to college, or had no retail experience when I hired them.  Don't look at what people don't have on the outside, but look what they have inside them. The same holds true about yourself.

4. Last but not least, believe in yourself.  As Calvin was celebrating his victory while still atop Mine That Bird, he pointed toward his helmet and screamed, "It's all in your head." Think like a winner, believe you're a winner, and chances are you'll fly to victory just like Calvin Borel and Mine That Bird.

Remember this; people, horses, and companies are only long shots because someone wasn't smart enough to bet on them.

A Positive Spring Perspective

Here in the Northeast the arrival of spring is a bit subtler than in other parts of the country. While we're happy that most of the snow has melted, those warmer days and budding flowers still seem far off in the distance.

But if I think about it, maybe we really are closer to that spring weather I'm looking forward to.  It has been a long time since I experienced spring and in the meantime we've lived with months of cold and an above average amount of snow.  Could it be that my perspective is clouded by four months of gloomy winter?

Clearly, the answer is yes.  When I wake up today I heard birds chirping, a sound I didn't hear just a few weeks ago.  At the end of the workday the sun is still shining, a welcome change.  And I can't forget that a lighter weight jacket has replaced my heavy winter coat.

I believe things are getting better in spite of my perspective!

Could the same thing be happening in your store?  Could things be starting to improve a bit in your store?  I'm not saying the economy is in a lot better shape (unless of course you were on the AIG bonus list) but is there a chance that your perspective is looking backwards rather than forward.

I recently exchanged emails with a retailer who planned to introduce the theme "We're Not Participating in the Recession" at her annual meeting.  While she didn't ask for my opinion, I did share with her an experience I had with that theme.

Late last fall I used the same line in a presentation.  Afterwards, a woman came up to me and reminded me that a lot of people don't want to participate in the recession but that hasn't kept them from losing their jobs. While she didn't say so directly I could sense that maybe the recession was hitting home for her whether she wanted it to or not.

From that day forward I quit saying that line.  While I know people mean it in a positive way, I can't help but think about this woman and so many others who have been forced to participate in the recession.

In my email exchange with the woman planning her annual meeting I hit upon a better way of rallying her team.  We came up with the "Let's Lead the Recovery!" theme.

Isn't that so much more positive?  Instead of dwelling on a negative past, "Let's Lead the Recovery" focuses on around creating a positive future.  Creating!  Taking Action!  And it doesn't hurt anyone who may be struggling as a result of the recession.

Perspective can make a difference.

So let me ask, what's your perspective?  Are looking forward to a more positive future or are you dwelling on that gloomy past?

Spring's not here yet but it is a lot closer than it was yesterday. Ah, perspective.

The Competitive Advantage of Being an Opportunist

op·por·tun·ist     (ŏp'ər-tōō'nĭst, -tyōō'-)  
n.   One who takes advantage of any opportunity to achieve an end.

Last week I was talking with a retailer about the importance of optimism, especially these days. I loved her comment, "I'm both an optimistic and an opportunist."  I have to say I don't think I've ever before heard anyone describe herself that way.

She explained that her father used to say that one of the keys to success is to never miss an opportunity when one is presented to you.  She said that it was her father's belief that people encounter many more opportunities than they realize.  As a result, they miss out on many.  So this woman has lived her entire life looking for opportunities every single day.  I don't know about you but I find this incredibly powerful.

It reminded me of a salesman who worked for me at The Sharper Image.  I like to joke that Jeff was the most annoying man in retail but boy, could he sell. Now that I think about it, what made Jeff so successful is that he was an opportunist.  He saw opportunities no one else on the staff did.

He was the kind of person who would ask questions and show products to a customer who came in asking us to make change for the parking meter.  When other salespeople might be annoyed at being asked to make change by someone who clearly didn't plan to make a purchase, Jeff saw an opportunity to engage the person and attempt to make a sale.  To tell the truth he was rarely successful in making a sale to the person asking for change but it's that opportunistic mindset that made him our top salesman almost every month.

