Brag

April 7, 2008

Jaguar XJ220In Colorado Springs there is a car repair center called Elite Auto. The lobby is clean and with carpet could pass for the reception area of a dentist’s office. There is a fridge in the corner with free drinks for customers. On the wall next to the cash register are dozens of thank you notes from customers. Behind the counter on the right are two floor-to-ceiling Snapon tool chests full of the owners’ personal tools. In the back wall is a window that let’s you see into the substantial repair bay. Parked out front next to the entrance is always, ALWAYS, a valuable sports car.

Last Saturday when I went to pick up my van there was a Jaguar XJ220 parked out front. The car was one of 17 in that particular style made and is one of only a couple in the United States. It is valued at about 1.2 million as it only has 700 miles on it. Inside the repair bay was a Shelby GT 500 that the shop are detailing.

All of this goes to create an atmosphere that this shop not only can be trusted but is also the best place in town to get a car fixed. After all, if people whose cars are worth several hundred thousand dollars will trust them, shouldn’t you be able to trust them with your $25,000 car?

This isn’t to say that the shop is perfect. I had to take my van back twice to have a gas leak fixed and I think a piece of sound deadener was forgotten when I last had it in the shop. But when something goes wrong, they fix it.

Now, think about your Catholic gift shop. What do you do to brag about your store? I’m not talking about the things you say, I’m talking about the things in your store and on your website that people will notice without having to ask. If you look around and can’t think of anything, here are some suggestions:

  • If people send you thank you notes, post them at the register.
  • If people leave you positive feedback on your website, post it there.
  • If your website is part of a ratings program like Shopzilla or Shopping.com, post your ratings on the site.
  • Figure out what sets your company apart from others and put that information up somewhere for people to find.
  • If your company has received industry awards, put them somewhere noticeable.
  • When people are at the checkout counter and you are engaging in that last-minute customer service that makes people remember your shop positively, mention to new customers how big / orthodox / selective your selection is.
  • Use your business cards to brag. The back of your cards is a great place to mention how great your store is.
  • Clean up your store’s presentation. In various industries – auto repair, garbage collection and Catholic stores – having a clean presentation will put you head and shoulders above the competition.

If you can’t do any of these things at present, your store is in serious trouble and you need to figure out how to make your business something to brag about.

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How Not to Write a Press Release

March 29, 2008

I recently stumbled across a press release that I assume was written by a Catholic company promoting its new products. While I commend the publisher for actually having enough business sense to make use of press releases, the manner in which this was accomplished veered into that murky area of ethics that I have commented on before.

The publisher put in quotes from another Catholic publisher talking about his financial hardships and mentioned two publishers by name that are having problems before talking about how even if these publishers go under, his company will be there to fill the gap.

It seems that in an industry where many companies are struggling financially, highlighting those companies by name for no reason other than to promote your own products is pretty low.

It would have been possible to write the same press release and mention industrial problems without singling out specific vendors.

If you want tips on writing good press releases, I recommend the Christian Newswire article.


It Isn’t Just Catholic Stores Having a Hard Time

March 20, 2008

Borders, the nation’s second-largest bookseller, said Thursday it may put itself up for sale and has lined up $42.5 million in financing to help the chain continue operations.

Shares tumbled more than 17 percent, or $1.23, to $5.87 at the open of trade.

Borders has lost market share both to online companies and to discounters like Wal-Mart Stores  Inc.

Source

As Catholic retailers we have to always keep in mind that running a business like a business is not an option in our market, any more than it is an option in the “real” world of business outside the religious sphere.

It is especially important to note that the reasons for the problems at Borders are not confined to that chain. Online competition will take a heavy toll on any store that doesn’t have a web presence. Our niche is both a curse and a blessing. As a group we run our businesses so poorly that there isn’t enough of a market for places like Walmart to get interested in selling Catholic stuff. On the other hand, our niche is run so poorly that there are very few healthy players in the industry.

I was reading a Christian Retailing trade journal a few months ago and there was an article about large, long-standing stores closing and they cited the same reasons as Borders for the closures.

As a business owner you have got to adapt to the changing retail environment around you or you WILL close. Adaptation doesn’t just give you a competitive edge,  it keeps you alive.


