This means making deals. The prices on EVERYTHING are going up, up, up. It’s true in my store, and I know it’s true in yours. When was the last time a vendor called you and said, “Hey, we like you so much we’re going to eat the rising cost of gas because you’re that awesome?”

If you’re like me, that’d be never.

So prices are going up, everywhere. The customer’s feeling it no matter where they go.

Send them coupons — 10% off anything in the store. Run lots of specials. Put things that are NEVER on sale on sale. It’s time, right now.

These don’t have to be super deep discount sales. Especially if you’re a niche market, with lots of brands that never, ever discount. Customers know and understand that they’re not going to get 50% off some of these items — and that’s ok: they’ll buy at 10% off, when they may very well not have at full price.

Realizing 90% of a sale is a lot better than realizing none of it!

The most common mistake retailers make when times get tight is to stop promoting, to stop making deals, to stop reaching out to the customer base. That’s just wrong: this is the time, more than ever, that you’ve got to be out there, constantly, giving the customer a reason to buy.

However, they still do shop. This is the time when it’s absolutely CRITICAL that you have and use your database!

A very good friend of mine is in the high end apparel business. This economy’s been rough on him — to the point where even he would tell you that his business tanked this summer. Nobody was buying.

So he went to his database, generated as list of customer’s addresses, and sent his clientele a coupon for 20% off. Suddenly, the customers came flying through the door — to take advantage of what was, for this retailer, a rare sales event.

Yes, he did give them 20% off: but 80% is tremendously better than 0%, and that’s roughly what he was making before the coupon campaign!

If you’re in the same spot, go to your database. Reach out to your customer. Customers are incredibly price conscious right now: it’s the time to offer them a deal as a way to say “Thank you” for sticking with you through the tough times!

Along the way, I’ve learned some stuff. And boy, some of it really wasn’t pleasant.

You have to understand that we’ve got vendors we’ve been working with for years. Decades. So when they offered to help us set up the new store, absolutely we jumped at the chance. We’ve got strong relationships with these companies, and I was looking forward to seeing what they could do.

It was mind-boggling: mind boggling how much these vendors really didn’t care about us! In a lot of cases, I wound up with double inventory, when vendors ordered the same exact merchandise I was moving from the old store to the new store!

And I’m flabbergasted at the absolute lack of the ability to merchandise effectively! This is what vendors do, all day every day! Yet we gave them endcaps to fill, and they put product in — but no pricing, no signage, and they didn’t even check to see if the product was in the computer system!

For example, one guy handled canned pet food. He had five flavors to stock — and he arranged them horizontally, filling the shelves so full you couldn’t get a hand in there to take a can out. Think about that: arranging five flavors, horizontally. What happens if you want the flavor on the bottom?

Another display had dog harnesses all the way at the top of a 7 foot tall gondola. Kareem Abdul Jabar couldn’t have reached these things without jumping — how are my customers supposed to get them?

Honestly, Mr. Vendor, Ms. Vendor, all independent retailers want from you is for you to make it easier for my guys to sell your products! Now, my guys are in hot water too — they should have never let you out of the store with the shelves looking like that! Now we’ve got a new rule going on the books: nothing goes out on our sales floor if it’s not priced, in the computer, and signed.

We just want to sell your merchandise. Why are you making it so difficult?

This is the environment where, even though we should be doing it all the time, retailers start focusing on controlling expenses.    Today I’m going to talk about two areas where you can really save some money — if you’re willing to take the time to do some research.

These two areas are utility bills and credit card processing.

Utility Bills

Recent governmental deregulation means that suddenly, there’s dozens of ways for a retailer to get the power that runs their store. There are real savings to be had — but it’s difficult to find out who is offering the best deals.

All of these utility companies are telemarketing. I know — you have a dozen other things going on during the day. However, you should take some calls and get quotes for two or three competing utility companies. Consider those quotes — and give your existing utility company a call to see if they can match what you’re being offered. You can save a ton of money, with just a little time on the phone.

Credit Card Processing

I’m not a betting man, but I’d be willing to put down some serious money that the average retailer gets a call an hour from telemarketers promising that it’s possible to save a gazillion dollars on credit card processing.

Every day, more and more customers are paying for their purchases with credit cards. Processing fees can take a huge chunk out of your sales. It is well worth it to take a few calls to see what the offerings really are.

The only way to really tell what is a good deal and what is just a bunch of high-powered sales spiel is to send the potential processing company a couple of months’ worth of statements and ask “What would it cost me, if we gave you this amount of business?”