Jeff is the only person I've ever known who tried to sell the UPS guy something every day.  We always told Jeff to back off but of course when the UPS driver finally did make a purchase it's not hard to guess who made the sale.  Jeff.

Are you looking for the opportunities in your day or could you missing one or two as so many people do?  Think about it.  Every day there are coaching opportunities, selling opportunities, new product opportunities, learning opportunities, and for you single readers there might even be romantic opportunities!

Here's a challenge I'll throw out to you today. I'd like you to find one or two opportunities today that can improve your business, your staff, or most of all.. . . . .you!

In these times being both an optimist and an opportunist will be an incredible competitive advantage.

The Everyone Trap

My oldest daughter and I have the same conversation almost every week.  It usually goes like this:

Kate:  "When can I get a cellphone?"

Me:  "For the 134th time, when you need one." (The only thing that changes is that the number goes up each time she asks.)

Kate: "But I need one."

Me:  "Did you have a need to call someone and not have access to a phone?"

Kate: "No.  But I still need a phone."

Me:  "Why is that?" (I don't know why I bother to ask this question because I know what's coming.)

Kate: "Because everyone else has one."

The conversation will go on a lot longer if I ask her who "everyone" is but I know for a fact that Kate is not the only student in the whole sixth grade who doesn't have a cellphone.  Many do, but not everyone.

I've never said we won't buy her a phone, I've said that we'll get her a phone when there is a need.  But rather than focus the discussion on why she needs a cellphone, she gets tripped up because of her perception of "everyone" else.

The same thing happens to adults, too. (You knew I had to eventually get it back to retail and management or I would have to rename this The Weekly Parent Experience.) Lumping "some" into "everyone" can actually cause people to make poor decisions that do impact everyone - and the bottom line.

I had a call last week with a retailer whose store is losing money.  At one point she said, "But everyone is struggling."  First and foremost, not everyone is struggling and I can guarantee that not everyone is losing money.  What matters is what is happening in her store and what she's doing to stem the losses.

I've also heard over the last few weeks:

* Everyone has stopped buying. If that's the case why are retailers letting people walk out of the stores with their products?  And why are the thieves standing in line at the register before stealing?

* Everyone is asking for a discount.  Some are looking to pay less but if every customer is looking for a discount then I suspect your pricing is way out of line.

I've also heard "everyone" comments about employees, vendors, and the business community as a whole.

The minute we starting talking about "everyone" we've given up the ability to manage or control our own destiny.

If the staff thinks all customers are cutting back then they will miss making sales to all of those people who are spending money. If they believe that all customers are asking for a discount they'll go into each customer engagement in a defensive mode that will cost sales.  You can't work successfully with a vendor if you think all of them are changing how they do business. 

As specialty retailers we succeed one customer at a time. There is no "everyone." There's just someone. An individual "someone" in front of us or on the phone; someone with a unique life and a unique set of circumstances.

Don't fall into the "everyone" trap.  Not only will staying out of that trap help you be a more successful retailer during challenging times but if you're a sixth grader it might even help you get your first phone.

Have a great week!

A Holiday Letter to the Staff

This week's posting is for the retail employee in the store. Please pass it on.

Dear Retail Employee,

With one week and a day before the "official" launch of the holiday season, I'd like to discuss the challenges and opportunities facing specialty retailers.

Unless your last name is Van Winkle and you just woke up from a long sleep, you're keenly aware of the challenges facing retailers this holiday.  Most of the holiday projections are indicating the weakest growth since 2002.

The good news is that there should be at least some growth this holiday.  The bad news for most Weekly readers is that most growth will likely happen at the discounters and online.  I don't think anyone can deny that it is going to be a challenging year for specialty retailers.

But with every challenge comes an opportunity.  For every store that struggles there will be another that succeeds.  For every store that fails before the doors open another will succeed out sheer determination.  For every staff that throws in the towel another will grind it out.

The difference this year is going to be you.  I'm convinced that the difference this year for specialty retailers will come down to the people in the store.  It's the staff that will ultimately decide the winners and losers this year.

