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One of my clients recorded the best day in 22 weeks last Sunday because a new sales assistant - decided to focus only on this one thing she learned from Sell$mart. (She said she lacked the confidence to try all/more things.)
Before I tell you; here is why it is NOT a good idea to up-sell:

• Up-selling is poor retail practice.
• Customers love to buy but hate being sold to.
• They have trained themselves to recognise when they are being sold to, and will resist.
• Even if you succeed, they will not have enjoyed the experience, so would have won the battle but lost the war
• But most importantly it is the wrong thing to do because there is a better way that is proven to increase your average sale.

Always offer/ show/ include your most expensive item when you are in a sales situation.

In some situations (a retailer of billiard tables) increased the average sale by 81.8%, but even if not that spectacular, the best day in 22 weeks isn’t so bad either.
I will spare you the psychology behind this, but suffice to say that if you always include your most expensive option, you obviously cannot ‘up-sell’.
Train your staff to always talk top-of-the line.

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1. Be Something. Everything = Nothing.

2. Be different. If you aren’t different to your competition, you are dead.

3. Be prepared to pay to acquire and to keep customers.

4. Honour thy customer. Customers owe you nothing. Their patronage is a privilege to earn.

5. Retail is not an ‘over the counter’ business only - not any longer.

6. There are many different (groups of) customers – deal with them differently. One size does not fit all.

7. Sell only that which is in demand or where a demand can be created.

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• Alpha & Omega
• Surprise Your Customers

One little freebie promotion from the vault for you to try out. (We don’t have to wait for Christmas to get into the spirit of giving, right?)

Concept: Buy two matching puzzles. The size of the puzzle depends on how many customers you have on your mailing list. (You do have a mailing list right?). If you have a very large list for an individual store you may have to have more than one prize. Build one puzzle and stick on a wall, but take one piece out of the puzzle. Make sure it is large enough and visible enough with good signage explaining what it is all about.

Execution: You can execute in one of two ways:

Customers receive a mailing with one piece of the (matching) puzzle, and they are invited to the visit the store before a certain time and to spend a certain amount, or buy a certain product.

OR

Have a bowl of all the pieces of the other (matching) puzzle on the counter and everyone that spends more than X gets to draw a piece and match their piece to the missing gap of the completed puzzle. This way you are opening it up to all the customers who meet the criteria. (You could require them to join your mailing list too.)

Determine your prize: It can be anything from a gift voucher to hamper, but I like the idea (over Christmas especially) of pinning 100 scratchies to a mini Christmas tree. The potential value of the prize could easily be millions – which registers on everyone’s radar, and the cost is low and the customer is guaranteed to win something!

KPIs: Set your objectives for number of sign-ups (new customers), average sale, participation rate etc. Only if you achieve your objectives, will you repeat it. If not, dump it and try something else.

Total cost $300 plus mail out/communications costs.

But hey, this is RetailSmart, so you are not going to get away without having to think about the promotion.

Before you use it, run it through this little checklist and determine if it will do at least ONE of the following things for your business:

1. Increase the average sale?
2. Increase stockturn of a category that is below par?
3. Draw additional customers to my store?

Posted in General       ]]> http://retailsmart.com.au/2008/11/09/one-promotional-idea/feed/ retailsmart http://retailsmart.com.au/2008/11/05/the-oldest-retail-disease/ http://retailsmart.com.au/2008/11/05/the-oldest-retail-disease/#comments Wed, 05 Nov 2008 00:12:14 +0000 retailsmart http://retailsmart.wordpress.com/?p=407

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The Oldest Retail Disease is RTD.

There is an area of the brain called the ‘nucleus accumbens’ – or to use the plain English version, the craving spot. This is the spot that literally ‘lights up’ when (for instance a smoker feels the craving to light up.)

Most people would know that intuitively or believe me when I tell you. But here is the killer.

When stimulated, this area requires higher and higher doses to gets its fix. That also makes sense, right? [As matter of interest, Lindstrom (2008) has published research that shockingly reveals that the graphic images on cigarette packs actually stimulate the craving for the next smoke!]

Discounting is the drug of choice for most retailers.

But here is something worth thinking about: the pleasure derived from bagging a bargain is also an addiction that requires higher and higher doses in order to satisfy the consumers’ cravings. Consumers develop RTD – Resistance to Discounting.

And this puts most retailers on a downward spiral of ever-increasing discounts. Which leads to….?

Maybe we should take our medicine and star weaning the customers from that addiction? Start adding value rather than simply buying tomorrow’s sales with cheap discounts. (There is a time and place for discounts, and definitely room for sales promotions. But it does not always have to be 30% off.) Discounting may become the superbug that will one day resist all forms of antibiotic.

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What exactly are my options here?

As of today, the second edition of The Age of Conversation has been launched. It is an amazing story about a group of evangelists (some more hardcore than others) who have embraced the social media platform (Web 2.0), and decided to walk the talk and use the web to converse, to cooperate and to care.