How Not to be a Good Vendor – Part III

March 13, 2008

1) Tell us we haven’t been paying our bills for two years.
2) When asked to send the invoices in question, never do.
3) When given payment information proving payment, do nothing with it for months.
4) When phone calls are made asking for some sort of assistance in getting the matter cleared up, don’t return calls for two weeks.
5) When sent payment information again, don’t do anything with it for a couple more weeks.
6) When repeated messages are left asking for some kind of update, don’t reply until you are finally caught in the office.
7) When you say you will get back to us in an hour, never call back.
8 ) When we call back several days later after not getting an update, tell us that because we are a credit risk, we now have to prepay all orders.
9) When you finally send us the invoices we requested five months earlier and it turns out that the issue is a joint error – the vendor hadn’t recorded more than half the amount due and we were missing some invoices, tell us that it doesn’t matter and we have to prepay all orders.

Anybody know a good supplier of audio talks?


Sales Won’t Wait for Tomorrow

March 11, 2008

We have been in our current location for four years now. Last month I decided to get a water cooler for the office. I had never had a salesman ever call or come by the store offering us one. The week after our new cooler arrived we had a salesman come to the store from a competing water company offering us a cooler. If he had shown up anytime over the previous four years I might have gone with his company. Unfortunately for him, he showed up a week too late.

When you think about making sales calls to local parishes or schools, are you still thinking about calling or do you have an appointment already? If you don’t, it’s time to get on the phone before your competitor does.


How To Conduct Advertising Campaigns

February 28, 2008

I’ve mentioned several times that if you can’t measure the response, don’t pay for the ad. Mark Riffey has several tips on how to properly handle your advertising campaigns.

Go take a look.


Business Goals New Year’s Resolution

February 18, 2008

Okay, so it’s February, what of it? If you own a business and you haven’t decided what you want to accomplish this year, now is the time to figure that out.

A few weeks ago I attended the Catholic Marketing Network trade show. I gave a presentation on why it is important for stores to have a website. During the presentation I asked how many stores had set goals for the year. Three people raised their hands. With that kind of response it’s no wonder that Catholic stores close as fast as they open.

Whether you see your store as a ministry or a business or a ministry run like a business (the best choice), you have got to set goals each year. Otherwise, you will end up in the same place you are now or worse off because someone out there is setting goals and trying to reach them.

So how do you decide what your goals should be? Before you decide that you need to know what characteristics good goals have.

Goals are measurable. If you can’t put a yardstick to the goal, you will never be able to really say that you achieved it, exceeded it or fell short of it.

Goals are time-sensitive. If you don’t set a date to achieve a goal it is unlikely you will ever finish because other things will get in the way.

Goals are achievable. Don’t set a goal that this year you are going to increase your sales by 500% unless you have a realistic plan to do so.

Goals are planable. I don’t think that’s a word but the point stands. When you are thinking about what you want your goals to be ask yourself if you can write a plan that explains how that goal will be achieved. If you can’t write the plan, choose another goal because this one isn’t going to happen.

Goals should take an effort to achieve. What satisfaction is there in setting a goal for 10% growth this year if you always grow by 10% every year? Set the bar high and also choose a reward appropriate to the difficulty in achieving that goal.

Goals should make your business healthier. If you have a goal to paint your store purple but doing so won’t improve sales, back away from the paint can.

Okay, so now that you know what a good goal looks like, how do you decide what to do?

First, you need to ask yourself if you have any past data on which to base your goal. If you set a goal to increase your gross profit by 20% but have no idea what your gross profit was the year before, the goal is useless. Here is a brief quiz that will help determine what your goal for the year should be:

  1. Can you tell what your gross profit for the year was last year?
  2. Can you tell what your top 100 sellers were and how many you sold on average each month?
  3. Can you identify your top 20 retail and top 5 parish customers?
  4. Can you identify what items in your store didn’t sell last year?
  5. Can you tell by gross profit what your top two marketing efforts were last year?
  6. Can you tell how many sales were produced by yellow page ads?
  7. What was your return on investment for online advertising?

If you can’t come up with these numbers in about ten minutes, then I would suggest that your goal for this year be to figure out how to measure your business. If you have a computerized point of sale system this could be as easy as calling your vendor for help. If you don’t then your goal for the year should be acquiring a computerized point of sale system to run your store.

If you were able to answer the first five questions, congratulations: you are doing better than about 70% of all Catholic stores. If you couldn’t answer the last two then I suggest that one of your goals for the year be to figure out how to track as much of your advertising as possible. One of the easiest ways is to turn any print ad into a coupon so you can record how much you made on sales with the coupon.