I have great admiration and respect for what you do because I've been there.  I know you work long hours at this time of year and often miss family events as a result. You have to deal with crowds and the occasional cranky customer.  And after all that time on your feet you're bone-tired at the end of the day.  I know you give your all but this year it's going to take even more.

Here are some tips for you and your colleagues to make sure you're one of those winning stores:

1. Stay positive. Attitude could be the biggest difference between the winning and losing stores this year. Every employee needs to do his or her part in keeping a positive outlook. Take a leadership role and turn negative colleagues positive.  The press will be looking to cover how bad things are but your customers will be looking for stores that make them feel good.  Make a customer feel great and a sale will follow.

2. Succeed one day at a time.  If you have a bad day - shake it off.  If you have a good day - do it again. You make your holiday by making your month. You make your month by making your week. You make your week by making your day. You make your day by making your hour.

3. Maximize every customer opportunity. You make your day by focusing on the needs of every single customer. Don't let your guard down and miss even one sale, because that one sale could be the difference in success or falling short.

4. Don't pre-judge what a customer is going to spend. Customers aren't a survey in the newspaper. Customers aren't a sales projection in some pundit's article. Customers are unique individuals who offer us a unique opportunity. Give them a unique experience and you're sure to be rewarded.

5. Be a better salesperson every single day. Push yourself out of your comfort zone. Keep showing products until the customer says they're done. Ask them if they'd like to also buy a gift card. Ask the customer who else is on their list that you can help them with. Focus on increasing your average sales and unit-per-transaction.

It doesn't matter if you work for the owner of an independent store, a regional or national corporation; I believe you can make the difference this holiday.

Do you?

Good luck this holiday,

Doug Fleener

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Four Months and Counting

Around here on the week of the 25th of August most people are thinking about summer winding down and the kids heading back to school. But I know what you're thinking. . . . it's only four months to Christmas!  That may seem far away to most people but we retailers know it will be here before we know it.  We'd better be ready.

Here are some of my predictions, thoughts, and tips to prepare for the 2008 holiday season.

1. My 2008 prediction. While most pundits and experts will be predicting holiday shopping season that falls somewhere between soft and disastrous, I'm taking a different route.  I'm predicting that (short of some catastrophic event beyond human comprehension) there will be a holiday season.  That's right; I'm going out on a limb and predicting that we will indeed have a holiday season in 2008.

Since we know the holiday is coming, why not plan to make it a successful one?  Why go into the holiday not planning to succeed?  Here's my advice: Look at your 2007 holiday results, review how you're trending over the last eight months, then create a realistic stretch goal. Don't plan low, don't plan unrealistically high, but do plan to be successful.

2. Be very picky about your seasonal hiring.  One of the upsides of this "challenging" economy will be the higher number of quality people in the seasonal hiring pool. People who either would not have considered a second job or are re-entering the workforce will be looking for a holiday opportunity.  You might as well be the person to give it to them - if they have the makings of great employees.

Don't settle for a run-of-the-mill carbon-based life form when you can hire people who will help you achieve your planned success. And don't be afraid of hiring highly-, if not over-, qualified applicants. Some of my best seasonal hires have been pharmaceutical salespeople, bankers, and college professors.  As with every holiday season, be aggressive in seeking out qualified applicants and wrap up your seasonal hires as early as possible.

3. Use this holiday to successfully steal your competitor's customers. We're calling this year the Beg, Borrow, or Steal Holiday Season.  Retailers without unique products, enticing store events, or a differentiated store experience engaging events will Beg for shoppers to no avail.  There are too many options available to consumers for them to settle for shopping in boring me-too stores. Those are the retailers likely to lose their own customers this holiday season.

Other retailers will successfully Borrow their competitor's customers by advertising rock-bottom low prices.  While this may create a short-term sales bump, unless the retailer can profit from this approach the benefit will be extremely short-lived.  January and February could be littered with broken-down retailers who tried to Borrow their way through the holidays.