Their answers will allow you to make apple to apple comparisons: you’re moving past the hype into actual nuts and bolts, real life numbers. You might discover that it is possible to save a lot of money by switching processors — or you might discover that you’re fine just where you are. The key is this: you’ll KNOW.

Bear in mind that this is a very dynamic industry. Things change all the time in the credit card processing word. It would be prudent to check these numbers on a regular basis: it’s just as important to save money when times are good as when they’re tight!

The Eleventh Commandment: Own Your Building!

Here’s why:  If you are a typical business owner you will never get enough out of your business to retire comfortably.  It’s next to impossible to accumulate a nest egg, especially if you’re a typical Mom and Pop style store. 

If you’re living in the moment, but want to keep one eye on being prepared for the future, there’s only one to make sure you’ll be okay in your later years.  That’s to own your building!

Nineteen years ago, I bought a building for one of our stores.  It has not appreciated one cent since I bought it — which really doesn’t sound like good news, does it?

But for nineteen years, I ran my business there.  Instead of paying rent, I paid the mortgage.  Now, we’ve decided to change locations, and I’ve sold this building.  At closing, I was handed a check for EXACTLY what I paid for that building, nineteen years ago.

Which means, you know, I pretty much operated rent free in that location for close to twenty years!

In one of our other locations, I pay $20,000 a month for rent.  Assuming everything stays at that level (which is doubtful, to say the least!) in twenty years, I’ll have paid 4.8 million dollars to that landlord, and when I close that store, I WALK AWAY WITH NOTHING.

You have to own your building.  Let’s say you don’t close your business, or move your store.  Owning your building is still a great idea.  After the mortgage is paid off, you have one huge expense off the table, which obviously means better numbers for your business!  Or, you could refinance the building, which gives you a huge glut of cash tax free.  That can be pretty handy in a pinch.

And then, when you do decide it’s time to close or move or retire — YOU STILL HAVE THE BUILDING TO SELL!

I can’t stress this strongly enough.  Learn and listen to the eleventh commandment: Own Your Building!

If you want to be a successful business owner, you need to keep an eye on what people are saying about your brand.

One way to do this is to look for what people are saying about you on the internet.  (A side note: you might want to take a Valium BEFORE you do this!)  Go online and check out the local forums and bulliten boards. 

9 times out of 10, you’ll find something about your store.

Here’s some things to keep in mind:

The Internet is an unregulated wasteland.  Anyone can go onto forums and say whatever they want.  That means you’re open to commentary from competitors, angry ex-employees, people who just don’t like you, and more.

Guess what?  These people aren’t going to say nice things!  It’s a sad truth about human nature that people are more than happy to say bad things whenever they’ve got the opportunity — yet when the time comes to say positive things, you can almost hear the crickets chirping!

So what good comes from reading bad things about your organization?

First and foremost, you’ve always got to be open to the fact that some of what might be out there could be true.  If you’re reading that your stores are dirty, that your employees are rude, that your prices are the highest in town, you might want to investigate.  If the stores are dirty, if the employees are rude — well, these problems can be fixed.  If your prices are higher, you need to have a good reason why — and make sure that reason is clear to the public!

Use a mystery shopper!  Have someone investigate these claims for you. 

Other things you read aren’t going to be true.   For me, that’s the infuriating bit.  It’s very hard to read lies about your business, the one you’ve put your heart and soul and life into.

However, you’ve got to, absolutely HAVE to, set emotion aside when dealing with false commentary on the internet.  As good as it may feel to tell some random internet poster that they’re an idiot, the fact is you’re a business.  You need to be calm and professional. 

Defend your brand by presenting facts.  If you’ve got research you can link to, great!  Stay level-headed and make sure you’re representing yourself in a positive light.

This is hard to do.  I’ve screwed up in this area, and wound up alienating a lot of customers.  I regret that — but at the same time, at least I’ve had the experience and learned from it!  It’s hard to stomach that there are people who aren’t going to like you no matter what — but the more important fact is that there are a great many readers who judge you and your store by how you respond to that angry, unpleasant person.

Let me start this out by saying that over the past 33 years, I’ve hired more people than you could ever imagine.  Hundreds and hundreds of people –  many of whom are on the younger side.

Lately, I’ve discovered that I’m not just hiring the young people.  I’ve got their parents on board, too!

99% of the young people we hire are GREAT!  They work hard and they do a good job.  But there’s always teh employee who just isn’t right for our store, for whatever reason.  They might not understand the importance of customer service.  They might be incapable of running the cash register properly, no matter how many times we train them.  They might, frankly, rather be anywhere else but working — and it shows.

Then we have to let those people go. 