If you are measuring your store now, here are some goal ideas for the year.

  1. Make sure all price lists from vendors are current twice a year. If you aren’t on top of pricing, this can kill your profit. That 14kt medal you just sold for $200? It cost you $180 instead of $100 because you didn’t notice that the vendor has raised the price on gold items twice in the last year.
  2. Don’t carry products that you make less than 40% profit on unless you have a very good justification for doing so. As an example, we carry the Didache high school textbook series which only gets a 20% wholesale discount. We carry it because it gets us contacts with schools that we can sell other items to in bulk at much better margins.
  3. Do book fairs at two parishes you never have done book fairs at before. This is a good way to get some extra exposure with people who may be unfamiliar with your store. Part of doing this effectively means making sure that your name is visible and you give everyone who walks by a business card or a flier with a map.
  4. Co-sponsor a diocesan event. You might not have to pay very much to get your name on every flier sent out for the next Christopher West talk.
  5. Go visit your bishop. Your bishop may not endorse your store but if he knows you exist and you can be on good terms with him, you won’t be any worse off and you might end up getting asked to participate in events you wouldn’t have otherwise.
  6. Get a website. You can gripe all you want about Amazon stealing your business but if you aren’t willing to even step on the field, you have no reason to complain.
  7. Write manuals for your store. If you are like most store owners, you are pretty chained to your store because you are the only person you trust to run it and you will be running until you drop dead of a heart attack while handing someone a St. Peregrine holy card at your counter. Document how things work at your store so you can go on vacation. Then find someone who meets these qualifications:
    1. You trust him.
    2. He can read.

    If your manual is good, your substitute manager should be able to find anything he needs in it to run the store while you take some time off. I know it can be hard, so treat it like babysitting. The first time you leave, take one day off and sit in your car across the street from the store all day to make sure that it doesn’t burn down. If the day is a success, you can stop worrying so much and take a little more time off. After a couple of years you should be confident enough in your manager’s abilities to go away for a few days to another city.

So what if you have no idea what your measurements were for your business last year? If you have a computerized point of sale system, most of the information you need is buried somewhere in that system. If your vendor can’t tell you how to get the information out, you need a new system because these measurements are vital to growing your business.

Here are a few basic measurements that you can do on paper if you don’t have a system yet:

  • Gross Profit – This tells you how much you make on average on the products you sell. To determine this, take the total cost of product (I would include the shipping charges from the vendors) and divide it by your total net sales (minus things like gift wrap and embossing). This number should be between 35% and 55%. If you are doing less than 35%, you need to examine what you are selling and find some better vendors.
  • Turn Rate – This tells you how many times your inventory “turned” in a year. This lets you know if the product you stock is what people want to buy and if you are stocking enough of it. To calculate, take the total cost of goods for the previous year and divide that by the average value of your inventory on hand. If you are a regular store that sells most things to customers who walk out with the product, your turn rate should be between four and six. If you are a church goods dealer or do a lot of business on-line with drop shipping, your turn rate could be much higher because you sell a lot of product that never becomes part of your physical inventory.If you are a regular store and your turn rate is less than four, you need to figure out what items aren’t selling and either return them or discount them to get them out of your store. Then you need to figure out why you aren’t carrying things that customers want. If your turn rate is great than six then you might not be stocking enough inventory because you are constantly reordering and probably losing sales because you don’t have enough inventory on hand to satisfy demand.
  • ROI (Return on Investment) – This tells you if your marketing campaigns are actually making you money. To calculate, take the total net you made on the campaign, subtract the cost of product and divide by the cost of the campaign. Hopefully this number will be much larger than 1.For example, pretend that you invest $100 in a newspaper ad. Because you have planned ahead, you have made the ad a coupon that people need to bring in to redeem so that you can track your advertising dollars. You sell $1000 net product from the ad. After subtracting $600 for cost of goods, you have $400 left. Divide that by $100 and you get 4, meaning that your marketing investment produced a 400% return. It’s up to you to determine if that is a good use of your money or not but either way, you have the numbers to make an educated decision.

    Did you notice that I described your marketing expenses as an investment? If you are marketing correctly your money should never be an expense because you are planning on getting a return on the money. If you don’t have any way of tracking your marketing then your marketing really is an expense because you have no idea what you got back on the spending.