The most successful retailers will use the 2008 holiday season to Steal their competitor's customers.  Attracting customers through a blend of unique products, compelling events, and aggressive pricing all delivered via a memorable experience will result in new loyal customers with a future revenue stream.  At the same time, these retailers will be able to retail their own customers against the aggressive discounters and e-tailers.

4. Last but not least, now is the time to plan how you will capture every single store visitor's contact information. Prepare now for drawings, giveaways, and birthday clubs - whatever it takes to get that store visitor to tell you his name and how to contact him again. Every contact is a potential future sale. Use your success this holiday season to create a successful 2009.

Ho, Ho, Ho, four months and counting.  Are you getting ready to succeed?

Maximizing Today's Consumer

I was recently shopping in an upscale vacation town and overhead a conversation between two middle-age women. Okay, I put myself in a position to overhear them, but it was all in the name of research for you, my readers.  Both women were what I would consider affluent consumers and regular buyers of luxury goods.

They were both carrying several shopping bags and had just exited a women's boutique. One woman turned to the other and said, "Last year I would have bought that outfit."  To which her companion replied, "Same here. It was cute but not today."

Granted, I only heard part of the conversation, but it was a textbook example of today's consumer. They had shopping bags in their hands and money in their wallets but they made a conscious choice to pull back their spending a bit.

This is exactly why it is so important for specialty retailers to execute at the highest possible level. Today's consumer is still spending money - but not as much as last year. There's little room to fall short. You want these consumers cutting back in someone else's store and not yours.

Here are three things specialty retailers can do to maximize their opportunities with today's consumer.

1. Have what the customer wants in stock.  Having the right product in stock has always been important.  Today it's more important than ever.  Not having a product in stock gives your customer extra time to consider whether he/she should buy the product or not. I can't necessarily measure it but I guarantee that second chance sales and drop ships from stores are down this year compared to the past.

At the same time, the staff needs to sell what's in stock. Obviously you want to match the customer up with the best products that meet their needs, but getting customers excited about something they can't buy right away rarely meet their needs either. Sell what's in stock!

2. Create a great first impression. That first minute when a customer enters a store is crucial to setting the stage for a great experience.  Last year those two women I overheard walked into stores with a lot more purchase intent than they did this year.  A memorable and unique store experience will begin to sway the buyer from "maybe I won't" to "maybe I will."  As I told a potential client the other day, I'm convinced that the first one or two minutes have a greater impact on sales than any other element of the customer's experience.

3. Engage with purpose. When the economy is humming along most retailers make sales in spite of their approach. When things tighten up, those easy "low-hanging fruit" sales are the first to go. Retailers have to work harder for their sales.  That's great news for retailers who can create sales.

Engaging with purpose begins with the belief that every customer is a potential buyer. In order to create that sale the retail staff must make a strong enough connection with the customer to identify his/her true needs and opportunities. "How may I help you?" won't create a sale. Engaging your customer in a friendly non-threatening way will. Asking questions so that every answer leads the associate to recommending a product will.  Recommending a product with enthusiasm and passion will.  Engage with purpose or leave money on the table.

Those two women I overheard weren't in your store and chances are they aren't your customers. But, every single one of you has customers just like them. It's important to ask yourself everyday, are you and your staff executing at the highest possible level so they cut back their spending in somebody else's store and not yours?

My Summer Reading List

A member of my mentor program asked me the other day what I choose for my summer reading.  It's a good question because I think reading and learning is indispensable for a successful retailer.  Stimulating your mind is essential to stimulating ideas.  So here's what I'm reading this summer.

Every day I read a large number of blogs which I'll post in my next posting. I try to not miss the daily online edition of The Wall Street Journal. I've said this here many times; I firmly believe that every retailer should read the "Marketplace" section of the Journal to see what's happening in industries besides our own.

I subscribe to Time, Fortune, Harvard Business Review, and Fast Company.  Magazines are great when I travel, so if I'm off the road for a bit I do get behind in reading them.

Now for my summer books.  I've shared before that I often read multiple books at once. Call it retail ADS I guess.  The downside is that it can take me a while to get through a book. The upside is I'm reading and learning in multiple areas.