That’s when the phone calls start.  Angry parents who cannot believe we’ve fired their child.  They call, confident in their knowledge that their child is an absolute perfect angel and that we’re the biggest jerks on the planet for firing their kid.

What are you supposed to say at that point?  I can tell you this: if I’d gone home as a young man and told my father I’d gotten myself fired, he would have been angry too — at me!  Clearly, if I got fired, I did something to deserve it.  No one fires employees for the fun of it!

I’m a parent too.  I know how much we love our kids.  I also know that sometimes the best thing we can do as parents is to step back and let our kids stand on our own two feet.  We don’t help them by interfering in their jobs!  Somehow that message has gotten lost along the way.

We get a lot of parents who tell us, “My kid needs a job.”  Now we say, “We don’t hire parents.  If your kid is looking for a job, have them come in and pick up an application!”

Some times, as retailers, we wind up training on the type of things that just seem like regular, ordinary common sense.  The truth is we have to train on this kind of stuff — because we can’t afford to take common sense for granted.

What happens if we do?

Your crew will make mistakes.  Big mistakes.  And when you ask your crew member why they didn’t do the proper procedure, they’ll look at you with this vacant, clueless stare: “I never knew we were supposed to do that!”

If you want a fool-proof, guaranteed way to eliminate this problem, just keep reading.

Write out the procedure you want your employees to follow.  Keep it short and to the point: you only want to focus on one issue at a time.

Include the procedure in your employees paycheck.  Before they get their NEXT paycheck from you, they have to read and SIGN the paper and return it to you to be kept in thier employee file.

That way when you’re faced with the “I never knew that..” scenario, you can say, “Well, according to this paper you signed, you did know that.”

Since we’ve started this policy at our stores (and it’s been in place for years now) the whole “I never knew” situation has virtually disappeared.  This is a quick, simple, and effective way to start improving your employees performance — TODAY!

I was standing in our North Hampton store, and saw a customer walking out empty handed.  That’s pretty unusual.  Generally when someone comes to our store, they’ve come with a purpose.  They have a mission in mind, and they come to us because they know we can help them achieve their mission.

I asked one of our cashiers what the story was.

“Oh,” she replied.  “She was looking for a LitterMaid.  We didn’t have one, but I told her it’s an item we regularly carry, and that it will be in on Monday.”

I looked around the store and discovered that we did INDEED have the LitterMaid on the shelves.

I counted to ten, and then went back to that cashier.  “Of course, you’ve got the lady’s name and phone number.”

“Oh, no,” she said.  “She’s a regular.  She’ll be back.”

This type of thing happens all the time and it drives me NUTS.  There’s two ways to handle this situation, the CORRECT way and the LAZY way.

The LAZY way was to do exactly what my cashier did: tell the customer we don’t have the merchandise, and when it would be in, and when the customer should come back.

What’s wrong with that, you ask?  Well, it leaves out the whole customer service part of the transaction.  Where in this model are we actually taking care of the customer?  You’re shifting the burden of monitoring when your inventory arrives onto the customer.  If they want to deal with that, why don’t they sit home and order their merchandise online?  They don’t need us for that!

The CORRECT way to handle the situation is this: (Assuming you’ve actually checked for the merchandise, and it’s really, actually not in stock!) Get the customer’s name and number, so you can call the customer back when the merchandise arrives, and when it would be convenient for the customer to pick it up!

This puts the customer service back in the deal.  You’re demonstrating concern for the customer’s needs, and demonstrating that you want to take care of them. 

Yes, it’s a teeny, tiny bit more work.  We’re talking about what?  Five minutes, maybe? To get the name and number and make the follow up call when the merchandise arrives? 

That’s five minutes that will make all the difference to the customer.  That’s the five minutes that will make the customer feel cared about and important.  That’s five minutes that’s critical in CREATING CUSTOMER LOVE.

Last time, we talked about the value of marketing to and retaining your existing customer base.  This is one example of this concept in action: we keep our customers five minutes at a time.

Marketers Put Emphasis on Loyalty
Budgets Shift to Programs to Keep Core Audience as Economy Tightens
By Michael Bush

Hilton’s Mr. Burke said that’s why the company focuses on customizing its offers. “We’re in an environment where we have, at any given time, as many as 100 offers in market being personalized on individual customer preferences. It’s become a very cost-effective way to run the business and generated a ton of business for the hotels.”

Why do I love this article? Besides the fact that it reinforces one of my core beliefs: that we’re far better off concentrating our time, energy and resources on making our existing customers happy, it points out a tremendous truth:

As the economy gets tighter, it’s critical to spend each dollar wisely. You need to consider the return on investment (ROI) of each and every marketing and promotional decision you make!