Converse: 237 smart people gave of their time to pen something original about the dawning of the new era in the evolution of society, relationships and technology. These conversations have been pulled together in a book: The Age of Conversation – Why don’t they get it?

Cooperate: These 237 people have used the web as platform to bring this book out. Nobody knows everybody – and in fact most people would only know a handful of others. But without ever having met each other, they managed to get it done. As always, there are some people who deserve more credit. It is the brainchild of two gentlemen (GAVIN in Sydney and DREW in Des Moines) who gave more than most. You may find every other author listed in the sidebar to the left, and it would be great if you could explore them, because even if I don’t know them, I can tell you that they are all thinkers about this brave new world.

Care: There is a buzz about cause marketing and of course some people are jumping on the bandwagon. The AOC is not about cause marketing; we all just wanted to put something of ourselves back into the system – no ulterior motive. All profits will go to Variety (the kids charity), but there won’t be any profits if you don’t buy the book.

We’d appreciate your support, the kids will appreciate your support – and you will become part of the Age of Conversation and be better for it.

This blogger is honoured to be part of this effort. If you want read my (or any other person’s contribution) you will just have to buy the book.

PS: The pic was taking last night at about 7pm (4 hours before the official launch) whilst Gavin was regaling my MBA (Marketing) class at the MGSM on the finer points of marketing in the Web 2.0 world. The launch of AOC being a case in point. And an excellent job he does too! (And he is not as scary as he looks here - let’s blame that one one on my Nokia

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This is the full list of sales promotions that I can think of. The list is old; and the success of the promotion lies in:

1. The quality of the idea.
2. The execution of the promotional mechanics.
3. The timing.
4. The relevance to the target market.

I thought it is a good idea to run through the list and see if there is anything you haven’t thought of. Remember that just because we are tired of a promotion, doesn’t mean that the customer is.

Consumer Promotions

• Value adds (like free delivery, free blow dry)
• Trade-Ins
• Taste Tests
• Premium Items
• Money Refunds/Rebates/ Cash backs
• Loyalty Programs (Points to redeem on incentives)
• Joint promotions (with buddy retailer/ alliance partner)
• Gift Vouchers
• Free samples
• Free gifts
• Finance deals
• Discounted prices (Cents-off Offer)
• Demonstrations (non-food ‘taste tests’)
• Coupons
• Consumer Contests and Sweepstakes
• Celebrity endorsement (signatures)
• Cause-related and fair-trade connections
• Buy-One-Get-One-Free (BOGOF)

Anyone add anything?

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Market segmentation is a very basic, core marketing activity. It is defined as an attempt to fit the product to the market.

Ensure meaningful market segmentation as follows:

• The specific segment must be large enough
• It must be possible to measure and compare segments with regard to marketing costs, sales figures and potential profit
• Classify the total market into homogeneous groups based on attributes, needs demands or preferences
• The market segment must be accessible

Evaluate of market segment as a potential target market

• The resources and skills of the enterprise
• Segment size and growth potential
• Attractiveness (including profitability)

Pros & Cons of market segmentation

• Satisfied customers
• Identification of excellent marketing opportunities
• Gives guidelines (good filter!)
• Allows focussed, on brand communications

x Risky - all the eggs in one basket
x Very expensive

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I am intrigued by the notion of having a vision. It seems to be universally admired and often the first (if not only) criterion mentioned when discussing leadership.

What is the difference between a vision and a dream? Vision and fantasy? Vision and a point of view?

But more importantly, what is the trick in moving from NOT having a vision to having one? Like how do you really do it? Can you ‘DO’ vision; i.e. can you acquire it, or is it something like ball sense or the ability to carry a tune; it can be improved but not acquired?

The best I can do is to describe vision as a personal concept of some future outcome.

I would suggest that clarity about the required actions that will deliver that outcome need not be included in such a definition. Translation of the vision into actionable strategies is the domain of management, and could conceivably be independent of the actual vision.

If vision does not include the translation (and subsequent execution) into the actions, then vision is purely a mental construct. Vision must then be born from conscious and /or unconscious mental activity. To put it simply, it is something that springs to mind.

If it were largely the product of the rational mind, then any person would be able to create/ have a vision, and again, I am not certain that any rational view of the future (the everyday garden variety) really constitutes what I understand from the term ‘visionary’.

So, a vision must also have an element of contrariness to it; and it certainly is a view of the future that is different from where the momentum of the status quo would ordinarily take you (or the company).

So a vision should then be defined as an intuitive mental construct of an unusual future.

This new definition would imply that visions somehow come about and are not likely to be something that can be acquired through practice.

As the apostle Paul advises about the speaking in tongues; it is rather useless if there is no one around to translate it – and the same seems true of a vision.

What does all this mean back at the ranch?

• Encourage mavericks and tolerate the weird – they may become leaders of the future.
• Embrace intuition – nothing ground-breaking (except tornados) has ever come from extrapolating the ‘usual’ trend.
• Build some triggers into your strategic plan that mandates change, even if it is only apparently change for the sake of change. (The alternative is atrophy.)
• Learn to trust your gut.

We need some leadership – go for it!