So here what's on my desk, nightstand, and in my pool and computer bags.

1. The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of The Ritz-Carlton Hotel Company, by Joseph Michelli.  I've gotten to know Joseph from work we've done with the National Association of College Stores.  Joseph is brilliant, funny, and writes a great book.  I've just started into this one and have already learned a lot. 

The five leadership principles are:

1) Define and Refine

2) Empower through Trust

3) It's Not about You

4) Deliver WOW

5) Leaving a Lasting Footprint

The chapter on remaining relevant to customers should be required reading for all retailers. I'll share more thoughts and lessons from the book after I finish it.  I can tell you already that you should buy this book, read it and use it.

I'm also reading

Made to Stick: Why Some Ideas Survive and Others Die, by Chip and Dan Heath.

Sam's Teach Yourself Adobe Dreamweaver CS3 in 24 Hours. (I have colleagues who tell me I should outsource this part of my business, but I have to confess that it's one of my favorite things to do.  It's more hobby than work.)

The Nine: Inside the Secret World of the Supreme Court, by Jeffrey Toobin. (I don't read much fiction so I read this kind of book for fun. So far it's pretty good.)

Crazy for God: How I Grew Up as One of the Elect, Helped Found the Religious Right, and Lived to Take All (or Almost All) of It Back, by Frank Schaeffer. (Very interesting book.)

So let me ask, is there anything you're reading that you would recommend? More important, are you reading enough to stay fresh and on top of your game?

Your Signature Dish

One of our favorite restaurants is Hamersley's Bistro, located in the South End neighborhood of Boston.  It's a beautiful, inviting space that combines France and New England, with wooden ceiling beams salvaged from a Connecticut barn and French tapestry florals.  The open kitchen - one of Boston's first - creates a lively and fun touch.  Chef Gordon Hamersley is known for straightforward dishes that creatively use seasonal and local ingredients.

Every time we dine at Hamersley's my wife studies the menu intently.  Recently the menu has included such tempting dishes as Spicy Halibut and Clam Roast with Bacon Braised Greens or Vermont Quail with Black Mission Figs and Grilled Napa Cabbage.  With so many wonderful dishes to choose from she inevitably orders the same thing every time - Roast Chicken with Garlic, Lemon and Parsley.

What's so special about roast chicken?  Trust me; this is no ordinary roast chicken. Boston magazine recently wrote that on any given night 20 to 30 percent of the dinner orders are for this chicken.  It's a signature dish that has defined Hamersley's since the restaurant opened in 1987.  Ask anyone who has ever dined at Hamersley's what you should order and you can be almost assured the answer will be roast chicken.

To be a successful specialty retailer we too need to have a "signature dish."  Something we're known for and a reason our customers recommend us to friends and family.  Our "signature dish" can often be a product or a selection of products, much like a restaurant becomes known for a particular dish.  Unfortunately that is getting harder and harder today due to Internet shopping as well as the willingness of many manufacturers to sell to big-box retailers.

For most specialty retailers the best "signature dish" is the customer's in-store experience.  Like a good recipe, an in-store experience is a balance of the best ingredients mixed together for something special and memorable.  For most specialty retailers it's a blend of the right products, smart merchandising, and a heavy dose of friendly, engaging, and knowledgeable salespeople.  The right mix of ingredients, well-executed, will create that signature in-store experience.

Creating a signature in-store experience takes a lot of vision and an incredible commitment from the owners, executives, managers, and staff.  Delivering the "dish" day in and day out is a challenge.  The reward of doing so is a more loyal customer and less pressure on margins than experienced by retailers who don't stand out from the crowd.

Boston Market sells a roasted chicken dinner for $6.99.  Hamersley's roast chicken goes for $26. One is selling a commodity, the other a signature dish.  You could say that they aren't targeting the same customer.  On the other hand, they're both selling chicken.  You have the same choice in your store.  Either create a signature in-store experience or compete against others as a commodity.  One option is easier - but the other is a lot more profitable.

So let me ask, have you defined your signature dish and do you execute it daily?